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Why Didn't the Government Stop the Crypto Scam? - 1 views

  • Securities and Exchange Commission Chair Gary Gensler, who took office in April of 2021 with a deep background in Wall Street, regulatory policy, and crypto, which he had taught at MIT years before joining the SEC. Gensler came in with the goal of implementing the rule of law in the crypto space, which he knew was full of scams and based on unproven technology. Yesterday, on CNBC, he was again confronted with Andrew Ross Sorkin essentially asking, “Why were you going after minor players when this Ponzi scheme was so flagrant?”
  • Cryptocurrencies are securities, and should fit under securities law, which would have imposed rules that would foster a de facto ban of the entire space. But since regulators had not actually treated them as securities for the last ten years, a whole new gray area of fake law had emerged
  • Almost as soon as he took office, Gensler sought to fix this situation, and treat them as securities. He began investigating important players
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  • But the legal wrangling to just get the courts to treat crypto as a set of speculative instruments regulated under securities law made the law moot
  • In May of 2022, a year after Gensler began trying to do something about Terra/Luna, Kwon’s scheme blew up. In a comically-too-late-to-matter gesture, an appeals court then said that the SEC had the right to compel information from Kwon’s now-bankrupt scheme. It is absolute lunacy that well-settled law, like the ability for the SEC to investigate those in the securities business, is now being re-litigated.
  • many crypto ‘enthusiasts’ watching Gensler discuss regulation with his predecessor “called for their incarceration or worse.”
  • it wasn’t just the courts who were an impediment. Gensler wasn’t the only cop on the beat. Other regulators, like those at the Commodities Futures Trading Commission, the Federal Reserve, or the Office of Comptroller of the Currency, not only refused to take action, but actively defended their regulatory turf against an attempt from the SEC to stop the scams.
  • Behind this was the fist of political power. Everyone saw the incentives the Senate laid down when every single Republican, plus a smattering of Democrats, defeated the nomination of crypto-skeptic Saule Omarova in becoming the powerful bank regulator at the Comptroller of the Currency
  • Instead of strong figures like Omarova, we had a weakling acting Comptroller Michael Hsu at the OCC, put there by the excessively cautious Treasury Secretary Janet Yellen. Hsu refused to stop bank interactions with crypto or fintech because, as he told Congress in 2021, “These trends cannot be stopped.”
  • It’s not just these regulators; everyone wanted a piece of the bureaucratic pie. In March of 2022, before it all unraveled, the Biden administration issued an executive order on crypto. In it, Biden said that virtually every single government agency would have a hand in the space.
  • That’s… insane. If everyone’s in charge, no one is.
  • And behind all of these fights was the money and political prestige of some most powerful people in Silicon Valley, who were funding a large political fight to write the rules for crypto, with everyone from former Treasury Secretary Larry Summers to former SEC Chair Mary Jo White on the payroll.
  • (Even now, even after it was all revealed as a Ponzi scheme, Congress is still trying to write rules favorable to the industry. It’s like, guys, stop it. There’s no more bribe money!)
  • Moreover, the institution Gensler took over was deeply weakened. Since the Reagan administration, wave after wave of political leader at the SEC has gutted the place and dumbed down the enforcers. Courts have tied up the commission in knots, and Congress has defanged it
  • Under Trump crypto exploded, because his SEC chair Jay Clayton had no real policy on crypto (and then immediately went into the industry after leaving.) The SEC was so dormant that when Gensler came into office, some senior lawyers actually revolted over his attempt to make them do work.
  • In other words, the regulators were tied up in the courts, they were against an immensely powerful set of venture capitalists who have poured money into Congress and D.C., they had feeble legal levers, and they had to deal with ‘crypto enthusiasts' who thought they should be jailed or harmed for trying to impose basic rules around market manipulation.
  • The bottom line is, Gensler is just one regulator, up against a lot of massed power, money, and bad institutional habits. And we as a society simply made the choice through our elected leaders to have little meaningful law enforcement in financial markets, which first became blindingly obvious in 2008 during the financial crisis, and then became comical ten years later when a sector whose only real use cases were money laundering
  • , Ponzi scheming or buying drugs on the internet, managed to rack up enough political power to bring Tony Blair and Bill Clinton to a conference held in a tax haven billed as ‘the future.’
  • It took a few years, but New Dealers finally implemented a workable set of securities rules, with the courts agreeing on basic definitions of what was a security. By the 1950s, SEC investigators could raise an eyebrow and change market behavior, and the amount of cheating in finance had dropped dramatically.
  • By 1935, the New Dealers had set up a new agency, the Securities and Exchange Commission, and cleaned out the FTC. Yet there was still immense concern that Roosevelt had not been able to tame Wall Street. The Supreme Court didn’t really ratify the SEC as a constitutional body until 1938, and nearly struck it down in 1935 when a conservative Supreme Court made it harder for the SEC to investigate cases.
  • Institutional change, in other words, takes time.
  • It’s a lesson to remember as we watch the crypto space melt down, with ex-billionaire Sam Bankman-Fried
  • It’s not like perfidy in crypto was some hidden secret. At the top of the market, back in December 2021, I wrote a piece very explicitly saying that crypto was a set of Ponzi schemes. It went viral, and I got a huge amount of hate mail from crypto types
  • one of the more bizarre aspects of the crypto meltdown is the deep anger not just at those who perpetrated it, but at those who were trying to stop the scam from going on. For instance, here’s crypto exchange Coinbase CEO Brian Armstrong, who just a year ago was fighting regulators vehemently, blaming the cops for allowing gambling in the casino he helps run.
  • FTX.com was an offshore exchange not regulated by the SEC. The problem is that the SEC failed to create regulatory clarity here in the US, so many American investors (and 95% of trading activity) went offshore. Punishing US companies for this makes no sense.
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Inside Gary Gensler's SEC Campaign to Rein In the Crypto Industry - The New York Times - 0 views

  • Under his leadership, though, the S.E.C. has made crypto a priority, nearly doubling its enforcement team to 50 members. In February, the agency levied a $100 million fine on the crypto lending company BlockFi over registration failures; BlockFi suspended operations this month as a result of its ties to FTX.
  • According to public filings, the agency is also investigating the process by which Coinbase, the largest U.S. crypto exchange, chooses which cryptocurrencies to offer.
  • “There were a lot of entrepreneurs that grew up in this field and chose to be noncompliant,” Mr. Gensler said in an interview last month at the S.E.C. headquarters in Washington. “We will be a cop on the beat.”
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  • Mr. Gensler’s central claim is simple: For all their novel attributes, most cryptocurrencies are securities, like stocks or other investment products. That means the developers who issue cryptocurrencies must register with the U.S. government and disclose information about their plans.
  • Even before FTX’s collapse, the debate was reaching an inflection point: A federal judge is expected to rule in the coming months in a lawsuit brought by the S.E.C. that charges the cryptocurrency issuer Ripple with offering unregistered securities. A victory for the government would strengthen Mr. Gensler’s hand, establishing a precedent that could pave the way for more lawsuits against crypto companies.
  • A former Goldman Sachs partner, Mr. Gensler became one of the most aggressive financial regulators in Washington after the 2008 recession. As chairman of the Commodity Futures Trading Commission, an agency that regulates the financial markets, he helped carry out the 2010 Dodd-Frank Act, which aimed to protect consumers and rein in Wall Street.
  • when Mr. Gensler took over the S.E.C., the crypto industry hailed him as an enthusiast who understood the technology’s potential. Bitcoin “is in good hands,” one venture investor tweeted.
  • But it soon became clear that Mr. Gensler would take a hard-line approach. In July 2021, he met with a group of industry representatives, including the leader of the Blockchain Association, a prominent crypto trade group. He bluntly informed her that most of the organization’s members were probably violating federal rules, two people familiar with the meeting said.
  • Rather than devise new rules for crypto, Mr. Gensler has focused on enforcing the current ones as broadly as possible.
  • A few days later, Mr. Gensler called crypto “the Wild West” while speaking at a national security conference in Washington.
  • Behind closed doors, Mr. Gensler has been equally aggressive. “I’ve heard about other groups going in and getting in arguments,” said Perianne Boring, the founder of the Chamber of Digital Commerce, a crypto advocacy group. “You want to have a fight, you can have one.”
  • In crypto circles, mentioning Mr. Gensler’s name elicits quivers of fury. A Twitter account for the crypto company LBRY once called him “a demon wearing human flesh.”
  • The basis for Mr. Gensler’s claim that cryptocurrencies are securities is a legal analysis known as the Howey Test, which the Supreme Court outlined in 1946. Under the framework, a financial product is deemed a security when it offers the chance to invest in a “common enterprise” with the expectation of profiting from the efforts of others.
  • FTX’s collapse has unleashed a new level of scrutiny. Screenshots of Mr. Gensler’s public meeting schedule, which show multiple sessions with Mr. Bankman-Fried, have circulated on Twitter, where crypto fans who once said Mr. Gensler was overly aggressive have now accused him of cozying up to a criminal.
  • “If you don’t like him, you don’t like the current S.E.C., then of course you’re just going to blame him, regardless of the facts,” Mr. Reiners said. “If Sam Bankman-Fried tried to get a meeting with the S.E.C., and Gary Gensler said absolutely not, I’ll never talk to you, the Republicans would’ve gone ballistic prior to the collapse.”
  • “Why we often separate these things out is so that the public is better protected about the inherent conflicts,” he said. “It’s really important to make sure that this field comes in, gets registered, gets regulated.”
  • In public remarks shortly after FTX imploded, Mr. Gensler argued that too many crypto companies performed multiple financial roles at the same time — like running an exchange and making trades, an apparent reference to the close relationship between FTX and Alameda.
  • The outcome will also draw attention in Congress, where a slate of crypto-related bills was introduced this year. When Mr. Gensler testified in front of the Senate Banking Committee in September, he was grilled by Republican senators, who said the S.E.C. was offering insufficient legal guidance to crypto companies that wanted to comply with federal law.“Not liking the answer from the S.E.C.,” he shot back, “doesn’t mean there isn’t guidance.”
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Supreme Court rules to limit SEC power to recover profit from fraud - The Washington Post - 0 views

  • The Supreme Court on Monday unanimously limited the federal government’s power to recover the profits made from illegal behavior.
  • The question for the Supreme Court was whether disgorgements were a form of a penalty, which is subject to the statute of limitations, or a remedy for unjust enrichment that simply restores the offender to the situation he would have been in if he had not acted illegally, as the government claimed.
  • A judge in 2015 ordered him to pay a $2.4 million civil penalty. But because the SEC has interpreted disgorgement to have no time restraint, the judge said Kokesh must also pay $35 million, the calculated amount of illegal profits dating back to the initiation of his illegal behavior.
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Whistleblower: Twitter misled investors, FTC and underplayed spam issues - Washington Post - 0 views

