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The Bug is now the Feature

Note: The views expressed in this article are my views alone and not the views of my employer or anyone else.

There are a lot of things that we look favorably on today in society but in a different time, they were seen negatively. Here are a couple of examples:

In Politics

1. Political Correctness — Politicians have always tried to say the right things and be “politically correct”. Being poised and polished was always seen as a trait of a politician and increased their chances of winning. With Trump and Bernie Sanders, they were highly unfiltered and politically incorrect, particularly Trump. That wasn’t a turnoff, it was the appeal.

2. Experience and Endorsements — Similarly, voters generally want experienced politicians who have mainstream political endorsement as well as mainstream media endorsements. Endorsements and Experience were always seen as a signal to voters as to who would best be able to do the job. In the case of Trump, he not having any political experience and not getting a single Republican endorsement was the big appeal of him to voters.

3. Raising Money — Every politician raises money for their campaign and generally the politician who raises more money wins elections [1]. In the case of Trump, this was not true. Trump raised a fraction of Jeb Bush raised and destroyed him. What’s even more interesting is that Jeb Bush raising all of that money made him look slimy and “like a politician” and made him appeal less to voters.

In Public Policy

1. Efficiency — Efficiency drives innovation. Uber tried to make taxis more efficient, Microsoft tried to make doing office work more efficient and so on. Being efficient was always seen as the end goal of innovation; however, with the rise of automation and the replacement of jobs, people are increasingly more concerned about employment than they are about efficiency. There was a pew survey that actually found that consumers are very apprehensive of automation [2] and want some regulations in place for the new technologies, especially when it comes to their impact on jobs [3].

2. Tipping vs. minimum wage — Tipping was started to supplement the minimum wage. In many states, the minimum wage for tipped workers is lower than the regular minimum with the expectation that tips will make up the difference [4]. Several tipped workers report that their gross income is significantly higher than their minimum wage counterparts [5]. As a result many tipped workers actually don’t want a higher minimum wage as it would mean no tipping.

3. Drug dealers– Drug dealers initially started out wanting drugs to be legal. When drugs became illegal, what they realized was that because it was a black market they were selling in, there was no price transparency and as a result no competition. The result was massive markups generating huge returns to the drug dealers. If drugs were to be made legal now, prices would be completely visible in the market and they would see competition from CVS and Walgreens and their profits would collapse.

4. Regulations — In theory corporations are supposed to be against regulations. Lots of companies lobby against new regulations but many also in favor of it. So then the question becomes why a company would be in favor of regulations on their industry? The answer is competition. What companies have realized is that because they have more resources than their smaller counterparts to deal with the regulations, it crowds out their competition from entering and growing.

5. Taxes and Tariffs — With the recent tariffs Trump slapped on China and other countries, it’s easy to think that companies would all be against the tariffs and would be hurt by it. Most companies are against the tariffs and several of them are feeling the pinch but some are not. There are some car dealers that have realized that they are able to sell more used cars now because of the tariffs as they only apply to new cars [6]. Or they are getting carve outs from Trump which makes the tariff ok for them and not for their competitors [7], in which case the companies will actually want to keep the tariffs later. If you don’t think so, just look at the Swiss cheese tax code and how companies fought to keep their deductions in the code while complaining about others [8].

In the Workplace and in School

1. Investment Banking — People in Investment Banking work very long hours largely because they are always understaffed and that is actually by design. Initially the understaffing was a bug, something they wanted to fix by hiring more people. To fill the gap, they piled more work onto their associates and paid them bonuses. The bonus structure worked out well for both the firms and the bankers. For the firms, they got double the work for 50% higher labor costs. For the bankers, they got higher pay. This bonus structure became a significant attraction of investment banking and is no longer the bug, it’s the feature.

2. Not picking the best resume — Every company’s wants to hire the best person for the job. This intuitively means picking the best resume from the pile. This is not always the case. Companies will often say a candidate is overqualified or will tell candidates in interviews “I don’t think you’ll be happy here”. In other words, their high caliber is actually seen as a negative in getting the job. A lot of companies now are trying to fill mid-skill jobs for which they don’t need the smartest people in the world but just smart enough.

3. Competition in school — School is competitive, particularly the more elite schools. Everyone is really smart and competing for the same set of jobs. Intuitively you would think that people don’t want the competition because it would make their job search easier? To a certain extent yes, but people value having an alumni network of really smart people from their school and that is actually a draw for people to attend certain schools. People may not like competition while in school but they like the network that comes along with it.

In Social Contexts

1. Being Busy — People always tell us, “Work to live, and don’t live to work”. This statement is true but work is no longer about just making a living, it’s a status symbol. If you ever go to a social event, all you hear people talk about is their work and how “busy” they are. People like to be busy because first they like to feel important and secondly they don’t know what else to do. When people talk about “Universal Basic Income” to combat mass unemployment, it’s unclear whether that would fix the problem because people like to brag about their jobs. People have an incessant need to show that they’re doing something. If they’re waiting at a bust stop, they can’t just sit and wait, they have to be on their phone showing how “busy” they are. Being busy is no longer something people try to avoid, it’s something they strive for.

