Technology

My BlockFi Crypto Account Is Frozen Due to Monster FTX Exchange Blowup

Scott Buchanan1 Comment

About a year ago, I posted some articles touting the use of BlockFi as an alternative checking account. It paid around 9% interest (this was back when interest rates were essentially zero on regular savings accounts), and allowed withdrawal or deposit of funds at any time. Nice. BlockFi is associated with respected firm Gemini, and (unlike many crypto operations) is U.S. based, with consistent formal auditing. They earned interest on my crypto by lending it out to “trusted counter-parties”, always backed by extra collateral. What could possibly go wrong?

In July I wrote about a big cryptocurrency meltdown, in which a number of medium-sized players went bust.  At that time, BlockFi assured its customers that its sound business practices put it above the fray, no problemo. They did make it through that juncture OK. But I withdrew a third of my funds, just to be on the safe side.

The huge news in crypto this past week has been the sudden, total implosion of major exchange FTX (more on that below). FTX is a major business partner with BlockFi. No worries, though, as of Tuesday of last week,  BlockFi COO Flori Marquez tweeted that “All BlockFi products are fully operational”.  Then the hammer dropped: On Thursday (11/10), BlockFi froze withdrawals, due to complications with FTX. My remaining crypto is stranded, most likely for years of legal proceedings, and I may never get it all back. I’m not going to starve, but the amount is enough to hurt.

In this case, I don’t really blame BlockFi – by all accounts, they have been trying to run an honest, responsible business. Before last week, nobody had much reason to think that FTX was totally rotten.  My bad for not connecting the FTX-BlockFi dots earlier, and pulling out more funds when I had the chance.

The Great FTX Debacle

The star of this show is Sam Bankman-Fried, the (former) head of FTX:

James Bailey posted here on EWED on the FTX crash last week. CoinDesk author David Morris summarized the downfall of Bankman-Fried’s crypto empire:

FTX and Bankman-Fried are unique in the stature they achieved before self-immolating. Over the past three years, FTX has come to be widely regarded as a reputable exchange, despite not submitting to U.S. regulation. Bankman-Fried has himself become globally influential, thanks to his thoughts on cryptocurrency regulation and his financial support for U.S. electoral candidates – not necessarily in that order.

… Facts first uncovered by CoinDesk played a major role in the events of the past week. On Nov. 2, reporter Ian Allison published findings that roughly $5.8 billion out of $14.6 billion of assets on the balance sheet at Alameda Research, based on then-current valuations, were linked to FTX’s exchange token, FTT.

This finding, based on leaked internal documents, was explosive because of the very close relationship between Alameda and FTX. Both were founded by Bankman-Fried, and there has been significant anxiety about the extent and nature of their fraternal dealings. The FTT token was essentially created from thin air by FTX, inviting questions about the real-world, open-market value of FTT tokens held in reserve by affiliated entities.

Negative speculation about a financial institution can be a self-fulfilling prophecy, triggering withdrawals out of a sense of uncertainty and leading to the very liquidity problems that were feared.

Customers started a “run on the bank”, withdrawing billions of dollars of assets, leading to total insolvency of FTX:

The Financial Times reported that FTX held approximately $900 million in liquid crypto and $5.4 in illiquid venture capital investments against $9 billion in liabilities the day before it filed for bankruptcy.

If FTX had been run as an honest exchange, this withdrawal should not have been too much of a problem – – just give customers back the coins they had deposited with FTX. Apparently, though, FTX had taken customer assets and transferred them over to a sister company, Alameda, to trade with. The valuable customer crypto assets left the FTX balance sheet, and were largely replaced by the self-generated (and now nearly worthless) FTT token:

It remains worryingly unclear, though, exactly why even such a dramatic rush for the exits would have led FTX to seek its own bailout. The exchange promised users that it would not speculate with cryptocurrencies held in their accounts. But if that policy was followed, there should have been no pause to withdrawals, nor any balance sheet gap to fill. One possible explanation comes from Coinmetrics analyst Lucas Nuzzi, who has presented what he says is evidence that FTX transferred funds to Alameda in September, perhaps as a loan to backstop Alameda’s losses.

It doesn’t help that on Friday (11/11) some $477 million was outright stolen from FTX wallets. (The Kraken exchange said it has identified the thief and are working with law enforcement).