  • Twitter executives deceived federal regulators and the company’s own board of directors about “extreme, egregious deficiencies” in its defenses against hackers, as well as its meager efforts to fight spam, according to an explosive whistleblower complaint from its former security chief.
  • The complaint from former head of security Peiter Zatko, a widely admired hacker known as “Mudge,” depicts Twitter as a chaotic and rudderless company beset by infighting, unable to properly protect its 238 million daily users including government agencies, heads of state and other influential public figures.
  • Among the most serious accusations in the complaint, a copy of which was obtained by The Washington Post, is that Twitter violated the terms of an 11-year-old settlement with the Federal Trade Commission by falsely claiming that it had a solid security plan. Zatko’s complaint alleges he had warned colleagues that half the company’s servers were running out-of-date and vulnerable software and that executives withheld dire facts about the number of breaches and lack of protection for user data, instead presenting directors with rosy charts measuring unimportant changes.
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  • “Security and privacy have long been top companywide priorities at Twitter,” said Twitter spokeswoman Rebecca Hahn. She said that Zatko’s allegations appeared to be “riddled with inaccuracies” and that Zatko “now appears to be opportunistically seeking to inflict harm on Twitter, its customers, and its shareholders.” Hahn said that Twitter fired Zatko after 15 months “for poor performance and leadership.” Attorneys for Zatko confirmed he was fired but denied it was for performance or leadership.
  • the whistleblower document alleges the company prioritized user growth over reducing spam, though unwanted content made the user experience worse. Executives stood to win individual bonuses of as much as $10 million tied to increases in daily users, the complaint asserts, and nothing explicitly for cutting spam.
  • Chief executive Parag Agrawal was “lying” when he tweeted in May that the company was “strongly incentivized to detect and remove as much spam as we possibly can,” the complaint alleges.
  • Zatko described his decision to go public as an extension of his previous work exposing flaws in specific pieces of software and broader systemic failings in cybersecurity. He was hired at Twitter by former CEO Jack Dorsey in late 2020 after a major hack of the company’s systems.
  • “I felt ethically bound. This is not a light step to take,” said Zatko, who was fired by Agrawal in January. He declined to discuss what happened at Twitter, except to stand by the formal complaint. Under SEC whistleblower rules, he is entitled to legal protection against retaliation, as well as potential monetary rewards.
  • A person familiar with Zatko’s tenure said the company investigated Zatko’s security claims during his time there and concluded they were sensationalistic and without merit. Four people familiar with Twitter’s efforts to fight spam said the company deploys extensive manual and automated tools to both measure the extent of spam across the service and reduce it.
  • In 1998, Zatko had testified to Congress that the internet was so fragile that he and others could take it down with a half-hour of concentrated effort. He later served as the head of cyber grants at the Defense Advanced Research Projects Agency, the Pentagon innovation unit that had backed the internet’s invention.
  • Overall, Zatko wrote in a February analysis for the company attached as an exhibit to the SEC complaint, “Twitter is grossly negligent in several areas of information security. If these problems are not corrected, regulators, media and users of the platform will be shocked when they inevitably learn about Twitter’s severe lack of security basics.”
  • Zatko’s complaint says strong security should have been much more important to Twitter, which holds vast amounts of sensitive personal data about users. Twitter has the email addresses and phone numbers of many public figures, as well as dissidents who communicate over the service at great personal risk.
  • This month, an ex-Twitter employee was convicted of using his position at the company to spy on Saudi dissidents and government critics, passing their information to a close aide of Crown Prince Mohammed bin Salman in exchange for cash and gifts.
  • Zatko’s complaint says he believed the Indian government had forced Twitter to put one of its agents on the payroll, with access to user data at a time of intense protests in the country. The complaint said supporting information for that claim has gone to the National Security Division of the Justice Department and the Senate Select Committee on Intelligence. Another person familiar with the matter agreed that the employee was probably an agent.
  • “Take a tech platform that collects massive amounts of user data, combine it with what appears to be an incredibly weak security infrastructure and infuse it with foreign state actors with an agenda, and you’ve got a recipe for disaster,” Charles E. Grassley (R-Iowa), the top Republican on the Senate Judiciary Committee,
  • Many government leaders and other trusted voices use Twitter to spread important messages quickly, so a hijacked account could drive panic or violence. In 2013, a captured Associated Press handle falsely tweeted about explosions at the White House, sending the Dow Jones industrial average briefly plunging more than 140 points.
  • After a teenager managed to hijack the verified accounts of Obama, then-candidate Joe Biden, Musk and others in 2020, Twitter’s chief executive at the time, Jack Dorsey, asked Zatko to join him, saying that he could help the world by fixing Twitter’s security and improving the public conversation, Zatko asserts in the complaint.
  • The complaint — filed last month with the Securities and Exchange Commission and the Department of Justice, as well as the FTC — says thousands of employees still had wide-ranging and poorly tracked internal access to core company software, a situation that for years had led to embarrassing hacks, including the commandeering of accounts held by such high-profile users as Elon Musk and former presidents Barack Obama and Donald Trump.
  • But at Twitter Zatko encountered problems more widespread than he realized and leadership that didn’t act on his concerns, according to the complaint.
  • Twitter’s difficulties with weak security stretches back more than a decade before Zatko’s arrival at the company in November 2020. In a pair of 2009 incidents, hackers gained administrative control of the social network, allowing them to reset passwords and access user data. In the first, beginning around January of that year, hackers sent tweets from the accounts of high-profile users, including Fox News and Obama.
  • Several months later, a hacker was able to guess an employee’s administrative password after gaining access to similar passwords in their personal email account. That hacker was able to reset at least one user’s password and obtain private information about any Twitter user.
  • Twitter continued to suffer high-profile hacks and security violations, including in 2017, when a contract worker briefly took over Trump’s account, and in the 2020 hack, in which a Florida teen tricked Twitter employees and won access to verified accounts. Twitter then said it put additional safeguards in place.
  • This year, the Justice Department accused Twitter of asking users for their phone numbers in the name of increased security, then using the numbers for marketing. Twitter agreed to pay a $150 million fine for allegedly breaking the 2011 order, which barred the company from making misrepresentations about the security of personal data.
  • After Zatko joined the company, he found it had made little progress since the 2011 settlement, the complaint says. The complaint alleges that he was able to reduce the backlog of safety cases, including harassment and threats, from 1 million to 200,000, add staff and push to measure results.
  • But Zatko saw major gaps in what the company was doing to satisfy its obligations to the FTC, according to the complaint. In Zatko’s interpretation, according to the complaint, the 2011 order required Twitter to implement a Software Development Life Cycle program, a standard process for making sure new code is free of dangerous bugs. The complaint alleges that other employees had been telling the board and the FTC that they were making progress in rolling out that program to Twitter’s systems. But Zatko alleges that he discovered that it had been sent to only a tenth of the company’s projects, and even then treated as optional.
  • “If all of that is true, I don’t think there’s any doubt that there are order violations,” Vladeck, who is now a Georgetown Law professor, said in an interview. “It is possible that the kinds of problems that Twitter faced eleven years ago are still running through the company.”
  • “Agrawal’s Tweets and Twitter’s previous blog posts misleadingly imply that Twitter employs proactive, sophisticated systems to measure and block spam bots,” the complaint says. “The reality: mostly outdated, unmonitored, simple scripts plus overworked, inefficient, understaffed, and reactive human teams.”
  • One current and one former employee recalled that incident, when failures at two Twitter data centers drove concerns that the service could have collapsed for an extended period. “I wondered if the company would exist in a few days,” one of them said.
  • The current and former employees also agreed with the complaint’s assertion that past reports to various privacy regulators were “misleading at best.”
  • For example, they said the company implied that it had destroyed all data on users who asked, but the material had spread so widely inside Twitter’s networks, it was impossible to know for sure
  • As the head of security, Zatko says he also was in charge of a division that investigated users’ complaints about accounts, which meant that he oversaw the removal of some bots, according to the complaint. Spam bots — computer programs that tweet automatically — have long vexed Twitter. Unlike its social media counterparts, Twitter allows users to program bots to be used on its service: For example, the Twitter account @big_ben_clock is programmed to tweet “Bong Bong Bong” every hour in time with Big Ben in London. Twitter also allows people to create accounts without using their real identities, making it harder for the company to distinguish between authentic, duplicate and automated accounts.
  • In the complaint, Zatko alleges he could not get a straight answer when he sought what he viewed as an important data point: the prevalence of spam and bots across all of Twitter, not just among monetizable users.
  • Zatko cites a “sensitive source” who said Twitter was afraid to determine that number because it “would harm the image and valuation of the company.” He says the company’s tools for detecting spam are far less robust than implied in various statements.
  • The complaint also alleges that Zatko warned the board early in his tenure that overlapping outages in the company’s data centers could leave it unable to correctly restart its servers. That could have left the service down for months, or even have caused all of its data to be lost. That came close to happening in 2021, when an “impending catastrophic” crisis threatened the platform’s survival before engineers were able to save the day, the complaint says, without providing further details.
  • The four people familiar with Twitter’s spam and bot efforts said the engineering and integrity teams run software that samples thousands of tweets per day, and 100 accounts are sampled manually.
  • Some employees charged with executing the fight agreed that they had been short of staff. One said top executives showed “apathy” toward the issue.
  • Zatko’s complaint likewise depicts leadership dysfunction, starting with the CEO. Dorsey was largely absent during the pandemic, which made it hard for Zatko to get rulings on who should be in charge of what in areas of overlap and easier for rival executives to avoid collaborating, three current and former employees said.
  • For example, Zatko would encounter disinformation as part of his mandate to handle complaints, according to the complaint. To that end, he commissioned an outside report that found one of the disinformation teams had unfilled positions, yawning language deficiencies, and a lack of technical tools or the engineers to craft them. The authors said Twitter had no effective means of dealing with consistent spreaders of falsehoods.
  • Dorsey made little effort to integrate Zatko at the company, according to the three employees as well as two others familiar with the process who spoke on the condition of anonymity to describe sensitive dynamics. In 12 months, Zatko could manage only six one-on-one calls, all less than 30 minutes, with his direct boss Dorsey, who also served as CEO of payments company Square, now known as Block, according to the complaint. Zatko allegedly did almost all of the talking, and Dorsey said perhaps 50 words in the entire year to him. “A couple dozen text messages” rounded out their electronic communication, the complaint alleges.
  • Faced with such inertia, Zatko asserts that he was unable to solve some of the most serious issues, according to the complaint.
  • Some 30 percent of company laptops blocked automatic software updates carrying security fixes, and thousands of laptops had complete copies of Twitter’s source code, making them a rich target for hackers, it alleges.
  • A successful hacker takeover of one of those machines would have been able to sabotage the product with relative ease, because the engineers pushed out changes without being forced to test them first in a simulated environment, current and former employees said.
  • “It’s near-incredible that for something of that scale there would not be a development test environment separate from production and there would not be a more controlled source-code management process,” said Tony Sager, former chief operating officer at the cyberdefense wing of the National Security Agency, the Information Assurance divisio
  • Sager is currently senior vice president at the nonprofit Center for Internet Security, where he leads a consensus effort to establish best security practices.
  • The complaint says that about half of Twitter’s roughly 7,000 full-time employees had wide access to the company’s internal software and that access was not closely monitored, giving them the ability to tap into sensitive data and alter how the service worked. Three current and former employees agreed that these were issues.
  • “A best practice is that you should only be authorized to see and access what you need to do your job, and nothing else,” said former U.S. chief information security officer Gregory Touhill. “If half the company has access to and can make configuration changes to the production environment, that exposes the company and its customers to significant risk.”
  • The complaint says Dorsey never encouraged anyone to mislead the board about the shortcomings, but that others deliberately left out bad news.
  • When Dorsey left in November 2021, a difficult situation worsened under Agrawal, who had been responsible for security decisions as chief technology officer before Zatko’s hiring, the complaint says.
  • An unnamed executive had prepared a presentation for the new CEO’s first full board meeting, according to the complaint. Zatko’s complaint calls the presentation deeply misleading.
  • The presentation showed that 92 percent of employee computers had security software installed — without mentioning that those installations determined that a third of the machines were insecure, according to the complaint.
  • Another graphic implied a downward trend in the number of people with overly broad access, based on the small subset of people who had access to the highest administrative powers, known internally as “God mode.” That number was in the hundreds. But the number of people with broad access to core systems, which Zatko had called out as a big problem after joining, had actually grown slightly and remained in the thousands.
  • The presentation included only a subset of serious intrusions or other security incidents, from a total Zatko estimated as one per week, and it said that the uncontrolled internal access to core systems was responsible for just 7 percent of incidents, when Zatko calculated the real proportion as 60 percent.
  • Zatko stopped the material from being presented at the Dec. 9, 2021 meeting, the complaint said. But over his continued objections, Agrawal let it go to the board’s smaller Risk Committee a week later.
  • Agrawal didn’t respond to requests for comment. In an email to employees after publication of this article, obtained by The Post, he said that privacy and security continues to be a top priority for the company, and he added that the narrative is “riddled with inconsistences” and “presented without important context.”
  • On Jan. 4, Zatko reported internally that the Risk Committee meeting might have been fraudulent, which triggered an Audit Committee investigation.
  • Agarwal fired him two weeks later. But Zatko complied with the company’s request to spell out his concerns in writing, even without access to his work email and documents, according to the complaint.
  • Since Zatko’s departure, Twitter has plunged further into chaos with Musk’s takeover, which the two parties agreed to in May. The stock price has fallen, many employees have quit, and Agrawal has dismissed executives and frozen big projects.
  • Zatko said he hoped that by bringing new scrutiny and accountability, he could improve the company from the outside.
  • “I still believe that this is a tremendous platform, and there is huge value and huge risk, and I hope that looking back at this, the world will be a better place, in part because of this.”
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Facebook Papers: 'History Will Not Judge Us Kindly' - The Atlantic - 0 views

