by David Zetland (originally published at One-handed economist)

Review: Bad Blood

I’d heard about this book — the story of the rise and fall of Elizabeth Homes and her company Theranos — long ago, but I only decided to read it when preparing readings for my course, The World of Entrepreneurs. I wanted to understand her case, as an example of the dark side of Silicon Valley —  not the side of “fake it until you make it” —  but the side of “lie to everyone, about everything, if that gives you an advantage.”

Aside: I worked in three start-ups in Silicon Valley, of which two were dominated by frauds of the “funding secured” and “vaporware” models, respectively, so I have a real interest in similar stories. That said, I am pretty sure that at least 80% of start-ups are, on the whole, legitimate (read this review). The trouble is not the really bad apples — Theranos and WeWork being recent examples — but those that cut corners as a “necessary part of doing business” — Facebook and Uber being high on that list.

This review will be short because Carreyrou is such a good writer and the story comes at a fast pace. What strikes me are the following:

• Elizabeth Holmes was an aggressive, ambitious founder who wanted to change the world and become rich and famous. Her challenge was reality. She preferred to ignore inconveniences and distorted reality to convince others that she knew what she was doing, i.e., building a machine that could run 200 blood tests based on a finger-prick sample of blood. Outside scientists told her that her goal was impossible, due to physics and chemistry. Inside scientists, lab workers and “beta-test” doctors said her machine was not working or viable. Rather than listen, she lied about using commercial equipment to do the tests supposedly run on her machines and ignored the dangers of bad results from her machines. (One million tests later deemed “inaccurate” translates into one million stories of false positives, false negatives and needless suffering.)

Industrial production improves in August, but with sharp deceleration

The COVID-19 Pandemic, the inadequate response thereto, and the incompetency of the Trump Presidency in general, combined, have exposed our nation’s weaknesses and failings to an extent unknown since at least the Great Depression. This is likely a do or die moment for America. Recovery will be difficult. Improbable unless we are careful in our choice of goals and daring in our efforts to achieve them. The margins for error do not allow for dawdling. Attempting to just return to a time before Trump and The Pandemic would be disastrous. A time like this should also be seen as a time of opportunity.

—

First, we must rid ourselves of denominational economics such as Capitalism, Socialism, Hayekism, Free Marketism, … These, but ideologies, dogmas, that some would impose on economics, on the rest of us; have done the Nation great harm. They are, at their very best, reasonings of a time past. As likely to be the answer to today’s problems as Adam Smith is to rise from his grave.

As a first step toward becoming again competitive in today’s world; we must stop blindly paying twice as much for inferior healthcare, internet, and cellphone service,… as is being paid in other developed nations; and while we are at it, we need to solve our homeless problem. These are all essential services that should be provided to all. In the grand competition of things; we’re losing. Have been for a while. Were before the pandemic. Ideology is a luxury we can no longer afford.

Let’s pay for these things that need to be done, and help with our wealth distribution problem, too, by taxing the piss out of the too rich and too profitable. Apple, Google, Amazon, Facebook, Microsoft, Sheldon, Warren, …; fun and games are over guys, time for you to pay up.

Let’s pay for these things that need to be done by cutting the ‘Defense’ Budget in half. Halve the number of Generals, the number of Admirals, the number of Aircraft Carriers, the number of Missiles, …; and full-stop attacking other nations. Half of $720⁺Billion is $360⁺Billion; $360⁺Billion is aplenty for Defense, nothing for Attack, and about right for expanding Medicare to Medicare For All. Ike was right about that and Harry was right about health care.

I. Internet Access and Cellular Networks

All those fireman who died because of poor communication on 9/11/2001 should have taught us the need for an ubiquitous cellular network. Mobile radio networks separate cellular networks should have shown us the need for one network. A police car with a half dozen radio antennas on the roof is ridiculous.

So, too, the fact that our cell phone uses a cellular network, our computers use a cable based internet service, and that we need a WIFI router to use our laptops. What’s now the cellular network should be the WIFI router and these routers should be all over our homes, all over every floor in every building, everywhere on our streets, and all across and over rural America. Ubiquitous. Today, thousands and thousands of teachers across America are trying to remotely teach kids, many of whom have very limited internet access, over an internet system that is not reliable. When the fires struck Santa Rosa, the cell towers went down. The internet w/ phones must work at all times during normal times and during times of emergency; needs to be bullet proof. This new inclusive internet is too critical to be trusted to the ‘Market’. Cell phone and Internet should be one and that one should be regulated as a public utility; a service, as a service application, and, as always, the application dictates. Not the ‘Market’.

As a Post Office service, maybe?

In order to fully utilize our Nation’s productivity, better fulfill our personal lives, and assist in times of emergency, the Internet needs be ubiquitous and bulletproof. We should be able to access the internet from our backyards, on a hike, in the mountains, in transit, …; from anywhere we are or can be. It was a big mistake letting cable companies have the internet and the cell phone companies the phone towers. Let the cable companies have Cable TV. Internet and cell phone transmission should be one and the same; should be a Public Utility. It isn’t about ideology, it’s about how it should be; what should be. Half-arsed won’t get it. If we continue to stick with ideology and dogma, China, Japan, and the EU will continue to eat our lunch.

Au Revoir, Robert J. Samuelson

Consumer inflation continues to accelerate YoY, but so far no big problem

The Revolutionary Post

Winifred Gallagher, author of How the Post Office Created America: A History, argues that the post office is not simply an inexpensive way to send a letter. The service was designed to unite a bunch of disparate towns and people under one flag, and in doing so, she believes the post office actually created the United States of America.

Digital Sight Management, and the Mystery of the Missing Amazon Receipts

 Amazon stopped including item details in order confirmation and shipping notification emails a few months ago. They just show the price and order date now. For all its faults, Amazon has pretty good customer service, which makes this user-hostile change baffling to understand. Sure, you can still see your orders on Amazon’s website and download a CSV, but it’s far more cumbersome than searching your email; …

What reason would be big enough for Amazon to annoy so many of their users? It’s simple: data.

Popular free email clients like Edison Mail and Cleanfox “scrape” their users’ emails and sell anonymised or pseudonymised data on to third parties. With enough users, they can detect trends and measure brand loyalty – valuable information for competitors. By stripping item details from its emails, Amazon tells us just how much this was hurting them.

Should We Fear A Reappearance Of Inflation?

There Will Be No Postponing Social Security Taxes

Jobless claims slowly continue to get “less worse,” while longer term deadweight loss builds

Coronavirus dashboard for August 19: a regional look at infections; the Deep South remains almost totally out of control

Total US cases: 5,457,824
Average last 7 days: 48,764

My overall thesis is that under the present leadership the US as a whole is politically and socially incapable of bringing the coronavirus under control, as almost every other industrialized country has been able to do. That is very likely to change beginning next January 20.  Before then, I expect there to be a yin and yang in the course of the pandemic, as areas in the US veer between “the pain threshold” at one extreme and complacency on the other. Together with a vaccine hopefully being available by next spring, at that time I am hopeful that the US will finally have beaten the virus.

Today let’s focus on infections, which lead hospitalizations by a couple of weeks, and deaths by a couple of weeks more.

Here is the overall regional picture: