The Numlock Podcast

Walter Hickey

Numlock News is a daily morning newsletter that pops out fascinating numbers buried in the news, highlighting awesome stories you're missing out on. Every Sunday, Walt Hickey interviews someone cool. Sometimes he records it in quality befitting a podcast. numlock.substack.com

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By Walt HickeyWelcome to the Numlock Sunday edition.This week, I spoke to the brilliant Alex Abad-Santos who wrote “The Open Secret of Looking Like A Superhero” for Vox. Here's what I wrote about it:Actors are increasingly turning to anabolic steroids in order to attain the figures necessary for movies today. While it’s not legal in the United States to use steroids or performance-enhancing drugs without a prescription, in the movie business it’s not considered cheating the same way it is in sports and obviously isn’t tested for. It’s part of a larger trend, too: testosterone prescribed to American men tripled from 2001 to 2011, and while it decreased from 2013 to 2016 following renewed warnings from the FDA about risks, it’s impossible to study the underground market and HGH is one of the most common drugs to go missing between manufacture and shipping. The long-term health effects of steroids are still little understood, but they’re not looking good: One recent long-term study of steroid-using weightlifters found that of 86 steroid users, three had a heart attack before 45, compared to none of the 54 comparison lifters.Alex is one of my favorite culture writers, and he wrote a really incisive story about the impacts that PED use in Hollywood and social media has on viewers. His story peels back the façade set up by the industry and speaks the truth all about how pervasive steroids and hormone usage is in the entertainment businessWe also talked about the pressures pushing actors towards this, from the demise of the mid-budget movie to the dominance of comic book movies, which bring hyper-masculine superheros from the page to the screen. Also, we talked about his favorite topic, the X-Men.Alex can be found at Vox, on Twitter and on Instagram. This interview has been condensed and edited. Alex, thank you so much for coming on.Oh my God. Thank you for having me. And oh my gosh, this is the first time that we're seeing each other IRL.I know. It's weird. Again, I've been a fan of your work for a really long time, so it's great to finally get a chance to hang out.Yeah. I am a fan of yours too. I remember when you were at, was it FiveThirtyEight?That's the number, yeah.FiveThirtyEight. I'm always really bad with the number, with remembering which one it is, but I remember being like, "Oh my gosh, this makes my job so much easier when I can link a study on something about comic books." Yeah, it's just very weird that we only are hanging out now.Yeah. I'm going to chalk it up to the ongoing SARS-CoV-2 pandemic, but—Yes. Blame the pandemic, please.We'll do that. You wrote a really, really fascinating story that talked about a topic that I think everybody kind of alludes to, but I hadn't really seen actual reporting behind and hard data behind. You talked about steroids, and HGH, and testosterone use among movie stars. What got you interested in the story?I think one of the first things that got me interested was, I was looking on my Instagram explore page and I was showing my friend at dinner and I was like, "Why am I having chicken nuggets? This guy looks like this." He was huge, his muscles were crazy, his abs were nuts. And then after that, my friend was just like, "Yo, he's on steroids."And I was like, "Oh." And they were just like, "You know, how everyone in Hollywood is."I'm like, "Oh, is everyone in Hollywood?"And he was just basically like, "Yes." I don't want to get sued, but there's a lot of people out there, if you're in an action movie or if you're with your shirt off, that might not be getting those results naturally. Just no matter how much you're at the weight room, no matter what you're eating, you're never going to look like that. And that was it. I was like, "Maybe I should write a story about this."I liked the story a lot, because particularly there was a part where you talked about, there may have been a time in history where you may have aspired to have the body of the movie stars, but they never were just like, "Oh yeah. No, it's just rest and exercise, I have a meal plan, I have this kind of workout," and they don't talk about them taking a ton of gear. Can you talk a little bit about the cultural place we’re at now?I think one of the things that is super important, what the doctors and researchers say, is that everything's on social media now. It’s so inundated with all these images, because it's not just a movie that comes out every three months or whatever. People on Instagram are using it, people around you are using it. I think that was the impetus behind it is, well, it's all around us. How is that messing with our own systems and messing with our own brains?If you look at Wolverine in 2000 versus Wolverine in 2014, and by that I mean Hugh Jackman — again, no speculation about what Hugh Jackman looks like or what he did or whatever — but if you look at those two, it's absolutely nuts. The difference of how jacked he is, how thick he is, how small his waist is. Every vein is rippling and you're just like, "Whoa, when did this happen?" And he's actually 14 years older in 2014, which makes no sense, because as doctors say and scientists say, the older you get the harder it should be for you to put muscle on. It's just like, how are you getting that muscle? How are you maintaining that muscle? How is everyone getting this superhuman aesthetic? It's just not possible without some help.And there's a health sacrifice that's made. You included some health studies in there. One of them that has stuck out was the risk of heart disease increased not inconsiderably for folks who were taking performance-enhancing substances.Yeah, I think the craziest thing is that when I was talking to people and I was talking to doctors, I was just like, "Oh, yeah. How do you study this?” And they're like, "We can't study it." I was like, “What do you mean?”And they were like, "Alex, think about it. You can't pump volunteers full of steroids. You can't pump them full of steroids to an unsafe level, which is what body builders, what some actors, what everyone basically is on. You can't sign up for the super soldier serum." They were just like, "It's actually medically unethical."A lot of the things that they're studying now actually happens all by volunteers, and they study on animals too. But with those human volunteers, you have people that were in the '80s and in the '90s who took it, and then now they're hitting middle age and up to their 60s, and the crazy part is that now they're finding out those people in their 60s actually might have heart disease or have these hardened arteries, and they also might be more susceptible to stroke. It's hard to get that across to someone who's young, who is like, "Well, if I can become an Instagram influencer and make a lot of money now, I don't care about heart disease when I'm 70. Who's to say there's even going to be a world when we're 70?" Or, "Who's going to say you might get a heart attack anyway?"It's hard to justify to young people and young men, especially, "Yes, be careful about this thing that will happen in X years, maybe," which is very, very difficult for scientists to get the point across.Yeah. We've been seeing a lot of that lately, I feel. Risk communication difficulties.I think the craziest stat, or the scariest thing that someone told me was, there's a leading doctor over in Harvard and he was just like, "Yeah, it's kind of reminds me of what happened with smoking and lung cancer.” There was some point where they were just like, “Oh yeah, they're connected,” and then it was too late, and then all this stuff started coming in. So he said, "Yeah, we're on the crest of that."It was also really interesting because legally, these things are illegal. People had mostly heard about them through athletics, where they're understandably and justifiably banned because they can diminish the competition. There is no World Anti-Doping Agency of acting, and you kind of allude to that's one reason that this has been so pervasive.Yeah. Acting is not professional baseball. No one is going to stop you. I doubt that there is a drug test that's happening and also, I think for the people whose livelihood depends on looking a certain way, it's a business decision, right?Yeah.Let's say you are an Instagram influencer and you're not even in a Marvel movie, but you're an Instagram influencer, and you're getting paid whatever, $40,000 a post to post, and basically you're selling your body and you want your body to look great, that is what you do. Or that is what some of them do. I do not want to get you sued. I don't want to get sued. Allegedly that is what some of them do. We're talking about a percentage that is not 100 percent but is also not 0 percent of people who are involved in the visual arts industry.It’s an industry that is built on the way they look. So to maximize that and to look the part, that's what happens, in addition to diet, eating, exercise.It's also interesting because again, this isn't a vacuum. This is aspirational. You wrote a little bit in the piece about the increase in whether it's supplemental hormonal prescriptions, or whether it's actual performance-enhancing drugs that are legal, that have seen a little bit of a surge popularity as well, potentially pushed by this.Yeah. So I think you and I have probably seen Low T Centers.Totally, I am a man who is aged 30ish and therefore I have been advertised this relentlessly on every podcast I listened to for the past probably five years.Testosterone is monitored by the Olympics and whatever, and if it's too high, they will ban you from the Olympics. So yes, testosterone is a performance-enhancing drug. One of the things that I think is a little bit shady — and there probably needs to be a better investigation of this, I think CBS did a good one in 2019, I think COVID derailed it — but it was: who's getting these prescriptions? Because you go to these places and you get a prescription and it's just like, "Well, do you actually have low testosterone, or are you just a normal man who is aging?"From that investigation, they were just like, "Yes, I think there are a lot of people with normal levels who are getting these drugs, and that cannot be good for you," because with any of these drugs, it could just screw you up on the inside in so many ways.Overuse and misuse when it comes to the endocrine system isn't always a fun one.You don't want to be pumping yourself up with a lot of hormones. Compared to everything else we're putting in our bodies, do you really want to add all that stuff?And to be clear, hormonal therapy is a critical thing for a lot of folks, but they do it under the supervision of a doctor, not a pill mill.Right. That is where a lot of these drugs come from, is that they were used as part of hormone therapy under the supervision of doctors. The doses are scientific, they’ve gone through trials of these small doses and they use them. I think with human growth hormone, they started with children, and children who didn't grow up fast enough or aren't growing. Then if you talk to doctors, they're just like, "Yeah. No one with normal levels of hormones should be on these things because we don't know all that they can do to you."To your point, the difference in, think of an action star in 2001, maybe an X-Men movie of sorts, who can possibly say, and then think of an action star 14 to 15 years later, and it's a completely different type of look.Yeah. To be honest, and I feel like I am part of the problem, I will be like, "Yes, Chris Evans looks amazing."Because he does! But then it's also, how much of that is realistic? And nothing against Chris Evans. I'm sure he does the diet, the eating, the whatever, basically ruining his social life to look a certain way. I'm not accusing him of any PEDs or anything, just to be clear. But it's also, that is probably not attainable for the rest of us.Just the simple fact that we don't have chefs and trainers training us every day. But it's also just of course, if someone finds out that someone might be on a PED — and there have been actors who have been busted with PEDs before — they're going to look on the internet, you're probably going to find some information out there and then you're going to seek it out, and then you have the problem.I think when we talk about the community, it's also there's a lot of young boys out there who just see this and it's drilled in their heads that this is what men are supposed to look like, and that's led to this increase of what is called muscular dysmorphia and people feeling that they're too small, that they're not big enough. So yes, you will also see them resort to PEDs, and that also makes doctors and psychiatrists very, very nervous because you have 11-year-olds photoshopping their bodiesI think it goes without saying, I think the narrative around women and female celebrities has been the way we talk about beauty and diets and whatnot, it's been like almost to the opposite point that it's almost talked about too much right? With men, it's just like, "Oh, well then it's all just hard work," and it's left in the dark. Whereas women are like, "Okay, well this is the eating disorder. This is X, Y, Z. This is the surgeries." With men, it's always like, "Oh, well this is what men are supposed to look like," and that lack of transparency, I think hurts us.Yeah. The magazine that presents body dysmorphia for women is called Cosmopolitan, and the one for men is called Men's Health. There's an asymmetry in how it is being described there.Right. It's a very strange thing that what women achieve to look impossible is all artificial, all fake, whereas with men who look impossible or who have these impossible gains, it's all just “hard work.” It's all “hard work” and “chicken breast.”Just rice and chicken. I don't know what to tell you.I love rice, I love chicken. I do not look like that.I want to back out a little bit just because again, glad to have you on, and specifically it would be a crime to have you on and not talk about X-Men and comic book movies. I guess, one of the motivations potentially for this is that you've gone from action movies being like Con Air, and random shoot 'em ups, to being comic book movies which are pulled directly from a source material that has aspirational bodily forms. How much of that do you think plays into it?There’s a whole bigger story of the movie business, You covered this and you probably know this. The whole idea of a mid-budget movie is gone.Nonexistent.And the only way studios make movies is just to mine IP, come out with action movies, make sequels to those action movies and just keep these cinematic universes spinning. The only movies that make a ton of money now are the action movies, and it's just, obviously every studio wants an action movie. I think one of the things is that the actors, and actresses too, who are the centers of these movies or who want to get big, you have to look the part, right?If you want to become a star in Hollywood, you have to be in a Marvel movie, like Chris Pratt. Look at Chris Pratt.Yeah. He went from a fluffy, fun comedian guy to he looks hard now. Yeah. This whole idea of this aesthetic, and it's not absolutely wed to this, but I'm sure it's influenced by this. Yes, action movies are everywhere now. They're the only movies that people go to the movie theaters for. Everyone wants to look bigger, bolder, badder, crazier. Did you see Vin Diesel, he sent out an olive branch to The Rock the other day?Is that what we're calling that? Yeah, I saw that.No, it was like, "Hey, let's quash the beef and come back for Fast and Furious 10," right?Yeah. There's something interesting about the photograph though. Would you like to get into that?Well, someone was like, "Yeah. Did Vin Diesel photoshop himself to look bigger than The Rock?" And people were like, "??? What is happening?" Again, nothing against Vin Diesel, we're not speculating here, but that is just a very funny thing that happens in this climate of everything is an action movie now, or the movie business is an action star business.Not to bring him up a third time, but I just think that his career is really interesting in this regard, where Hugh Jackman, the minute that he didn't have to keep making comic book movies, he made a musical and then he had fun. You can tell that there were just a lot of career pressures on folks within the industry, who are trying to remain in it, to just get huge.Yeah. I think with Hugh Jackman, he's the easiest example of what the aesthetic looked like, just because he was there at the very beginning.And at the very beginning it was like, "Oh, he's hot." They were like, "Oh, Wolverine's so hot. Look at Wolverine." And then 15 years later, Wolverine is 50 years old, still hot, hotter than he was, his body is better than he was. And it's a little nuts because that's not the way it's supposed to work, but yes.At least we didn't have to pump Sir Ian McKellen full of gas in order to get the Magneto of the comic books, right?Who knows what'll happen? If there's a reboot, if there's a House of X reboot, and Magneto is now daddy. Magneto now in comic books is always shirtless or in a robe and his pecs are crazy.It got interesting. Yeah.Who knows what'll happen when The X-Men finally make it, and if they make Magneto as big as he's supposed to be in the comic books?Yeah. Screw it, let's talk about this. You've been following The X-Men for a very long time. They are your favorite character; you are, if anything, the dean of X-Twitter and—No, no, no.No?The dean is Connor Goldsmith. I am just an assistant professor.An assistant professor of X-Men. Excellent.Yeah.So clearly there's been a lot of speculation about them and the MCU. Do you want to talk a little bit about the journey that they've had and what's been maybe drawing your eye in the books?Oh my gosh. Do we have 17 hours to talk about this?Yeah. Screw it, we'll go.You know how it is. It's just X-Men, because of the way the film rights were divided. X-Men went to Fox, Marvel kept Marvel, and then basically, X-Men movies made a ton of money for Fox. Fox kept mining that IP. Finally, they're all back together with the acquisition and everyone's just like, "Well, can we get the X-Men movie?" And to me, I think as someone who sees this from it's part of my job to figure out what the schedule looks like and what's happening, it just seems there's no space for The X-Men in the next five years.It seems like it's going to be a minute. It seems like we got an Eternals movie before we got an X-Men movie.Oh, the Eternals. Also, remember we got the Inhumans before The X-Men, and it was just like, "Ooh"?I've told this story once or twice before. I forget if you know it. So when I was at ABC, I was doing a show occasionally talking to people who worked with Marvel for the Marvel adaptations.Right.And one week, after we're doing this for two years, they pull me aside like, "Listen, hey, we might have an actual show here. You might be doing an aftershow. You might be the aftershow host for a new show that's coming out." And I'm like, "Wow, that's really amazing." They're like, "Yeah, it's called the Inhumans. It's coming out on Friday nights to ABC." And then I think that they got the pilot in and then they pulled me and said, "Actually, we're not doing this. We're not doing the show anymore." So that was my big break that did not materialize.I don't understand why you have an Inhumans — Okay. For anyone that's read the comic books, there is a central figure named Medusa, whose power is she has very strong hair that also is sentient and she can control it. And then in the very first episode or something, they shave her head.It’s just like, "What are you doing?"Well in doing so, they removed the entire CGI budget that had been allocated for hair.But yeah, X-Men; I think what makes me want to see X-Men come to life is because in the last, I want to say three years, House of X came out with Hickman writing, and Hickman and a lot of writers and a lot of artists, and I don't want to forget any of their names — but yes, it was masterminded by Hickman, and he basically, I guess rebooted, rejiggered, just reestablished The X-Men in a way that I think was very, very smart.For folks who might not know about Hickman, he ran the Fantastic Four books for a while and did a really incredible job with those. Those are some of my favorite comics. Then he ran the Avengers for a while and completely overhauled the Marvel universe in a way that people actually kind of liked, which is usually not a thing that is said after somebody completely does that.And they toss him the keys to X, and this is the run that you're talking about.Yeah. So basically, he came off of Secret Wars, which basically just revamped the entire universe and was like, "Okay, well we're reestablishing that. So here, have a go at X-Men." And for those who don't know, the idea is the revamp is pegged to this woman and character, a beloved character named Moira MacTaggert. We find out that she is a mutant and every time she dies, she basically restarts the timeline and she's been doing this the entire time. And when she restarts the timeline, she also carries with her the knowledge of the previous timelines. So basically, she's just like, "Hey, Professor X, everything's going to go sideways. Everyone's going to get fucked up. This is what we got to do. We got to make a mutant utopia and we're going to create a community on a sentient island and it's going to be great, and this is how we advance the mutant race." Did I get that right?I would say that you did a fantastic job for about three minutes.But, it's X-Men, and they're messy and everything in between, of course, all the politics are crazy because it's just Magneto and Professor X have very different views about how mutants should be. Emma Frost has very different views about how mutants should conduct themselves with humans. But yeah, basically the mutants are like, "Well, we ascended to a higher plane. We are awesome. You can't f**k with us anymore." They basically buy off the entire world's governments with medicines and are just like, "Now you're dependent on us. We're the superior race. You're only here because we allow it. Please don't try and f**k with us because we will kill you." Basically they were just like, "Coexisting isn't an option because you guys always try and f**k us up and kill us. So we're just going to take that out of the equation now. Now that we know how everything's going to play out, we're going to take that out of the equation."There's been speculation, because Hickman's work lends itself well cinematically, that this could be the way that they take he X-Men next.It could be. Hopefully, I'm still alive and the earth is still here when this happens because like I said, the Disney Marvel schedule of everything that is coming out, it's every three years they do one of these conferences and they're always like, "This is coming out, and this is coming out, and this is coming out." They did one today and Agatha Harkness has her own show, and they're continuing the X-Men animated versions. There's just so much coming out at this point, and if anyone’s doing math and there should be two or three movies a year, we're pretty stacked until like 2025. Right?Yeah.Between all the sequels that are coming out, we are very, very busy until 2025. But I do want to see the X-Men because I feel like those are the characters that... I don't know. I just love them. I grew up reading them, I watched the television show all the time, and it'd just be nice to have them get the same kind of treatment that the Avengers have gotten.Yeah. They're fun. They're heady. The thing that's, I think a little cursed about it at times, is when Marvel was going out of business in the early '90s, the things that they sold were the things that were the most culturally significant, namely the X-Men, Spider-Man and Hulk. Those are some of the best stories. There's a really deep reservoir there, which is one reason that it was so attractive for acquisition. But that's also the exact same thing that's kept them off the board potentially for the next couple years.Yeah. It's also, let's say hypothetically, if Marvel still had the X-Men, I don't think you would ever see an Avengers movie. You would never see a Scarlet Witch miniseries, because it would fall in that pattern of, "Let's just keep really releasing X-Men movies." It's just like, "We'll keep releasing these trilogies to go around in a circle because they make a ton of money," right?Yeah. If you did have a Scarlet Witch miniseries, it would be a spinoff of your Magneto miniseries.Yeah. But it's also what forced Marvel to do this entire cinematic universe. People don't know that the... Casual fans don't know that the Avengers were basically the B team. They were such a B team.I'm not going to get into spoilers for Eternals, but I was watching the movie with a few friends and then one of them was just like, "Oh, who is this character?" who is revealed. It's like, "Oh, that's an F-list character and a D-list movie." What they're dealing with is remarkable. What they're getting out of it is great because again, Chloé Zhao is a really great director, but it is just wild that the X-Men are the A-team and have been the A-team since the '80s, and then by a twist of intellectual property ownership fate, all of a sudden they're on the sidelines.Yeah. If you look at the comic book sales from the '80s and '90s, you could have come out with a title that was like X-Grandmas, and it would be a top-10 bestseller because people could not get enough of The X-Men, and it's just, now we're getting Eternals and probably an Eternals spinoff before we get to see Storm and Professor X, and Emma Frost, and all my favorite characters just be goofy in the MCU.Yeah. The Avengers weren't even the B team. The B team was X-Force.Yes. We are being very generous to the Avengers when I was calling them the JV or B team. There was Excalibur, X-Factor, X-Force. I forgot X-Tremes probably. There was an X-Men Blue team, an X-Men Gold team. It was literally every X-comic was a top-10 in the '90s.Yeah. Well, and then here we are now.Hey, thank you so much for coming on. This has been really great. I love the story. I love your work in general. It's great to talk about X-Men with you for a few minutes, and thank you.Oh, let's do you. I want to know who your favorite X-Men character is.Good question. So I was introduced to them through the movies and I was like, "Oh yeah, this Pyro guy and this Iceman guy, they must be the big rivals in the comic," and then they're not. The answer is obviously Magneto. I think that Magneto is the greatest character ever made, and I think he makes a lot of valid points a lot of the time, and I think that it is just a really cool character. I know that he's not an X-Man technically, but—I mean, he is. In the new world, there are basically no X-Men, everyone's just a mutant.They domesticated my boy. He's a Brotherhood of Evil Mutant.You? Emma Frost, is that right?Emma Frost. Emma Frost was always right. If you look at every comic, Emma Frost is always right. The world would be a better place if we just put Emma Frost in charge. She'd be like, "You know what? We could have just completely sidestepped the decimation of the mutant race if you'd just listened to me."I think that we're both right. I think that Emma Frost was always right, but Magneto did make some valid points.Magneto makes all the points. I think especially now, when you think about the political climate and what Magneto says, you're just like, "You know what? Yes." The way things are going and what we've seen so far, I think the older you get, you're like, "Yeah. You know what? He was probably right about this."All right. So Alex, where can folks find you?You can find me on Vox, you can find me on Twitter but I'm usually just making dumb jokes. I think Twitter is kind of a hellscape for everyone, I think you should just be making jokes on Twitter and that should be it. I'm also Instagram but, that's just like really weird shirtless content. Yes, so Vox.com, find me on Twitter, and if you want to see shirtless content and you're a homo come visit my Instagram it's it's free for everyone.If you have anything you’d like to see in this Sunday special, shoot me an email. Comment below! Thanks for reading, and thanks so much for supporting Numlock.Thank you so much for becoming a paid subscriber! Send links to me on Twitter at @WaltHickey or email me with numbers, tips, or feedback at walt@numlock.news. Get full access to Numlock News at numlock.substack.com/subscribe