  • Facebook’s hypocrisies, and its hunger for power and market domination, are not secret. Nor is the company’s conflation of free speech and algorithmic amplification
  • But the events of January 6 proved for many people—including many in Facebook’s workforce—to be a breaking point.
  • these documents leave little room for doubt about Facebook’s crucial role in advancing the cause of authoritarianism in America and around the world. Authoritarianism predates the rise of Facebook, of course. But Facebook makes it much easier for authoritarians to win.
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  • Again and again, the Facebook Papers show staffers sounding alarms about the dangers posed by the platform—how Facebook amplifies extremism and misinformation, how it incites violence, how it encourages radicalization and political polarization. Again and again, staffers reckon with the ways in which Facebook’s decisions stoke these harms, and they plead with leadership to do more.
  • And again and again, staffers say, Facebook’s leaders ignore them.
  • Facebook has dismissed the concerns of its employees in manifold ways.
  • One of its cleverer tactics is to argue that staffers who have raised the alarm about the damage done by their employer are simply enjoying Facebook’s “very open culture,” in which people are encouraged to share their opinions, a spokesperson told me. This stance allows Facebook to claim transparency while ignoring the substance of the complaints, and the implication of the complaints: that many of Facebook’s employees believe their company operates without a moral compass.
  • When you stitch together the stories that spanned the period between Joe Biden’s election and his inauguration, it’s easy to see Facebook as instrumental to the attack on January 6. (A spokesperson told me that the notion that Facebook played an instrumental role in the insurrection is “absurd.”)
  • what emerges from a close reading of Facebook documents, and observation of the manner in which the company connects large groups of people quickly, is that Facebook isn’t a passive tool but a catalyst. Had the organizers tried to plan the rally using other technologies of earlier eras, such as telephones, they would have had to identify and reach out individually to each prospective participant, then persuade them to travel to Washington. Facebook made people’s efforts at coordination highly visible on a global scale.
  • The platform not only helped them recruit participants but offered people a sense of strength in numbers. Facebook proved to be the perfect hype machine for the coup-inclined.
  • In November 2019, Facebook staffers noticed they had a serious problem. Facebook offers a collection of one-tap emoji reactions. Today, they include “like,” “love,” “care,” “haha,” “wow,” “sad,” and “angry.” Company researchers had found that the posts dominated by “angry” reactions were substantially more likely to go against community standards, including prohibitions on various types of misinformation, according to internal documents.
  • In July 2020, researchers presented the findings of a series of experiments. At the time, Facebook was already weighting the reactions other than “like” more heavily in its algorithm—meaning posts that got an “angry” reaction were more likely to show up in users’ News Feeds than posts that simply got a “like.” Anger-inducing content didn’t spread just because people were more likely to share things that made them angry; the algorithm gave anger-inducing content an edge. Facebook’s Integrity workers—employees tasked with tackling problems such as misinformation and espionage on the platform—concluded that they had good reason to believe targeting posts that induced anger would help stop the spread of harmful content.
  • By dialing anger’s weight back to zero in the algorithm, the researchers found, they could keep posts to which people reacted angrily from being viewed by as many users. That, in turn, translated to a significant (up to 5 percent) reduction in the hate speech, civic misinformation, bullying, and violent posts—all of which are correlated with offline violence—to which users were exposed.
  • Facebook rolled out the change in early September 2020, documents show; a Facebook spokesperson confirmed that the change has remained in effect. It was a real victory for employees of the Integrity team.
  • But it doesn’t normally work out that way. In April 2020, according to Frances Haugen’s filings with the SEC, Facebook employees had recommended tweaking the algorithm so that the News Feed would deprioritize the surfacing of content for people based on their Facebook friends’ behavior. The idea was that a person’s News Feed should be shaped more by people and groups that a person had chosen to follow. Up until that point, if your Facebook friend saw a conspiracy theory and reacted to it, Facebook’s algorithm might show it to you, too. The algorithm treated any engagement in your network as a signal that something was worth sharing. But now Facebook workers wanted to build circuit breakers to slow this form of sharing.
  • Experiments showed that this change would impede the distribution of hateful, polarizing, and violence-inciting content in people’s News Feeds. But Zuckerberg “rejected this intervention that could have reduced the risk of violence in the 2020 election,” Haugen’s SEC filing says. An internal message characterizing Zuckerberg’s reasoning says he wanted to avoid new features that would get in the way of “meaningful social interactions.” But according to Facebook’s definition, its employees say, engagement is considered “meaningful” even when it entails bullying, hate speech, and reshares of harmful content.
  • This episode, like Facebook’s response to the incitement that proliferated between the election and January 6, reflects a fundamental problem with the platform
  • Facebook’s megascale allows the company to influence the speech and thought patterns of billions of people. What the world is seeing now, through the window provided by reams of internal documents, is that Facebook catalogs and studies the harm it inflicts on people. And then it keeps harming people anyway.
  • “I am worried that Mark’s continuing pattern of answering a different question than the question that was asked is a symptom of some larger problem,” wrote one Facebook employee in an internal post in June 2020, referring to Zuckerberg. “I sincerely hope that I am wrong, and I’m still hopeful for progress. But I also fully understand my colleagues who have given up on this company, and I can’t blame them for leaving. Facebook is not neutral, and working here isn’t either.”
  • It is quite a thing to see, the sheer number of Facebook employees—people who presumably understand their company as well as or better than outside observers—who believe their employer to be morally bankrupt.
  • I spoke with several former Facebook employees who described the company’s metrics-driven culture as extreme, even by Silicon Valley standards
  • Facebook workers are under tremendous pressure to quantitatively demonstrate their individual contributions to the company’s growth goals, they told me. New products and features aren’t approved unless the staffers pitching them demonstrate how they will drive engagement.
  • e worries have been exacerbated lately by fears about a decline in new posts on Facebook, two former employees who left the company in recent years told me. People are posting new material less frequently to Facebook, and its users are on average older than those of other social platforms.
  • One of Facebook’s Integrity staffers wrote at length about this dynamic in a goodbye note to colleagues in August 2020, describing how risks to Facebook users “fester” because of the “asymmetrical” burden placed on employees to “demonstrate legitimacy and user value” before launching any harm-mitigation tactics—a burden not shared by those developing new features or algorithm changes with growth and engagement in mind
  • The note said:We were willing to act only after things had spiraled into a dire state … Personally, during the time that we hesitated, I’ve seen folks from my hometown go further and further down the rabbithole of QAnon and Covid anti-mask/anti-vax conspiracy on FB. It has been painful to observe.
  • Current and former Facebook employees describe the same fundamentally broken culture—one in which effective tactics for making Facebook safer are rolled back by leadership or never approved in the first place.
  • That broken culture has produced a broken platform: an algorithmic ecosystem in which users are pushed toward ever more extreme content, and where Facebook knowingly exposes its users to conspiracy theories, disinformation, and incitement to violence.
  • One example is a program that amounts to a whitelist for VIPs on Facebook, allowing some of the users most likely to spread misinformation to break Facebook’s rules without facing consequences. Under the program, internal documents show, millions of high-profile users—including politicians—are left alone by Facebook even when they incite violence
  • whitelisting influential users with massive followings on Facebook isn’t just a secret and uneven application of Facebook’s rules; it amounts to “protecting content that is especially likely to deceive, and hence to harm, people on our platforms.”
  • Facebook workers tried and failed to end the program. Only when its existence was reported in September by The Wall Street Journal did Facebook’s Oversight Board ask leadership for more information about the practice. Last week, the board publicly rebuked Facebook for not being “fully forthcoming” about the program.
  • As a result, Facebook has stoked an algorithm arms race within its ranks, pitting core product-and-engineering teams, such as the News Feed team, against their colleagues on Integrity teams, who are tasked with mitigating harm on the platform. These teams establish goals that are often in direct conflict with each other.
  • “We can’t pretend we don’t see information consumption patterns, and how deeply problematic they are for the longevity of democratic discourse,” a user-experience researcher wrote in an internal comment thread in 2019, in response to a now-infamous memo from Andrew “Boz” Bosworth, a longtime Facebook executive. “There is no neutral position at this stage, it would be powerfully immoral to commit to amorality.”
  • Zuckerberg has defined Facebook’s mission as making “social infrastructure to give people the power to build a global community that works for all of us,” but in internal research documents his employees point out that communities aren’t always good for society:
  • When part of a community, individuals typically act in a prosocial manner. They conform, they forge alliances, they cooperate, they organize, they display loyalty, they expect obedience, they share information, they influence others, and so on. Being in a group changes their behavior, their abilities, and, importantly, their capability to harm themselves or others
  • Thus, when people come together and form communities around harmful topics or identities, the potential for harm can be greater.
  • The infrastructure choices that Facebook is making to keep its platform relevant are driving down the quality of the site, and exposing its users to more dangers
  • hose dangers are also unevenly distributed, because of the manner in which certain subpopulations are algorithmically ushered toward like-minded groups
  • And the subpopulations of Facebook users who are most exposed to dangerous content are also most likely to be in groups where it won’t get reported.
  • And it knows that 3 percent of Facebook users in the United States are super-consumers of conspiracy theories, accounting for 37 percent of known consumption of misinformation on the platform.
  • Zuckerberg’s positioning of Facebook’s role in the insurrection is odd. He lumps his company in with traditional media organizations—something he’s ordinarily loath to do, lest the platform be expected to take more responsibility for the quality of the content that appears on it—and suggests that Facebook did more, and did better, than journalism outlets in its response to January 6. What he fails to say is that journalism outlets would never be in the position to help investigators this way, because insurrectionists don’t typically use newspapers and magazines to recruit people for coups.
  • Facebook wants people to believe that the public must choose between Facebook as it is, on the one hand, and free speech, on the other. This is a false choice. Facebook has a sophisticated understanding of measures it could take to make its platform safer without resorting to broad or ideologically driven censorship tactics.
  • Facebook knows that no two people see the same version of the platform, and that certain subpopulations experience far more dangerous versions than others do
  • Facebook knows that people who are isolated—recently widowed or divorced, say, or geographically distant from loved ones—are disproportionately at risk of being exposed to harmful content on the platform.
  • It knows that repeat offenders are disproportionately responsible for spreading misinformation.
  • All of this makes the platform rely more heavily on ways it can manipulate what its users see in order to reach its goals. This explains why Facebook is so dependent on the infrastructure of groups, as well as making reshares highly visible, to keep people hooked.
  • It could consistently enforce its policies regardless of a user’s political power.
  • Facebook could ban reshares.
  • It could choose to optimize its platform for safety and quality rather than for growth.
  • It could tweak its algorithm to prevent widespread distribution of harmful content.
  • Facebook could create a transparent dashboard so that all of its users can see what’s going viral in real time.
  • It could make public its rules for how frequently groups can post and how quickly they can grow.
  • It could also automatically throttle groups when they’re growing too fast, and cap the rate of virality for content that’s spreading too quickly.
  • Facebook could shift the burden of proof toward people and communities to demonstrate that they’re good actors—and treat reach as a privilege, not a right
  • You must be vigilant about the informational streams you swim in, deliberate about how you spend your precious attention, unforgiving of those who weaponize your emotions and cognition for their own profit, and deeply untrusting of any scenario in which you’re surrounded by a mob of people who agree with everything you’re saying.
  • It could do all of these things. But it doesn’t.
  • Lately, people have been debating just how nefarious Facebook really is. One argument goes something like this: Facebook’s algorithms aren’t magic, its ad targeting isn’t even that good, and most people aren’t that stupid.
  • All of this may be true, but that shouldn’t be reassuring. An algorithm may just be a big dumb means to an end, a clunky way of maneuvering a massive, dynamic network toward a desired outcome. But Facebook’s enormous size gives it tremendous, unstable power.
  • Facebook takes whole populations of people, pushes them toward radicalism, and then steers the radicalized toward one another.
  • When the most powerful company in the world possesses an instrument for manipulating billions of people—an instrument that only it can control, and that its own employees say is badly broken and dangerous—we should take notice.
  • The lesson for individuals is this:
  • Facebook could say that its platform is not for everyone. It could sound an alarm for those who wander into the most dangerous corners of Facebook, and those who encounter disproportionately high levels of harmful content
  • Without seeing how Facebook works at a finer resolution, in real time, we won’t be able to understand how to make the social web compatible with democracy.
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The Crypto Meltdown Could Have Been So Much Worse - The Atlantic - 0 views

