Links - October 14, 2017

• What Facebook Did to American Democracy
  Alexis Madrigal - The Atlantic
  

  A great summary of how social media’s influence creeped into the political landscape. Madrigal’s account is more thorough than I could even imagine. Perhaps the most interesting point about his piece - one that I had not seen made this clearly elsewhere - is that the 2016 election was not so much about blind-siding, but frog-boiling.

• Cryptocurrency Incentives and Corporate Structures
  Elad Gil
  

  The reason cryptocurrencies, and the technology behind them, are exciting for me is not their insane returns, but the economic and political implications of creating totally new incentive systems. Matt Levine has a good summary of how these differ from the traditional VC backed company in yesterday’s Money Stuff, but Elad Gil’s post goes much more in depth into what kinds of corporate structures are enabled by crypto.

• Trustworthy Networking
  Ben Thompson - Stratechery
  

  The notion that Trumpism arose thanks to the 2017 equivalent of a DDoS attack, or an SQL injection on social media has been going around for a while. Here, Thompson makes a good analogy between Facebook today and Microsoft in the early 2000s, and exposes the dangers of assuming people’s good intentions on your platform.

• Trump and Stocks: What Gives?
  Justin Fox - Bloomberg View
  

  A lot of people are asking themselves how is it that the market is doing so well, when the political environment and various economic indicators make it seem like it should not. Many people predicted that with Trump as president, the US economy would not do well - myself included - so what’s going on? Fox argues that a good chunk of the growth is coming from increased consumption abroad, that investors expect Trump’s business friendly policies to be good for the market, and that maybe we’re just looking at the wrong metrics. One point he doesn’t make, and which I have not seen elsewhere, is that the dollar itself is losing value (nearly 6% since election day), so the bull-market is not actually as strong as it seems.

• When is a Dollar not a Dollar?
  Leo Polovets - Coding VC
  

  I initially thought this would go in another direction, i.e. money from different VC firms comes with different kinds of strings attached, giving different investment dollars different real values. However, Polovets pleasantly surprised me with a list of how changes in the various lines on your balance sheet have very different effects, and how startups could make better decisions by keeping that in mind.

• I wanted to understand why racists hated me. So I befriended Klansmen
  Daryl Davis - The Washington Post
  

  Racism is about ignorance, and this story is just one more example of it. I insist that all of politics distills down to applied otherness. Once you remove otherness, and you can see, um, others, as equals, it is much easier to agree on what a government should or should not do…

• Let Them Eat Paper Towels
  Paul Krugman - The New York Times
  

  …and on that note, here’s Krugman showing how the administration, and a good chunk of the population, don’t see Puerto Ricans as Americans.

• The Athletic Brassiere (podcast)
  99% Invisible
  

  It is always strange to hear about how much thought and effort went into the development of products that I don’t use and totally take for granted. One of the things I like the most about Roman Mars’ podcast is that it exposes me to stories that I would never wonder about on my own.

• Suitable for Children (podcast)
  This American Life
  

  More on race, history, and immigration.

• Flood Money (podcast)
  Planet Money
  

  An explanation of the insane insurance system that allows people to live in flood-prone areas in Houston, and elsewhere in the US. Through the National Flood Insurance Program “one percent of homes have been responsible for more than 25 percent of the claims,” which is kind of the point of insurance - except when you stop and think that if this incentive system were not in place, people would just not live there! By insuring these homes at subsidized rates, the government is incentivizing dangerous behavior (living in a flood-prone area) out of tax payers’ pockets.

• Tim O'Reilly on What's the Future (podcast)
  EconTalk
  

  An unusual EconTalk, where the topic is a mixed bag of technocracy and an optimistic outlook of the current technological revolution.

• The Super-Aggregators (podcast)
  Exponent
  

  In case the Stratechery post above was not enough, here’s Ben doubling down. Aggregation theory paired with politics. Towards the end of the episode there is a discussion on how, via regulation, increased transparency in the decisions made by algorithms could enable journalists and citizens to openly review the outcomes of machine learned systems, which in turn would change the behavior of the advertisers and scammers. Overall, a good way to spend an hour.