Nov 14

34 min 15 sec

By Walt HickeyWelcome to the Numlock Sunday edition.This week, I spoke to Sarah Frier, the author of No Filter: The Inside Story of Instagram. The past two weeks has revealed a great deal of information about how Instagram and Facebook operate thanks for the most part to a trove of documents published by The Wall Street Journal. Sarah’s covered the inner workings of Instagram and its tenuous relationship with Facebook for a long time, and with her book now coming out in paperback this week I wanted to talk to her about what we’ve just learned, how Facebook got more powerful in the pandemic, what we’ve always known about Facebook, and how deep into this company’s culture this goes. Sarah can be found at Bloomberg where she runs the big tech team, she’s on Twitter and the book No Filter is available wherever books are sold. This interview has been condensed and edited. Sarah you are the author of No Filter: The Inside Story of Instagram, that this week is coming out in paperback. Can you tell us a little bit about the book?No Filter is the first book to give the behind-the-scenes story of how Instagram came to be so powerful, have so much of a hold over our culture, over our economy, over our sense of self. I think that the paperback comes out at a time that the app has just become even more relevant. You would think that an app that was about measuring us socially and sharing our experiences would maybe dwindle during a deadly pandemic that forces us to stay inside, but in fact, when we remained at home, we scrolled more, and we shared more. Some of the in-person stuff we were doing became on Instagram and some of the small businesses that were trying to figure out how to sell stuff with their doors closed shifted to Instagram.It’s just become an even more relevant story today. I know I'm biased, but with the book, what I try to do is I didn't want to just tell the corporate story. I wanted to tell the story of how those internal decisions affected us on the outside, changed our culture, changed our world. And hopefully people who read it will feel that way.I really enjoyed the cultural parts. I enjoyed the rise of influencer culture and how kind of cultivated that all was. To your point, that has only gotten more significant in the past year.There's been a couple of recent revelations about Facebook and Instagram in particular that echo some of the stuff that you wrote about. Do you want to talk a little bit about what the past two or three weeks have been for Facebook and Instagram?Oh, my goodness. They've had to reckon with some truths here from the Wall Street Journal. They had an incredible leak of documents. They called them the Facebook Files, and they just were probably very painful if you're a Facebook employee because these are the stories that they've tried to tamp down on. When Congressmen and women have asked Facebook, "Is Instagram harmful for teens?" Their response is always, "Oh, the research is mixed." Well, this shows definitively in their own internal research that, yes, they know that it's harmful for teen body image for girls and boys.The Journal had several parts of the investigation, some of them have to do with Facebook Inc. One really uncovered how the company does not have appropriate staff in countries where it's in languages where it just simply doesn't have people to moderate that content. This is a product used by more than 3 billion people around the world, and when you consider that fact, it's more than half of the world's internet connected population.These products have just enormous impact and they're all controlled by a single person who doesn't want us to think anything badly about them. And so, they consistently obfuscate the truth. They make sure that there's nothing out there that could be negative for Facebook or Instagram. And in doing so, are totally disingenuous because of course there's stuff that is real awful that is happening on their platforms.On that note, one thing I really liked about your book, was that it was kind of very personal, describing the relationship between Kevin Systrom and Mark Zuckerberg. And at the time, it can kind of be like, "Oh, is this just drama between two dudes who are very powerful?" But to your point, it is one person who controls this entire ecosystem. Do you want to get into that?Well, I think it's a huge challenge for Facebook, that they have all the voting power, all of the control, centered in this one person who has not surrounded himself with anyone that will critique him. He just simply isn't trusted anymore. If you're using Facebook, you've been lied to so many times or you've been misled so many times, that it's simply is not a product that you can trust, at least not under Mark Zuckerberg's leadership.I think that this company has only given him more power over time. I think that in the Instagram story, you'll see that he is working to consolidate power at Facebook, taking more control over the future of Instagram, more control over the future of WhatsApp, and Oculus and integrating that into the core product. And Facebook Inc is not as important as Facebook, the Social Network. I mean, that's really the core of it all. That's his brainchild that he wants to survive.It’s just incredible how the company is attempting to pretend like it doesn't do anything wrong. I was talking with some colleagues the other day, and we were talking about the fact that Facebook doesn't just come out and say, "Listen, the reason we do it this way is because we're a business and we need to money. And if we did it the way you're saying we should do it, well, that might be better for our users, but we lose a ton of money."Right.That would be honest.The tobacco companies did that for years. And it's a viable, straightforward argument in the United States. There is something said for, "I have a fiduciary responsibility to my shareholders to maximize profit, which is why I'm making the decisions that I'm making."Facebook has never said that, ever.It's always like, "No, it's good."They're saying, "Listen, we have the interests of our users, first and foremost. Privacy is at the foundation of our business. Wellbeing, we are making incredible investments." All of these things, over and over and over become these lines in PR. But ultimately, yeah, Facebook is a business and their main objective is to grow.Can you get into their growth because even in the past year, it's been substantial since we last chatted?With the pandemic, there were fewer things that you could do in person, whether that was shopping or going to a concert or hanging out with your friends. Facebook, and especially Instagram, took advantage of that shift and moved a lot of our offline activity online, especially in the case of small businesses. Now they're leaning hard into content creators. I think that they're trying to make this trend exist beyond the pandemic, whenever that may end. That’s the case with all the tech companies. You saw Amazon get more powerful, you saw Google get more powerful, because these companies are now the infrastructure of our society. They're almost as crucial as any of the roads we use. It's just like, this is how we live, is through Facebook, Instagram, Amazon, Google, especially in a mode where we've been forced, virtually.To that end, what you're kind of describing there is getting utility-esque. Right? And we've seen some stuff from the FTC this year. What's kind of been going on, on that end, because it seems like they've been playing a little bit of tennis with the courts?Yes. So, what you're referring to is a monopoly claim from the FTC that Facebook has just way too much power over our social interactions. And so much so, that it is considered a monopoly. And that monopoly has been enriched by the purchases of Instagram and WhatsApp, purchases that the FTC considers to be anti-competitive.Because if you look at what internal documents show, and if you read, No Filter, of course, you will see that the reason that mark Zuckerberg buys Instagram is to quash a competitor.Really? The entire reason?Well, absolutely. I mean, he would rather own it than have someone else own it. He would like for Facebook to be somewhere in mobile. At the time, they didn't have really, a mobile strategy. And one of the things that points to this, there's an anecdote in my book where Instagram comes and joins Facebook HQ. The acquisition was announced for a billion dollars, and was the most anyone ever paid for a mobile app.And in the first weeks that they're there, the growth team at Facebook says, "I'm sorry, but we really can't help you grow until we find out if you are a threat to sharing on Facebook."Huh?So, they ran a study to see if Instagram was threatening Facebook. They were willing to let it wither, this incredible investment, if it was going to be a problem for Facebook down the road. And then you see that later, when Zuckerberg sees Instagram becoming more popular, really on that ramp to a billion users.It coincides with this time that we're all scrutinizing Facebook a lot more, after Donald Trump is elected president, the spread of misinformation on Facebook is scrutinized, violent live video, et cetera, et cetera, privacy scandals come about. And Zuckerberg is thinking, "The reason people may not be using Facebook so much is because they have this alternative, that we've been pumping resources into. So, maybe the problem is that we should be directing more attention from Instagram to Facebook."It’s at the root of a lot of personal difficulties between the founders.It was jealousy.Seems like a fascinating way to run a business.Yeah, because he owns Instagram. Right? He owns this product that's incredibly successful and he doesn't want it to cannibalize. That's the word they use internally. He doesn't want it to cannibalize Facebook.Again, that sounds a little like buying rival businesses, in order to guarantee that they don't undermine me. That sounds extremely anticompetitive. Oh, you mean, buying something so that they won't compete with you, is anti-competitive? Yeah.That's the definition. But, the law is a little squishy on this. If you and I look at this and say, "Okay, is Instagram a part of Facebook strategy to quash competitors?" Of course, it is. They have a version of every competing product. They have reels to compete with TikTok, they have IGTV to compete with YouTube. They have highlights to compete with all sorts of stuff. There's this infrastructure of things. If you break down every product in Instagram, it correlates with something else outside. And Instagram's purpose within Facebook is really to be the product that brings in that audience. And compared to other products at Facebook, they're doing a much better job. That’s about that longevity, that’s about the continued domination of Facebook around the world.If I may. some of my favorite things in your book were just how initially Facebook was worried about Twitter. And they used Instagram to really kind of poach stuff away from Twitter. And I'm almost kind of wondering is Facebook the quarterback in this situation and they're using Instagram kind of like a lineman? Really just the thing that hits the threats, in order to preserve home base of Facebook?Yeah, I would say that, that's a pretty good interpretation because when you look at something like reels, do we need reels? Do people need that on Instagram? When Instagram still had its founders and they copied Snapchat stories, Snapchat was a threat for sure, especially among that younger demographic. But there was also a real reason that they needed to do it for their user base because people were incredibly anxious about posting on Instagram. And that anxiety was actually bad for growth. Because if you don't think that your life is worth posting about, you are going to post less. And when you look at Instagram, it's not going to be full of content from your friends who were also all anxious, it's going to be content from celebrities. And then you'll think, "Nobody hangs out here anymore." And the app dies. That was the thesis of why they did Instagram stories, so there would be some lower pressure way to post on Instagram. But when you think about reels, the reason for reels was, "Oh my God, everybody loves TikTok. We need reels." And then, you are Mark Zuckerberg solving a business problem. You're not Instagram solving a user problem.It seems like TikTok is really giving them a real run for their money. I know that Snapchat took a ding from the adaptation of stories, but is actually kind of still doing decently to this day. But TikTok really seems like it's been the first thing that really has kind of stolen Instagram's thunder, particularly in the past year.Well, I would say that TikTok, yes, in part, because Facebook is so determined to move in the same direction that TikTok is moving. One of the things that's interesting about Snapchat is they're trying to do things in their own unique way. It's a little quirky and it doesn't necessarily fit with what you expect every social network to be doing.But Instagram is kind of just hitting back with the same play. And I think that in that sense, you get an app that strays a little bit from its purpose. And when you think about what Instagram's purpose is now, it used to be very clear. There's a place where you go to share the highlights of your life, and make your life appear more beautiful and perfect than it actually is. And discover corners of society that maybe you didn't know about before.Now, you have reels, you have IGTV, you have regular posts, you have Explore, you have all of these different components of Instagram. You have direct messaging, which is combined with Facebook messenger. You have text posts, you have memes. It's just like, it's everything to everyone.And I think that that becomes difficult.That's really interesting. There's one thing that I wanted to talk about from your book that has to do kind of with the recent news, and that has to do with kind of teens using Facebook. A lot of what you cover in the book is just how development happened on the platform for a while, that really came from its user base. Like, teens came up with the idea of making Finstas and they had to find out — why are Finstas a thing?And then, I guess, I'm kind of curious, as we kind of saw with some of the recent revelations, this isn't really a particularly healthy platform for its users. Can you just expand on some of the stuff that you wrote about in the book when it came to youth users, and then how that kind of reflects on some of the things that we've seen in the past two weeks?Yeah, I talked a little bit about this, about the intense anxiety for posting on Instagram and why that was bad. But Instagram didn't really look into this, in any formal way until around 2015. And when they did, they heard a lot from teens about how hard it was on them to keep up appearances on Instagram. And teens had all sorts of strategies. Some would just delete their entire grid of photos every month and post a new one, or they would try to find a way to, as you said, have a fake Instagram, which is really their real Instagram. And, of course, they use things like filters for their faces to make themselves appear more attractive, get rid of their acne, whiten their teeth, whatever the case may be.The way that Instagram learned a lot more about teens is they would have this Thursday teen observation, where they would have a bunch of product people, sometimes including Instagram's CEO, sitting at this table. And there was this one way mirror and the teens are on the other side discussing the new products that Instagram is building. And they often don't know that it's Instagram building them. But all the things that they're saying about it are being observed by this internal team drinking a bottle of wine on a Thursday night.That's wild.And that's how the product development works at Facebook. I mean, there's a lot of focus grouping, a lot of observation. The goal isn't like, "Let's make sure this is a product that's healthy for our users.", as much as it's, "Are people going to use this? Is it going to increase their time spent on the platform? Is it going to increase engagement with Instagram? Is it going to improve our retention?" All of those things.Remind me — I think that some of the things that came out — were there opportunities to install fixes, whether it was on Facebook or Instagram, I don't recall which. But that got shut down because engagement did not go up.Right. If there is a solution to some wellbeing problem that also dings at engagement, it's really just not going to work. I mean, look what they did, they were going to get rid of likes, and they'll say that they did, but the likes still exist. You can just hide them. And that's the way that they've done a lot of their wellbeing initiatives. For example, if you want to not see all of the comments that are calling you a slut, you just mute the word, slut. Right?Oh, God.But that doesn't mean that you're not getting those comments. And if you're being attacked, you kind of want to see it. I think that, that's the problem with likes too. If you're hiding your likes, but you're still getting that score every day on your photos it's like telling someone, "You can have a test, but we're not going to show you the grade, if you don't want to see it." Everyone wants to see what grade they got on the test. It's irresistible.And it's not just the likes. It's the followers, it's the comments, it's the views on your stories, the order of people who view your story, everything gets obsessive. You can turn your account into a business account and see, "Oh, I have an audience that is more heavily female and concentrated in Brazil. And they look at my profile in between the hours of 4:00 and 6:00 PM most." If you are a young person in the world, you can know that much about what people think about you. It’s not a real measure of how relevant or popular or interesting or exciting your life is. It is a measure of how well you're playing the game.You’re in charge of big tech coverage at Bloomberg. In the end of September, they had an editorial that basically said, "Instagram is no place for kids." But also, stop me if they canceled this, but Facebook is literally building an Instagram for kids. [Ed note: the day after we recorded this they did in fact delay it] At a certain point, are they going to have an obligation under any of the online protection acts that we have for children who use the internet? At what point does this become more of a liability for them than anything else?Well, that is certainly something that everyone in Washington is up in arms about, on both sides of the aisle. We've seen a lot of screaming matches, a lot of strongly worded emails. The question is can you stop them from doing it? I don't really think that you can.They did roll out Messenger Kids. And that, of course, had a lot of similar concerns and privacy issues. But the product has been relatively successful. We haven't gotten strong numbers, but it does exist and it is used. I think Instagram, it's hard to make an Instagram for kids that doesn't use tons of images of children in it. Right? Instagram is about images.So, I'm curious to see what that product looks like. The thesis is that kids use Instagram no matter what. So, we want to make a safe space for them. But Instagram hasn't made a very strong effort to root out the under-13 audience on Instagram. They've made a few steps towards better age verification, but it's really easy to find nine year olds hanging out on Instagram and just using it the way we all use it.It sounds a little bit like what the tobacco industry had to deal with. Again, underage smoking was not considered a very good thing. It happened, absolutely. And they got dinged for not doing enough to stop it. And it wasn't particularly healthy for anyone involved in it.That, though, is a very highly regulated industry now. And this social media industry, I mean, how do you even regulate it? It's speech by people. If you are the government and you say, "Well, we don't want Facebook to show anyone anti-vaccine misinformation." Well, then you have to define that. It just gets really complicated. In that category, of course, the science has changed over the course of many months.It's a tricky problem to solve. What I hope happens when people read the book is they understand the infrastructure of these products, the motivations of these executives, the grow-at-all-costs mentality at Facebook, and are able to make healthier decisions for themselves, informed decisions about how they want to use the products with some level of intention. And maybe that's a way to help it be healthier.All right. So, to make an informed decision, you have got to be informed and the book is No Filter. It won a bunch of best book awards last year, right? Like NPR, the Economist, I think McKinsey, rightIt was the Financial Times McKinsey Business Book of the Year, which was very exciting!Very cool! And it's out in paperback now, and folks can get it anywhere.Anywhere. Anywhere books are sold, eBooks, audio books, it's there,Sick. And then where can folks find you?I am on Twitter and Instagram and everywhere that people are on the internet these days.If you have anything you’d like to see in this Sunday special, shoot me an email. Comment below! Thanks for reading, and thanks so much for supporting Numlock.Thank you so much for becoming a paid subscriber! Send links to me on Twitter at @WaltHickey or email me with numbers, tips, or feedback at walt@numlock.news. Get full access to Numlock News at numlock.substack.com/subscribe

