The NewCo Daily: Today’s Top Stories
Maybe the Market Knows Something We Don’t
Markets are supposed to hate uncertainty and unpredictability, and those are surely hallmarks of the Trump administration’s early days. Yet the stock market, at least, has shrugged off fear of volatility and charged ahead: This week the Dow Jones index leaped past 21,000.
Is the “Trump bounce” just about anticipation of tax cuts and deregulation? Is it a result of large pools of investment cash desperate for a better return than bonds and banks can offer? Or is the market sending us a signal that the global economy, after a decade of slow growth and low inflation, about to return to the more familiar pattern of the ’80s, ’90s, and aughts, with faster growth and higher inflation punctuated by occasional recessions?
Maybe the “new normal” of the Trump economy will look less like the “secular stagnation” of the past decade and more like the old normal of preceding decades (Neil Irwin in The New York Times). This is definitely a scenario, not a certainty; economic data offers clues, not proof, of a change in the global financial weather.
Things that could still gum up the works include how far Trump goes with protectionist trade measures and how much instability his policies introduce in international relations. Wars usually take a bite out of prosperity (unless you’re a defense contractor). Does Trump deserves credit for unleashing Wall Street’s “animal spirits? “ Or are we just finally seeing some payoff from years of “stimulative” fiscal policy and relatively restrained federal spending under his predecessor? For the moment, it doesn’t seem to matter. Stocks (like today’s Snap IPO, which seems to have benefited from the general euphoria) will keep going up — until, of course, they don’t.
How “Big Nudging” Becomes Big Brother
Machine-learning-driven artificial intelligence will “fundamentally change the way in which we organize the economy and society,” according to a group of German scholars writing in Scientific American. Put big data, social networks, and AI together and you have all the ingredients you need for a powerful Big Brother-style apparatus of state control.
Singapore’s feedback-driven public order systems and China’s announced plan of issuing “citizen scores” already represent prototypes for such a system. Add techniques of “big nudging” or “persuasive computing” — designing interfaces and systems to encourage preferred behaviors with ever greater effectiveness fed by real-time data — and you’re on the way “from programming computers to programming people.”
This future, the authors argue, is a dystopian roadmap to totalitarianism: “A centralized system of technocratic behavioral and social control using a super-intelligent information system would result in a new form of dictatorship.” The notion that a super-smart AI fed by big mountains of data could make perfect social and political decisions is a pipe-dream, anyway, because the complexity of our social systems increases faster than the data we can accumulate about them. The antidote to such a future is a program of familiar but essential civil-rights and participatory democracy measures that guarantee transparency, diversity, decentralization, privacy, and individual choice.
Trump’s Team Turned Down the “Intro to Ethics” Course
Senior members of every new presidential team since 2000 have taken a course in navigating the complexities of White House ethics rules. The Trump transition opted out (Politico). Now, maybe the new administration’s transition leaders just felt it was a good idea to save the $1 million the program was budgeted to cost. Or maybe they had other priorities. Either way, given how many rule-breaking incidents and problems with truth-telling that the Trump White House has already encountered — with a national security advisor already gone and an Attorney General in trouble — it might have been money well-spent.
The lesson here, for business as well as political leaders, is clear: When you’re stepping into a new role, you may itch to show how different things are going to be from day one. But it makes more sense to press “pause” on the iconoclasm and study up on the existing rules and customs of your institution before you start trashing them.
The Goof That Took Down Amazon’s Cloud
We shouldn’t be surprised that the embarrassing cause of Amazon Web Service’s outage this week turns out to be, er, “a few mistaken keystrokes” (Brian Fung in The Washington Post). In other words: an engineer’s typo took out a sizable chunk of the internet.
You can count on two certain outcomes from this mishap. First, Amazon will take smart measures to make sure that this particular kind of massive snafu never happens again. And it probably won’t. Second, the failure serves as a reminder to all of us that there is no such thing as a failsafe system. Any opening for input in a software environment introduces the possibility that someone’s mistake (or malice) can take down the whole game. That’s why it’s more important to be resilient in the face of failure (as Amazon seems to have been) than to aim for perfection.