2. Dating Down — This is similar to the picking the middle of the pack resume but it relates to dating. People often try to find the “best match” in dating but sometimes people intentionally date people who are below their caliber. The reasons for this may vary but one reason is security. Some people are so insecure about their baggage in a relationship that they fear scaring away a potential partner that they want someone lesser on the totem pole who will stick around.

3. Penthouse living — If you go to any apartment complex, the top floors are always the most expensive. Living on the top floors and even partying on the top floors of a building is what everyone wants to do now because of the view. What’s ironic is that 50 years ago rich people wanted to live on the bottom floors and reserved the top floors for their servants. Even in middle class homes, the top floor was the attic where all of the dusty furniture was stored. Today’s trash is tomorrow’s gold.

4. City living — In the 1950’s, rich people wanted to move to the suburbs where they could own a big home and pay lower taxes. This was called “White Flight” in many cities and city living was highly undesirable. Starting in the 1980’s, the network effect became a bigger concept and rich people wanted to live closer to each other. As a result they chose to move to the city from the suburbs. City living was now the place to be.

5. Expensive Items — When we purchase a product or service, we generally are looking for the lowest possible option of a certain quality. What’s interesting here is that people actually view cheap or free items suspiciously. Think of house hunting; after you have gotten a good sense of the market and what people pay for houses and you see a house that’s 30% lower than that, you immediately start to question it. Is it damaged inside? Is the neighborhood sketchy? Are the schools bad? Or even when it comes to buying food, if you see a $0.50 pizza, you are immediately suspicious of quality. Or take dating mixers. The cost of hosting a dating mixer is virtually 0 since they are hosted in bars and you pay for your own drinks. Despite that, they typically charge around $20 or so. Why? Because they want to filter out non-serious people to the event who would go only if it’s free. In all of these cases, the price is more of a signal for quality and not a direct result of quality.

In Social Media

1. Selfies — Selfies initially started because people wanted to take pictures but there was nobody around to take the picture for them. The selfie was essentially a bug because people wanted to take a regular picture but couldn’t. Fast forward a couple of years and selfies are now mainstream and a desirable photo choice even when the option of a regular picture is available.

2. Snapchat — Social media companies like Facebook invested a lot of time and money into data storage for all of their user data. The capacity to store data used to be a limiting factor for social media companies. What snapchat realized is that many users don’t actually want to store their data and instead want to delete it right away. Not being able to permanently store user data was now the feature instead of the bug.

Food and Exercise

1. Being skinny — Being skinny historically was seen as a bad thing in society because it meant you couldn’t afford enough food. Being fat meant 2 things — you could afford 3 meals a day and you weren’t doing grueling physical labor. Fast forward to today and the exact opposite is true. Since most people don’t have jobs that involve grueling physical labor, being fat means you eat at McDonald’s and can’t afford a gym membership. It probably means you can’t afford to shop for fresh produce and have to go for processed food instead.

2. Rustic Food — Fast casual was the largest growing food category in America [9]. Fast casual is higher quality than fast food restaurants like McDonalds and Taco Bell but lower than fancy sit down restaurants. In general, all of the places that go viral on the internet are not fancy, gourmet food; it’s rustic, basic food done well and in a creative way. Now Americans want simple food that they can do themselves with the rise of HomeChef and BlueApron [10]. Simplicity is now the feature, most restaurants strive for.

3. Coffee and sleep — Coffee is used by most people as a way to get energized for the day or recharge during the day. The flip side to this recharge is that you feel a crash later in the day. What’s ironic about most people is that they use the highs and lows of coffee to help regulate their sleep. Coffee is no longer something to help readjust their schedule, it’s part of their schedule and if they deviate from it, their sleep pattern gets ruined.

4. Taking the long walk home — People often want to take shortcuts to get places. This ranges from taking the fastest route home or not walk up the stairs and take the elevator. There are times however when people use these as an excuse to get exercise. They purposely take the long walk home or walk up the stairs even the alternative is available.

Sources:

1. https://www.opensecrets.org/news/2012/01/big-spender-always-wins/

2. http://www.pewglobal.org/2018/09/13/in-advanced-and-emerging-economies-alike-worries-about-job-automation/

3. http://www.pewresearch.org/fact-tank/2017/10/04/6-key-findings-on-how-americans-see-the-rise-of-automation/

4. https://www.dol.gov/whd/state/tipped.htm

5. https://www.theatlantic.com/business/archive/2015/02/how-much-do-waiters-really-earn-in-tips/385515/

6. https://www.cnbc.com/2018/08/17/used-car-prices-are-weirdly-spiking-and-tariffs-may-be-to-blame.html

7. https://www.nytimes.com/2018/05/31/us/politics/trump-aluminum-steel-tariffs.html

8. https://www.usatoday.com/story/money/2017/09/01/tax-reform-push-simplify-taxes-on-but-dont-touch-some-deductions/620531001/

9. https://www.bloomberg.com/news/articles/2017-06-01/chipotle-potbelly-qdoba-are-sinking-into-fast-casual-malaise

10. https://www.bloomberg.com/view/articles/2018-10-09/the-end-of-coal-could-be-closer-than-it-looks