Oct 3

26 min 30 sec

Listen now | Welcome to the Numlock Sunday edition. This week, I spoke to Ben Casselman of the New York Times who wrote “The Pandemic Changed How We Spent Our Time” and “More phone calls, less shopping: how the pandemic changed American lives, down to the minute” with Get full access to Numlock News at numlock.substack.com/subscribe

Aug 1

22 min 53 sec

By Walt HickeyWelcome to the Numlock Sunday edition.This week, I spoke to frequent Numlock guest Joanna Piacenza of Morning Consult, who this week published a deep report about travel and trust in the wake of COVID-19. Here's what I wrote about it:Pre-pandemic, 51 percent of business travelers took at least four business trips per year, and a new survey from Morning Consult found that figure dropped to just 31 percent during the pandemic. A third of business travelers did not travel at all since the start of the pandemic, and that’s been brutal for the hospitality industry because many airline and hotel balance sheets simply can’t work in the absence of reliable business travelers. The good news is that 58 percent of business travelers said they planned to travel for business at some point this summer, which would bring a needed boost. The report is fascinating, and puts hard numbers to a whole suite of changing views about how Americans think about travel in the wake of the pandemic. We spoke about why the Herculean steps taken by airlines and hotels resulted in a net gain in trust over the course of the pandemic, why cruise companies are in such a difficult position and the eagerly-awaited return of business travel.Joanna leads industry intelligence at Morning Consult, she can be found at their website and on Twitter.This interview has been condensed and edited. Just this past week, you published a super deep look at the travel industry at a time that I think a lot of people are real interested in what's happening with the travel industry. Want to explain why you wanted to do this topic first and what drew you to the state of travel in the States?You kind of nailed it on the head there, it's a travel season like no other, right? This summer travel season, people are out, people are ready to vacation, but at the same time, I don't think that we've really paused and thought about the anxiety that encompasses a lot of consumers right now. Because of that, we wanted to go into the field and figure out consumer trust, because a lot of that anxiety is going to be in the hands of travel brands as people get on trains, rent their RVs, get on airplanes, and one small misstep from an airline or a travel brand could be pretty bad for their brand reputation. We wanted to figure out how consumer trust is built, how it's broken, what the current state of it is as we're in the midst of a global pandemic, so it's a continuation of a lot of the kind of trust work that we've been doing at the company.These results are really remarkable. You have the net trust for airlines, hotels, casinos and resorts going back to at least 2018. And over the course of 2018 and 2019, it was rather flat, people tended to trust things a little bit. At the start of the pandemic, back in March, we saw a decline in trust for these institutions, but then last summer, you saw something really remarkable happen, where they not only got it back, but they got it back even more. Do you want to talk a little bit about what you observed and kind of the broader contours of how people feel about travel?This is one of the datasets that I pulled and then checked it and double-checked it. You know what I mean? You're like, "This has to be wrong. There has to be something here." But if you look at this trend line on this report, you'll see that when the pandemic starts, it starts to tick down consumer trust for the airline industry, and the hotel industry just starts kind of this slippery slope. It doesn't really stop until summer of last year.Then it rebounds, and it rebounds pretty dramatically. The thing that I would kind of ascribe that to is all of the policies that a lot of airlines and hotels really started to embrace and implement last year, last summer. I'm talking about blocking out the middle seat. I'm talking about employees wearing masks and requiring customers to do the same, putting up signage about sanitizing high-touch areas. These policies became so much a part of our experience with these brands, and they really started to build back that trust in ways that didn't exist before the pandemic. So, it was very odd to see collectively, as a whole, this entire industry kind of exiting 15 months of this with higher trust. But that's what our data says.It's interesting to me because, again, it was a ton of work. It was a ton of money. It was a ton of stress. It was an effort, and it is just really interesting to see that on a level, it was really worth it. Even setting aside the positive public health benefits, it's almost like the old Tylenol story, right? Where there was an issue with Tylenol. They ripped it off the shelves. And then they exited the process even more trustworthy.Okay, I want a podcast on that. I want to listen to it, I've not heard that story before. This is just proof that a lot of travel brands were really mindful during this time, listening to their consumers, trying to be extra careful, taking it step-by-step, and it paid off. One of the things that I'm going to keep my eye on is now that things are returning to something that resembles close to normal, where does that consumer trust go, and how is it correlated with some of these policies being loosened? We all know that the middle seat being blocked off is no longer a thing, which I think we're all really upset about. But will hotels keep putting up signs kind of marketing that they regularly sanitize high-touch surfaces? I don't think that's going to go away anytime soon, and I don't think it should. I think it still really builds consumer trust.One thing that I really love about this is that you basically investigate what are the points of pain that cause people to lose trust in institutions. I really like this because it seems like in travel specifically, more so even than dining, there's just such an aversion to bad experiences. There's a reason that TripAdvisor is so popular, and that is that people really don't want to have a bad vacation, in a way that maybe sometimes people are willing to tolerate a rough meal. You have a chart in here that talks about the share of U.S. adults who say that they would stop purchasing from a travel and hospitality brand if it did one of the following things, and I would love to hear just kind of from your findings, what are some of the breaking points for people?Yeah, this is a category I called trust benders, which is actually a phrase I did not get okay-ed by anyone above me. So, we're just going to put a trademark after that.Yes. Official TrustBenders™ by Morning Consult.I need more supervision. So, trust benders™ and trust breakers. The trust benders are the things that would impact trust among consumers, but wouldn't necessarily cause a consumer to walk away and never come back. Among the biggest trust benders, this is the share of U.S. adults who said they would stop purchasing from a brand if it did the following, mistreating luggage or possessions, having surprise fees. We've all experienced that. Bad customer service, not following clear safety precautions, data breaches, not being reliable, and not regularly cleaning or sanitizing. I want to kind of pause on that last one because I think that it seems natural for us to have that policy be within the top ten, be within the top 5, but it really isn't. Cleaning and sanitizing, although an incredibly important policy that every consumer-facing brand should follow, was not necessarily as important pre-pandemic. The thing that I take away from this is that the pandemic is still very much top of mind for consumers. These travel and hospitality brands as they're welcoming folks into their hotel lobbies and into their airplanes, one of the things that they may not realize is that this is the first time these people are entering these spaces after months. What are the things that you can do to make them feel really, really safe? That is regular cleaning or sanitizing.The other thing that was really interesting about this trust benders list, and I think it's something you and I have talked about before, is that getting political or taking a political or social stance that a consumer disagrees with, that was pretty low on the list! There's been a lot of ink spilled about brands taking stances and what you should do and how you should navigate that. I am guilty of spilling some of that ink! I've written a lot about brands getting political, but I think it's a really good gut check to notice that this is at the bottom of the list. There are the normal keeping me safe, keeping my data safe, being a reliable brand that are hitting the top of the list that I think that these travel brands should really be paying attention to more.We've definitely talked about this a couple times, because it is just so interesting and there is so much consternation about it, people psych themselves out over, "Is my corporation saying or doing the right thing?" But realistically, at the end of the day, and this data really bears it out, there's a baseline expectation of the customer service, and a lot of the rest of it is just kind of aesthetic.I even thought it was remarkable that you asked about data breaches on here. I know that that's a little bit timely, I suppose, but people are vastly more ticked off if you have a data breach and their data is unaffected than they are if they take a particular stance on a social issue that you're not cool with, right?I'm really happy that that kind of different phrasing made the list, that "there was a data breach and your data was impacted," but we also asked the question "there was a data breach and your data was not impacted." The latter still bends trust at a higher rate. Thank goodness your data was not compromised, but what that does is it tells you that this brand that you had your trust in before might not be able to protect some of your most valuable assets.This is all very cool in the context of it, but what really hammers it home is that you actually asked another set of questions, which is basically like if a company goofs up, how do you then act? You found that 88 percent of people will either only use competitor services or use more competitor services moving forward. It seems like within travel and hospitality that there's just so much competition, that if United burned me once, I will never fly United again. If I had a rough time in a Marriott, then there are plenty of other options. It seems like these companies were really, really assiduous over the course of the pandemic, and I think it's because they're aware of the fact that if they lose a customer, they lose a customer real hard.I think that's a great data point for a lot of travel brands to just meditate on a bit. It's a very competitive space, especially the airline industry. If you lose a customer, especially if you lose a business traveler, which is just a whole other part of this report, you might not see them again. The one kind of caveat that I want to add to this, and this is also a piece that I did years ago, is that for the most part, consumers have pretty short memories. I did a piece a few years ago about a United scandal when they dragged a passenger off of their flight and that got injured.We ended up going into the field for a few weeks, I think maybe even a few months after the incident and consistently asked, "Okay, here's a United ticket. It's $200. Here's an American ticket. It's $300," some combination of that, United versus a competitor. Each week, what we saw is that at first, everyone was choosing the competitor, right? No one wanted to choose United. United was dominating the headlines in a very negative way. But as the weeks went on, as the months went on, suddenly those proportions shifted, and consumers were going for the cheaper flight. We also did something with direct and non-direct flights, where the ticket was actually cheaper on United, and it was direct.Anyway, it was such a cool polling project, but that's all to say that even if a brand gets negative buzz in the headlines, if you're seeing something negative written about that brand, consumers are going to react to it. But for the most part, they do have short memories. Six months after that incident, our data was essentially back to normal.I want to kind of caveat this again by saying this is something that people are reading about, right, rather than experiencing. If I'm at the front desk of a hotel and I have a negative experience with whoever's behind it, some concierge, that's going to stay with me in a way that reading about how United mishandled an incident, it just impacts folks differently.The cruise business to me is just super interesting, because you have these very loyal folks, you have these people who are absolutely not, and then you have these folks in the middle that kind of seem to be who the cruises are actually competing for. I'm really interested in hearing a little bit about how the math around cruises is different than hotels and resorts, which are fairly highly acclaimed, and airlines, which people come and go.Well, I think let's speak from a micro and a macro level, right? So think back to March 2020. I'm going to make you time travel back for the last 15, 16 months.Yes. March 2020. The biggest story that will happen in March 2020 is obviously the Super Tuesday. That is where my head's at.Always. Political editor. I mean, gosh, can you believe that? That was happening, too.But the cruises, I guess, are what you're getting at — I remember that was just like, "Oh, there's a new disease on cruise ships. That's not great."Yes. Cruise ships had a very, very early and public presence with the pandemic. I think it was Diamond Princess that was off the coast of Southeast Asia in which there was hundreds of cases. Remember?There was a boat that they just wouldn't let show up anywhere, right?Yes, exactly. I think we forget that, but maybe it's still kind of in our subconscious.It totally did.Because of that, because of that connection with this virus that has upended the entire world, cruises have a very, very long runway to recovery, much longer than airlines, much longer than hotels because of kind of that connection. The other thing to keep in mind is that cruises overall, similar to airlines, require a little bit more consumer trust, simply because of the nature of the business, right? You're in a vessel in the ocean for a long period of time. You have to put your trust in a specific brand, in a specific staff and team in a way that you don't necessarily have to if you're checking into a Best Western or taking a two-hour flight. Airlines, it's a little bit different as well. But cruises, there's a bigger commitment there personally, I think that that really impacts consumer trust. If you look at the report, throughout the report, cruises have a higher standard when it comes to consumers. I think that's largely because of the pandemic and just the nature of the business.It's like it's a hotel that you are unable to physically exit.You should do marketing for them. Yeah, that's a great."Come on a Disney cruise, it's a hotel that you're physically incapable of exiting."We'll sell out the first night.You did mention business travel a little bit earlier, you have some really good stuff on that in this report. You mentioned that about 51 percent of business travelers before the pandemic were traveling at least four times a year, and that is now down to 31 percent. 34 percent, about a third of business travelers have just been sidelined the entire pandemic. You can see it in any city urban core. I was in Midtown recently and some places are a bit of a ghost town, in large part because the business travel is just completely undercut. What's going on with that? You seem to have some signs of a positive development on that front?You already noted kind of the 20-point difference between people who said they had traveled at least four times a year. Business travel all but came to a halt, especially on airlines. I know that a lot of folks were still traveling via car for business. But looking ahead, 58 percent of business travelers said they plan to travel for business this summer, and then 62 percent said the same of fall and winter. Now, this is a really important demographic for the travel industry, and anyone listening in the travel industry knows this and is probably getting excited about that number, and they should be for a lot of reasons. Business travelers make up, depending on the mode of transportation, anywhere from 10 to 15 percent of travelers, but they make up a majority of revenue. They are not spending their own money. They are spending the money of corporations. They can buy that $25 burger at the airport. I never could.They got those per diems.Right, God, I love a good per diem. But they make up a majority of their revenue within the travel industry. They're so important and key, one of the things that's also sprinkled throughout the survey is the survey overall looks at US adults, but within it, we're able to cut out business travelers. How important is trust when business travelers are making decisions? It's more important among business travelers than compared to US adults. Are business travelers more likely to stray from a brand if that trust is broken? Yes. Everything is a little bit more capitalized and saturated with business travelers. They spend more, but if you break their trust, they're more willing to walk away. So it's wonderful that they're coming back, it's great news for the industry that a majority of them will be traveling this summer, fall, and winter, but it is also something that should keep hotels and airlines on their toes. You are welcoming back a demographic that is much more picky and fickle when it comes to their experience with your brand.That is just kind of really good news, because, again, the balance sheets for a lot of these companies just simply don't work unless you have business travel built in.This is one big recent report, but you guys have been very, very busy at Morning Consult. As I understand it, you're now a mythical creature known as a unicorn. Is that right?We are. Thank you very much. So, we're all going to go get unicorn tattoos.Amazing.I'm going to throw some time in people's Google Cal. We'll figure it out. Everyone's going to be so upset I said that. It's fine.Guaranteed, lock it in, unicorn tattoos. What have you got cooking this summer? I know that you guys have been able to have a lot of ongoing trackers of the pandemic and kind of attitudes toward it, and some of the most encouraging kind of news has been, I think, from y'all, because the nice thing about polling is you do kind of get a sense for where things are going. It's been really encouraging, in the back nine of the pandemic in the United States at least, it has been a good indication of comfort levels somewhat getting back to normal.We're going to have a busy summer, to be quite honest. No traveling, but yeah, we have a busy summer at our team and within our company. We've been tracking kind of this return to normal data since early 2020. I don't know the exact date, but I do know when we hit one year of tracking, I ended up sending our lead writer some flowers just to thank her, because every week, she had to look at consumer comfort, which in the middle of a pandemic can be a rough thing! But we have I think at least 15 months of data on consumer comfort levels in going to the movies, dining out, going to a shopping mall, going to a sporting event, Olympics, we update those every week.We're looking to this summer do some deeper dives into that share of people who are not yet comfortable doing stuff. That's kind of an interesting and exciting change for us, because we've just reached the point where a majority of people feel comfortable doing almost all of our leisure activities listed. Now we're left with this 25 to 32 percent who don't feel comfortable going to the movies, who don't yet feel comfortable going to a museum. Who are they? Why don't they feel comfortable? Are they vaccinated? We want to learn more about that group. We've got a lot of data to go through, so look for more stories on that.In addition, ahead of back to school season, we'll be releasing a report on commerce. So, I went a little crazy with my online shopping the last year. I'm not sure if you did, too.I have a lot of possessions that I didn't necessarily think I would be the kind of guy who has. A vegetable slicing mandolin! I emerged from this pandemic really into that. So, yeah, I did hit a little bit of the online shopping. I would agree.You love to see that sort of thing. I think I saw a TikTok where it's constant, constant depression, and then a package arrives and you're happy for 30 seconds. Then constant, constant depression, which should tell you a little bit about my TikTok conventions. What our commerce report will do is investigate consumer trust, again, trust is a big thing for Morning Consult. We keep putting out these deep dives into different industries, but consumer trust in terms of online shopping. So the pandemic forced a lot of us online to get the goods that we needed and maybe in your case, the goods that you didn't need.A lot of those!I think that there's a certain demographic that was always used to shopping online, but millions of others were not. They were forced to download grocery apps or order things that they normally would've picked up at a brick and mortar store. Now that those habits have been somewhat formed and now that things are opening back up again, what happens to those habits? Did they build enough trust with this online supplier that that's going to be the norm moving forward for them? Those are kind of the questions I want to answer, and I think it'll be really interesting with the back to school season. Do people want to head to Target and get in line and do their back to school shopping in person, or have those habits been formed to the extent that you're sitting on the couch, looking at your phone, boop, boop, boop, done, online school shopping done?I think that one thing that I've enjoyed a lot about your coverage is that it has been a big question about what is going to endure from this in a way. A lot of changes were made with regards to how people work, how people commute, how people travel, how people do all that. Some of them seemed extremely temporary and extremely desirable to remain temporary, but a lot of them just seem sticky, and it's going to be really interesting to see how this happens. I'm just very grateful that you guys have been kind of running these recurring trackers because I think that they are just such a cool little scientific component.Absolutely. Have to look to the past to look to the future.Where can people find the report? Where can folks find you?MorningConsult.com. You will find the trust report on our homepage, and you'll find our other kind of deep dives in financial services and see what else is to come the rest of the year and @morningconsult on Twitter, and got to pitch myself, @jpiacenza on Twitter. I tweet out lots of pictures of pasta.Lots of pictures of pasta.It's a lot. It's a lot of pasta.If you have anything you’d like to see in this Sunday special, shoot me an email. Comment below! Thanks for reading, and thanks so much for supporting Numlock.Thank you so much for becoming a paid subscriber! Send links to me on Twitter at @WaltHickey or email me with numbers, tips, or feedback at walt@numlock.news. Get full access to Numlock News at numlock.substack.com/subscribe