  • The only reason we do not currently have a financial crisis, with a crash and with bailouts, is because regulators have withstood enormous pressure to allow interconnection and linkages between the crypto activities and the core of the financial and banking system,” he said. Because of their regulators’ stance, American banks are not collateralizing loans with cryptocurrencies, for instance. They are not freely trading crypto derivatives.
  • Meanwhile, an aversion to U.S. regulation has kept crypto businesses, many of which are based offshore, from getting more deeply involved in American finance. “If you are registered with the SEC and regulated by the SEC, you are required to have segregation of customer accounts,” Kelleher explained. “You’re required to have books and records. You’re required to have codes of conduct that include prohibitions on or identification of conflicts of interest. You’re prohibited from commingling funds. You’re required to have margin capital, and you have liquidity requirements.” Crypto companies “did not want that,”
  • It’s a Ponzi scheme. When there was tulip mania, at least when you lost all your money, you still had a tulip.”
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Frances Haugen's lawyers accuse Facebook of misleading investors about covid and climat... - 0 views

  • The complaint also cites internal records about the platform’s Climate Science Information Center, a much-touted hub designed to connect people with authoritative climate information. Awareness of the webpage was “very low,” even for people who had visited it.
  • “Climate change knowledge is generally poor,” one of the internal reports from 2021 said. “Given how many people use Facebook for information about climate change … climate science myths are a problem across all surveyed markets.”
  • The filings argue that it’s particularly urgent that Facebook tackle climate change misinformation, in part because of the popularity of the site. An internal company document cited in the complaint says Facebook is the second-most common source for news related to climate change, behind only television news and ahead of news aggregators, movies, online climate news sources and other social media platforms.
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  • The company adds information labels to some posts about climate change, and it reduces distribution of posts that its fact-checking partners rate as false. But it generally does not remove those posts, as it does with certain false claims about vaccines and the coronavirus. Michael Mann, director of the Earth System Science Center at Pennsylvania State University, called the company’s approach “disturbing.”
  • “Unmitigated climate change is projected to lead to far greater numbers of human fatalities than covid-19,” said Mann, author of “The New Climate War.” “The fact that they’re treating greater threat with so much less urgency and care is problematic.”
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Trump Nominates Wall Street Lawyer to Head S.E.C. - 0 views

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    President-elect Donald J. Trump said on Wednesday that he planned to nominate Jay Clayton, a partner with the prominent New York law firm Sullivan & Cromwell, to lead the Securities and Exchange Commission, the latest appointment with strong ties to Wall Street.
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Ukraine conflict taking heavy toll on economy says IMF - BBC News - 0 views

  • Ukraine's economy is likely to shrink by a worse-than-expected 9% in 2015, an International Monetary Fund (IMF) mission to the country has concluded.
  • The continuing conflict in the east of the country "took a heavier-than-expected toll on the economy in the first quarter of 2015", IMF mission chief Nikolay Gueorguiev said.Ukraine's inflation rate will hit 46% by the end of the year, he said.
  • Cash-strapped Ukraine has agreed a $17.5bn (£11.5bn) bailout programme with the IMF, and is hoping that the latest $2.5bn tranche of credit will be made soon. But the IMF will only release the money if it is satisfied the government is serious about reforming its beleaguered economy, which has been crippled by high energy costs, endemic corruption, and the conflict with pro-Russia separatists in the east of the country.
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    Ukraine is experiencing economic difficulties and is excepting help from the IMF.
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2 Abortion Foes Behind Planned Parenthood Videos Are Indicted - The New York Times - 0 views

  • A grand jury here that was investigating accusations of misconduct against Planned Parenthood has instead indicted two abortion opponents who made undercover videos of the organization.
  • Prosecutors in Harris County said one of the leaders of the Center for Medical Progress — an anti-abortion group that made secretly recorded videos purporting to show Planned Parenthood officials trying to illegally profit from the sale of fetal tissue — had been indicted on a charge of tampering with a governmental record, a felony, and on a misdemeanor charge related to purchasing human organs.
  • That leader, David R. Daleiden, 27, the director of the center, had posed as a biotechnology representative to infiltrate Planned Parenthood affiliates and surreptitiously record his efforts to procure tissue for research. Another center employee, Sandra S. Merritt, 62, was indicted on a felony charge of tampering with a governmental record.
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  • The record-tampering charges accused Mr. Daleiden and Ms. Merritt of making and presenting fake California driver’s licenses, with the intent to defraud, for their April meeting at Planned Parenthood in Houston.
  • Abortion opponents claimed that the videos, which were released starting in July, revealed that Planned Parenthood was engaged in the illegal sale of body parts — a charge that the organization has denied and that has not been supported in numerous congressional and state investigations triggered by the release of the videos.
  • In a statement on Monday night, Mr. Daleiden said: “The Center for Medical Progress uses the same undercover techniques that investigative journalists have used for decades in exercising our First Amendment rights to freedom of speech and of the press, and follows all applicable laws. We respect the processes of the Harris County district attorney, and note that buying fetal tissue requires a seller as well. Planned Parenthood still cannot deny the admissions from their leadership about fetal organ sales captured on video for all the world to see.”
  • The release of the videos last summer created a furor and gave new strength to the conservative drive to defund Planned Parenthood. The organization was forced to apologize for the casual tone that one of its officials had used to discuss a possible transfer of fetal tissue to what she believed was a legitimate medical company. But Planned Parenthood said the fees being discussed were to cover costs and were legal. Advertisement Continue reading the main story Advertisement Continue reading the main story
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Apple Fights Order to Unlock San Bernardino Gunman's iPhone - The New York Times - 0 views