Where does the FTX saga go from here? There seems little in the way of assets left for the bankruptcy judge to distribute to former customers and creditors. In the case of BlockFi, they are dependent on a $400 million line of credit extended to them by FTX back in June, to keep operating. And who knows how much of BlockFi assets were stored with FTX – – since FTX was to be their white knight, BlockFi would not be in a position to withdraw deposits from FTX like other customers did.

I predict that nothing really bad will happen to Bankman-Fried and his buddies who ran this thing. Although its operation was apparently dishonest, it is not clear how much is subject to U.S. federal or state legal jurisdiction. Bankman-Fried and friends ran their empire from a big apartment suite in the Bahamas. Plus, he is pretty well-connected. Beside his massive campaign contributions, his business and sometimes romantic partner Caroline Ellison (she is CEO of Alameda) is the daughter of MIT professor Glenn Ellison, the former boss (as colleagues at MIT) of the U.S. Securities and Exchange Commission chair Gary Gensler. These relations were captured in an impish tweet by Elon Musk:

Two Types of News: Elections vs Crashes

James Bailey3 Comments

Some events are like elections: it was obvious that some big political news would break on Election Day, we just had to wait to find out what exactly would happen. Others are like market crashes: you might know in principle they’re a thing that can happen, but you don’t really expect any particular day to be the day one happens, so they seem to come out of the blue. As it turns out, for one of the largest crypto exchanges the day of the crash also happened to be Election Day.

FTX.com is facing a bank run sparked by competitor Binance tanking the price of the token that backed some of their assets. Customers are having issues withdrawing their money, Binance has withdrawn its offer to bail out FTX by taking them over, and bankruptcy seems likely. Supposedly this doesn’t affect Americans using FTX US, but I’d be nervous about any funds I had there, or indeed with funds in any centralized crypto exchange or stablecoin (Tether and even USDC seem to be having issues holding their pegs). All this was especially shocking because many considered FTX founder Sam Bankman-Fried one of the most trustworthy people in the often sketchy world of crypto. He was always meeting with US regulators and lawmakers, and seems not to be motivated by greed; he had already begun to give away his fortune at scale.

After any surprising event like this, some people claim it was actually obvious and they saw it coming (despite usually never having said so beforehand), while others start looking back for warning signs they missed. The most interesting one is something that shocked me when I first heard it March, but I never considered the risk it implied for FTX until the crash:

Going forward, red flags to watch out for seem to be topping a list of youngest billionaires (as Elizabeth Holmes also did) and buying naming rights to a stadium.

In contrast to this crash, the election happened right when we all expected, and at least largely how I expected. Like markets, I underestimated Democrats a bit; polls overall were impressively accurate this year, though they of course missed on some particular races. Votes are still being counted, and as of now we don’t even know for sure which party will control Congress (PredictIt currently gives Democrats a 90% chance in the Senate and a 20% chance in the House). But here are some early attempts to assess forecast accuracy. As I said, some polls were quite good:

Some polls weren’t so good, which means its important to weight better pollsters more heavily when you aggregate them. Some attempts at that were also quite good:

Oddly, some no money (Metaculus) / play money (Manifold Markets) forecasting sites seem to have done better than the real-money prediction sites:

The Sins of TikTok, Part 1: Extreme Privacy Theft by China-Based Company

Scott Buchanan1 Comment

Social media apps are nosy by nature; it is no secret that their main business model is to snoop out information about you, the user, and package and sell that information to advertisers who can target you. But there is one wildly popular app which goes beyond the norms of intrusiveness and privacy invasion AND is targeted largely at children and adolescents AND is based in China and thus is subject to Big Brother’s request for any and all data. That app is TikTok.

To avoid a bunch of re-wording, I will largely share excerpts from “ The Privacy Risks of TikTok – Why This Invasive App is So Dangerous “ by Priscilla Sherman at VPNOverview. Other articles echo her concerns with TikTok:

TikTok is an extremely popular social media video app owned by the Chinese tech company ByteDance. On TikTok, users can create and share short-form videos using a variety of filters and effects. The platform is full of dancing, comedy, and other entertaining videos….

Several agencies and news outlets are now sounding the alarm and reporting on the many problems that have surfaced. ByteDance claims to want to break away from its Chinese background in order to serve a global audience and says it will never share data with the Chinese government. This claim, however, seems impossible now that new security laws have been introduced in Hong Kong.

