Patterico's Pontifications

5/5/2014

Why Gold? (And, Why the Gold Standard?)

Filed under: Economics,General — Patterico @ 7:29 pm



In comments to the gold standard blog post from this morning, a lot of people asked a question that I have asked from time to time in my life: why gold? You can’t eat it. You can’t wear it. Who cares if you have a little yellow metal or not? Who cares if the country does? If banks do? Etc.

It’s a natural reaction, but I think I have learned the basic answer in beginning to study Austrian economics. Beware: I am not an economist. Beware: I have read very little. Beware: A little knowledge is a dangerous thing. And so on and so forth. As always, I am throwing out these ideas to be discussed; this is not my area of expertise and I am happy to be corrected or to have my arguments improved upon. That said, I think I understand enough to contribute some insight into this question.

Before we get there, let’s take a step back and talk about the division of labor. (We’ll get to gold, but this is necessary background.)

As I have remarked before, the division of labor is the reason that we have a standard of living that would have been the envy of kings centuries ago. But it’s as simple as this: people specialize in those areas that they do best.

In providing examples of a very simple economy, economists love to cite Robinson Crusoe and Friday on a desert island, and who I am to try to improve on that? So: imagine a desert island where Crusoe and Friday each need 10 bananas and 10 coconuts per day to live. Crusoe can gather 10 bananas an hour, but only 4 coconuts per hour. Friday can gather 10 coconuts per hour, but only 4 bananas per hour.

If each is left to his own devices, he will work 3 1/2 hours per day: one hour gathering that which he is best at, and 2 1/2 hours gathering that which is he least efficient at gathering.

But if each spends two hours gathering what they are best at, Crusoe can get 20 bananas in two hours, and Friday can get 20 coconuts. Each trades half his supply for half of the other’s, and each has his 10 coconuts and 10 bananas, and each has cut his labor time from 3 1/2 hours to 2 hours.

It is this concept that allows you to live in a comfortable house you could never construct, drive a car that you could never build, and turn on the air conditioning even if you don’t have the slightest clue how it works.

So far so good. But in a more complex economy, it is difficult to barter your own commodities in kind, because the person from whom you need goods or services doesn’t always want what you have. So you want to try to trade your goods or services for something that more people will accept. That’s a “medium of exchange”: a commodity that everyone in the society (or nearly everyone) wants. People will accept that commodity in exchange for providing you with what you want — because they know they can turn around and provide it to someone else for what they want.

Different commodities have functioned as media of exchange in different societies. Some have used cigarettes. Some have used cocoa beans.

The more universally desired the commodity, the more valuable it is as a medium of exchange. Initially, there is competition among various commodities. But over time, people start to notice which are the more universally accepted commodities, and those commodities crowd out other commodities. Think about it. If two people want my services, and one is offering me cigarettes, and the other is offering me gold, I will provide my services to the person who can give me the medium of exchange that most other people will accept when I try to buy something.

With me so far? Good. Here’s the important part. A good medium of exchange should have several characteristics. (I’m not taking these from a textbook, but am rather going from memory, so cut me some slack if I miss some.)

It should be unchanging. Thanks for the fruit, but in two weeks it will be spoiled. Gold is inert — one of the “noble metals” that resists corrosion or oxidation.

It should be transportable. There are fascinating stories of cultures that use giant unmovable boulders as currency. Everyone knows that is Og’s boulder over there, even if Og can’t drag it to his cave. These cultures have been known to employ giant ships to move boulders from neighboring islands — and if the ship capsizes and the boulder sinks to the ocean floor, they don’t even sweat it . . . because, well, Dag’s boulder is the one at the bottom of the sea! That’s nice and all, but most societies tend to think that a medium of exchange should be transportable. A related factor is that it should be divisible, such that different amounts (weights) can be used to represent different values.

It should be rare, in the sense that, while you don’t always want a fixed amount, you don’t want to have a situation where one can easily double the supply. After all, when you increase the supply of a commodity, you decrease the demand and therefore the price. A medium of exchange that is rare, and cannot have its amount increased by multiples overnight, is one that preserves value (purchasing power) for all who hold the commodity.

There are other desirable characteristics that a successful medium of exchange should have. It should be recognizable, hard to counterfeit, easy to store, and have some intrinsic value. And so on.