  • Last month, some of President Obama’s top intelligence advisers met in Silicon Valley with Apple’s chief, Timothy D. Cook, and other technology leaders in what seemed to be a public rapprochement in their long-running dispute over the encryption safeguards built into their devices.
  • But behind the scenes, relations were tense, as lawyers for the Obama administration and Apple held closely guarded discussions for over two months about one particularly urgent case: The F.B.I. wanted Apple to help “unlock” an iPhone used by one of the two attackers who killed 14 people in San Bernardino, Calif., in December, but Apple was resisting.
  • When the talks collapsed, a federal magistrate judge, at the Justice Department’s request, ordered Apple to bypass security functions on the phone.
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  • The order set off a furious public battle on Wednesday between the Obama administration and one of the world’s most valuable companies in a dispute with far-reaching legal implications.
  • This is not the first time a technology company has been ordered to effectively decrypt its own product. But industry experts say it is the most significant because of Apple’s global profile, the invasive steps it says are being demanded and the brutality of the San Bernardino attacks.
  • Law enforcement officials who support the F.B.I.’s position said that the impasse with Apple provided an ideal test case to move from an abstract debate over the balance between national security and privacy to a concrete one
  • The F.B.I. has been unable to get into the phone used by Syed Rizwan Farook, who was killed by the police along with his wife after they attacked Mr. Farook’s co-workers at a holiday gathering.
  • Magistrate Judge Sheri Pym of the Federal District Court for the District of Central California issued her order Tuesday afternoon, after the F.B.I. said it had been unable to get access to the data on its own and needed Apple’s technical assistance.
  • Mr. Cook, the chief executive at Apple, responded Wednesday morning with a blistering, 1,100-word letter to Apple customers, warning of the “chilling” breach of privacy posed by the government’s demands. He maintained that the order would effectively require it to create a “backdoor” to get around its own safeguards, and Apple vowed to appeal the ruling by next week.
  • Apple argues that the software the F.B.I. wants it to create does not exist. But technologists say the company can do it.
  • pple executives had hoped to resolve the impasse without having to rewrite their own encryption software. They were frustrated that the Justice Department had aired its demand in public, according to an industry executive with knowledge of the case, who spoke on the condition of anonymity about internal discussions.
  • The dispute could initiate legislation in Congress, with Republicans and Democrats alike criticizing Apple’s stance on Wednesday and calling for tougher decryption requirements.
  • His vote of confidence was significant because James Comey, the F.B.I. director, has at times been at odds with the White House over his aggressive advocacy of tougher decryption requirements on technology companies. While Mr. Obama’s national security team was sympathetic to Mr. Comey’s position, others at the White House viewed legislation as potentially perilous. Late last year, Mr. Obama refused to back any legislation requiring decryption, leaving a court fight likely.
  • The Justice Department and the F.B.I. have the White House’s “full support,” the spokesman, Josh Earnest, said on Wednesday.
  • Donald J. Trump, the Republican presidential contender, also attacked Apple on Fox News, asking, “Who do they think they are?”
  • But Apple had many defenders of its own among privacy and consumer advocates, who praised Mr. Cook for standing up to what they saw as government overreach.
  • Many of the company’s defenders argued that the types of government surveillance operations exposed in 2013 by Edward J. Snowden, the former National Security Agency contractor, have prompted technology companies to build tougher encryption safeguards in their products because of the privacy demands of their customers.
  • Privacy advocates and others said they worried that if the F.B.I. succeeded in getting access to the software overriding Apple’s encryption, it would create easy access for the government in many future investigations.
  • The Apple order is a flash point in a dispute that has been building for more than a decade. Advertisement Continue reading the main story Advertisement Continue reading the main story
  • The F.B.I. began sounding alarms years ago about technology that allowed people to exchange private messages protected by encryption so strong that government agents could not break it. In fall 2010, at the behest of Robert S. Mueller III, the F.B.I. director, the Obama administration began work on a law that required technology companies to provide unencrypted data to the government.
  • Lawyers at the F.B.I., Justice Department and Commerce Department drafted bills around the idea that technology companies in the Internet age should be bound by the same rules as phone companies, which were forced during the Clinton administration to build digital networks that government agents could tap.
  • The draft legislation would have covered app developers like WhatsApp and large companies like Google and Apple, according to current and former officials involved in the process.
  • There is no debate that, when armed with a court order, the government can get text messages and other data stored in plain text. Far less certain was whether the government could use a court order to force a company to write software or redesign its system to decode encrypted data. A federal law would make that authority clear, they said.
  • But the disclosures of government surveillance by Mr. Snowden changed the privacy debate, and the Obama administration decided not to move on the proposed legislation. It has not been revived.
  • The legal issues raised by the judge’s order are complicated. They involve statutory interpretation, rather than constitutional rights, and they could end up before the Supreme Court.
  • As Apple noted, the F.B.I., instead of asking Congress to pass legislation resolving the encryption fight, has proposed what appears to be a novel reading of the All Writs Act of 1789.
  • The law lets judges “issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.”
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Shares of Weight Watchers Jump as Oprah Winfrey Takes a Stake - The New York Times - 0 views

  • Her show might be gone but the “Oprah Effect” clearly endures.
  • After Oprah Winfrey said on Monday she would buy a 10 percent stake in Weight Watchers and take a seat on the board, the company’s slumping stock doubled to $13.92 per share, adding about $400 million to its market value
  • Ms. Winfrey also plans to give Weight Watchers unfettered access to her name and face for marketing purposes.
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  • For years, Ms. Winfrey has helped make countless little-known brands wildly successful by endorsing them through one of the media ventures that made her a billionaire. But this is the first time she has made such an investment in a public company.
  • This year, Weight Watchers announced plans to cut roughly $100 million in additional costs and laid off the president of its North American business.After 10 straight quarters of declining sales, the stock had slumped 73 percent, to $6.79 on Friday.
  • Only one analyst out of eight had encouraged investors to buy shares of Weight Watchers. But that did not stop Ms. Winfrey.
  • Her successful endorsement of products through her annual list of favorite things so often produced skyrocketing sales and popularity that the result was called the “Oprah Effect.” Spanx, an undergarment used to make women look slimmer, was on the list in 2000, giving the then-unknown product national fame and helping turn its founder, Sara Blakely, into a billionaire.
  • Ms. Winfrey is expected to bring some major gravitas to Weight Watchers’ marketing department. She agreed to offer her name and face to Weight Watchers and no other weight-loss products for five years with the option to renew afterward, according to a filing with the Securities and Exchange Commission. The company already has a picture of Ms. Winfrey on its website home page.But it is unclear whether Ms. Winfrey’s backing can help Weight Watchers expand outside of its core demographic and attract younger users, according to R. J. Hottovy, an analyst at Morningstar.
  • The company agreed to issue Ms. Winfrey 6.4 million shares of common stock for $43.2 million, with the option to purchase an additional 3.5 million shares, the regulatory filing showed.
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    Oprah Winfrey's stock buy in Weight Watchers doubles company's value
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Iraq and the Kurds Are Going Broke - The New York Times - 1 views

  • Islamic State now have to wrestle with a challenge that has the potential to change battlefield fortunes: the slumping price of oil
  • racked up $18 billion in debt
  • Iraqi officials last year obtained a $1.7 billion loan from the World Bank and reached an agreement with the International Monetary Fund that will allow it to obtain additional loans
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  • which have become less advantageous for Iraq as the price of oil has crashed
  • Lukman Faily, Iraq’s ambassador
  • Iraqis are willing to do the fighting on the ground
  • “In some ways, our economic challenges are an opportunity for us to get our house in order,” Mr. Faily said
  • The Kurdish region, which includes three provinces, received a percentage of Iraq’s national budget until 2014
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Trump doesn't deserve credit for all the economic good news - The Washington Post - 0 views

  • He is president of the United States, not the world. And the economic surprises in the rest of the world have been more favorable than those in America. The scale of upward revisions of growth forecasts for 2017 and 2018 has been higher in Europe, Japan, China and emerging markets broadly than for the United States. Many other stock markets have outperformed those here.
  • If Trump’s pro-business policies were driving the global economy, one would expect an increase in net capital flows into the United States, and so a stronger dollar. In fact, the dollar has weakened significantly in the past year, despite more Federal Reserve tightening than was anticipated at the beginning of 2017.
  • Complacency about the economy can be a self-denying prophecy when it leads to excessive valuations, lending and spending. We are surely closer to such a point than we were a year ago. Sooner or later, another downturn will come
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  • If and when recession comes, the world will have much less room than usual to maneuver.
  • At the political level, the kind of agreement forged in London in 2009 between the G20 group of most developed countries to keep markets open, support international institutions and cooperate to stimulate their economies seems much more difficult to achieve today. And there is the real risk in many countries that recession would reinforce tendencies toward authoritarian nationalist politics.
  • If the short-run concern of those gathered in Davos will be how the world will deal with the next recession, the long-run one has to be declining appeal of democratic global values. In countries as diverse as the United States, Britain, Turkey, Russia, Israel and China, it appears that the governmental platform that commands the most popular support is rooted in nativism, nationalism and negativism. Populist nationalism eventually produces bad economic results, leading to more pressures for anti-establishment leadership and extreme policies.
  • The world can accept a message that the United States wants a fairer allocation of the burden of upholding the global system, that after a period of weak economic performance America needs to concentrate more efforts at home, and that it will be guided by its economic and security interests, not the promotion of abstract values.
  • But such a message needs to be accompanied by clear signals that the United States will strive to be a reliable and predictable partner, that it understands its interest in strong effective global institutions and that it recognizes that even self-interested nations can benefit from thoughtful diplomacy
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iHeartMedia laid off hundreds of radio DJs. Is AI to blame? - The Washington Post - 0 views

  • When iHeartMedia announced this month it would fire hundreds of workers across the country, the radio conglomerate said the restructuring was critical to take advantage of its “significant investments … in technology and artificial intelligence.” In a companywide email, chief executive Bob Pittman said the “employee dislocation” was “the unfortunate price we pay to modernize the company.
  • But laid-off employees like D’Edwin “Big Kosh” Walton, who made $12 an hour as an on-air personality for the Columbus, Ohio, hip-hop station 106.7 the Beat, don’t buy it. Walton doesn’t blame the cuts on a computer; he blames them on the company’s top executives, whose “coldblooded, calculated move” cost people their jobs.
  • It “ripped my [expletive] heart out,” Walton said. “The people at the top don’t know who we are at the bottom. They don’t understand the relationships and the connections we had with the communities. And that’s the worst part: They don’t care.”
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  • The dominant player in U.S. radio, which owns the online music service iHeartRadio and more than 850 local stations across the United States, has called AI the muscle it needs to fend off rivals, recapture listeners and emerge from bankruptcy
  • The company, which now uses software to schedule music, analyze research and mix songs, plans to consolidate offices around what executives call “AI-enabled Centers of Excellence.”
  • The company’s shift seems in line with a corporate America that is increasingly embracing automation, using technological advances to take over tasks once done by people, boosting profits and cutting costs
  • While the job cuts may sound “inhumane,” she added, they made sense from a Wall Street perspective, given the company’s need to trim costs and improve its profit margins.
  • “This is a typical example of a dying industry that is blaming technology for something that is just absolutely a reduction in force,”
  • iHeartRadio spokeswoman Wendy Goldberg declined to make executives available for comment or provide a total layoff count, saying only that the job cuts were “relatively small” compared with the company’s overall workforce of 12,500 employees
  • Del Colliano estimated that more than 1,000 people would lose their jobs nationwide.
  • iHeartMedia was shifting “jobs to the future from the past,” adding data scientists, podcast producers and other digital teams to help transform the radio broadcaster into a “multiplatform” creator and “America’s #1 audio company.
  • the long-running medium remains a huge business. In November, iHeartMedia reported it took in more than $1.6 billion in broadcast-radio revenue during the first nine months of 2019, and company filings claim that a quarter of a billion listeners still tune in every month to discover new music, catch up on the news or hear from their local DJs.
  • Executives at the Texas-based company have long touted human DJs as their biggest competitive strength, saying in federal securities filings last year that the company was in the “companionship” business because listeners build a “trusted bond and strong relationship” with the on-air personalities they hear every day.
  • The system can transition in real time between songs by layering in music, sound effects, voice-over snippets and ads, delivering the style of smooth, seamless playback that has long been the human DJ’s trade.
  • its “computational music presentation” AI can help erase the seconds-long gaps between songs that can lead to “a loss of energy, lack of continuity and disquieting sterility.”
  • One song wove cleanly into the other through an automated mix of booming sound effects, background music, interview sound bites and station-branding shout-outs (“Super Hi-Fi: Recommended by God”). The smooth transition might have taken a DJ a few minutes to prepare; the computer completed it in a matter of seconds
  • Much of the initial training for these delicate transitions comes from humans, who prerecord voice-overs, select songs, edit audio clips, and classify music by genre, style and mood. Zalon said the machine-learning system has been further refined by iHeartMedia’s human DJs, who have helped identify clumsy transitions and room for future improvements.
  • “To have radio DJs across the country that really care about song transitions and are listening to find everything wrong, that was awesome,” Zalon said. “It gave us hundreds of the world’s best ears. … They almost unwittingly became kind of like our QA [quality assurance] team.”
  • he expects that, in a few years, computer-generated voices could automatically read off the news, tee up interviews and introduce songs, potentially supplanting humans even more. The software performed 315 million musical transitions for listeners in January alone.
  • The company’s chief product officer, Chris Williams, said last year in an interview with the industry news site RadioWorld that “virtual DJs” that could seamlessly interweave chatter, music and ads were “absolutely” coming, and “something we are always thinking about.”
  • That has allowed the company, she said, to free up programming people for more creative pursuits, “embedding our radio stations into the communities and lives of our listeners better and deeper than they have been before.”
  • In 2008, to gain control of the radio and billboard titan then known as Clear Channel, the private-equity firms Bain Capital and Thomas H. Lee Partners staged a leveraged buyout, weighing the company down with a mountain of borrowed cash they needed to seal the deal.
  • The audacious move left the radio giant saddled with more than $20 billion in debt, just as the Great Recession kicked off and radio’s strengths began to rust. The debt would kneecap the company for the next decade, forcing it to pay more toward interest payments some years than it earned in revenue.
  • In the year the company filed for bankruptcy, Pittman, the company’s chief and a former head of MTV and AOL, was paid roughly $13 million in salary and bonus pay, nearly three times what he made in 2016
  • The company’s push to shrink and subsume local stations was also made possible by deregulation. In 2017, the Federal Communications Commission ditched a rule requiring radio stations to maintain a studio near where they were broadcasting. Local DJs have since been further replaced by prerecorded substitutes, sometimes from hundreds of miles away.
  • Ashley “Z” Elzinga, a former on-air personality for 95.6 KISS FM in Cleveland, said she was upbeat about the future but frustrated that the company had said the layoffs touched only a “relatively small” slice of its workforce. “I gave my life to this,” she said. “I moved my life, moved my family.
  • Since the layoffs, they’ve been inundated with messages from listeners who said they couldn’t imagine their daily lives without them. They said they don’t expect a computer-generated system will satisfy listeners or fill that void.
  • “It was something I was really looking forward to making a future out of. And in the blink of an eye, all of that stopped for me,” he said. “That’s the painful part. They just killed what I thought was the future for me.”
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Trump coronavirus scare shows no American is immune from risk - CNNPolitics - 0 views