TikTok’s user base mostly consists of children and adolescents, which many consider to be vulnerable groups. This is a main reason for different authorities to express their worries. However, it isn’t just the youth that might be in danger from TikTok. From December 2019 onwards, U.S. military personnel were no longer allowed to use TikTok, as the app was considered a ‘cyber threat’…

[Hacker group] Anonymous has published a video listing the many dangers of TikTok. They quote a source that has done extensive research on TikTok: “Calling it an advertising platform is an understatement. TikTok is essentially malware that is targeting children. Don’t use TikTok. Don’t let your friends and family use it. Delete TikTok now […] If you know someone that is using it, explain to them that it is essentially malware operated by the Chinese government running a massive spying operation.”

These claims fit in with the recent developments surrounding TikTok. For example, Apple researchers announced that TikTok deliberately spies on users.

Claims keep piling up, showing that TikTok is a very invasive application that poses a substantial privacy risk. It seems that the data collection at TikTok goes much further than other social platforms such as Facebook or Instagram. This is surprising, since both of these companies have already faced backlash for the way they’ve dealt with user privacy. TikTok seems to collect data on a much larger scale than other social media platforms do. This, combined with TikTok’s origins makes it quite plausible that the Chinese government has insight into all of this collected data…..

Research from a German data protection website has revealed that TikTok installs browser trackers on your device. These track all your activities on the internet. According to ByteDance, these trackers were put in place to recognize and prevent “malicious browser behavior”. However, they also enable TikTok to use fingerprinting techniques, which give users a unique ID. This enables TikTok to link data to user profiles in a very targeted way.

Unfortunately, this happens with a great disregard of privacy – perhaps intentionally so. The German researchers indicate, for example, that IP addresses aren’t anonymized when TikTok uses Google Analytics, meaning your online behavior is directly linked to your IP address. An IP address provides information about your location and, indirectly, about your identity…

A user on Reddit used reverse engineering to figure out more about TikTok. Anonymous quoted the results in the video we mentioned earlier. The Reddit user discovered that TikTok collects all kinds of information:

  • Your smartphone’s hardware (CPU type, hardware IDs, screen size, dpi, memory usage, storage space, etc.);
  • Other apps installed on your device;
  • Network information (IP, local IP, your router’s MAC address, your device’s MAC address, the name of your Wi-Fi network);
  • Whether your device was rooted/jailbroken;
  • Location data, through an option that’s turned on automatically when you give a post a location tag (only happens on some versions of TikTok);

Additionally, the app creates a local proxy server on your device, which is officially used for “transcoding media”. However, this is done without any form of authentication, making it susceptible to misuse….

We asked investigative journalist and writer Maria Genova about her vision on TikTok. … Genova says: “There’s a reason several countries have banned it. It’s unbelievable how much information an app like that pulls from your phone”…

TikTok needs access to your camera and microphone in order to work properly… However, there aren’t any specifications explaining how exactly these permissions are used. Therefore, TikTok could theoretically record conversations and sounds using your microphone, even when you aren’t filming a TikTok video.

We could go on and on with the technical details here, but you get the point. The fact that “IP addresses aren’t anonymized“ is really a big, bad deal. The article concludes:

The current findings and concerns surrounding TikTok are reason enough for us [the staff at VPNOverview] to remove the app from our devices. Whether TikTok’s main target group – young people between 14 and 25 – is sensitive to the privacy concerns that have come to light, remains to be seen.

Indeed.

One more quote , from Brendan Carr of the U.S. Federal Communications Commission (FCC), regarding the reliability of TikTok’s claims that they do not share data with the Chinese government:

“China has a national security law that compels every entity within its jurisdiction to aid its espionage and what they view as their national security efforts,” Carr said earlier this year, alluding to the fact that Chinese companies must make all the data they collect available to the Chinese Communist Party (CCP).

Stay tuned for Part 2, dealing with some larger market ramifications of TikTok’s evasion of  Apple and Android privacy protections.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~

This just in from BuzzFeed (added to original post here):

“Leaked Audio From 80 Internal TikTok Meetings Shows That US User Data Has Been Repeatedly Accessed From China”

For years, TikTok has responded to data privacy concerns by promising that information gathered about users in the United States is stored in the United States, rather than China, where ByteDance, the video platform’s parent company, is located. But according to leaked audio from more than 80 internal TikTok meetings, China-based employees of ByteDance have repeatedly accessed nonpublic data about US TikTok users — exactly the type of behavior that inspired former president Donald Trump to threaten to ban the app in the United States.