Well, it turns out that, over time, humans have always gravitated towards gold and silver as containing the best mix of characteristics to serve as a medium of exchange. Silver has typically been employed for smaller transactions, and gold for transactions involving higher values (because gold better provides the mix of characteristics needed for a medium of exchange).

But the most important fact here is this:

GOLD IS A COMMODITY. It is a thing. It is tangible. It is a commodity used as a medium of exchange, but it is nevertheless a commodity. It has some intrinsic value in its beauty and use for ornamentation. But it is a thing, which just happens to be the best thing to use as a medium of exchange.

That answers the question. You can stop reading now if you want. But I have to keep writing.

CIRCLING BACK TO CURRENCY AND THE GOLD STANDARD: I now have to circle back around to paper (currency), because I know that people will object that in a modern economy, you simply can’t have rapid financial transactions occurring with people handing pieces of gold back and forth. That’s why you have to have pieces of paper or the equivalent (nowadays, it could even be computer code) — something that cannot be easily counterfeited, that represents your right to exchange it for gold if you so choose. Call it currency, call it a bank note, call it what you like.

The genius of Murray Rothbard is to compare these currencies to a warehouse receipt. Here’s the idea: again, GOLD IS A COMMODITY. So, you can’t always carry around your commodity. Business will arise that will warehouse your commodity for you, and give you a slip of paper (call it a bank note) which you can use to redeem for gold any time you like.

When these warehouses, which we call banks, begin to engage in “fractional reserve banking” — lending out more gold than they have — they are giving multiple people warehouse receipts to the same commodity. This is fraud. Let me repeat: THIS IS FRAUD. Giving multiple people warehouse receipts to the same commodity is fraud, because the receipt should entitle the holder to repossess his property whenever he so chooses (although this can of course be limited by a contract with the bank).

Although it’s fraud, it works great — unless and until people get suspicious that they can’t get their commodity back . . . and then you have a “bank run.” People line up to get their gold, because they are afraid they can’t get their gold back. And, if their bank is a fractional reserve bank, as all banks are these days, they are right. They can’t get their gold back, because the bank committed fraud the minute it promised the same gold to multiple people.

If society treated fractional reserve banking as the fraud that it actually is, and kept us on a strict gold standard, then maybe — just maybe — governments would not have the ability to borrow endlessly; to mask their debts and lessen their pain by causing runaway inflation; and to generally deprive people of the value of their savings.

I could go on and on, but hopefully this gives readers a better idea of why humans might value gold, why fractional reserve banking is dangerous; and why going off the gold standard unmoors us from any fiscal discipline.

Don’t say any of this too loud, though. People will think you’re crazy.

Ah, but the system of fiat money we have nowadays? The one that is about to drive us into the depression to end all depressions? That system? Yeah, that system is totally awesome. And stuff.

It’s the gold standard that’s crazy, we’re told. What we’re doing right now? Perfection.

Why Not the Gold Standard?

Filed under: General — Patterico @ 7:59 am



Nothing gets you derided as a crank faster than talking about the gold standard. In the past, I have associated such arguments with lunatics.

But I recently read Murray Rothbard’s “What Has the Government Done to Our Money?” (available for free here), and it makes a lot of sense. I want to throw it open to the readership, then: why not the gold standard?

Clearly, we’re talking theory here, just like we are when we talk secession. Nobody is going back onto the gold standard when the government has most of the gold and has zero intention of cuffing its own hands and preventing runaway inflation — the very thing government will be forced to resort to when all other attempts to deal with the debt have failed.

We’re talking theory.

The traditional argument against the gold standard, I think, is summed up in two arguments, one theoretical and one historical. The theoretical one is that, due to the ever-growing population and thus ever-growing economy, we need a medium of exchange that will keep up with that growth. Otherwise we go into a deflationary spiral. Historically, people argue that countries’ going off the gold standard coincided with their getting out of the Great Depression: those that were never on it were fine, and those that were on it, suffered until they got off. The traditional view is encapsulated in this Planet Money podcast, and depends on the idea that it was scary to have a gold standard because when times got bad, everyone wanted to cash in their money for gold, and there wasn’t enough gold to go around.

Rothbard’s argument is too detailed to sum up in a single blog post, but I think it reveals the fallacy of the historical perspective: after World War I, countries weren’t really on the gold standard anyway. They were on a modified and fraudulent gold standard — one that, like fractional reserve banking itself, relied on the idea that people with pieces of paper representing gold (or deposits) weren’t actually going to cash them in. Rothbard points out that, if you don’t have the gold needed to redeem someone’s piece of paper, it was fraudulent to issue those pieces of paper to begin with.