  • The White House insists President Donald Trump doesn't need a coronavirus test, despite several members of his political circle self-quarantining after they came into contact with a man later diagnosed with the disease.
  • They include Florida GOP Rep. Matt Gaetz, who rode in "The Beast" limousine with Trump in the Sunshine State on Monday, before climbing up the steps of Air Force One behind the President. Incoming White House chief of staff Mark Meadows is also staying home until Wednesday despite his test coming back negative. Another Trump friend, Rep. Doug Collins, a Georgia Republican, was pictured shaking hands with the President on Friday.
  • The issue of Trump's health coincided with an alarming day as the number of infected Americans rose above 700, hard-hit Italy went into total lockdown and Wall Street stocks crashed to their worst day since the Great Recession amid widening fears that the crisis could tip the economy into a recession. The Securities and Exchange Commission on Monday asked all personnel based at its headquarters to work from home due to an employee who may have the virus, becoming the first federal agency to ask its Washington employees to stay home.
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The Geography of Trumpism - The New York Times - 0 views

  • We examined what factors predict a high level of Trump support relative to the total number of registered voters.The analysis shows that Trump counties are places where white identity mixes with long-simmering economic dysfunctions.
  • What they have in common is that they have largely missed the generation-long transition of the United States away from manufacturing and into a diverse, information-driven economy deeply intertwined with the rest of the world.
  • “It’s a nonurban, blue-collar and now apparently quite angry population,” said William Frey, a demographer at the Brookings Institution. “They’re not people who have moved around a lot, and things have been changing away from them, but they live in areas that feel stagnant in a lot of ways.”
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  • in the places where support for Mr. Trump runs the strongest, the proportion of the white population that didn’t finish high school is relatively high. So is the proportion of working-age adults who neither have a job nor are looking for one. The third-strongest correlation among hundreds of variables tested: the preponderance of mobile homes.
  • Trump counties include places that have voted for both Republicans and Democrats, and the strongest predictors of Trump support include how a county responded to two very different third-party candidates: Trump territory showed stronger support for the segregationist George Wallace in the 1968 election than the rest of the country, and substantially weaker support for the centrist former Republican John B. Anderson in 1980.
  • the economic problems that line up with strong Trump support have long been in the making, and defy simple fixes.
  • have any of the individuals commenting ever met or talked to the uneducated trailer dwellers referred to in this article. I think not. This poor pitiful underclass that we must now fix as true liberals has been making poor decisions for decades. Serial children withe serial mothers and resulting large child support payments. Job hopping and laying around the house all winter when laid off while waiting for the Wife to get home from work and make dinner. Gun purchases for thousands of dollars and 45,000 dollar trucks on an annual income of 35,000. Cashing in 401ks. To buy the latest 4 Wheeler. Oh and don't forget the biannual trips to Disney world or to hunt out west on credit cards. I sprang from uneducated people of another generation and the men by and large did not engage in self destructive behavior like this. sorry you make your bed and don't expect me to cry about it.
  • I think at least half of the American political class, the republican half, wants Americans to be ignorant. The ignorant are easily duped and manipulated. The GOP establishment clearly knows that, but they never expected someone like Trump to beat them at their own game. That explains why the GOP is generally unwilling to adequately fund public education and is content to punish the non-rich who seek higher education by burying them in debt.
  • Until now I had deceived myself into believing that I am a college educated hard working East coast Caucasian with moderate views and a penchant for reading a multi-faceted world class newspaper. However, the continued biased reports concerning Mr. Trump and his campaign are quite distasteful and have completely lost objectivity.Now, the journalistic attacks have moved toward his supporters and potential voters. Well, as with many of my fellow unintelligent white trash friends this only cements my unwavering support for the Trump campaign.
  • I have seen technology take jobs from people more than immigrants. It is a terrible feeling. Most of my peers and I are now working freelance jobs. Sometimes its voluntary but often times it is because we can't find full time jobs with benefits. For those of us over 60 it is the only work available. If you have never been independent you are in for a shock at how hard it can be to run a small sole proprietor business from scratch.
  • Enormous advances in technology have made the trans-oceanic distances disappear. Foreign-based administrative jobs are now transparent, meaning that "back-room" corporate jobs such as payroll, accounting and corporate management can be off-shored. Jobs in this category also include computer software development and computer system help-line support. The concept of the "virtual corporation", which maintains low levels of "project managers" can scale up or down, and only a small "corporate core" needs to be physically in the USA.
  • Trump has said that he hires people from other countries over American citizens and thinks Americans are already overpaid. So, why is he so popular with the angry voters who are living from paycheck to paycheck or were forced to retire? Trump is part of the problem, not the solution. The working class voters need wage insurance or a living wage solution and they need the government to step in and help them. Remember the WPA programs from the 30s? My guess is that Trump's supporters don't want to be the takers after years of thinking they were above that and were the makers. Surprise, we are all in the same boat.
  • there is a much bigger issue than creating jobs for these people. It is figuring out why so many are incapable of learning at a college level and beyond. I refuse to believe that it is nature dictating such a limitation. My money is on nurture; therefore, my money is on being able to solve that problem too.
  • Until we as a country stop treating intelligence as a disease and take steps to improve education across the board, this is what the fall-out will be. It was only a matter of time before someone figured out they could get to the White House by courting the angry white people vote.
  • among high school or less, 40% some college, but 33% among college graduates, and 19% among the post-graduates. In no election did Trump get the vote of the majority of college graduates or postgraduates. The education gap is consistent and steady. The gender gap is equally consistent.
  • The jobs engine the drove the US to its post war boom was the manufacturing sector. That has been gutted - by US consumer decisions.FDR did not practice racial identity politics.
  • Racism lurks - always - near the surface for ALL human beings. Don't believe me? Go take Harvard's Project Implicit tests (free) and learn about your own racist proclivities!By nature, all human beings tend toward tribalism; we are *wired* to notice and react to "difference". Civilization is the mass awareness of that proclivity towards shunning or rejecting "the other" and creating laws to stop it from becoming reality.When people become stressed, the veneer of civilization starts to break down - our more primitive, wired behaviors take over. That's what is happening now.We also have a huge propensity - as a species - towards cooperation. We have to somehow keep pursuing that "Better Angel of Our Nature" to keep the tide from turning permanently ugly.
  • As I read this article I began to confront an uncomfortable reality. We, as a society are to blame for Mr. Trump's support. Apparently we have ignored or overlooked the tragic plight faced by a sizable minority. Imagine the unemployed coal minor in West Virgina. His financial life is probably a shambles and he has no realistic prospect of recovering. He feels hopeless and abandoned. He sees publicized efforts to address problems of ethnic minorities and immigrants, yet he sits cold and jobless without anyone clamoring to address his situation. He starts getting angry and frustrated.Then, out of nowhere someone comes who appears to want to fight for him. Finally, someone who might champion his cause. Bring back jobs. Stop cheap labor from coming in.
  • Nationally, 23 percent of the 25-to-54-year-old population was not working in March, up from 18 percent in 2000. The areas where Trump is most popular appear to be at the forefront of that trend.
  • Don't people realize that technology, computers, automation and especially robots have replaced more manufacturing and more factories than all the illegal immigrants ever have? On many factory floors you hardly see any human beings at all. Every product is whisked along conveyor belts and assembled (or cooked), and then inspected, labeled, packaged and shipped with a minimum of human intervention. That's today's world. What are we to do? Protest against computers and robots.Also, American corporations have zero loyalty to the USA. Their loyalty is to their bottom line. They take advantage of every tax loophole they can; and if their product is labor intensive they would much rather pay 5000 workers a dollar a day with no benefits rather than stay in America and have to pay someone $18 an hour will vacation time, holiday time off, Soc Sec taxes and Medicare taxes.
  • This is the Party of Stupid the Republican carefully constructed through painstaking racism, defunding of public education, defunding of infrastructure, hate radio, Fox-Henhouse News and trickle-down poverty.Donald Trump's supporters are the direct result of the Republican's decades-long efforts at dumbing down a large swath of Americans.The Republican Party needs to take a giant proud bow as their electorate walks down the runway of nationally-assisted-suicide.
  • The irony of all this is that, yes, the world is shifting out from under the feet of the less-educated poor, but none of us face a really BIG or YUGE problem like slavery, Civil War, total war, a Great Depression, or even a gold/silver conflict. Yet Ken Lay and others can seriously muse over the possibility of secession from the union.The goals that so many of T's supporters are crying for are already in the process of being achieved -- the debt is too high but the national deficit has been cut in half under Obama. Millions now have health care that they didn't have before. "Taxed Enough Already" couldn't be more of an inept slogan.I wonder sometimes if the collapse of the USSR was such a good thing. Having a common enemy provided a kind of glue that held us together. Now some of us seem -- recklessly., hysterically, feverishly -- anxious to find an equally powerful enemy in our own ranks.
  • I can't count the number of my husband's uneducated white southern relations who have taken extensive advantage, repeatedly, of both state and federal programs, including unemployment, food stamps, occasional welfare, and (sometimes specious) "disability." (My husband's mother was one of 11 born to poor sharecroppers, and the only one to leave her subculture
  • Oh, and about the "myth" that opposition to Islam is only is by simplistic Islamophobes. Let me suggest for those who didn't get to it, this article about about the premier public intellectual of France: "Once Hopeful for Harmony, a Philosopher Voices Discord in France" It said that he has concluded that Islam is not comparable with 'Western enlightenment values."
  • It's obvious that the changing economy has structurally disadvantaged many less educated people across America. But, it is also true that economically distressed whites enjoy access to exactly the same programs that assist minorities. They just don't "feel" like this is true.
  • Truth be told, Trump is supported by numerous highly educated people who choose not to support known liars and/or socialists. These same people are tired of candidates who are bought and paid for by secret and evil Super PACs-- Trump is not controlled by these groups. Rubio, Kasich, Cruz and C;inton are.
  • The counties where Trump is most popular also have the lowest employment participation rates. Ordinarily, those folks would be expected to vote Democratic, which is more likely to continue the government spending that sustains them. Trump followers are willing to support him even though it is probably against their economic interest.So how to explain this? The strong correlation to previous support for George Wallace suggests it's about identity. A certain segment of the population does not accept diversity and change. They cling to white supremacy. The irony, as the article notes, is that these are the same folks who self-identify their heritage as "American," rather than, say "English" or "German." However, to me, they seem very un-American.
  • If policy hadn't been influenced by campaign funding, perhaps we would be in a better situation. Maybe congress would have paid more attention to improving the education system. It's a shame that most people don't understand that their only true weapon is voting for someone that isn't in debt to an industry. If we don't change our campaign finance system, nothing will change. Our voices will never be heard, our needs will never be met and policy will continue to favor profit, not people.
  • You are misinterpreting the analysis. This is a correlation analysis and what it says is that there is a moderately strong positive correlation between the % of people in a county that are white and have no high school and the % of people that support Trump. The 61 number is the correlation coefficient. The analysis does NOT show that folks in mobile homes vote for Trump.
  • There is only one interesting question regarding Trump: can he win Ohio and Florida in the national elections? Otherwise his campaign will turn into a footnote in American history like the campaign of many other unsuccessful candidates (Dukakis someone?). His voters, then, will be forgotten, as they usually are, until the next elections. That's the only time America's, winner takes it all culture, remembers those people exist.
  • However crude his message, on trade Trump has a legitimate point, which is that the US (not US companies, which don't care about international boundaries, but US workers) has got the short end of trade deals for decades. Whatever benefits the US has gleaned from these deals, they are minuscule compared to their utterly transformative effects on India, Mexico and especially China, which begs the question of why we couldn't have negotiated a better deal, one less devastating to old-line manufacturing. It often seems US negotiators are driven more by a religious belief in and devotion to free-trade principles, than by national self-interest. Trump may be unfit to be president, but I don't doubt he would have driven a harder bargain and come out with a better deal, if only because, unlike US negotiators, he'd be fully prepared to walk away from a deal he didn't like.
  • It's high time we re-engage in our communities with love and empathy. We need less talk of the theoretical economics underpinning trade deals and the credibility of climate science. It's not because these things are unimportant or irrelevant to governing in a complex world, but because our neighbors are afraid we've forgotten them in all our sophistication. They need to hear and see that we care about them. Our ideas about common efforts to improve their lives need to be less about class and more about community. We need to be clear that even the least among us are important to our common future
  • So many of the comments on this piece seem to fall into the category of subliminal rationales for long held prejudices that many of us have but don't understand.
  • this analysis didn’t show a particularly powerful relationship between the racial breakdown of a county and its likelihood of voting for Trump. There are Trump-supporting counties where very high proportions of the population are African-American and others where it was very low, for example.
  • There's a very powerful stigma associated with being poor in this country. Frankly, it makes it nearly impossible for an elite institution like the Times to write about poor populations without those same people perceiving a condescending tone. At the first mention of trailer parks--even if that is an apt descriptor for a type of housing--the words begin to cut and defenses rise. When spoken by a rich person, those words demean, even if they're not meant to by the speaker
  • The problem is that "Thug Trump," just so happens to touch on some truths, and existing bi-partisan defects that we ignore. Funny, as different as they are, Ralph Nader made the same point, that the major defects of our country are supported by both parties and thus untouchable. I guess the nature of a revolutionary is part misfit but also sensing the time is ripe for a drastic change. It may be better to look less at the person, and more that the endemic defects that he promises to change. From Huey Long to Norman Thomas, outsiders have had positive effects.
  • These relatives, who are very pleasant to talk to on a one-to-one basis, are the same people who send us rabid chain emails about how Obama hates America, how we need to "take back our country," etc. "The blacks" are "parasites and takers" and the real reason they invariably vote Republican. They see no relationship between their own "taking" and the "taking" by blacks and Hispanics.
  • Whether Trump can appeal to enough independent or even blue collar Democrats is problematic absent some sensational catastrophe in the economy or in government. But you never know. Recall the charge of "Rum, Romanism, and rebellion" late in the 1884 election. It changed history
  • I bought into that "it's the fault of freeloaders" shtick for years, until i was laid off at age 50. Suddenly, I was one of those "freeloaders" with a 30 year impeccable work history and it changed my mind drastically. I've run into people like me from all walks of life; people with degrees and skills who lost jobs and are cut out of returning to the world of employment. I found something eventually, but at half the pay with no benefits. I don't support Trump but he's tapped into the lives of people like me. Globalization has showed us that for those at the very top, the elites, our country and it's workers don't matter much as long as the money keeps flowing. Unfortunately, I can't see that Trump would do much to change that
  • racism in the US is complicated. Some people who say the right things do the worst things, and vice versa. What gets you in trouble is saying blue-collar stuff like "nappy-headed ho's" White liberals are the most politically correct and the most critical of crude speech. But white liberals often have less contact with blacks than any other whites. Bigotry is not easily identified.
  • One of the strongest predictors of Trump support is the proportion of the population that is native-born. Relatively few people in the places where Trump is strong are immigrants — and, as their answers on their ancestry reveal, they very much wear Americanness on their sleeve.
  • The point is that now, the entire middle class and working class have been fleeced by the Repubs AND the Dems, elected representatives who have shirked their duties and spent their time helping their billionaire puppetmasters.
  • Bernie supporters and Trump supporters have something big in common: their basic grievance, which is that the economy is rigged for the 1%. It's helpful to understand our differences, but then we should be finding common ground, not calling each other names. We're all people; we all deserve dignity and respect.
  • We are in the early throes of another revolution now, and this one will even more dramatically favor those with superior cognitive abilities and education over those with average or below average cognitive abilities and education. Yet all people at all levels need to eat, have shelter, and pursue lives of dignity and meaning. It remains unclear what kind of society will emerge from the current disruptions, but it is increasingly obvious that the transition will not be pretty.
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How Emergent BioSolutions Put an 'Extraordinary Burden' on the U.S.'s Troubled Stockpil... - 0 views