Jun 27

27 min 52 sec

By Walt HickeyWelcome to the Numlock Sunday edition.This week, I spoke to Pat Garofalo who writes the wonderful newsletter Boondoggle. Pat appears in Numlock all the time, here’s a recent thing of his I covered in February:Lawmakers in 11 states have introduced bills for the 2021-22 legislative session that would form an interstate compact to eliminate tax giveaways to corporations. Right now, companies play states off one another, goading them into bidding wars over who gets less money to host the corporation. For many states, who see new businesses as a way out of their problems, this has become an increasingly standard practice, but if every time a company wants a new HQ it’s a 50-party bidding war, eventually we’re going to not collect taxes from businesses anymore. To avert this, the states are eyeing a disarmament, not unlike what Kansas City, Missouri and Kansas City, Kansas worked out in 2019. If the compact enters law, states will agree not to use tax incentives to poach jobs from the other states in the compact. This isn’t particularly new, as there are 200 ongoing interstate compacts and each state is in an average of 25. Pat’s beat is one of my favorites, he covers one of the most pervasive ways the big and powerful fleece the government at the expense of the small and not as powerful. Today in another special podcast edition of the newsletter, we talk about the botched Foxconn deal, why everything is suddenly a “campus,” the Peace of Kansas City and whether or not the federal government accidentally screwed over every local corporate tax incentive project.Pat can be found at his newsletter, Boondoggle, and his book The Billionaire Boondoggle is really great.This interview has been condensed and edited. Pat, thank you so much for coming on. You have a bunch of really cool stories coming out through both your day job and your newsletter, Boondoggle, but just taking a step back, do you want to talk a little bit about what you generally cover when it comes to incentives and how different cities try to woo different companies to various successful and unsuccessful ends?The tagline that I use is "how corporations are ripping off your state and city," and I got interested in this actually way back during The Great Recession. I was an economic policy reporter covering this fallout from the recession and the austerity push that was happening across the country. You saw all these wacky situations where cities were literally turning off their streetlights, while at the same time paying to give some billionaire a sports stadium. Then the more I started digging into this, I realized it wasn't just sports stadiums.It was hotels, it was massive sporting goods stores. It was every corporate headquarters in the country. There's been this long, decades-long push amongst the corporate elite in this country to tell a story about how economic development happens in the U.S. and to reap rewards for doing things that way. And it's totally wrong. The way they're going about it and the way the politicians they have in their pockets go about it is just backwards. It's just the completely wrong way to build local economies. That's the sort of work I've been doing ever since.The Amazon HQ2 thing was a huge illustration of this, where, basically, it inverted the way that lots of local economics should work and turned cities into bidders for a headquarters that was going to happen nevertheless.Right, and that one was an interesting anomaly in this system that corporate America has built because it was so public. Jeff Bezos, the CEO of Amazon, was so brazen about it and pitting all these states and cities against each other. The really problematic aspect of this to me is actually how much of it happens in the dark, how much of it we don't know about. These deals are often presented by local officials as a fait accompli. They come out and announce it before any other resident, any other local official can have a say, and say, "Hey, we're doing this. We're going to give this corporation a bunch of money. You're going to see all those benefits. You're welcome. Goodbye."The reason for that is that these things actually pay a lot of political capital. If you dig into the literature on incentives and corporate tax deals, they don't pay off on the economic side. They don't create jobs, they don't boost incomes, they don't boost local GDP, they often cost localities a whole lot of money, but what they do increase is incumbent politician vote totals. One of the most fascinating stats that I've seen in the academic literature about this stuff is that states' use of incentives goes up once every four years. Why is that? Because governors are running for re-election.Whoa. The secrecy component, you've written a lot about this lately. I like how you've really highlighted that there are towns and city councils that are voting on incentive packages where they don't even all necessarily know who the money is going towards in some cases with server farms and whatnot.Yeah, this is totally wild. This actually happened in Fort Wayne recently. Literally, the city council was voting on an incentive package, and most of the city council did not know who the recipient was going to be — it turned out to be Amazon — because the people who were involved in the deal making had signed non-disclosure agreements. This is public officials, spending public dollars, signing non-disclosure deals with the corporation to say that they can't divulge any information about the recipient, including, literally, its name. It's just so corrupt. This to me is just — there's the economic stuff, right, that these deals are not paying off for states and cities, and they're not bringing the economic benefits? But that also is just problematic democratically, right? How are you supposed to assess the job that your local officials are doing if they literally will not tell you who they are meeting with, who they are dealing with and who they're giving your money to?It's so huge. And I wanted to take everything back to a very big case that has gone down that has attracted a lot of attention and I think put a lot of these stories on the map, which is the situation with Foxconn and Wisconsin. It's got all the makings of things that you've been talking about: it came about during an election, the economics of it were suspect to begin with and only kind of got worse as it went along. The economic benefit has really folded and collapsed. I would love to hear what that story is and where we're at now because I know that we've actually had some recent news on it.To back up to this from the beginning, this was 2017, Donald Trump had just been elected President. Scott Walker was the Governor of Wisconsin. They announced this massive deal with Foxconn, which is a Taiwanese manufacturer, they make a lot of Apple products. And it was something on the order of $4.8 billion. They were going to create tens of thousands of blue collar jobs, and this is Wisconsin in the Midwest, so that was a big deal. It was going to be part of Trump's big move to bring manufacturing back to the U.S., make America great again.Then fast-forward a few years, and Foxconn literally did nothing. There was just nothing there. They changed their plans over and over and over. It went from tens of thousands of jobs in a manufacturing site to 1,000 white collar jobs in an office building. The whole thing unraveled and actually the promising thing about this deal in my mind was that there actually was a political price for it, as opposed to a political benefit. Governor Walker lost his re-election to current Wisconsin Governor Tony Evers, in large part because of this deal, because Wisconsin residents looked at this thing and went, "This is not good. This is clearly not working out for us." So, Evers recently renegotiated the deal. The amount of money went from about $4.8 billion to about $80 million. So a huge, huge, huge decrease in the amount of money.One of those Bs became an M. That's not usually a good sign.Exactly. I think the nice thing about that deal was that there actually was a little democratic accountability. Someone lost office, the current governor had a mandate to re-negotiate and he did, and that's good. I still don't love the deal for two reasons. One, is that in a sense, you're sort of giving Foxconn another whack at something it doesn't deserve. It didn't even come close to fulfilling its side of the original deal, and so you're letting it rework it and try again and promise something new. There's no real reason to think that Foxconn is going to keep its promises this time either, but you're still putting the state on the hook for $80 million, which again, is a lot better than $4.8 billion. That's great. That's many billions of dollars that you're not liable for, but there's certainly a world in which just letting the original deal play out and having Foxconn just fall on its face and not meet any of its metrics and, therefore, not get most of its money would have actually saved the state money, if we assume that Foxconn is going to fulfill the second deal, which I don't really think it will, but that remains to be seen. But the second part of this is that — and then this is an important part, I think, of the overall incentive stories — localities in Wisconsin made investments on the premise that Foxconn was going to build the first thing, the massive manufacturing plant. Made infrastructure investments, seized homes through eminent domain. One town in Wisconsin is on the hook for hundreds of millions of dollars in compensation for eminent domain for seizing folks' homes. Those people had to move. And now the plant just isn't happening. And that's one of the things I tell people, I spend a lot of time in my day job at the American Economic Liberties Project, talking to folks around the country, both in office and activists and community members about these deals. One of the things I bring up all the time is these plans are not ironclad. The officials will tell you, "Oh, we are giving X million dollars and we are receiving Y benefits," as if Y benefits are certain and it's definitely going to happen, but they often don't and Foxconn is such a perfect example There are reasons that they don't that are both nefarious — like the corporation never intended to do the thing it was doing, it was just dragging people along to get some money—- but also legitimate, right? Sometimes a pandemic happens and lots of corporations have to suddenly change their spending plans, but the way these deals get treated in the public square, and in public debate, and the way that politicians talk about them as if they're done deals.Foxconn is just such a great example of the sort of things that folks need to look out for and why states and localities need to be really, really careful. Because again, these little Wisconsin towns spent money, but the one village in Wisconsin actually had its credit downgraded because its promised outlays for Foxconn were so high that even the credit rating agencies were like, "Whoa, there is no way that this is going to happen." But they did it! And now they're just out this money. No one's ever going to make them whole. Even if Foxconn fulfills the second smaller deal and does build this smaller plant, you're never going to get that back. For those folks who had their homes seized and had to move, you're not going to get your house back either. That's why states and localities need to be so, so, so, so careful when they enter into these massive mega-deals.The reason that these deals are struck and come up with is because for the point of view of the company, it's really privatizing a lot of the benefit and publicizing a lot of the risk. And it seems like this is just a really good illustration of what went down in Wisconsin. You have to look at who's holding the bag right now. What negative consequences Foxconn suffered as a result of backtracking on this deal versus what are the negative consequences that small towns have suffered?Absolutely. Foxconn's ding was to its reputation, right? But again, it got to come right back and renegotiate a new deal. The number of times you see these things fall apart, and then you turn around and the same company comes riding back in and says, "Oh no, we'll do it here. And we'll do it better." I mean, Tesla is a perfect example, it has ripped off city after city after city. Elon Musk is a sort of famous grifter in this state, not just with Tesla, but with some of his other companies. And yet, states and cities still will sit down at the table and will give him something and say, "Okay, this time it's different. Our community is different." It can get really distressing. But I think one of the reasons that happens, and you'll often see in this space, it is the big tech companies that tend to get some of the largest deals, some of the flashiest deals.Talking about Amazon HQ2, we can talk about a new Apple campus in North Carolina. We can talk about Tesla getting deals all over. Austin is throwing money at tech companies left and right. It's because there's this allure, right, of these shiny new tech jobs. Even though this is actually just a very old model of ride into town, promise the residents a lot of benefits in return for a lot of money. You can literally date this back to the beginning of the United States. Alexander Hamilton got the first corporate tax break in U.S. history for a manufacturing plant in Paterson, New Jersey that never was completed. We started off exactly where we wound up. And some of his associates went to jail.I think I missed that song in the musical.Somehow, Lin Manuel Miranda left that one out of the show. But it goes back to World War II, in the post-World War II period when Southern states were trying to diversify their economies coming out of the war. They were mostly agricultural. It was Mississippi that really started this shtick of going to Northern manufacturing plants and saying, "Hey, we'll give you a lot of money. Bring your plant down here." John F. Kennedy, when he was in the Senate, would go on the Senate floor and just rail about Southern states, poaching Northeastern manufacturing plants. Even though today's version of that is to pay some shiny tech company to do it like a Foxconn, like a Tesla, this is the same story that we've seen over and over and over again.Setting aside the municipal blow back, setting aside the fact that that's money that you can't spend on school textbooks, and when you don't collect property taxes, that does have ramifications for what you can offer kids in libraries and all that kind of stuff. Setting that aside, you have this really cool study that's come out that talks about how states give incentives and how that actually affects small businesses in the area. Do you want to go into what the research showed?This is a fascinating new study by a guy named Manav Raj at the Stern School of Business. He very kindly sent it to me and it shows two things. It shows, one, that political competitiveness in a state legislature is correlated with increased use of incentives. So, the tighter the governing majorities are, the smaller the governing majorities are in the state legislature and the likelier the legislature has to flip back and forth between the two parties, the more likely that legislature is to hand out incentives. And then the second thing is the more incentives the legislature hands out, the less likely it is that small businesses will succeed. This study is so fascinating because it ties together a lot of what both myself and all the other folks in this space have been talking about for so long, which is that these things are not about economics, they're about politics.They're about entrenching dominant incumbent firms and harming small businesses. It makes sense, right? The companies that get the bulk of these incentives are the large, big ones that can afford to pay to have lobbying shops. Amazon and other big companies will literally pay people, who are called site selection consultants — that's a job — to go out and to figure out how to get the most money out of these states and localities. Small businesses just can't afford to do that. The academic research is really clear: It's big companies that get the most of this stuff. So, states and cities are literally subsidizing the business model of large companies vis-à-vis their smaller competitors, right? It makes perfect sense that this is harmful to small folks who just don't get the same level of support from the state.The example that always comes to mind when I talk about this particular aspect is Amazon. Amazon is notorious. They've gotten some $3 billion-plus dollars in state and local incentives over the years. Most of that is actually not HQ2, even though that was a big one. Most of that is for its distribution network, it's for its warehouses and for its distribution houses. You can see if you're a small retailer how they really grind your gears, right? That Amazon is receiving money to build out its distribution network, that's not something you ever receive as a small business. If you're just selling stuff out of your garage, it's not like the mayor is going to come down and be like, "Here, have all this money to buy a delivery truck. Excellent. Keep up the good work." That doesn't happen.So, it's making the cost of building out distribution networks cheaper for Amazon versus other retailers, which Amazon then turns around and uses as leverage to pound other retailers into the dirt. Amazon is notorious for using its distribution network as a stick to beat other retailers with. They'll say, "Oh yeah, if you pay us to use our distribution network, we'll give you Prime access. We'll do all these other things." And they just ratchet up the fees year after year after year, so you sort of just become beholden to Amazon's taxpayer-funded network. The fact that it was great to put some numbers to this story and to have data showing that this feeling that we all had in this space, that this is bad for small businesses, actually does bear out when you look at the data.Then the second part was really interesting to me too. The fact that tighter, more competitive legislatures give out more incentives. It does make sense if you think about it, because in a tight legislature, where say, the majority has one or two votes and it can only lose one or two or their bills go down, that gives each individual lawmaker more leverage to get concessions during legislative debates. Since we know that incentives are good political capital, that seems to be what state legislatures go for. So, if you're like the Joe Manchin of the Missouri legislature, you're the critical key vote that can be lost, you go and say, "Hey, give my buddies down here some incentives, and then sure, I'm on your bill." I was just really fascinated with, again, Manav Raj at the Stern School of Business. I wrote it up in my Boondoggle newsletter. It just really tied together a lot of strands, circling back to the core point about all this, which is that it’s a political problem. It's not an economic problem. The economics are unambiguous. This stuff is bad for states and localities. The reason it continues year after year, and folks like me are actually screaming about it all the time is because these giveaways make for really good politics.It's really interesting, that finding about how it negatively impacts small business, which very much makes sense to me because small business owners do tend to pay corporate taxes. Because they are individually held, they tend to do profit and then pass those profits on to shareholders, which are taxed. And you have the entire Amazon credo, like Bezos notoriously said, “your margin is my opportunity.” That seems very true here, where the local tax base is subsidizing a new contender, which to some notoriety, aggressively minimizes its tax obligation, right? Whereas your local retailer operating with QuickBooks is a little less adept at doing that.Yeah, Amazon was born out of a tax loophole, right? The whole reason that Jeff Bezos got into online book selling is because he realized that there was a hole in the law that said, if you didn't have a physical presence — and this hole has since been patched — but that if you didn't have a physical presence in a state, you didn't have to collect sales tax. From Washington, he was able to sell books in every other state without collecting sales tax. Obviously, that lets him undercut every local bookseller that has to pay sales tax because they're literally handing you the book and you're giving your money, and there are sales taxes involved in that transaction.Bezos took that out of the equation. He then used that, and the proceeds he made from that, to just pull the same trick in line after line after line after line. I mean, there are lots of reasons Amazon is what it is and not all of them are tax-related, but that is a really key part of its power, is its ability to both avoid paying taxes on the one hand and then to actually collect subsidies and government largesse and other regulatory favors on the other.You've also highlighted a number of other recent cases. There was this case in Nashville regarding Oracle and they managed to get a 50 percent property tax for 25 years. How does that shake out for Nashville?This is such a weird one. Tennessee is sort of notorious for these deals. Memphis has a horrific record of just handing out corporate tax giveaways willy nilly. I talk about Memphis a bunch in my books because it's just —There's a monument to it. A very large pyramid, I understand.Exactly. You come walking down the street, here you go, here's your corporate tax abatement. This deal with Oracle is strange. The way it's structured is that Oracle will come in, it's building a "campus." And this is the hot new thing now in taxes, it's call everything a 'campus.' Every time you're bringing a company, it's building a 'campus' because that's more than a headquarters and that's more than just new jobs. It's always a 'campus' now. An Apple campus is opening in North Carolina, a new Google campus in North Carolina.But, anyway, Oracle will pay $175 million in Nashville up front for some public infrastructure, a pedestrian bridge, a park, some other stuff. And then yes, will get a 50 percent rake off on its property taxes until that $175 million is repaid. This isn't actually new money going out the door and Oracle does have these upfront costs. It's just a very strange situation in which Nashville has decided to sort of outsource its infrastructure building to a private corporation and then recoup it through taxation. It's just a little weird. It's not the most egregious of these deals I've seen. I think the larger concern with that deal is that there are real displacement concerns, and that's part of the problem with a lot of these arrangements is that they don't do anything to sort of ameliorate the knock on effects of the people who are already there.This large corporation comes riding in and brings all these workers, contrary to what the corporation usually tell you. Those aren't local people getting hired. It's oftentimes just current employees moving in. There are gentrification and displacement concerns with this Oracle deal that the city says it has a handle on, but in my experience, it probably doesn't because cities don't ever really in these circumstances. It's just weird, the way to structure it, and that Nashville decided that the way to do this was to have Oracle pay for a bunch of stuff that taxpayers should just pay for, and then give it a giant tax break when you could just tax Oracle and build the public infrastructure like normal? But the reason I actually liked this Nashville situation is because there's a congressional candidate in Nashville— her name is Odessa Kelly, and she's the head of an organization called Stand Up Nashville — who is talking about these deals a lot and has been through a bunch of them in Nashville, a bunch that were much worse than this Oracle deal. She also was a key part of the city negotiating one of the better stadium subsidies arrangements in America. They made a really good deal actually with the new Nashville MLS team that's coming there, and in return for some public subsidies for a sports stadium, which I generally hate — cities should not do that — they did actually make a really good community benefits agreement. She is now running for Congress on this platform of stop letting corporations hose our city. It's a really interesting test of whether the politics of this can be flipped on their head, because I've been saying this whole time, this is a political problem.There's political capital to be built from doing these deals and if you're an incumbent politician, getting your face in the local paper and being able to send out a press release and to be able to tell about all this job creation is big. You send out tweets and Facebook posts and say, “look at all the good I'm doing." That's worth something politically, even if it actually turns out to be worth bupkis, economically. Odessa Kelly's campaign is going to be a really interesting case study, if you could flip that on its head and say, "No, actually, this isn't working for our city and this isn't appropriate, elect me to stop doing these things and we need more community input." Her line was just great, she said, "Oracle, isn't the prize. Nashville is the prize." And I just love that because it's exactly right.That's great.It's so perfect because the thing about these deals, right, is that we've been told, and this sort of gets back to what I said at the beginning of this story, the corporate elite and the politicians who love them have told us for 40, 50, 60 years that you should be thankful we are here. We are going to come in to town and rain down benefits upon you, and that's why we deserve these tax giveaways. When, actually, it should be the other way around. That should be the city saying, "No, it's a privilege for you to be here. And if you want to be here in our excellent community, where we have paid for lots of great things with our taxes, then we have certain expectations for you and you have to achieve certain benchmarks for the community."The way we talk about economic development is just backwards, the way to build a local economy isn't to dump a bunch of money on a corporation and hope something good happens. It's to have the best education system, have the best transportation system, have the highest quality of life for workers. Then corporations are going to want to come there, right? Places have incumbent advantages and they need to play them up and build on them. That was one of those maddening things about Amazon HQ2, was that why is Northern Virginia — for all intents and purposes, the greater DC Metro area — paying all this money for Amazon to be in the nation's capital?Are you kidding me? Amazon doesn't want to have a massive presence in Washington, DC where, oh, by the way, Jeff Bezos has a massive house and owns a newspaper? Of course he wants to be here! And yet we've been told that we need to grovel before these corporations in return for their investments that they were going to make anyway. So, that's why I just love the Odessa Kelly line to flip this on its head. I really hope it goes well for her.I mean, I live in Queens right near where the other HQ2 was going to go, and I was very frustrated by that because that place is really lighting up already. I don't know how much you need to write him a check to move into a neighborhood that is already blowing up. One of my favorite stories that you've ever covered was the Kansas City-Kansas City ending of the conflict between the Kansas Cities. And I guess what I'm wondering is, how has that been going? Are you seeing more of that? Is there moving forward any kind of hope for more of those disarmament campaigns? I know that you had kind of alluded to recently a number of state legislatures that were looking at a disarming compact, but I guess I'm wondering what's the status?This was — for listeners who are interested in the backstory — a so-called border war between Kansas City, Kansas and Kansas City, Missouri. It's so good.They were literally using incentives to have companies move a couple of miles because the Metro area straddles the state line. So, companies were literally just moving back and forth across the border. Nobody's job was changing, people's commute was just altered a little bit. And yet tons of money was going out the door to do this obviously ludicrous thing. And even though it did take forever, and much longer than it should have — because, again, this is obviously and patently stupid — the two states did agree to a ceasefire and said, "Okay, we're not doing this anymore. No more incentives to get companies to just hop the border within the Metro area. That's no good for anybody, obviously."So, it's holding. It's sort of tenuous. Every now and again, you'll see a company pop up and say that it's going to try and claim incentives to hop back and forth from one state or another. It looks like it's going to break, but it is holding so far. Assuming that keeps holding, and I think it will, then that is a model for a larger solution to this problem because that's always the next step, right? So, what are we actually going to do about it? And unless we think that the federal government is going to use its power to come in and put the kibosh on this, which is... Actually, we should maybe circle back to this. It accidentally may have recently. But I don't think —We'll circle back to that.I don't think it's going to do it affirmatively in any big way anytime soon. There is an effort amongst state lawmakers to form a compact that essentially is a sort of collective ceasefire where all the states will get together and say, "We're not doing this anymore. Every state that joins this compact agrees not to use state or local incentives to steal businesses from any other state in the compact." It's like multilateral disarmament, right? That's the problem, is that no one state wants to just say, "Okay, we're turning off the spigot," because there's going to be a political cost. Some governor next door is going to be a jerk about it, and start poaching all your businesses, and claiming that great things are happening. And you're going to look terrible and probably lose your re-election campaign. So, the great thing about the compact is everybody sort of puts the weaponry down together and says, "Okay, let's all do this at the same time."They also agree to a bunch of data sharing practices, which I think would be really helpful just because it's just that much harder to play states off against each other because they'll be able to literally ask, "Hey, what's this corporation telling you? Oh, well, here's what they're telling us." It would improve a lot of things. There are bills in 13 states at the moment to form this compact. I believe a 14th is coming, though I won't get ahead of them, in a state that is pretty exciting, but I'll let them announce it and we can talk again when they do. That's up from this coalition working on this effort two years ago, when there were bills in five states and it's up to 13 now. This isn't going to happen this week or next week or next year, but I do think it's really promising. I've seen a noticeable uptick in interest in it since the pandemic, because state lawmakers, for reasons good and bad, are looking around and realizing that this is a giant waste of money and are looking for ways to sort of collectively get out of handing out these incentives. I think it's promising and it's just such a good model. It doesn't depend on the federal government doing anything. It's just the states agreeing to do it together at the same time. So, we will see!That's cool. So, how did the federal government maybe accidentally stop corporate giveaways?There's a provision in the most recent COVID relief package that says that any state that enacts a net reduction in taxes needs to pay back to the federal government an equal amount of relief funds. Essentially, if you decide to cut taxes by $100 million, give back $100 million in your relief funds, because you clearly didn't need it if you were cutting taxes. If you look at the way the law is phrased, I think it doesn't take a deep reading to say that it applies to most definitely new state and local corporate tax incentive programs, but even because it talks about administrative analyses being part of the equation here, also new awards under existing programs. I think there's a world in which you can very, very credibly claim that this provision should apply to incentive programs.Most certainly any new incentive program that gets authorized, you should have to pay back the federal government by the same amount and maybe new awards under existing programs. This makes sense. This is the federal government trying to essentially ensure that members of other states didn't have to subsidize tax cuts in a particular state. I think it certainly applies, and the key is going to be what the Treasury says about it. Treasury will be issuing guidance on this provision about what counts and what doesn't and what you have to do to pay back. But if Treasury goes with what me and a lot of other folks are saying, and applies this to incentive packages, suddenly new incentive programs will be twice as expensive! So, if you authorize a $2 billion incentive program, it's not just those $2 billion out the door, it's also $2 billion in relief funds that need to go along with it.It could be very interesting to see how states react. States are throwing a fit about this provision in general, but so far, Treasury has been pretty adamant about wanting it policed the way it's written in the law. We're going to see, but if Treasury goes along with that interpretation, there could be just a window there where these things have to slow down for a couple of years and hopefully give the folks who are working on a compact a little time to try and get it implemented instead of just having to play constant whack-a-mole, because that's sort of how you feel like working on this.That every day, a new bad deal pops up somewhere and you're scrambling so hard to try and just address that, that there's no time to sit down and stop them systemically. The piece I did recently on that study about small businesses, I had sitting around for several weeks just because new bad deals kept popping up. I kept having to write newsletters about those and be like, "Oh, I have to push the study edition back another week." And that's sort of how it is on policy level all the time too.So Janet Yellen, please make Pat's job easier. That about wraps everything up. Where can folks find you?The newsletter is called Boondoggle, it's on Substack. I work at the American Economic Liberties Project and a lot of my work on not just taxes, but corporate power in general at the state and local level shows up there. And I am on Twitter @Pat_Garofalo, the underscore is really important because otherwise -The most important underscore.The most important underscore because otherwise, you're going to wind up following a conservative member of the Minnesota State House.Got it. And you and he, I understand, have distinctly different opinions on corporate tax incentives.On most things.All right. Well, thanks again. I will be sure when I open up the Numlock Campus to call it a campus.I hear you should move to Memphis. Move Numlock headquarters to Memphis and you're going to get a really sweet deal.Noted! If you have anything you’d like to see in this Sunday special, shoot me an email. Comment below! Thanks for reading, and thanks so much for supporting Numlock.Thank you so much for becoming a paid subscriber! Send links to me on Twitter at @WaltHickey or email me with numbers, tips, or feedback at walt@numlock.news. Get full access to Numlock News at numlock.substack.com/subscribe