The recordings, which were reviewed by BuzzFeed News, contain 14 statements from nine different TikTok employees indicating that engineers in China had access to US data between September 2021 and January 2022, at the very least. Despite a TikTok executive’s sworn testimony in an October 2021 Senate hearing that a “world-renowned, US-based security team” decides who gets access to this data, nine statements by eight different employees describe situations where US employees had to turn to their colleagues in China to determine how US user data was flowing. US staff did not have permission or knowledge of how to access the data on their own, according to the tapes.

“Everything is seen in China,” said a member of TikTok’s Trust and Safety department in a September 2021 meeting.

How to Magnetize a Screwdriver (So It Holds onto a Screw)

Scott BuchananLeave a comment

This is an economics blog; here is a life hack that can save you some money, and maybe time.  It can be really helpful to have your screwdriver magnetized, so a screw will stick to it. This past weekend I helped someone repair a microwave door, and for re-assembly I had to get a screw into its hole, where its hole was recessed in a narrow space where I could not have held the screw with my fingers whilst starting it with the screwdriver. So it was very helpful to just stick the screw on the end of the tool, and (carefully) insert the tip of the screw into its threaded hole and just start turning. Likewise, it was helpful in disassembly to be able to draw a screw out with the magnetized tip.

You can go buy a set of magnetized screwdrivers from Amazon. But these get mixed reviews and of course cost money and shipping delay and now you have more screwdrivers to store. A comment in one of the Amazon reviews clued me in that you can easily magnetize a screwdriver which you already have. Here is how:

( 1 ) Start with a strong magnet – – maybe a single magnet that you happen to have, or make a stack of say five medium sized disk refrigerator magnets. Techies can remove magnets from an old speaker or hard drive.

( 2 ) Using only one end (pole) of your magnet, draw it along the  screwdriver shaft, from the top or middle out to the end, always in the same direction. Do this maybe four times, then rotate the screwdriver a quarter turn, then make another four strokes, and so on for all four sides of the screwdriver. You’re done.

I did this, and it worked great. A couple of further comments – – first, if there is no rubbery coating on your magnet and you don’t want to scratch up the finish on your screwdriver, you could put a single layer of  masking tape or painters tape on the part of the magnet that is scraping along the screwdriver. Second, the hard steel of the screwdriver is not a great permanent magnet. You might need to do this again in a year, and you will never get a really strong magnetic effect (this may be why there were some complaints on Amazon). Also, if you give the screwdriver some sharp taps (or drop it on concrete floor), it can rescramble the magnetic domains and lose  magnetic orientation in the steel, so again you’d have to repeat the treatment.

You can also magnetize a screwdriver by wrapping a coil of insulated wire around it, and hooking the wire up to a battery. Also, you can make the screwdriver magnetic temporarily by sticking a disk magnet on the shaft.

I suppose you could bring your magnet to your friend’s house and process his or her favorite screwdriver next time you go over for some other reason. Or you could make magnetized screwdrivers for gifts.

Some references:

https://www.wikihow.com/Magnetize-a-Screwdriver

https://www.instructables.com/How-to-Magnetize-a-Screwdriver-at-Home/

Bonus hack: How to Sanitize Face Masks

Now we are back to being able to buy KN95 and (even better) KF94 face masks, if a mask gets too breathed in, we can just throw it out and get a new one. But if for some reason (a new pandemic apocalypse like 2020?) you need to disinfect a face mask, there are ways.

Most flu and coronaviruses cannot live indefinitely on a dry surface. So one approach is simply to put each mask in its own dry paper bag (to prevent contact with more virus particles) and leave in a dry, preferably warm place for 3 days.

If you are in a hurry, apparently heating for 60 minutes at  the oven at 70°C (158°F) will also do the trick.

Reference: https://smartairfilters.com/en/blog/disinfect-clean-n95-mask-virus-coronavirus/

An intervention for children to change perceptions of STEM

Joy Buchanan1 Comment

Here is a a new paper related to the topic of women getting into technical fields (see previous post on my paper about programming).

Grosch, Kerstin, Simone Haeckl, and Martin G. Kocher. “Closing the gender STEM gap-A large-scale randomized-controlled trial in elementary schools.” (2022).

These authors were thinking about the same problem at the same time, unbeknownst to me. In their introduction they write, “We currently know surprisingly little about why women still remain underrepresented in STEM fields and which interventions might work to close the gender STEM gap.”