When we had something much closer to a non-fraudulent gold standard, in the 1800s, we actually did pretty well.

As for the theoretical argument, I’m no economist, but I’m not as scared by deflation as some. Deflation happens in the home computer market, for example — prices are always decreasing for better goods — and somehow we all live. Deflation might be worrisome in a hampered market economy, where unions see to it that wages are fixed and can’t fall below a certain level, and other forms of regulation interfere with the natural operation of the market. But in our theoretical unhampered market economy, deflation doesn’t sound that scary to me; prices and wages might nominally be lower, but purchasing power is likely to be strong, and the economy will adjust.

Collectively, you folks know way more than I do. Today seems like a slow news day, so let’s talk about this. What are your thoughts?

9/6/2016

Jeff Goldstein: The Alt-Right Philosophy Is At Odds with America’s Fundamental Principles

Filed under: General — Patterico @ 7:33 am



An excellent piece at The Federalist. I agree with virtually every word. Some excerpts to whet your appetite:

American exceptionalism, which neither Barack Obama nor Donald Trump understand or can articulate, was born of our founding. This exceptionalism is found not in its genetic makeup (after all, we fought other white Europeans for our independence) but in a collage of Enlightenment ideas our Founders pulled together to create what became our national portrait.

To reclaim our birthright, we need only reclaim the Constitution. We need to re-embrace American exceptionalism and reject the kind of toxic identitarianism the Left uses to divide us, manage us, and place us into needy voter blocs they then collect to win elections, and through which an institutionalized progressive cancer spreads to eat away its bones.

. . . .

Vox Day claims “The Alt Right is an ALTERNATIVE to the mainstream conservative movement in the USA.” In this he lumps together all who have described themselves as conservatives and writes them off as only nominally so. Elsewhere you’ll see alt-righters refer to “Conservative Inc.,” which is shorthand for this claim. But this, too, is nonsense. Again, one is “conservative” or not based on what he believes and how he governs — and, importantly, based on the way the label is currently understood.

Simply adopting the label as it suits you doesn’t make you something you aren’t, much like calling your hamburger a carrot doesn’t make you a vegetarian. It is about a set of principles that, once they’ve become too commingled with self-serving pragmatism or “realism,” devolve into a mash of weak progressivism.

. . . .

According to Vox Day, “The Alt Right believes in victory through persistence and remaining in harmony with science, reality, cultural tradition, and the lessons of history.” Yet that same alt-right simultaneously misunderstands history, embraces tribalism, eschews American exceptionalism, and relies on the legitimate science of population genetics to draw pseudo-scientific racialist conclusions that glut the burgeoning field of white nationalist sociology.

This country was born out of clashes within the very homogeneous and unadulterated tribe he pines for.

Similarly, it speaks of a “cultural tradition” it can’t possibly define. Cultures are amalgams. To distill them down to that mythical moment of original purity is to pick a particular point in time to declare the culture the culture. It is an act of will, and a self-serving one at that. Making Vox Day’s support of a nationalism “homogeneous and unadulterated by foreign invasion and immigration” just another instance of rank tribalism — one that forgets this country was born out of clashes within the very homogeneous and unadulterated tribe he pines for.

Calling themselves anti-globalist, the alt-right defines itself against free-market capitalism. As Vox Day puts it, “The Alt Right rejects international free trade and the free movement of peoples that free trade requires. The benefits of intranational free trade is not evidence for the benefits of international free trade.” He does so shortly after declaring that the alt-right is “scientodific” — it “presumptively accepts the current conclusions of the scientific method (scientody).” Yet it rejects any evidence free trade has been a net positive for the United States in terms of living standards for citizens, wealth accumulation, and so on.

Read it all.

P.S. His avatar at the link is pretty funny.

5/12/2010

Jeff Goldstein’s Latest Attack on Textualism

Filed under: General — Patterico @ 8:47 pm



In his latest post on intentionalism and legal interpretation, Jeff Goldstein attacks textualism with arguments that (I think) talk past the arguments I have made in recent weeks.