May 23

32 min 17 sec

By Walt HickeyWelcome to the Numlock Sunday edition.This week, I spoke to Joshua Darr, professor of political communication at Louisiana State University and an author of the new book Home Style Opinion: How Local Newspapers Can Slow Polarization. Here's what I wrote about it:The Desert Sun, a local newspaper serving Palm Springs and the Coachella Valley, launched a fascinating project on their opinion page in June 2019 by dropping national politics from the opinion section and asking readers to contribute opinions about local issues. A new study comparing that paper to a similar paper, the Ventura County Star, which did not drop national politics, found reverberations across the community. While dropping national politics didn’t stop polarization in the community, it did slow it. Further, in the month before the experiment less than a half of the op-eds and letters to the editor were about California issues, but in July that rose to 95 percent. Readers also really enjoyed it: online readership of op-eds doubled that July.The book is about a fascinating, once-in-a-lifetime natural experiment that has broad reverberations across the news industry and the world of American politics. Darr has spent his career exploring the impact that what we read in local news has on how we vote. In the summer of 2019, he and his colleagues heard about a fascinating experiment going on at The Desert Sun, and sprung into action to find out what happens when a local newspaper ignores national opinions. It’s a very cool story that gets to the heart of what local news offers, and also why it’s in danger.Darr can be found on Twitter and the book, Home Style Opinion: How Local Newspapers Can Slow Polarization, can be found wherever books are sold. This interview has been condensed and edited. You wrote a really fun book all about how opinion journalism reflects the communities that it’s happening in. Do you want to get into what the experiment that you tracked with The Desert Sun was?In June of 2019, my co-author Johanna Dunaway — I wrote this with her and Matt Hitt of Colorado State, she's at Texas A&M — got a Google alert that somebody mentioned our names. It turned out that it was the executive editor of The Desert Sun in Palm Springs, who was referencing a previous paper we'd written about when a local newspaper closes, polarization in that area goes up. We theorized that it was because people were reading more national news. She said, "Well, we have national stuff on our opinion page. So, why don't we just drop that?" So, they decided to drop all their national opinion content for a month. We were able to track that, and write this book, about not only how the content of that page changed and how local issues filled the void, but also how it changed the attitudes of people in that area. It was a really cool process.Let's actually just take a step back a little bit and talk about what you research. You mentioned an earlier study that you had done, focusing on what happens after local news dies out. Can you tell me a little bit about your research?I'm interested in local news, and what role that plays in people's political awareness and political opinions, particularly, because it's in such dire straits right now. It can't be overstated, the decline in local news that was already happening and then was accelerated by the COVID pandemic. That paper looked at areas where local newspapers closed and split-ticket voting, whether you were likely to vote for a Democrat at one level and a Republican at another. We found that in areas where a local newspaper closed, there were significantly less split-ticket voting, about 1.9 percent less. People were just voting straight party, up and down. That was, we thought, interesting. We weren't sure actually where to go next with the research agenda, but this experiment just sort of fell into our laps. We were very excited to be able to test what's basically the other side of that previous paper, which is, not just what happens when local news goes away, but what happens when it actually gets more local, when it actually strengthens in some ways, by providing more local stuff to people. Is that better?It's such a cool experiment design that, as you just kind of mentioned, seemed to fall into your lap. You guys really swept in quickly and managed to do some very cool stuff with it. Can you tell me a little bit about kind of how the experiment was carried out and what you were able to monitor?Sure. I have to give many thanks to the LSU Institutional Review Board for being very quick to approve this — you've got to get IRB approval before any sort of survey or experiment like this. Because we found out about it on June 8, 2019, and the experiment started on July 1. We had to get the surveys written and fielded with enough time to get the full 500 person sample before July began, and we just did get that done. That was very nice, we were very happy about that. As a political scientist, which we all are, you're trained to keep a very close eye out for natural experiments in the world, and this immediately struck us as one. It's the kind of thing where you just drop everything and get right to work on making sure you can measure something like this that's very cool.The basic design of the experiment was we surveyed people in Palm Springs in the zip codes where The Desert Sun circulated. Then we also surveyed people in Ventura, which is on the other side of LA, and is also served by a Gannett newspaper, the Ventura County Star. They didn't change at all in July. It's basically what we call a difference in differences model, where one area changed something, the other area didn't, and then we can compare how the attitudes in those areas changed over the course of July.That's really interesting. What precisely did this opinion page do?They dropped anything national politics, which meant dropping their national syndicated columnists, which were previously a pretty good chunk of their opinion page, one or two syndicated columns a day. Anything that mentioned President Trump, so that was quite a few letters, as you might imagine. People were writing in about Trump, and then those didn't get published in July. They warned people, but those didn't get published in July. And editorial cartoons, none of those either, about national politics. It was just California and the Coachella Valley around Palm Springs for the entire month. That meant more work for the opinion editor, quite frankly, because he had to be finding content to fill the pages, which meant soliciting the community. Whenever you have people that are writing in for the first time, that means you have to edit their work because they're not used to writing for newspapers. It was a good amount more work for the opinion editor at the time, but I think they were all glad they did it.You write about how there was a pretty considerable shift in the actual content, that something like 95 percent of it became California-focused.Before that we didn't really know what to expect in terms of either what the experiment would change or what they did before that. It turned out that, and I don't think this is unique to them, around half of the opinion page before that was focused on California state and local topics. There was quite a bit of other stuff and national politics. So, it went from 40 percent to right up around 95 percent, as you mentioned. It was at least a doubling of the amount of local content that was there. It was a very strong treatment as we would say, methodologically. Of course, the fact that Trump mentions dropped to zero was another part of that treatment, from about one third of all pieces to about zero.What moved into its place?This is, I think, where it gets to the uniqueness of Palm Springs, which is not your average community. It's got a large LGBTQ+ community. It's very interested in art and in architecture. Obviously in California, as a place where many people retire, they're very concerned with traffic and transportation. So, the letters to the editor about architectural preservation in particular went way through the roof. Over a quarter of all the letters to the editor in July were about preserving various architectural sites around the city. About another quarter was about the AHL minor league hockey affiliate of the Seattle Kraken, the new team that starting next year is going to be in Palm Springs. There were quite a few letters after that was announced saying, “is this going to increase our traffic because there's going to be a hockey arena downtown?” So, these were intensely local concerns. Not every community would experience a spike in arts and culture letters and in transportation, traffic letters, but that is what happened in Palm Springs.That's very cool. You also wrote about a little bit about how they also didn't see a drop off really in readership when it came to this shift.No, the opposite, actually. The online readership of opinion content that they tracked actually almost doubled in July. People were reading the stuff that came with the local opinion content. When you get local op-eds, they're not really from journalists, they're mostly from people writing in, whether it's business leaders or elected officials or people that are in charge of these local groups. For example, the architectural preservation groups that are around town, and so they're hearing from their neighbors. It de-professionalizes the newspaper and makes it more accessible, and readership went up. It's interesting as well, because it does make sense. Many, many folks are interested in national politics, but there's lots of folks in this country who are just kind of disengaged at the national level. I imagine in a state like California, which is fairly reliably one way or another during presidential elections, it's much the same way. But everybody's got an opinion about that new traffic light!I think it accentuates the value that local news provides in the marketplace, which is, you can get national opinion content literally anywhere all the time. You can't get those local perspectives on local issues. You get a sense of how complex some of these things are and the local ins and outs of it. The hockey arena is being built next to the Native American casino of the Agua Caliente tribe there in Palm Springs. So, you have just that one example of something that's like, oh it's Californians complaining about traffic. Well, really it gets into all of these community relationships with the Native American tribe and with ‘what does the downtown mean in an area that's kind of spread out, and around the whole Coachella Valley.’ You get a real sense of the ins and outs and the complexities of a community by reading the letters to the editor and the op-eds for three months and coding them as I did.You weren't kidding, you were really into the Palm Springs community.Yeah, in a way I was. I've actually not been there.Really?Yeah! We were supposed to go in March 2020, which as you may have heard didn't work out for anybody to do anything. We had it all worked out. We were going to present our findings at a conference in San Diego and drive up to Palm Springs. So, now not only did I not get to take that trip, but I've written a book about a place I've never been. But I have read so much of their newspaper that I do feel like I've been there.You have a favorite columnist and everything?Yeah, I can talk about the newspaper like a local, no question.What was going on over in the control group?Over in Ventura? Well, that's the thing. They didn't change. So, whatever was going on there kept going on, which meant these national opinion columnists. It meant E.J. Dionne and Marc Thiessen and just people that are sort of either pro- or con- the administration. And you're just getting a lot of that national argumentation. And this was July 2019, so there was a lot of commentary about the very first Democratic presidential debates. There was a lot of talk about what are the Democrats doing, and can they beat Trump, and what's going on with immigration? And so it was very noticeable when that went away in Palm Springs. But in Ventura, it didn't. So, they just kept getting that same dosage of national conflict.You ran a second survey then, is that right?Yeah, we ran the first survey at the end of June, to try to end it before the treatment started in July. Then at the end of July into early August, we did the second wave and it was about 500 people in each city in each wave. So, I'll also thank LSU for helping to pay for that.That's a very large city-level survey. That's cool.It is, yeah. We worked with Qualtrics on that and they were very helpful in getting us the samples we needed. But, yeah, LSU, Texas A&M, University of Texas — we had a lot of help and we were very grateful for that. But you needed that size sample to detect these changes, and, like I said, when you see a natural experiment you drop everything and go for it.What were some of the changes that you noticed?We wanted to check into the effect of polarization here. We weren't really able to measure something that specific in the previous article, which was just split-ticket voting, but the effect of polarization is this idea that members of the two parties just don't like each other, and they rate the other side as more negative.In the content in previous months, it had been about 25 percent of pieces on the opinion page mentioned either the Democratic or the Republican party, in July that dropped to only one in 10. So, they just weren't talking about the parties as much, not even national politics, but just the parties at all. Maybe that's because California is kind of a one-party state, but either way there was just less of it. So did that affect the way people saw the other side? We were really interested in that. We were able to measure that before and after. And those are obviously pretty deeply held beliefs, how you feel about the other side. We measured it on what they call a feeling thermometer where you just say rate the other side from zero to 100. We found that there were differences between the communities after July.What happened?Among the kind of people that we might expect to be most attuned to this — the people who prefer to read the local newspaper, people who know more about politics, people who are more engaged in politics in Palm Springs — polarization slowed down for them. So, it didn't decrease, which we sort of expected. These are very, like I said, deeply held opinions and beliefs, but they did slow down relative to Ventura. Trump was holding rallies that were controversial, there was a Democratic primary going on, there was a lot happening in national politics. When Ventura kept getting that, polarization went up. It went up a little bit among those groups in Palm Springs, but not nearly as much, and so there was a statistically significant difference there. It slowed it down, and over the course of a month, when you only change two pages in a newspaper on a given day, we thought that was still a pretty powerful effect. It is interesting because you mentioned a lot of the issues moved to development. It is interesting to remind folks that there are polarizations in the world that are not simply left and right. Like NIMBY versus YIMBY and that kind of thing. And reminding that Democratic NIMBYs and Republican NIMBYs have things in common at times. It does seem interesting to kind of illustrate that you wouldn't necessarily change your entire worldview about that, but that might change exactly how strongly that is.No, I think so. And when you're talking about local news, you're emphasizing a different identity than if you're talking about party politics. If you lead with party politics, you're going to get people thinking like Democrats and Republicans. But if you lead with local news and local opinion and local concerns, like we found they did in July of 2019, you emphasize that local identity. We're both residents of the same area, we are both going to be affected by the traffic from this new arena, we both want to see this architectural landmark preserved. And it's a cross cutting identity in that parties, like you say Democrats and Republicans both, can both have that same identity. So, we draw on Lilliana Mason's work, she's a political scientist at the University of Maryland, for that concept. But when you emphasize local, you cut across party.Have they repeated the experiment since, or have you seen any interest in this kind of thing moving beyond this one wonderful summer in beautiful Palm Springs?The Trump-free July that Palm Springs had, no, they have not repeated it actually. Their experience is kind of a microcosm of what's happening in opinion journalism right now, which is that actually in late 2020 the opinion editor that ran this month-long experiment, took the buyout that was offered by Gannett, and so he's gone. Which was too bad because the fact that he'd been working for the newspaper for over 20 years, the fact that they had him was a major reason that they were able to do this thing. When you take a buyout, that position is gone. So, actually what the community did was start a nonprofit organization that allowed them to raise money to rehire a new opinion editor.The community decided, ‘we think this is a valuable thing that we need to have.’ And the executive editor, Julie Makinen, led that charge and the community responded. They were able to just, I think in the last couple of weeks, hire a new opinion editor. You do need somebody on staff that can edit and solicit from the community and be in charge of something like this if you're going to do that. That's just sort of a luxury in most of these places now for local newspapers. If you can still have an opinion editor, you're doing all right, and so the strong get stronger here. If local newspapers invest in opinion journalism, they might be able to reap some of the rewards of doing something like this, but if they can't afford an opinion editor, which again, given the steep declines during the COVID era for local newspapers, they're just going to end up taking the cheaper content, which is national for the most part.Where do you see taking this kind of research moving forward? Clearly you have a really interesting result here, but what else interests you in the local news space or just the news space in general?Well, there's just so much happening. There's these bills in front of Congress right now about collective bargaining between local newspapers with Facebook and Google. There's just a lot of philanthropy in this space and these new nonprofit, local news organizations that are starting up, or state level news organizations. We actually found one of the important things in this study is California has a nonprofit service called CalMatters that produces state level columns and solicits op-eds about state politics and The Desert Sun really leaned on that organization’s work in July. They took far more columns from CalMatters. In states that don't have that, it would be a lot harder to do something like this. So, we're interested in that nonprofit news space. We'd love to measure an area where philanthropists were investing in supporting nonprofit news, like starting a new newspaper or a newsletter in an area. Not just what happens if we change an existing source, but what happens if we start something new, do people latch onto that, is that something that could have similar effects? Because fundamentally local news is in a difficult spot right now, and if we're going to advocate for it, if we're going to think that it can have these kinds of good civic effects, we need some hard evidence to back that up. So, I think measuring experiments like this is part of that solution, and we'd like to be a part of that.Excellent. That's very, very cool. Where can folks find you and where can folks find your work?I'm on Twitter @JoshuaDarr, and joshuadarr.com is my website. And I'm here at LSU.Sweet. You got a local newspaper that you like?Oh yeah, The Advocate. It's actually sort of weird, they're now the dominant newspaper in the state. New Orleans is the bigger city, but The Advocate now is headquartered in Baton Rouge, but there's a New Orleans Advocate, they sort of took over that area. So, we actually have pretty good state politics coverage. And I will put in a plug for LSU, we send students to the capitol building to do real state capitol news reporting, and they often will get their stories placed in newspapers across the state. I think they placed something like 400 stories last year. So, we're doing our part here at LSU.That's great. That's good stuff. I like the Queens Daily Eagle. There's a lot of really great stuff out there.If you have anything you’d like to see in this Sunday special, shoot me an email. Comment below! Thanks for reading, and thanks so much for supporting Numlock.Thank you so much for becoming a paid subscriber! Send links to me on Twitter at @WaltHickey or email me with numbers, tips, or feedback at walt@numlock.news. Get full access to Numlock News at numlock.substack.com/subscribe