My conclusion from my paper is that, by college age, subjective attitudes toward tech are very important. This leads to the questions of whether those subjective attitudes are shaped at younger ages. Grosch et al. have run an experiment to target 3rd-graders with a STEM-themed game. I’ll quote their description:

The treatment web application (treatment app) intends to increase interest in STEM directly by increasing knowledge and awareness about STEM professions and indirectly by addressing the underlying behavioral mechanisms that could interfere with the development of interest in STEM. The treatment app presents both fictitious and real STEM professionals, such as engineers and programmers, on fantasy planets. Accompanied by the professionals, the children playfully learn more about various societal challenges, such as threats from climate change and to public health, and how STEM skills can contribute to combating them. The storyline of the app comprises exercises, videos, and texts. The app also informs children about STEM-related content in general. To address the behavioral mechanisms, the app uses tutorials, exercises, and (non-monetary) rewards that teach children a growth mindset and improve their self-confidence and competitive aptitude. Moreover, the app introduces female STEM role models to overcome stereotypical beliefs. To test the app’s effect, we recruited 39 elementary schools in Vienna (an urban area) and Upper Austria (a predominantly rural area).

This is a preview of their results, although I recommend reading their paper to understand how these measurements were made:

Girls’ STEM confidence increases significantly in the treatment group (difference: 0.047 points or 0.28 standard deviations, p = 0.002, Wald test), and the effect for girls is significantly larger than the effect for boys.

Result 2: Children’s competitiveness is positively associated with children’s interest in STEM. We do not find evidence that stereotypical thinking and a growth mindset is associated with STEM interest.

Lastly, my kids play STEM-themed tablet games. PBS Kids has a great suite of games that are free and educational. Unfortunately, I have not tried to treat one kid while giving the other kid a placebo app, so my ability to do causal inference is limited.

Cheers to Sumproduct!

Zachary Bartsch2 Comments

I teach macroeconomics, finance, and other things.

Often, I use Excel to complete repetitive calculations for my students. The version that I show them is different from the version that I use. They see a lot more mathematical steps displayed in different cells, usually with a label describing what it is. But when I create an answer calculator or work on my own, I usually try to be as concise as possible, squeezing what I can into a single cell or many fewer cells. That’s what brings me to to the sumproduct excel function that I recently learned. It’s super useful I’ll illustrate it with two examples.

Example 1) NGDP

One way to calculate NGDP is to sum all of the expenditures on the different products during a time period. The expenditures on a good is simply the price of the good times the quantity that was purchased during the time period. The below image illustrates an example with the values on the left, and the equations that I used on the right. That’s the student version. There is an equation for each good which calculates the total expenditure on the individual goods. Then, there is a final equation which sums the spending to get total expenditures, or NGDP.

Continue reading →

Bounce Houses are Surprisingly Cheap

James BaileyLeave a comment

Last year was the first time I saw a family that owned their own bounce house and just set it up in their living room. At the time I thought, what a lucky rich kid, that must cost at least a thousand dollars. But my wife looked into it and found out that bounce houses are surprisingly cheap these days. She got our kids this one last Christmas, its currently going for $234 on Amazon:

The kids love it and its still going strong ten months later, despite substantial use from kids and the presence of two sharp-clawed cats. It was certainly a bigger hit than the other major gift we tried last Christmas- telescopes are surprisingly hard to use.

Can You Use an Expired Home COVID Test?

Scott BuchananLeave a comment

Using a COVID test is a fairly serious matter – the results of such tests drive decisions on staying home and isolating or not, which in turn affect the spread of the virus in the population. I am known to use medicines that maybe expired six months earlier, figuring that the med will still be say 80% effective, but for a COVID test I want it to be as accurate as possible.

We all have on our shelves boxes of rapid COVID tests which were send out by the government in the first half of 2022. Most of these tests had nominal six-month lives, so according to what is stamped on the box, they are expiring right about now.

But wait – – that six-month life was just a (conservative) estimate from back when the tests were manufactured. For about a dozen out of the original 22 approved tests, subsequent data has shown that the tests remain accurate for longer than six months. Typically, the approved life is extended an additional six months or more. So before using or throwing out a box whose stamped expiration date has passed, go to this FDA link. You can quickly find your brand of test. The instructions for using this site are:

To see if the expiration date for your at-home OTC COVID-19 test has been extended, first find the row in the below table that matches the manufacturer and test name shown on the box label of your test.   