I have explained my position on this: “sometimes the speaker’s intent is irrelevant to the practical problem of what to do with his words.” I argue that, without pretending to say that the speaker meant something different than he meant, a judge is sometimes entitled to enforce a speaker’s words in a manner consistent with the original understanding of the words (what Goldstein calls “convention”), rather than the speaker’s intent. Thus:

I have also argued that this need not be restricted to legalisms. Using Goldstein’s own example of a bookshelf assembler armed with assembly instructions that work when conventionally interpreted, but that are actually intended ironically, I argued:

  • The bookshelf assembler should follow the instructions as written, if he knows that they will work if interpreted conventionally — even if he knows that they are not intended to be followed conventionally.

In these examples, the receiver of the communication acknowledges that he understands the speaker’s intent — and then proceeds to ignore it, not in his “interpretation” of the language but in its implementation.

In his latest post, Goldstein says:

When a textualist[] asks “does a failure on the part of the utterer to signal intent allow the judge to interpret the text as a reasonable man, without consideration of intent, might?” and goes by that standard, the flaw is in the question as phrased. Were he to ask “can a reasonable man be expected to know the author’s intent from what’s been signaled?” he is asking a different question, and basing his reasoning for ruling a particular way on a different standard: to wit, he isn’t ruling that because intent is unknowable, we can dismiss intent and rule on the basis of convention; instead he is ruling that because intent wasn’t signaled, a reasonable man couldn’t possibly reconstruct the intent.

A distinction with a big difference.

Yes, but in all the above examples, I am talking about a third scenario. Namely, the intent can be reconstructed — but a receiver simply chooses to enforce or implement the language in a manner inconsistent with that intent. Which does not mean he is pretending that the intent is different than it was. It means he understands the intent, and has decided to ignore it when it comes to the practical question of how the speaker’s language should be enforced or implemented.

Whether such a course of action is justifiable is a question I have posed in several posts. For the life of me, I can’t tell whether Goldstein agrees with me that such an approach is justifiable.

If anyone can point me to somewhere he has addressed this issue in a clear, understandable fashion, I’d be much obliged. And I invite him to answer the question in comments.

If he does agree, the upshot is this: even if a speaker means one thing, an audience may be entitled to understand his intent, and yet act on his words as if he meant something different. I’m not sure that this is something the intentionalists want to acknowledge — but if they don’t, how do they get around the aforementioned examples??

P.S. As with any post about intentionalism, I’m going to apply my strict no-personal-attacks rule in this thread. Argue issues and not personalities, period. Given my restrictive rules, I will accept comments from banned commenters, as long as they follow the rules I have set forth.

11/30/2009

Readers’ Rep Jamie Gold Out at the L.A. Times

Filed under: Dog Trainer — Patterico @ 6:10 pm



The memo from editor Russ Stanton says they’re accepting applications!

He sets forth the qualifications needed, which include:

Highly organized and able to set priorities in a fast-paced environment, keeping in mind the overall goal of the office: to act as a voice for our readers and to help hold us accountable to our professional standards.

If you’re laughing, you must be a regular reader.

I don’t have anything personal against Ms. Gold — and I never really saw it as her fault that she often didn’t act as a voice for readers, but rather for the newspaper. This sort of thing is a decision made at levels much higher than her — and it isn’t going to change any time soon.

Thanks to several readers.

P.S. I still have a few letters to write about James Rainey’s latest column. Where do I send them now??

8/25/2009

ObamaCare gets dire prognosis from Sen. Russ Feingold

Filed under: General — Karl @ 10:43 am



[Posted by Karl]

At the very least, one of the Senate’s leading progressives knows what his constituents want to hear:

U.S. Sen. Russ Feingold told a large crowd gathered for a listening session in Iron County last week there would likely be no health care bill before the end of the year – and perhaps not at all.

It was an assessment Feingold said he didn’t like, but the prospect of no health care legislation brought a burst of applause from a packed house of nearly 150 citizens at the Mercer Community Center.

“Nobody is going to bring a bill before Christmas, and maybe not even then, if this ever happens,” Feingold said. “The divisions are so deep. I never seen anything like that.” (Emphasis aded.)

In reality, Feingold’s assessment may be as disingenous as his misleading assurances that ObamaCare would not fund abortions.  But he probably would not be floating the notion of healthcare reform pilot programs in five states if he was not a bit worried about the fate of ObamaCare.