Apr 25

23 min 37 sec

By Walt HickeyWelcome to the Numlock Sunday edition. This week, another podcast edition! This week, I spoke to MIT Technology Review editor Karen Hao, who frequently appears in Numlock and wrote the bombshell story “How Facebook Got Addicted to Spreading Misinformation.”The story was a fascinating look inside one of the most important companies on the planet and their struggles around the use of algorithms on their social network. Facebook uses algorithms for far more than just placing advertisements, but has come under scrutiny for the ways that misinformation and extremism have been amplified by the code that makes their website work. Karen’s story goes inside Facebook’s attempts to address that, and how their focus on rooting out algorithmic bias may ignore other, more important problems related to the algorithms that print them money.Karen can be found on Twitter, @_Karenhao at MIT Technology Review, and at her newsletter, The Algorithm, that goes out every week on Fridays. This interview has been condensed and edited. You wrote this really outstanding story quite recently called, “How Facebook Got Addicted to Spreading Misinformation.” It's a really cool profile of a team within Facebook that works on AI problems, and extensively was working towards an AI solution. But as you get into the piece, it's really complicated. We talk a lot about algorithms. Do you want to go into what algorithms are in the context of Facebook?What a question start with! In the public conversation when people say that Facebook uses AI, I think most people are thinking, oh, they use AI to target users with ads. And that is 100 percent true, but Facebook is also running thousands of AI algorithms concurrently, not just the ones that they use to target you with ads. They also have facial recognition algorithms that are recognizing your friends in your photos. They also have language translation algorithms, the ones when someone posts something in different language there's that little option to say, translate into English, or whatever language you speak. They also have Newsfeed ranking algorithms which are ordering what you see in Newsfeed. And other recommendation algorithms that are telling you, hey, you might like this page, or you might want to join this group. So, there's just a lot of algorithms that are being used on Facebook's platform in a variety of different ways. But essentially, every single thing that you do on Facebook is somehow supported in part by algorithms.You wrote they have thousands of models running concurrently, but the thing that you also highlighted, and one reason that this team was thrown together, was that almost none of them have been vetted for bias.Most of them have not been vetted for bias. In terms of what algorithmic bias is, it's this field of study that has recognized that when algorithms learn from historical data they will often perpetuate the inequities that are present in that historical data. Facebook is currently under a lawsuit from the Housing and Urban Development agency where HUD alleges that Facebook's ad targeting algorithms are showing different people different housing opportunities based on their race, which is illegal. White people more often see houses for sale, whereas minority users more often see houses for rent. And it's because the algorithms are learning from this historical data. Facebook has a team called Responsible AI, but there's also a field of research that's called responsible AI that's all about understanding how do algorithms impact society, and how can we redesign them from the beginning to make sure that they don't have harmful unintended consequences?And so this team, when they spun up, they were like "none of these algorithms have been audited for bias and that is an unintended consequence that can happen that can legitimately harm people, so we are going to create this team and study this issue." But what's interesting, and what my main critique is in the piece, is there are a lot of harms, unintended harms, that Facebook's algorithms have perpetuated over the years, not just bias. And it's very interesting why they specifically chose to just focus on bias and not other things like misinformation amplification, or polarization exacerbation. Or, the fact that their algorithms have been weaponized by foreign actors to disrupt our democracy. So, that's the main thrust of the piece, is that Facebook has all these algorithms and it's trying, supposedly, to fix them in ways that mitigate their unintended harmful consequences, but it's going about it in a rather narrow minded way.Yeah. It definitely seems to be a situation in which they're trying to address one problem and then alluding to a much larger problem in that. Can you talk a little bit about like, again, one of the issues that they have is that there's this metric that you write about called L6/7. How does their desire for engagement, or more specifically not ever undermining engagement, kneecap some of these efforts?Facebook used to have this metric called L6/7. I'm actually not sure if it's used anymore, but the same principle holds true, that it has all of these business metrics that are meant to measure engagement on the platform. And that is what it incentivizes its teams to work towards. Now I know for a fact that some of these engagement metrics are the number of likes that users are hitting on the platform, or the number of shares, or the number of comments. Those are all monitored. There was this former engineering manager at Facebook who had actually tweeted about his experience saying that his team was on call, every few days they would get an alert from the Facebook system saying like, comments are down or likes or down, and then his team would then be deployed to figure out what made it go down so that they could fix it. All of these teams are oriented around this particular engagement maximization, which is ultimately driven by Facebook's desire to grow as a company. What's interesting is I realized, through the course of my reporting, that this desire for growth is what dictates what Facebook is willing to do in terms of its efforts around social good. In the case of AI bias, the reason why it is useful for them to be working on AI bias is actually for two reasons.One is they're already under fire for this legally. They're already being sued by the government. But two, when this responsible AI team was created, it was in the context of big tech being under fire already from the Republican-led government about it allegedly having anti-conservative bias. This was a conversation that began in 2016 as the presidential campaign was ramping up, but then it really picked up its volume in 2018 in the lead up to the midterm elections. About a week after Trump had tweeted #stopthebias in reference to this particular allegation towards big tech, Mark Zuckerberg called a meeting with the head of the responsible AI team and was like, "I need to know what you know about AI bias. And I need to know how we're going to get rid of it in our content moderation algorithms."And I'm not sure if they explicitly talked about the #stopthebias stuff, but this is the context in which all of these efforts were ramping up. My understanding is Facebook wanted to invest in AI bias so that they could definitively say, "Okay, our algorithms do not have anti-conservative bias when they're moderating content on the platform." And, use that as a way to keep regulation at bay from a Republican-led government.On the flip side, they didn't pursue many of these other things that you would think would fall under the responsible AI jurisdiction. Like the fact that their algorithms have been shown to amplify misinformation. During a global pandemic, we now understand that that can be life and death. People are getting COVID misinformation, or people were getting election misinformation that then led to the US Capitol riots. They didn't focus on these things because that would require Facebook to fundamentally change the way that it recommends content on the platform, and it would fundamentally require them to move away from an engagement centric model. In other words, it would negatively impact its growth. It would hinder Facebook's growth. And that's what I think is the reason why they didn't do that.One part that's interesting is Facebook was not instantaneously drawn to AI. When The Facebook was made it didn't involve AI. AI is a solution to another suite of problems that it had in terms of how do you moderate a social network with billions of people, an order of magnitude larger than anyone has ever moderated before, I suppose.It's interesting. At the time that Facebook started, AI was not really a thing. AI is a very recent thing, it really started to show value for companies in 2014. It's actually really young as a technology, and obviously Facebook started way before 2014. At the time they adopted AI in late 2013, early 2014, because they had this sense that Facebook was scaling really rapidly. There was all of this content on the platform, images, videos, posts, ads, all this stuff. AI, as an academic research field, was just starting to see results in the way that AI could recognize images, and it could potentially one day recognize videos and recognize text and whatever.And the CTO of the company was like, "Hey, this technology seems like it would be useful for us in general, because we are an information rich company. And AI is on a trajectory to being really good at processing information." But then also what happened at the same time was there were people within the company as well that started realizing that AI was really great at targeting users, at learning users' preferences and then targeting them, whether it was targeting them with ads to or targeting them with groups that they like or pages that they like or targeting them with the posts from the friends that they liked the most.They very quickly started to realize that AI is great for maximizing engagement on the platform, which was a goal that Facebook had even before they adopted AI, but AI just became a powerful tool for achieving that goal. The fact that AI could help process all of this information on Facebook, and the fact that it could really ramp up user engagement on the platform, collided and Facebook decided we're going to heavily invest in this technology.There's another stat in your article that really just was fascinating to see laid out. You wrote about how there's 200 traits that Facebook knows about its users, give or take. And a lot of those are estimated. The thing that's interesting about that is I feel like I've told Facebook fairly limited amount of information about myself in the past couple of years. I unambiguously directly told them like, yes, this is my birthday. This is where I live now. This is where I went to college. And then from that, and from their algorithms, and from obviously their myriad cookie tech, they've built this out into a suite of 200 traits that you wrote about. How did AI factor in in that, and how does that lead into this idea of fairness that you get at in the piece?Yeah, totally. The 200 traits are all about, they're both estimated by AI models, and they're also used to feed AI models. It's dicey territory to ask for race data. Like when you go to a bank, that's part of the reason why they'll never ask you race data because they can't decide banking decisions based on your race. With Facebook that's the same, but they do have a capability to estimate your race by taking a lot of different factors that could highly correlate with certain races. They'll say like, if you are college educated, you like pages about traveling, and you engage a lot with videos of guys playing guitar, and you're male, and you're like within this age, and you live in this town, you are most likely white.I was about to say, you are a big fan of the band Phish. We're kind of barking up the same tree here, I suspect.They can do that because they have so much data on all the different things that we've interacted with on the platform. They can estimate things like your political affiliation, if you're engaging with friends' posts that are specifically pro-Bernie or whatever, you are most likely on the left of the political spectrum in the US. Or, they can estimate things like, I don't know, just random interests that you might have. Maybe they figure out that you really like healthy eating, and then they can use that to target you with ads about new vegan subscriptions, whatever it is. They use all of these AI models to figure out these traits. And then those traits are then used to measure how different demographics on Facebook, how different user groups engage with different types of content in aggregate.The way that this ties to fairness, and then ties to this broader conversation around misinformation? So this Responsible AI team was really working on building these tools to make sure that their algorithms were more fair, and make sure that they won't be accidentally discriminating against users, such as in the HUD lawsuit case, by creating these tools to allow engineers to measure once they've trained up this AI model. Okay, now let's like subdivide these users into different groups that we care about usually based on protected class, based off of these traits that we've estimated about them, and then see whether or not these algorithms impact one group more than another.So, it allows them a chance to stress test algorithms that are in development against what it hypothetically would do?Exactly.Sick.The issue is that even before this tool existed, the policy team, which sits separately from the Responsible AI team, they were already evoking this idea of anti-conservative bias, and this idea of fairness, to undermine misinformation efforts. So, they would say, "Oh, this AI model that's designed to detect anti-vax information and limit the distribution of anti-vax misinformation, that model, we shouldn't deploy it because we've run some tests and we see that it seems to impact conservative users more than liberal users, and that discriminates against conservatives, so unless you can create this model to make sure it doesn't impact conservative and liberal users differently, then you can't deploy it." And there was a former researcher that I spoke to who worked on this model, who had those conversations, who was then told to edit the model in a way that basically made the model completely meaningless. This was before the pandemic, but what he said to me was like, this is anti-vax misinformation. If we have been able to deploy that model at full efficacy, then it could be quickly repurposed to anti-vax COVID misinformation. But now we're seeing that there's a lot of vaccine hesitancy around getting these COVID vaccines. And there were things that basically the policy team actively just did in the past that led to this issue not being addressed with full effectiveness.You talk about this in the piece where instead of fairness being, “we shouldn't have misinformation on the platform, period," it's like, "well, if there's something that could happen that would disproportionately affect one side or the other, we can't do it." Even if one side — I'm making this up — but let's say that liberals were 80 percent of the people who believed in UFOs. And if we had a policy that would roll out a ban on UFO content and it would disproportionately affect liberals, then that would be stymied by this team?Yes and no. The responsible AI team, what's really interesting is they sent me some documentation of their work. The responsible AI team, they create these tools to help these engineers measure bias in their models. But they also create a lot of educational materials to teach people how to use them. And one of the challenges of doing AI bias work is that fairness can mean many, many different things. You can interpret it to me in many different things.They have this specific case study about misinformation and political bias, where they're like, if conservatives posted more misinformation than liberals, then fairness does not mean that this model should impact these two groups equally. And similarly, if liberals posted more misinformation than conservatives, fairness means that each piece of content is treated equally. And therefore the model would, by virtue of treating each piece of content equally, impact liberals more than conservatives. But all of these terms are really spongy. Like "fairness," you can interpret it in so many different ways. Then the policy team was like, “we think fairness means that conservatives and liberals cannot be treated differently." And that was what they were using to dismiss, weaken, completely stop a lot of different efforts to try and tamp down misinformation and extremism on the platform.Where are we at moving forward? It seems like you had alluded to AI being really central to Facebook's policy. And this team, even physically, was close to Mark Zuckerberg's desk. Where are we at moving forward now? Is there a chance that the policy team will lose sway here? Or is there a chance that this is just, it was what it was?I think what I learned from this piece is that there's just a huge incentive misalignment problem at Facebook. Where as much as they publicly tell us, "we're going to fix these problems, we're going to fix these problems," they don't actually change their business incentives in a way that would allow any of the efforts trying to fix these problems to succeed. So, AI fairness sounds great, but AI fairness in service of business growth can be perverted.And if the company is unwilling to change those incentive structures, such that truly responsible AI efforts can succeed, then the problems are just going to keep getting worse. The other thing that I realized is we should not be waiting around anymore for Facebook to be doing this stuff because they promised, after the Cambridge Analytica scandal three years ago, that they were going to fix all these things. And the responsible AI team was literally created a couple of weeks after the Cambridge Analytica scandal, as a response to a lot of the allegations that Facebook was facing then about their algorithms harming democracy, harming society.And in three years, they've just made the problem worse. We went from the Cambridge Analytica Scandal to the US Capitol riots. So, what I learned was, the way that the incentive structures change moving forward will have to come from the outside.Yeah. Because it is also bigger than just the United States. You alluded in your piece to the genocide in Myanmar. There are much bigger stakes than just elections in a developed democracy.That was one of the other things that I didn't really spend as much time talking in my piece about, but it is, I think, pretty awful that some of Facebook's misinformation efforts, which impact its global user population, are being filtered based off of US interests. And that's just not in the best interest of the world's population.Karen, where can people find your work? You write about this stuff all the time and you are the senior editor for AI at MIT Technology Review. So where can folks get ahold of you and find out more about this?They can follow me on Twitter, @_Karenhao. they can find me on LinkedIn. They could subscribe to MIT Technology Review and once they subscribe they would get access to my subscriber only AI newsletter, The Algorithm, that goes out every week on Fridays. If you have anything you’d like to see in this Sunday special, shoot me an email. Comment below! Thanks for reading, and thanks so much for supporting Numlock.Thank you so much for becoming a paid subscriber! Send links to me on Twitter at @WaltHickey or email me with numbers, tips, or feedback at walt@numlock.news. Get full access to Numlock News at numlock.substack.com/subscribe