  • If the Expiration Date column says that the shelf-life is “extended,” there is a link to “updated expiration dates” where you can find a list of the original expiration dates and the new expiration dates.  Find the original expiration date on the box label of your test and then look for the new expiration date in the “updated expiration dates” table for your test.   
  • If the Expiration Date column does not say the shelf-life is extended, that means the expiration date on the box label of your test is still correct.  The table will say “See box label” instead of having a link to updated expiration dates.  

A couple more notes re COVID Tests:

( 1 ) The tests do detect the omicron BA.5 subvariant, which has driven much of the infections lately. However, if you have been exposed to COVID, the new recommendation is to take three (instead of just two) tests, at least 48 hours apart. (If you take the test too early, not enough antigen has built up to detect, so you might get a false negative).

( 2 ) Although the initial federal program for free tests has expired, there are several ways to still get free tests. Any health insurer will pay for them, as will Medicare. And there are other venues for uninsured or low-income people. See this article.

Administration’s Drastic Drawdown of Strategic Petroleum Reserve Makes Us Vulnerable to Actual Oil Supply Shock

Scott BuchananLeave a comment

Although fracking technology has enabled renewed oil production in the U.S., the West remains heavily dependent on oil imports, especially from the Middle East. Even in the U.S., the current refining capacity is not well-matched to the type of light oil produced by fracking, so we still import oil (of types that our refineries can handle), although we also export fracked oil. Since oil remains the basis of so much economic activity, and since many oil exporting countries are unstable or even hostile to the U.S and our allies, the U.S. in 1975 established a large Strategic Petroleum Reserve (SPR) to store up crude oil. The storage is mainly in caverns in Texas and Louisiana, dissolved out of underground salt deposits. It was mainly filled in the Reagan/Bush administrations in the late 1970’s, and topped up under Bush II around 2003-2004.

The statutory purpose of this stockpile is to protect us and our allies against a “a significant reduction in supply which is of significant scope and duration,” per the Department of Energy. If such an event occurs, leading to high prices and associated economic impact, the President is authorized to release oil from the SPR. However,

In no case may the Reserve be drawn down…

 (A) in excess of an aggregate of 30,000,000 barrels with respect to each such shortage;

(B) for more than 60 days with respect to each such shortage;

Somehow various administrations and also Congress have circumvented these restrictions on draining the SPR, and over the years have sold off bits and pieces to raise money for government spending. However, the current administration has decimated the SPR, selling off a third of it (some 200 million barrels), mostly in the past six months:

Source: U.S. EIA

The administration projects this gusher to stop after November. Essentially all objective observers recognize this as primarily a political move, to reduce gasoline prices in order to curry favor with voters for the mid-term elections this November. It’s one thing to knock the price of gasoline down from $5.00/gallon back in the spring, when the world was panicked about Russia’s invasion of Ukraine, but to keep on selling into a moderated market is irresponsible. We haven’t had an actual shortfall in supply these past few months. Among other things, Russia keeps happily pumping and selling, out into the global grey market.

I won’t belabor the point here (stay tuned for more posts on this subject), but the world is structurally short of oil. With this administration having spent its first year demonizing oil and oil companies, the petroleum industry is understandably cautious about making expensive investments in future oil production. They know they will be stabbed in the back as soon as the current party in power no longer needs them.

By dumping this oil now, the administration is making the U.S. and the West more vulnerable later, if there is an actual global oil supply crisis (think: Iran vs. Saudi Arabia in the Persian Gulf…). Irritated by the lowish oil prices engendered by the SPR release, OPEC just announced production cuts which will drive prices right back up. They can cut production far longer than we can drain the SPR. If this all motivates further investment in low CO2 energy (including nuclear), that is perhaps a good thing. But between now, and attaining a carbon-free utopia in the future, we need to keep the crude flowing. Let us hope for the best here.

Energy analyst Robert Rapier writes:

Ultimately, drawing down the SPR was a political decision. Think about it. An administration that has frequently emphasized the importance of reducing carbon emissions is trying to increase oil supplies to bring down rising oil prices — which will in turn help keep demand (and carbon emissions) high.

But even though the Biden Administration wants to address rising carbon emissions, high gasoline prices cause incumbents to lose elections. So, they try to tame gasoline prices even though it contradicts one of their key objectives of reducing carbon emissions.

The SPR has now been depleted since President Biden took office from 640 million barrels to 450 million barrels…

President Biden’s gamble to deplete the SPR in order to fight high oil prices may not hurt him at all. Of course, if for some reason we had a true supply emergency and found ourselves needing that oil, it would be looked upon as a terrible decision.