The other big topic at this Feingold town hall was the federal deficit.   Concern over the deficit was already shaping the healthcare debate on Capitol Hill.  And the Obama administration’s latest forecast has deficits rising to a level that Office of Management and Budget director Peter Orszag called unsustainable in March.

Update: Feingold’s rep has his backpedal in motion — but Feingold is still talking about Christmas.  That is far too long for an effort continuing to lose popularity.

–Karl

3/31/2007

The Benefits of Having Lower Standards Than the L.A. Times

Filed under: Dog Trainer,General — Patterico @ 2:38 pm



I spoke to L.A. Times Op-Ed and Current Editor Nick Goldberg today on the phone about his nixing Jack Dunphy’s proposed piece about LAPD’s anti-gang initiatives. The background is in this post of mine from Thursday. Briefly, Dunphy contacted Goldberg proposing to write an article about (to use Dunphy’s words) “the sham that is the LAPD’s new anti-gang efforts.” Goldberg said no.

I asked Goldberg today why he refused to give a green light to Dunphy’s proposed piece. Goldberg e-mailed me this quote, which he authorized me to use:

We’re reluctant to use anonymous pieces. While I don’t want to close the door to Dunphy forever — he’s a good writer and he brings an important point of view — I want to keep it infrequent and I want to limit it, if possible, to pieces that really are special in some way. The more I think about it, the more I don’t want him just writing on any old LAPD subject. As I’ve told you before, we don’t let people write without using their real name except in extraordinary circumstances.

Goldberg also pointed out that the paper has run two pieces by LAPD officers in the past week: this piece by “L.A. Rex” author Will Beall, and this piece by Central Division Captain Andrew Smith.

I take Goldberg at his word when he says that he hasn’t blackballed Dunphy entirely. I find Goldberg to be a smart and honorable guy. But I am distressed by this part of Goldberg’s quote: “The more I think about it, the more I don’t want him just writing on any old LAPD subject.” That sounds to me like we’re not going to be seeing much from Jack Dunphy in the pages of the L.A. Times. After all, the LAPD is what Dunphy knows best. Dunphy is a capable writer on other subjects, but his best pieces all relate to the LAPD, where his experiences infuse his writing with the sure authority of someone who actually knows what he’s talking about.

I don’t know what “any old LAPD subject” means. I don’t know what it would take for Goldberg to find a Dunphy topic to be “really . . . special in some way.” I hate to be a pessimist, but Goldberg’s quote makes it hard to be an optimist. Dunphy is not just any anonymous submitter of op-eds. He has been published in the L.A. Times many times before. He has met L.A. Times personnel (and he has met me). They know that he is who he says he is. The paper is far less likely to be embarrassed by a Dunphy piece than they are to be embarrassed by some random piece submitted by, say, the owner of a sewer pipe company.

To me, all Dunphy pieces “really are special in some way” — because the quality of the writing, coupled with the insights they convey, are head and shoulders above what most writers in The Times are capable of producing.

Take, for example, Dunphy’s latest piece from National Review Online, titled Where Have All the Fathers Gone? Here is a sample of the sort of writing that L.A. Times readers are missing:

I met the boy one summer day while taking refuge from the heat. I had parked my police car beneath the spreading boughs of a large tree, one of the few spots in the neighborhood that offered a patch of shade. He rode his bicycle down the sidewalk past me two or three times, slowing a little with each successive pass to allow himself a better look inside the car and at all the hardware it contained. I recall doing much the same when I was his age.

On the next pass I called him over and invited him to sit in the front seat, which he did with great enthusiasm. He checked out the car’s computer and my flashlight, but of course he was most interested in the emergency lights, which he delighted in turning on and off and on and off.

We continued to meet in this fashion once or twice a week over that summer, and before long I met his sisters (one of whom was his twin) and their parents. They had moved from Colorado, they said, to be near relatives in southern California. They had heard that things were rough in parts of Los Angeles but they weren’t prepared for the life they found in this building and on this block.

They couldn’t afford much. The father was disabled, and the family got along on government assistance and charity from their church, so when they found the apartment on the tree-lined street they considered it a blessing. But they could smell the marijuana and hear the loud music coming from the other apartments all day and all night, they said, and some of the young men in the building sold drugs on the street.