Mar 28

25 min 26 sec

By Walt HickeyWelcome to the Numlock Sunday edition.This week, I spoke to Abraham Riesman, the author of the electric new book True Believer: The Rise and Fall of Stan Lee, out last week. It’s another podcast Sunday edition. Let me know what you think of these.I have been waiting for this book for ages, I’m a huge fan of Abe’s and the topic could not be more prescient. We talk about the actual role Lee played in making the characters, how Stan Lee was ahead of his time when it came to making a living as a proto-influencer, and the undercovered, complex and unsavory period from the 1970s through his death. It’s a complicated portrait of a complicated guy, and is deeply reported at every stage.True Believer: The Rise and Fall of Stan Lee can be found wherever books are sold, and Riesman can be found on his website and on Twitter. This interview has been condensed and edited.The book is out, you've been working on this for quite a while at this point. It was delayed back in September. It's all about one of these people who have become a very central figure in modern American pop culture, Stan Lee. What got you interested in him as an individual?Oh, geez, what got me interested in him? I guess you have to go a long ways back for the beginnings of it in that I grew up reading comics and being interested in Marvel. I think I first became aware of Stan Lee when I was very young, watching the now mostly forgotten Marvel Action Hour cartoon show. He used to introduce the animated segments there. And basically he remained this figure in the background of my life, in the way that he's been in the background of the lives of countless people who have engaged with Marvel superhero products. And long story short in 2015, I started writing a profile of Stan for my then place of employment, New York Magazine, and it came out in 2016. Then in 2018, when Stan passed away, an editor at Penguin Random House who had read the 2016 profile approached me about writing a full biography, and that's where it began.He's interesting because he had a fairly seminal role at a company that has become incredibly central to American pop culture, but he himself has appeared in a lot of these entities. How did you get at the question of who is Stan Lee in terms of both the public and private and the individual person?Well, it's a big question, isn't it? I tried to base it on as much evidentiary stuff as I could, as opposed to surmise and opinion. So, I did more than 150 interviews. I went through thousands and thousands of pages of his personal and professional documents, which were mostly ones that I got from the University of Wyoming, their American Heritage Center, which is where Stan's papers and other archival materials are stored — long story about why it's in the middle of nowhere in Wyoming. But, yeah, in addition to reading through documents, I also watched a bunch of home movies. There was this Holy Grail moment of the last day I was at the archives — I only had five days there — I found this box among the almost 200 boxes of materials there that was just a bunch of unlabeled home movies.I started popping them in the little VCR they had at the reading room, and was just blown away by the fact that right under my nose there had been all this stuff that the Lee family either advertently or inadvertently had left behind for posterity. So, you take that, you take the documentation, you take the interviews, you take the comics, you just throw everything in a blender and try to sort it out in your brain and then put it on paper. There's no magic recipe to it. You just have to engage with the source material and then see if you can craft something from it.It's fascinating because this is an individual around whom a couple of major corporations have attempted to construct a mythology.A lot of your reporting, whether it was in that feature from a few years back or in the book itself, it's not poking holes, but really saying a lot of what we held up to be the myth of Stan Lee, is it necessarily as black and white as it might appear. Do you want to go into some of what you found?There's a lot that Stan was less than truthful about, a lot of things he just outright lied about and then other things where there were sins of omission or misdirection. And the big thing that matters when it comes to talking about Stan's dissembling — there's a lot of things that matter with that — but the big one, as you mentioned, is the corporate claim on Stan and the characters that Stan was credited with creating. What my research turned up was there's literally no evidence Stan created any of those characters.There's not?No, there's none. There's nothing. There's no presentation boards. There's no diary entries. There's no contemporaneous accounts from friends saying Stan was working on this and told me about it and then he created it. Nothing. It was a fly by night industry, so there wasn't a whole lot of documentation of anything to be fair, but there's significant evidence — it doesn't prove it, I don't have a smoking gun — but there's significant evidence or at least testimony that goes against Stan's word and says that one of his main collaborators, Jack Kirby, was the guy who came up with almost all of those characters.Jack was also an artist. So he, according to him and his defenders, created the characters from whole cloth, whereas Stan at best can only claim to have come up with the idea. He was not an artist, so he didn't come with the visual look of these characters. It's a sticky thing because, again, you're not going to find a smoking gun. There really was just terrible documentation and a large lack of professionalism at comics companies circa the 1960s.These were not the glossy corporate entities that they are now. Marvel was not a Disney subsidiary as it is now back in 1961. So, we don't really know who created those characters, but what I wanted to do in the book was just say the fact, which is we don't know that it was Stan. We've just taken it for granted that Stan was presented to us factually as the progenitor of these characters, usually at best you'll get people saying, “Jack was the co-creator, Jack did it with Stan.” Now that may be the case, but we don't know that. We can't say that with any certainty. It may well be that Jack was the only one who was actually coming up with these characters and that he was doing them from whole cloth. That's not even getting into the stuff that Stan more transparently lied about when it comes to crediting his collaborators for the actual comics they made. It's a long, complicated thing, but basically the process by which the classic Marvel stories were created was not "Stan sits down and writes a script, and then hands the script to the artists to draw." Stan was not writing scripts. He was having brief conversations with the artists who would then go home and write the story. So, really they were writer-artists.They would go home and just draw out the entirety of the narrative that they were working on in the comic, add in little notes sometimes in the margins about what dialogue should go in there, and then they would hand this completed story, or more or less completed story, to Stan who would then add in dialogue and narration. Now, the dialogue and narration were very important, I don't want to discount that, and he also wrote the letters columns in the back, which were enormously influential and helped create the Marvel phenomenon. But he wasn't crediting his artists as co-writers, which they were. You can even argue that they were the primary writers since they were the ones who were actually coming up with the structure of the narratives. Anyway, I could go on and on like this, but that's just one area in which I wanted to cast some light on the disputes and force people to live with the ambiguity, which no one likes, of not knowing who actually is responsible for these things that are so enormously popular and prominent.We always talk about people who were ahead of their time, and oftentimes that's indicated as a very unambiguously positive statement, but the idea of a person who is a brand creator, that seems fairly prescient for a couple of reasons. It's not the first time that, again, not necessarily negatively, not necessarily positively, somebody has been able to float to vast cultural influence through basically brand definition and steering.You're exactly right. Stan was, in a time when we didn't talk about branding the way we talk about it now or being an influencer or any number of pop-y terms that we use to describe the present day media landscape, he really was an influencer and a brand himself. His personal brand and the brand of Marvel were intimately intertwined, and he was so good at promotion. There are very few people in the history of American life who have sold better and at a higher profile than Stan Lee, and that's huge. Jack may have been the person coming up with the characters, but Jack was a terrible salesman in terms of public relations and advertising and slogans and all of that. That was not something he was good at or enjoyed, whereas Stan, that was what he lived for.He loved being a raconteur. He loved creating a fan base. He loved all of that. And without him, I don't think we would have the Marvel phenomenon, even if the creative material had been in there, it wouldn't have become this — again, to use a modern term to describe something not so modern — it wouldn't have gone viral in the way that it did. He was ahead of his time. I find myself, as I promote this book, often looking in the mirror and thinking, well, I've become my subject. There's so much in just the modern publishing landscape that requires you to be a Stan Lee if you want to succeed. It's all about individual hustle and getting your name out there. I wasn't alive in the ‘60s, but I don't presume these things were talked about in quite the same way that they are now, and they were skills that Stan had that, if anything, in the ‘60s were maligned.That was back when the biggest object of joking that you could put into a satirical pop culture thing was about ad men. That was one of the reasons that Mad Men was the show that it was, because it was set during a time when being in advertising was in a lot of ways like having a tech gig now in that there was good money to be made, it was very much a hotly discussed industry, it was all based on bluster, et cetera, et cetera. And at the time you could really make fun of somebody for being a big promoter and advertiser, but Stan was really good at it! Now it's something we look at with a great deal of admiration, or at least grudging admiration when people can pull that off. And Stan really did.Partially because they're both owned by Disney now, but you have a guy like Jim Henson who was very much in the trenches of making the art that he was promoting pretty consistently, and then Stan really was a little bit more hands-off than I think people tend to think when it comes to developing characters.For the most part. Again, we don't know because we can't go back in time and figure out exactly who said what inside a closed room. We'll never know for certain, but even when it comes to creating individual comics as opposed to just creating the characters, yeah, he was relatively hands-off when it came to an individual comic, because he wasn't writing a full script. He was not being the auteur of these comics. He was saying, “okay, here's some ideas,” and then people would go and run with them. And a lot of the time it wasn't even, "here's some ideas, go run with," it was the writer-artists would come to him and say, “we're going to do this.” Stan would maybe have some tweaks, but would largely just say, “okay.” Then the writer-artists would go home and do that. So, it's not exactly like you say. It's not like Jim Henson going and tinkering away with his characters, it's much more of an ambiguous and distant creative role that he had.Over the course of Marvel's history, obviously, the company had I think some of the most tumultuous possible business situations through the ‘80s, ‘90s and 2000s. What of Stan Lee's later life and pops culture ascendance do you track in the book?All of it. There's nothing that was off-limits for this book. It's the full arc of his life to the best of my ability. I tried to keep it short, it's not a Robert Caro, but I talk a lot about what happened later because I think that that's the most interesting stuff to be honest. I think we're pretty well-covered — not as well as we should be — but prior to the release of my book, we were pretty well covered in terms of stories about Stan's life and work in the ‘60s. People have written about that stuff pretty extensively. Now, I have things to add to the ‘60s narrative that hadn't been there before, but comparatively, not that much, because it's been so heavily excavated. But when it comes to things that happened to Stan from 1971 and onward, basically no one had written in-depth about any of that.There've been some attempts at it. The comics journalist Tom Spurgeon and his collaborator Jordan Raphael, who's now a lawyer, wrote a book together, the first biography of Stan in the early aughts. It had a lot of really good stuff, but it too was heavy on the ‘60s and some of the ‘70s and then drops off. And I just felt, well, there's got to be something in there and turns out, I think that's where the whole story was. That's where you see the vast majority of what Stan's life was like, both in terms of just the numbers of years— he was alive for much longer than that one decade of the 1960s — but also because that's where you start to really see what fame and success and money did to Stan.What was it?Well, a lot of things, but one was he wanted more. He was never satisfied. He didn't like comics, particularly. He didn't like superheroes, particularly. He said that on the record — that's not me inferring — it's just people don't pay attention when he said that because he would also talk out of the other side of his mouth and say he loved the medium, and he loved the genre. But evidence points toward that not really being the case. Every time he tried to break out of comics, which was basically every day of his life since he got back from World War II and went back to his comics job he had left to go be in the service, every time he was trying to escape comics, it was never to make more comics. It was never, "I want to go do superhero stories in another medium either." It was, “I want to go make movies and I want to be taken seriously as a novelist or as any number of other things that are not comic book writer.”Later in life, once he had the taste of fame that he got from his work in the ‘60s, he just spent the rest of his life from 1971 until 2018 just trying to be something else. That led to a lot of disastrous incidents. I trace the history of his two post-Marvel companies. His first one was a Dot Com Bubble-era company called Stan Lee Media. The other one is one that still exists now as a subsidiary of this big Chinese conglomerate, but it's called POW! Entertainment, and both of them were accused of enormous criminal, or at least unlawful, malfeasance, of bilking investors and juicing a stock and all kinds of stuff. No one had talked about that, no one had looked at that. And yet that's where Stan's true colors — in a lot of ways, I don't want to say always — but where a lot of his professional true colors came through. He wanted to have money, he wanted to be famous. He wanted to break out of just being thought of as the Marvel guy. And it never happened.Around the end of his life, or by the end of his life I should say, he was world famous for being the Marvel guy, but he was not world famous for anything else. No one talks about the great triumph that was Stan Lee's Stripperella, or Stan Lee's The Mighty 7, or Stan Lee's Superhero Christmas. All of these silly tossed off things that didn't really go anywhere. No one talks about them. They just talk about the work he did in the ‘60s, and that's something that Stan found very frustrating. He wanted to be known for more.It's an incredibly powerful story and it's so deeply reported. It's gotten a lot of love from folks within the comics industry, many of whom have seen this, but have not had a chance to really see the real situation laid out. I suppose coming to the end, what do you think your main takeaways about this are? What do you think the main difficulties are? And where do you think this goes next?Well, I don't know. I'd love to see what people have to say about it. I've been very gratified to get some nice responses so far, but I want this to be something that opens up discussion, not just about — this is all highfalutin, I don't know if any of this will happen — but I would love for this to be the beginning of a discussion about the ‘great man’ theory of business. I hate it. I hate this fixation we have on having singular geniuses who are responsible for the products that we like. We want there to be an intimate one-to-one relationship between us and the creator. If you want to get really heavy about it, you can talk about it in religious terms.Maybe we want to feel like we have a relationship with one who creates, with one who has this godlike ability to make something out of nothing. That leads us down dangerous paths because we start avoiding the truth. We're not looking for the actual ways in which something does get created. The other problem is we then throw under the bus all of the many people who are not the one great man, who are in some part, or sometimes in most part, responsible for creating the thing. So, I would hope that if there's a lesson to this book, it's question what you're told about people, and especially what people tell you about themselves. People have regurgitated Stan's version of events for more than a half a century now. We just have widely taken this one man's word as gospel.I would love for this to be something that prompts journalists and historians to think more carefully about who they believe, because oftentimes we just go with whoever the most charismatic and nicest seeming person is and say, well, their version of events is probably true, and then we print it uncritically. I get it. I'm a journalist. A lot of times you don't have enough information to be able to make a claim that you know something is one way or another, but that shouldn't be an excuse to do a shoddy job of describing what you know, or acting like you know something that you don't know for certain.So, I guess that's the last thing. I would like for this book to be something that encourages us to live with the awful agony of ambiguity. We're not necessarily going to know what happened in the past in order to influence things that we like in the present. You sometimes have to sit with the fact that these things are unknowable, and that's hard for people. It's hard for me, it's hard writing a piece to admit that you don't know, but it's also sometimes the only intellectually and morally honest way to approach a subject.So, there you have it, the definitive answer on Stan Lee. It is unknowable. And we must be content with ambiguity within the art that we like. Abraham, thank you so much for coming on. The book is True Believer: The Rise and Fall of Stan Lee, where can folks find it?Easiest way is to go to your one-stop shop for all Abraham Riesman needs, which is Abrahamriesman.com. I'm on Twitter, @abrahamjoseph.All right. Thanks so much for coming on. I appreciate it. And we'll want to hear why all of Stan Lee's stuff is in Wyoming at a later time.Some other time. If you have anything you’d like to see in this Sunday special, shoot me an email. Comment below! Thanks for reading, and thanks so much for supporting Numlock.Thank you so much for becoming a paid subscriber! Send links to me on Twitter at @WaltHickey or email me with numbers, tips, or feedback at walt@numlock.news. Get full access to Numlock News at numlock.substack.com/subscribe