  • Government purchases for the Strategic National Stockpile, the country’s emergency medical reserve where such equipment is kept, have largely been driven by the demands and financial interests of a handful of biotech firms that have specialized in products that address terrorist threats rather than infectious disease.
  • “Today, I think, we would not allow anthrax to take up half the budget for a guaranteed supply of vaccines,” he said, adding, “Surely after such a calamity as the last year, we should take a fresh look at stockpiles and manufacturing and preparing for the next pandemic.”
  • Under normal circumstances, Emergent’s relationship with the federal stockpile would be of little public interest — an obscure contractor in an obscure corner of the federal bureaucracy applying the standard tools of Washington, like well-connected lobbyists and campaign contributions, to create a business heavily dependent on taxpayer dollars.
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  • Security concerns, moreover, keep most information about stockpile purchases under wraps. Details about the contracts and inventory are rarely made public, and even the storage locations are secret.
  • Former Emergent employees, government contractors, members of Congress, biodefense experts and current and former officials from agencies that oversee the stockpile described a deeply dysfunctional system that contributed to the shocking shortages last year.
  • Purchases are supposed to be based on careful assessments by government officials of how best to save lives, but many have also been influenced by Emergent’s bottom line
  • The stockpile has long been the company’s biggest and most reliable customer for its anthrax vaccines, which expire and need to be replaced every few years.
  • In the two decades since the repository was created, Emergent’s aggressive tactics, broad political connections and penchant for undercutting competitors have given it remarkable sway over the government’s purchasing decisions related to the vaccines
  • While national security officials still consider anthrax a threat, it has not received specific mention since 2012 in the intelligence community’s annual public assessment of dangers facing the country, a report that has repeatedly warned of pandemics.
  • Emergent bought the license for the country’s only approved anthrax vaccine in 1998 from the State of Michigan. Over time, the price per dose the government agreed to pay Emergent increased nearly sixfold, accounting for inflation, contributing to record revenues last year that topped $1.5 billion
  • The company, whose board is stocked with former federal officials, has deployed a lobbying budget more typical of some big pharmaceutical companies
  • Competing efforts to develop a better and cheaper anthrax vaccine, for example, collapsed after Emergent outmaneuvered its rivals, the documents and interviews show.
  • preparations for an outbreak like Covid-19 almost always took a back seat to Emergent’s anthrax vaccines
  • the government approved a plan in 2015 to buy tens of millions of N95 respirators — lifesaving equipment for medical workers that has been in short supply because of Covid-19 — but the masks repeatedly lost out in the competition for funding over the years leading up to the pandemic
  • After Dr. Frieden and others in the Obama administration tried but failed to lessen Emergent’s dominance over stockpile purchases, the company’s fortunes rose under Mr. Trump, who appointed a former Emergent consultant with a background in bioterrorism to run the office that now oversees the stockpile
  • “If I could spend less on anthrax replenishment, I could buy more N95s,” Dr. Kadlec said in an interview shortly after leaving office. “I could buy more ventilators. I could buy more of other things that quite frankly I didn’t have the money to buy.”
  • And now, as some members of Congress push for larger reserves of ventilators, masks and other equipment needed in a pandemic, a trade group led in part by a top Emergent lobbyist has warned that the purchases could endanger companies focused on threats like anthrax and smallpox by drawing down limited funds.
  • Last year, as the pandemic raced across the country, the government paid Emergent $626 million for products that included vaccines to fight an entirely different threat: a terrorist attack using anthrax.
  • “I think it’s pretty clear that the benefit of the vaccine is marginal,” he said in an interview
  • “They’re very vicious in their behavior toward anybody they perceive as having a different point of view,” said Dr. Tara O’Toole, a former Homeland Security official who says she ran afoul of Emergent in 2010 after telling Congress that the nation needed a newer and better anthrax vaccine.
  • That year, the company that would become Emergent — then known as BioPort — paid Michigan $25 million to buy the license for a government-developed anthrax vaccine and an aging manufacturing plant.
  • The company opened its doors with one product, called BioThrax, and one customer, the Defense Department, which required the vaccine for service members.
  • Emergent’s anthrax vaccine was not the government’s first choice. It was more than 30 years old and plagued by manufacturing challenges and complaints about side effects. Officials instead backed a company named VaxGen, which was developing a vaccine using newer technology licensed from the military.
  • Emergent’s successful campaign against VaxGen — deploying a battalion of lobbyists, publicly attacking its rival and warning that it might cease production of its own vaccine if the government didn’t buy it — established its formidable reputation. By 2006, VaxGen had lost its contract and the government had turned to Emergent to supply BioThrax.
  • “They were totally feared by everybody,” Dr. Philip Russell, a top health official in the administration of President George W. Bush, said in an interview. He said that he clashed with Emergent when he backed VaxGen, and that his reputation came under attack, which was documented by The Times in 2006. (Dr. Russell died this January.)
  • the group of federal officials who make decisions about the stockpile and other emergency preparations — known as the Phemce, for the Public Health Emergency Medical Countermeasures Enterprise — ordered up a study. It found in 2010 that the government could not afford to devote so much of its budget to a single threat.
  • Instead, the review concluded, the government should invest more in products with multiple applications, like diagnostic tests, ventilators, reusable respirator masks and “plug and play” platforms that can rapidly develop vaccines for a range of outbreaks.
  • from 2010 through 2018, the anthrax vaccine consumed more than 40 percent of the stockpile’s budget, which averaged $560 million during those years.
  • Emergent and the government have withheld details of the stockpile contracts, including how much the company has charged for each dose of BioThrax, but executives have shared some of the missing information with investors.
  • The company in 1998 agreed to charge the government an average of about $3.35 per dose, documents show. By 2010, the price had risen to about $28, according to financial disclosures and statements by Emergent executives, and now it is about $30
  • Over the past 15 years, the company recorded a gross profit margin of about 75 percent for the vaccine, in an arrangement that one Emergent vice president called a “monopoly.”
  • Emergent’s rise is the stuff of lore in biodefense circles — a tale of savvy dealings, fortuitous timing and tough, competitive tactics.
  • One afternoon in October 2010, Wall Street investors gathered at the Millennium Broadway Hotel in Manhattan for a presentation by Mr. Burrows. He shared with them a secret number: 75 million.That was how many BioThrax doses the government had committed to stockpiling, and it was the backbone of Emergent’s thriving business. In pursuit of that goal, the government had already spent more than $900 million, and it continued to buy virtually every dose Emergent could produce. It had even awarded the company more than $100 million to expand its Michigan factory.
  • “The best approach toward anthrax is antimicrobial therapy,” Dr. Anthony S. Fauci, the government’s top infectious-disease expert, told Congress as early as 2007.
  • In an analysis published in 2007, the firm determined that giving antibiotics immediately after a large outdoor anthrax attack was likely to reduce serious illnesses by more than 80 percent. Administering the vaccine would then cut serious illnesses only by an additional 4 percent.
  • Dr. Ali S. Khan, who ran the C.D.C. office managing the stockpile until 2014, said bluntly: “We overpaid.”
  • “A bunch of people, including myself, were sitting in a room and asking what kind of attack might happen,” said Dr. Kenneth Bernard, a top biodefense adviser to Mr. Bush, recalling a meeting in the months after the 2001 attacks.
  • “And somebody said, ‘Well, I can’t imagine anyone attacking more than three cities at once,’” he said. “So we took the population of a major U.S. city and multiplied by three.”
  • A team of Homeland Security and health officials began doing just that in 2013. The group determined, in a previously undisclosed analysis, that the government could stockpile less BioThrax and still be prepared for a range of plausible attacks, according to two people involved in the assessment. Separately, government researchers concluded that two doses of BioThrax provided virtually the same protection as three.
  • the National Intelligence Council, which helped draft the assessments during Mr. Obama’s second term, said in an interview that the idea of a three-city attack affecting 25 million people was “straining credulity.”