The kids adopted a stray puppy, a scrawny little mutt they found wandering the street one day. They named him Lucky. But even inexpensive dog food was a luxury beyond the family’s means, so they fed it whatever meager scraps were left from their own table. I took to dropping off cans of dog food from time to time, and sometimes I chipped in for the family’s food or medicine or for some little toy for the kids. When I dropped in my presence was greeted with stony silence from the other tenants in the building.

One day I was parked in my usual spot under the tree and saw my little friend riding down the sidewalk toward me. But instead of stopping at my car as I expected him to, he just kept on riding as if he didn’t see me.

Some of the boy’s neighbors, I came to learn, took a dim view of the boy’s friendliness with the police, and they had dispatched an older, larger boy to teach him a lesson. My little friend had taken a beating, one that achieved its intended purpose. It was many days before the boy would so much as look at me again, and even then it was only when he was safely out of the view of his neighbors.

It’s a good thing that standards are so much lower at National Review Online than they are at the Los Angeles Times, so that writing like this can see the light of day.

Jack, my standards are lower here, too! So please: keep that guest login handy.

3/8/2007

Goldberg on the Real Victims: Joe and Val!

Filed under: Dog Trainer,General — Patterico @ 7:07 am



Jonah Goldberg is pretty funny sometimes, and today is no exception. Even though I have no reason to question Libby’s conviction, I can tell that lyin’ Joe Wilson’s lies dwarf Libby’s — they just weren’t told under oath. Goldberg puts this well in a piece called The Joe and Valerie show:

SURE, SURE, “Scooter” Libby might go to jail. His career is in tatters, his life a shambles. Even Denis Collins, the omnipresent juror-journalist, says he and his peers feel sympathy for Libby, the “fall guy” in this whole spectacle. But really, who is the real victim?

Joe and Valerie, of course.

Why is that? Goldberg tells us:

“The golden couple targeted by White House machine,” as described by one British paper this week, have had to put up with so much. There’s no need to dwell on the early hardships faced by former Ambassador Joseph C. Wilson IV: that arduous junket to Niger helped along by his wife, Valerie Plame; the endless cups of sweet mint tea he had to drink; the awkwardness that his findings, as privately briefed to the CIA, supported President Bush’s famous “16 words” although he said the exact opposite on the New York Times Op-Ed page and in 12 trillion television studios.

Indeed, though (if you will permit me a brief digression) you will never learn that fact by reading the news section of the L.A. Times, the very paper where Goldberg’s op-ed appears. Readers who get all their news from that paper must be furrowing their brows, wondering what the hell Goldberg is talking about. After all, in a recent analysis, the folks at the L.A. Times tell us:

The statement drew the attention of Wilson, who had been sent by the CIA to Africa in February 2002 to assess the claim about Iraq; he had found it baseless.

and today:

The year before, at the CIA’s request [who in the CIA would that be? — Ed.], Wilson, a retired ambassador who had served in several African nations during a lengthy Foreign Service career, had looked into allegations that Iraqi President Saddam Hussein had sought to purchase yellowcake uranium from Niger, and found them groundless.

Sure, he had brought back evidence that it was true — but never mind that!

OK, my digression is over. Let’s get back to Goldberg’s piece:

A man of less mettle might grow frustrated with the effrontery of the Washington Post’s editorial page calling him a liar, a blowhard and the real destroyer of his wife’s career. Simply because it’s true hardly justifies stepping on his story line. Don’t they know he’s the author of a book, “The Politics of Truth,” and a winner of awards for his self-proclaimed courage for “speaking truth to power”? Why should a bipartisan Senate intelligence report cataloging his dishonesty and distortions stand against a man with such important hair?

The Great Dissenter’s burden doesn’t end there. Joe wanted to appear on equal footing, as befits his stature, with Katie Couric on the “Today” show. Instead he was stuck in D.C., and his “one chance to sit face to face with America’s sweetheart” was dashed. And it must have been those cheap partisans who forced the ambassador to sell himself to the John Kerry campaign, to call for the frog-marching of Karl Rove, to call Weekly Standard Editor Bill Kristol a “drunk.” Joe’s a statesman, darn it!

It goes on like that. Read it all.

11/28/2023

Sports Illustrated Caught Using Artificial Intelligence Bots to Generate Content

Filed under: General — JVW @ 7:16 am



[guest post by JVW]

An amazing story published Monday morning on the website Futurism calls to account the historically-venerable but increasingly-tiresome magazine Sports Illustrated for deceiving the public:

There was nothing in Drew Ortiz’s author biography at Sports Illustrated to suggest that he was anything other than human.