Feb 21

24 min 15 sec

By Walt HickeyWelcome to the Numlock Sunday edition. Each week, I'll sit down with an author or a writer behind one of the stories covered in a previous weekday edition for a casual conversation about what they wrote.This week, I spoke to Alex Davies, the author of the brand new book Driven: The Race to Create the Autonomous Car. It’s just out as of last week and is an enthralling read about the events that led us to the present-day state of the art of autonomous vehicles.I’ve been looking forward to this book since it was announced, and it doesn’t disappoint: from the iconic if shambolic 2004 DARPA Grand Challenge to the legal battles that threatened to tear the industry apart, the creation of this tech could change the world. It’s a great story.For the first time, I recorded one of these to be podcast-quality so you can actually listen to the interview up top. Let me know if you enjoy that, and maybe I’ll do more of them!The book is Driven: The Race to Create the Autonomous Car and can be found wherever books are sold, and Alex is on Twitter at @adavies47. This interview has been condensed and edited. Unless otherwise indicated, images are from DARPA. Podcast theme by J.T. Fales.Alex, you are the author of the brand new book, Driven: The Race to Create the Autonomous Car. You cover all about transportation, you cover all about vehicles and you've also covered a lot about the technology that goes into them. There's been a lot of talk about driverless cars recently, you were talking about how this is a really long journey. How far back have we been working on driverless cars?I think the people first started talking about the driverless car right around the time people came up with the car itself. The car was a great invention for all sorts of reasons but one thing people noticed very quickly was that when you got rid of the horse, you got rid of the sentient being that would stop you from driving off a cliff or into a wall if you, the human driver, stopped paying attention. You see these stories from the ‘20s and ‘30s of people coming up with ways of remote-controlling cars using radio waves. And in the ‘50s, you start seeing programs from General Motors and RCA working on embedding electric strips into the road, which obviously didn't work for various reasons, that would help guide a car along the highway. You see examples from the 1939 and 1964 World's Fairs in New York where GM is talking about, "oh, cars that will drive themselves and you'll have these things like air traffic controllers saying, okay, your car is clear to go into self-driving mode," or back then they would have used the word autonomous.Ford Pavilion, 1939 World’s Fair, via Library of CongressSo, the idea itself is really old but technologically, I think you've got to date this work from the ‘70s, ‘80s and ‘90s. That's when you first start seeing the technology that undergirds the way we think about building self-driving cars today, which is not by following any kind of radio path, nothing built into the infrastructure and the system, but the basic idea of giving the car the tools it needs to drive itself the way a human operates a car. You've got three basic buckets: one is you have to recreate a human’s senses, so that's where you see things like cameras, radars, LiDAR sensors, giving the car the ability to see the world around it. You have to replace what a human's arms and legs do or hands and feet, really, and those are just kind of servo motors built into the car that give the car the ability to turn the steering wheel or pump the gas and brakes. And, actually, in today's cars, that's all done purely over software, it's not even really mechanical in there anymore. And then the last, the really tricky thing is how do you replace the human's brain? The step between the senses and actually carrying out the decisions you need to make.I start my story with the 2004 DARPA Grand Challenge. I give a little bit of the history of the robotics and artificial intelligence research that happened before it. But for me, the Grand Challenge is really the starting point. DARPA is that really kooky arm of the Pentagon that is basically charged with making sure the U.S. government is never surprised on the technological front. It came out of the Soviets launching Sputnik, which really shocked the Americans to hell, and they're like, “okay, we need an arm of the military that's just going to do the kooky kind of far out stuff.” So DARPA, a lot of big hits — the internet, GPS, stealth bombers. Some not so great moments — DARPA was instrumental to the creation of Agent Orange. Whoops.Oops, yeah no, don't want to do that one.That one, not so nice.Look, they're not all hits, they're not all hits and that's okay. We are friends, we have been friends for a while now. I feel like you have told me the story of the 2004 DARPA Grand Challenge many times, as this deeply formative event, not only for self-driving cars but also robotics and Silicon Valley and how government can work together on different things. Do you want to go into what went into creating this event and kind of what happened at it? Which I feel like is a very, very cool story that I imagine is a solid chunk of the book.It is a solid chunk of the book. It's also, personally, my favorite part of the book. To me, this is really the heart of the story. DARPA was tasked with helping the U.S. military develop autonomous vehicles and the basic thinking there was that vehicles were a way a lot of soldiers got hurt, especially in the early 2000s, as we were starting to get mired down in these wars in Iraq and Afghanistan. We wanted autonomous vehicles so soldiers didn't have to be in vehicles that were being hit by IEDs, so you could send cars by themselves on convoys and dangerous missions, and basically, it was to save the lives of the troops. DARPA had been funding all sorts of research into autonomous driving for decades by this point and the guy running it, DARPA director Tony Tether, was frustrated that he just wasn't seeing the kind of progress he wanted to see, it just felt like one internal research project after another.So, he said, “do you know what?” DARPA had, at the time, a relatively new power to give out prize money and he could give out up to a million dollars without needing congressional approval. So, he created a thing called the DARPA Grand Challenge with a $1 million first prize. It was a race for autonomous vehicles across the Mojave Desert in California. You would go from this real dusty little town called Barstow in the California Mojave Desert to just across the line to Primm, Nevada, which is a pretty sad town because it's the least driving you have to do from California to legally gamble in a casino. If you're like, “I don't have the energy to drive the extra 45 minutes to Las Vegas,” you go to Primm.Oh no.And so, Tether's original idea, very briefly, it was we're going to have the cars go from Los Angeles to the Las Vegas Strip and they'll go on the freeway. And the guy at DARPA who was actually in charge of putting on this race was like that is completely insane, you can't do any of that. These robots don't work, we don't even know what they're going to look like. So, they ended up doing it in the desert, which made more sense for the military application anyway when you think about what your driving in the Middle East would be like. But the key part of the challenge was that it was open to anybody, this was not just Lockheed Martin and Boeing and Carnegie Mellon University, the big contractors who had been doing this kind of work. Tony Tether just said, “anybody who can build a self-driving car, we’ll bring them all to the desert and we'll do this big race.” And so, you see this wide range of characters who come into this.I think, foremost among them, interestingly, is Anthony Levandowski, who at the time is just about 23 years old. He’s an graduate student at UC Berkeley and he decides he really wants to be in this because he loves robotics, even though he doesn't have a ton of robotics training. He's like, “I'm going to build a self-driving motorcycle.” So, that's his idea. You've got the big players like Carnegie Mellon and that's where Chris Urmson, who becomes Anthony Levandowski's great rival once they're both at Google years later, comes in. Chris Urmson is a big player, Carnegie Mellon is the robotics powerhouse in the world, probably the best roboticists in the world and have been doing tons and tons of self-driving research over the decades. They field this team as a powerhouse of a team and you've got this guy, Red Whittaker, who's the old roboticist there.This is amazing.I have been yelled at by Red Whittaker more times than I care to remember. Really!He's just very cantankerous, he's an ex Marine, he's now 70 years old, he's well over six feet, he's 250 pounds, the guy is built like a redwood and he's just always yelling. And he builds robots, someone pointed this out to me once, he builds robots that look like him, in a sense. They're always these enormous, hulking things and for the Grand Challenge, they built this Humvee. And Red Whittaker, someone told me, he has this penchant for saying really bombastic things that sound crazy and don't actually make any sense. So, he once told someone, this project, it's like a freight train, you've just got to grab on and it'll rip your arms off.It sounds terrible.When he told me this, it's like, what does that even mean? But he has this incredible talent for really developing young engineers. And Chris Urmson is among his many proteges who are now pushing this technology into the world.And so, you have this collection of wacky racers, gathering to win a million dollars from the Defense Department in the desert. And the first one is 2004, what happens at the first one?It is a disaster. The 2004 DARPA Grand Challenge is supposed to be a 142 mile race through the desert, 15 teams get out of a qualifying round and make it to the final round. If you looked at the qualifying round, vehicles were smoking and shaking or they couldn't even start at all or they were just driving into every last thing. And then the race in the desert itself, wasn't all that much better. It got off to a great start, Carnegie Mellon's Humvee, Sand Storm, was first off the line, it shoots off into the desert. So, it's doing okay, the first couple of vehicles get off the line okay. And then you get through the bottom half of the field and it becomes a comedy of errors. You've got one little bathtub shaped thing that goes up onto the tiny ridge just on the side of the trail where it's raised and flips over and lands upside down.You've got one that drives 50 yards out, does an inexplicable U-turn and drives back to the starting line. We've got one, one just veers off-road into barbed wire and then can't find it's way back. You've got this thing from OshKosh that's a 14 ton military truck, a six wheeled thing, it's lime green and it's got a tumbleweed, like a bush thing in front of it. And its detection system says, this is an unmovable obstacle, but then another tumbleweed shows up behind it and so, it just starts going forward and backward and forward and backward like Austin Powers, trying to turn around. And then, even Carnegie Mellon's vehicle, which is doing well and is seven miles into the race, it's going around a hairpin turn, it goes off the edge of the road a little bit and it gets hung up on this rock. It gets, basically, stranded like a whale on a beach. It's raised up to the point where its wheels can't get any traction anymore. The robot brain doesn't know this and it's just spinning its wheels, spinning its wheels at full speed until the rubber is on fire and smoke pouring off this thing. And DARPA has to show up from a helicopter. They hop out of the helicopter with the fire extinguishers, and it's a complete disaster.And the thing that DARPA had really hyped up, they're like, “this is the new innovation, we're going to save the lives of all these troops.” And so then, reporters come after Tony Tether and he meets them, he meets the reporters who are waiting at the end line, at the finish line, which is roughly — it's 142 mile race — 130 miles away from the closest car. The Outcome.Carnegie Mellon did the best, it went 7.4 miles. Anthony Levandowski's motorcycle makes it into the final round, mostly as a stunt. It did horribly in qualifying, but the DARPA guys are like, “this thing is so crazy, it really embodies the spirit of what we're trying to do, so let's just bring it to the race anyway.” It's not like it can win, its gas tank doesn't hold enough gas for it to go all the way to the finish line.So, Anthony brings it up to the starting line, hands it off to a DARPA guy who kind of holds his hand on it until it goes, motorcycles starts going, he takes his hand off and motorcycle instantly falls to the ground. Anthony had forgotten to turn on the stabilizing software system before it started.That will get you.And so, one of his lessons for the next year was make a checklist.The cool thing about this is that it's an utter fiasco, it's how you always tell it. But then everybody who was there for this fiasco, they stuck around and they went, in many ways, to kind of form the current self-driving industry. Do you want to talk about that seed, what it has turned into since?Yeah. So, very quickly, what's great about the Grand Challenge is that it brings all these people together, and it pits them against this problem that everyone had kind of dismissed as impossible. So, what happens is DARPA does the 2005 Grand Challenge 18 months later, and the 18 months really prove to be the difference in that teams that weren't ready at all for the Grand Challenge, for the original one, are ready 18 months later. They've learned much more about how this works. And so, the 2005 race is a huge success. Stanford, led by Sebastian Thrun, comes in first place, Carnegie Mellon second, five teams finish this big race through the desert. Then DARPA follows it up with the 2007 Urban Challenge, which pits the vehicles against a little mock city, where they have people driving around and all of a sudden they have to deal with traffic and stop signs and parking lots and all of this stuff.What you really get from the Urban Challenge is the sense that this technology seems, suddenly, very possible. And by 2007, this is a big media event, it's hosted by the guys who did MythBusters and Larry Page is there, and he shows up in his private plane full of Google execs, and it's like, look at this future of technology. About a year later, Larry Page wants to build self-driving cars. This is actually something he'd looked at as an undergraduate or a graduate student and then his thesis advisor said, “well, how about you focus on internet search instead?” And it worked out pretty well.It worked out okay, I think, right?I think he did fine, that's what I thought. He decided I want to get back to self-driving cars. He'd been at the Urban Challenge and been like, “I can see how far this technology has come,” so what he did was he went to Sebastian Thrun, who had led Stanford's team through the challenges and he was already working at Google, he was a big part of making Street View happen. Along with Anthony Levandowski, who Thrun had met through the challenges and he's like, “oh, this guy's nuts but he's really talented and he's a real go-getter.” So, he brings him on to help them do Street View and then Larry Page says, “okay, now build me a self-driving car.” Sebastian Thrun says, "okay, well I happen to know the 12 best people on the world at this technology, I met basically all of them through the DARPA challenges."He has this meeting at his chalet in Lake Tahoe, at the end of 2008. And he brings together a dozen people and it's Anthony Levandowski and it's Chris Urmson and then people like Bryan Salesky — names that are now really the top tier in self-driving cars. And he says, “Google is going to build a self-driving car, we're going to have something that looks a whole lot like a blank check and I want this team to be the one to do it.” And that becomes Project Chauffeur. They become this really secretive project within Google, they go forth over the next couple of years, and they make this incredible progress in self-driving cars. And this is the story of the second half of the book: how this team it comes together and then how they ultimately come apart because as soon as they have to start thinking about how to make a product, how to commercialize this technology and the reality of money and power within the team become real wedge issues.Within them, you see rivalries, especially between Urmson and Levandowski, who are fighting for control and fighting for the direction of the team. Ultimately, things kind of break apart and what you see over time is as people leave and as this technology starts to look a lot more real, everyone splinters off to do their own thing, and this was what I call Google self-driving diaspora. Chris Urmson leaves to start Aurora. Bryan Salesky leaves to start Argo. Dave Ferguson and Jiajun Zhu leave to start Nuro, Don Burnette leaves to start Kodiak, and Anthony Levandowski, of course, leaves to start Otto, which is acquired by Uber, which is the genesis of the Uber-Waymo huge self-driving lawsuit.Considerable amount of litigation that I believe is ongoing to this day, yes.So, the litigation did end, fortunately for everyone but the lawyers, I think. Uber and Waymo ultimately settled and then, weirdly, about a year after that, the Department of Justice charged Levandowski with criminal trade secret theft to which he ultimately pled guilty, and a few months ago he was sentenced to 18 months in prison, but he will not start his sentence until the pandemic is over.So, it definitely seems that this is still very much seen as the start of something, and you have covered a lot of this industry. What's kind of the state of the art now and where are things kind of moving forward?Well, fortunately for the industry, all of these personal rivalries, I think, have largely cooled off. And I think the book is really a history of how this got started and how these people pulled this technology forward, and then kind of came apart at the seams. But now what you've got is something that looks a little bit like a mature industry. You have Waymo with its program in the Arizona suburbs of Phoenix, and it’s starting to really take the safety drivers out of its cars in earnest. Cruise, which is also a focus of the book, which is part of GM and also backed by Honda, is moving to take the safety drivers out of its cars in San Francisco, a much more dynamic environment, as it moves to start a self-driving system there. Self-driving trucks are looking much more serious than ever before. Argo AI, which has partnered with Ford and Volkswagen, is moving towards starting a taxi service, a robo-taxi service in Miami.I talk about the Gartner hype cycle where, I think, from 2014 to 2017 or so, we were really at peak hype, totally inflated expectations where everyone said, “your kids will never have to learn how to drive.” Chris Urmson is saying, "my 12 year old son will never have to learn to drive a car," and I'm pretty sure the kid’s got his learner's permit by now. Those inflated expectations burst a little bit as people realize just how hard this technology is. But I think where we are now, on that Gartner hype cycle, is on what's called the slope of enlightenment, where people are getting more serious. Even if they haven't cracked the problem yet, I think they have a really good sense of what it takes to crack the problem, which, it turns out, is a lot of time, an incredible amount of money and at least 1,000 very talented engineers.Whole lot of lasers, a very sympathetic governmental oversight structure in a suburb of Phoenix. We have the ingredients for the solution, right?We could make it work. And so, I'm still optimistic about it, I still think the technology can do a lot of good. I think what people are figuring out is how to right-size this technology. People are figuring out how to actually apply self-driving cars in a realistic way, and I think the cooler projects out there are companies that are working on making self-driving shuttle cars for senior living communities, these big areas in Arizona and Florida, they cover 1,000 acres and people need to get around but can't necessarily drive anymore. And where the driving environment is pretty calm, that's a great use case. The trick right now is to figure out where you can make the technology work, and then the next question will be where can you actually make money off of this? That one I'm less bullish on because the economics of this, I think, are going to be pretty tough to crack.I mean, we're closing in on the end of this one, but DARPA seeded a little bit of the initial funds, it seems, for a lot of this research. Is that still an application that people are looking into or getting folks off the road in places that are dangerous?The army is still working on that, and I think those projects are still ongoing. But the initial push for DARPA was a line in a congressional funding bill from the end of 2000, it was one of the last things Clinton signed into law. And it mandated that by 2015, one-third of all ground vehicles, I think it was military, be unmanned, which was completely insane.How did we do? What's the number?I mean, maybe we've got three vehicles. That stuff hasn't panned out so much. But my favorite thing, one of the first people I managed to track down for this book was the guy, the congressional staffer who got that line into the bill. And I told him, I was like, "oh, I'm researching this and I would just want to ask you about why you put that in there and what your thinking was." And he goes, "Oh, did something come of that?"That's amazing.I was like, “yeah, I don't know, an industry that's predicted to be worth $7 trillion.”And what also came of it is Driven: The Race to Create the Autonomous Car by Alex Davies. Alex, where can people find the book? You can find this book, basically, anywhere online, it's available through Amazon, Barnes and Noble, your regular booksellers. It's out in hardcover January 5. You can also get the audiobook, you can get it on Kindle. Get it however you like, I just hope you enjoy it.My Twitter handle is @adavies47. You can find some of my work on Business Insider, where I'm the senior editor for our transportation desk.Ah, excellent website, very, very good website. If you have anything you’d like to see in this Sunday special, shoot me an email. Comment below! Thanks for reading, and thanks so much for supporting Numlock.Thank you so much for becoming a paid subscriber! Send links to me on Twitter at @WaltHickey or email me with numbers, tips, or feedback at walt@numlock.news. Get full access to Numlock News at numlock.substack.com/subscribe

Jan 10

25 min 48 sec