  • “If you talk to the head of the House Intelligence Committee,” Don Elsey, Emergent’s chief financial officer, told investors in 2011, “and you say, ‘What are you most worried about?’ he’ll say, ‘Let me see: Number one, anthrax; number two, anthrax; number three, anthrax.’”
  • Emergent’s sales strategy was to address that fear by promising the federal government peace of mind with its vaccine.
  • “There’s a political element involved,” Mr. Burrows, the company’s vice president of investor relations, said at an industry conference in 2016. “I don’t have a marketing expense. I have lobbying expense.”
  • Since 2010, the company has spent an average of $3 million a year on lobbying — far outspending similarly sized biotech firms, and roughly matching the outlays of two pharmaceutical companies with annual revenues at least 17 times greater, AstraZeneca and Bristol Myers Squibb
  • In 2015, as stockpile managers questioned the large purchases of BioThrax, the spending topped $4 million
  • “They were pouring it on — how poor they were and how this was going to ruin the company, and they’d have to close down factories, and America was going to be left without anthrax vaccine,”
  • “Their revolving door is moving at 60 miles per hour,” said former Senator Claire McCaskill, a Democrat from Missouri who had questioned spending on the vaccine while in the Senate. “There is really a lot of incestuousness because it’s such a specialized field.”
  • Ms. DeLorenzo, the Emergent spokeswoman, said the lobbying was necessary because government investment “in biodefense and other public health threats has not been as strongly prioritized as it should be.”
  • Over the past 10 years, Emergent’s political action committee has spread almost $1.4 million in campaign contributions among members of both partie
  • The move followed a yearslong pattern of retaining a bipartisan lobbying corps of former agency officials, staff members and congressmen, including Pete Hoekstra of Michigan, Tom Latham of Iowa and Jim Saxton of New Jersey.
  • “You have people coming and saying, ‘There’s no market for this — nobody’s going to produce this unless you buy enough of it to keep the production line open,’” he said. “It’s an absolutely appropriate argument to make.”
  • Emergent’s campaign proved effective. Despite the 2015 recommendation by the stockpile managers, Senate overseers made clear they opposed the reduction, and the government went ahead and bought $300 million worth of BioThrax.
  • Emergent executives, meanwhile, warned that there could be job losses at the factory in Lansing, Mich. — the capital of a swing state at the center of a contentious presidential campaign between Mr. Trump and Hillary Clinton.
  • Because Emergent was the sole manufacturer of a product deemed critical to national security, the company has played what one former executive described to The Times as “the we’re-going-to-go-bankrupt card.”
  • Dr. Hatchett said the idea gave him pause. But, he explained in an interview, “if there’s only one partner that can provide a product and only one customer for that product, the customer needs the partner to survive.”
  • Just a year later, Emergent spent about $200 million in cash, and made other financial commitments, to acquire Sanofi’s smallpox vaccine and GlaxoSmithKline’s anthrax treatment, two products with established pipelines to the stockpile. The purchases expanded Emergent’s hold over the reserve.
  • Ms. DeLorenzo said the acquisitions did not suggest the company was better off than it had claimed, but Dr. Bright said he and others involved in the bailout felt used.
  • a plan five years earlier to create an emergency supply of N95 respirators was simply not funded. A team of experts had proposed buying tens of millions of the masks to fill the gap during an outbreak until domestic manufacturing could ramp up, according to five officials involved in the assessment, which has not been previously disclosed.
  • By the time the novel coronavirus emerged, the stockpile had only 12 million of the respirators. The stockpile has since set a goal of amassing 300 million.
  • Dr. Kadlec, the Trump administration official overseeing the stockpile, said he used the previous administration’s mask recommendation to raise alarms as early as 2018.
  • Dr. Annie De Groot, chief executive of the small vaccine company EpiVax, spoke about the need to break Emergent’s lock on research dollars at a biodefense forum in 2015.
  • “Politicians want to look like they’ve addressed the problem,” she said. “But we need to actually listen to the scientists.”
  • Over the last five years, Emergent has received nearly a half-billion dollars in federal research and development funding, the company said in its financial disclosures.
  • “We know ahead of time when funding opportunities are going to come out,” Barbara Solow, a senior vice president, told investors in 2017. “When we talk to the government, we know how to speak the government’s language around contracting.”
  • The company used federal money to make improvements to BioThrax, and also found a way to earn government money from a competing anthrax vaccine it had excoriated. After the demise of VaxGen in 2006, Emergent bought the company’s unfinished vaccine and in 2010 persuaded the federal government to continue paying for research on it
  • By the time the research contract was canceled in 2016, Emergent had collected about $85 million, records show. The company then shelved the vaccine. “If the U.S. government withdraws funding, we re-evaluate whether there is any business case for continuing,” Ms. DeLorenzo said.
  • For more than 30 years, the government had been encouraging the development of a BioThrax replacement. In 2002, the Institute of Medicine had concluded that an alternative based on more modern technology was “urgently needed.” By 2019, there were three leading candidates, including one made by Emergent, known as AV7909.
  • Emergent’s candidate was hardly the breakthrough the government was seeking, former health officials said. AV7909 was essentially an enhanced version of BioThrax. The competitors were using more modern technology that could produce doses more rapidly and consistently, and were promising significant cost savings for the stockpile.
  • To qualify for emergency authorization, a vaccine must be at an advanced stage of development with no approved alternatives. Emergent acknowledged in its financial disclosures that there was “considerable uncertainty” whether the new vaccine met those requirements.
  • The election of Mr. Trump as president was good news for Emergent.
  • Dr. Lurie, the senior health official in the Obama administration who had tried to scale back BioThrax purchases, was out. Mr. Trump’s pick to replace her was Dr. Kadlec, a career Air Force physician and top biodefense official in the Bush administration who was fixated on bioterrorism threats, especially anthrax, current and former officials said
  • Soon after entering the Trump administration in 2017, Dr. Kadlec took a series of actions that he characterized as streamlining a cumbersome bureaucracy but that had the effect of benefiting Emergent.
  • He assumed greater control of purchasing decisions, diminishing the authority of the Phemce, the oversight group that had proposed buying less BioThrax. And in 2018, he backed a decision to move control of the stockpile to his office in the Department of Health and Human Services and away from the C.D.C., which is based in Atlanta and prides itself on being insulated from the influence of lobbyists.
  • Dr. Frieden, the former C.D.C. director, was strongly opposed. The move, he said, “had almost as an explicit goal to give the lobbyists more say in what got purchased.”
  • That July, the government made the announcement Emergent had been banking on, committing to buying millions of doses. Separately, it said it would stop funding Emergent’s competitors.
  • The decision to side with Emergent did not surprise Dr. Khan, the former C.D.C. official overseeing the stockpile.“Again and again, we seem unable to move past an old technology that’s bankrupting the stockpile,” he said.
  • Last month, as the death toll from Covid-19 neared a half-million, Mr. Kramer, the company’s chief executive, told analysts there had been no “evidence of a slowdown or a delay or a deprioritization,” and echoed a statement he had made in April when asked whether the pandemic might interrupt Emergent’s sales to the stockpile.“It’s pretty much business as usual,” he said then.
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GA Sec Of State Calls Out GOPers Who Won't Condemn Death Threats: 'Really Complicit' | ... - 0 views

  • After telling the Post that he’s “not supposed to put my thumb on the Republican side,” the Georgia secretary of state argued that fellow Republicans are only harming themselves by feeding into unfounded allegations that are an attempt to delegitimize the election process, which Raffensperger warned could discourage Republicans from voting in the Senate runoffs.
  • “People need to get a grip on reality,” Raffensperger told the Post.
  • Raffensperger then reiterated that not only is he facing threats, but his family has taken the brunt as well. Raffensperger told the Post that he and his wife have received many threats over the past few weeks and that there was a break-in at another relative’s home, which prompted him to accept a state security detail.
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  • “If Republicans don’t start condemning this stuff, then I think they’re really complicit in it,” Raffensperger told the Post. “It’s time to stand up and be counted. Are you going to stand for righteousness? Are you going to stand for integrity? Or are you going to stand for the wild mob? You wanted to condemn the wild mob when it’s on the left side. What are you going to do when it’s on our side?”
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