Postmodernism to Poastmodernism

Joy Buchanan18 Comments

Authors of the kinds of books I read present themselves as a voice of reason against our declining society that no longer can evaluate arguments or define moral principles. (I’m fun at parties.) “Postmodernism” has been attacked all my life.

For a while, I have been looking for a successor of postmodernism. To simply define our age as the one that came after modernism seems unsatisfactory. How many more decades can we coast along on this antithesis idea?

One reason I don’t like the term postmodernism is that it gives a sense of progress where we might be losing ground. If you aren’t modern, then you are pre-modern. If you aren’t a verbal culture, then you have regressed to pictographs. If you aren’t engaging arguments, then you have degenerated to tribalism. So, postmodern might be dressing up a decline with a word that is too respectable sounding.

Calling people who use smartphones premodern does not seem right. But, what information are they consuming on those screens? Is it mostly low-quality videos and quick poasts? That doesn’t seem like what someone in 1900 would expect of a modern person.

Here’s an idea for the new century. We are in an age of poastmodernism, beginning with the founding of Twitter. This is different from the kind of skepticism or moral relativism that defined postmodernism. The poasters and their followers can be earnest. They retweet like evangelists. (A “poast” is a message posted in an internet forum.)

Poasts are short. This does not allow for nuance or traditional rational forms of argumentation. A poast could be referencing a rich history or body of literature, but if this generation has not evaluated those original sources then they are really just getting the meme. The poast does not provide its own context. Tyler Cowen says that people who think “modern art” is absurd have no context. Context for modern art would be the classical art and realistic landscape paintings that came before. Most Americans including myself are pretty ignorant about classical art. Similarly, how much value would teenagers get from Lord of the Rings internet memes if they have never seen the movies or read the books?

I’m on Twitter. The pace of discourse is more fun than reading a 50-page econ journal article. I get the appeal of poasting. It’s easy. Our first pediatrician told us not to let our baby use touchscreen games. She told us that it is good for a child to struggle to touch a ball that is two feet away across the floor. Better that they cry over the ball than get the dopamine too easily on a tablet game. Tapping on a screen trains kids for instant rewards. Something that concerns me about a generation that was not raised on books is that they will actually enjoy poasting less than I do, because they will be used to the rapid pace of reward. Twitter as a company benefits from the current generation of people who did not grow up with Twitter.

Poasting affects politics. This week two US Senate candidates had a debate. What would someone who gets most of their news from social media learn about the debate? Some top poasts about the debate have almost zero positive policy substance. Campaigners use the internet medium to dunk on their opponents instead of offer solutions to problems. What attracts engagement is the fire emoji.

This is not meant as a comment on either men as candidates. I share these jabs because lots of Americans are consuming their “news” in this form (see Pew Research chart). In postmodernism a successful political candidate has to appeal to feelings as much as reason. In poastmodernism, they only have 280 characters to work with. (Donald Trump was a skilled poaster.)

Getting elected today might require great poasting, but that has little to do with being good at governing. Most people think the details of government are dull. Ten minutes into a city council meeting, I’m bored and ready to check the notifications on my phone. And yet, we cannot just poast about poasting. It’s the physical political world and the classic books that make the best subjects of conversation. So, I’m not sure if the era of poastmodernism will last for a long time, or simply to the end of my lifetime. Millennials are not going to give up the dog fire meme.

You’ll have to pry it from our hands after our large generation has passed on. But will it inspire people in the future? I have already been informed that teenagers are calling our gifs “cringe”. They seem to prefer 90 second videos of their peers dancing to pop music. Don’t ask me what comes next after that.

I’ll end on a positive note by saying that sometimes shorter is better. Get to the point quickly, if you can. Some of the novels produced in the modern era were too long. Adam Smith’s books would be more widely read if they were shorter. Long-winded speeches are not necessarily good and I’m glad I am not forced to listen to them. (I get the tl;dr the next day.)

A lot of bad ideas were dressed up in pages of smart-sounding language and then passed off for wisdom in the modern era. It might be harder to pull that off today. Authoritarian regimes in the past relied on being able to lie about conditions on the ground. Today, we know what is happening because of individuals on the ground sharing to Twitter (although social media can also be used for disinformation). American elites believed lies about what was going on inside the Soviet Union for years. That would be more difficult today.