“Drew has spent much of his life outdoors, and is excited to guide you through his never-ending list of the best products to keep you from falling to the perils of nature,” it read. “Nowadays, there is rarely a weekend that goes by where Drew isn’t out camping, hiking, or just back on his parents’ farm.”

The only problem? Outside of Sports Illustrated, Drew Ortiz doesn’t seem to exist. He has no social media presence and no publishing history. And even more strangely, his profile photo on Sports Illustrated is for sale on a website that sells AI-generated headshots, where he’s described as “neutral white young-adult male with short brown hair and blue eyes.”

“Drew Ortiz” is allegedly not the only fake author on the SI website, according to an unnamed source who helped the magazine in its deceptions:

“There’s a lot,” they told us of the fake authors. “I was like, what are they? This is ridiculous. This person does not exist.”

“At the bottom [of the page] there would be a photo of a person and some fake description of them like, ‘oh, John lives in Houston, Texas. He loves yard games and hanging out with his dog, Sam.’ Stuff like that,” they continued. “It’s just crazy.”

Why would SI go to such links to invent ersatz content providers? Apparently because some of the content itself is generated by artificial intelligence:

According to a second person involved in the creation of the Sports Illustrated content who also asked to be kept anonymous, that’s because it’s not just the authors’ headshots that are AI-generated. At least some of the articles themselves, they said, were churned out using AI as well.

“The content is absolutely AI-generated,” the second source said, “no matter how much they say that it’s not.”

After we reached out with questions to the magazine’s publisher, The Arena Group, all the AI-generated authors disappeared from Sports Illustrated’s site without explanation. Our questions received no response.

Sports Illustrated was once the gold standard not only of sports journalism, but of magazine journalism in general. Some of the most celebrated sports writers of the second-half of the Twentieth Century — Dan Jenkins, Jim Murray, Frank Deford, Rick Reilly, Franz Lidz, Gary Smith — were on the SI masthead, and notable literary figures such as William Faulkner, George Plimpton, John Updike, and Kurt Vonnegut, to name but a few, contributed guest pieces. These days, in a world full of sports blogs, 24-hour sports media on television and the Internet, sports podcasts, and numerous other outlets, SI finds itself with a declining circulation and has responded by branching out into new realms including even opening up sports-themed resort hotels in college towns and the Caribbean.

So it shouldn’t come as a surprise that while SI is looking to maintain their brand by diversifying their focus, traditional journalism is being neglected. Thus far, the magazine has not been accused of using AI bots to help create sports reportage or write long-form stories, but it would appear that it has been used to generate product guides and reviews on items for which the magazine receives financial compensation for clicks. And to keep it on the QT, it seems that old fake authors would disappear after a while and new fake authors would come along:

Sometime this summer, for example, Ortiz disappeared from Sports Illustrated’s site entirely, his profile page instead redirecting to that of a “Sora Tanaka.” Again, there’s no online record of a writer by that name — but Tanaka’s profile picture is for sale on the same AI headshot marketplace as Ortiz, where she’s listed as “joyful asian young-adult female with long brown hair and brown eyes.”

“Sora has always been a fitness guru, and loves to try different foods and drinks,” read Tanaka’s bio. “Ms. Tanaka is thrilled to bring her fitness and nutritional expertise to the Product Reviews Team, and promises to bring you nothing but the best of the best.”

[. . .]

It wasn’t just author profiles that the magazine repeatedly replaced. Each time an author was switched out, the posts they supposedly penned would be reattributed to the new persona, with no editor’s note explaining the change in byline.

In the least surprising development of all, when Futurism asked Sports Illustrated about this curious behavior, all of the fake authors and their past articles suddenly disappeared from the SI website, with no explanation as to why nor any reply by SI to Futurism. As the article pointed out, at no point did SI ever appear to append any kind of disclaimer that these product guides and reviews had been generated by third-party providers, let alone by a bot.

And, in the second least-surprising development of all, it turns out that SI is not the only Arena Group holding to use AI bot-generated content. Futurism reports that this phenomenon of never heard of before writers suddenly appearing, writing for a short period of time, then being scrubbed from the site is common at TheStreet, a financial publication founded by CNBC’s Jim Cramer which the Arena Group purchased four years ago. And the editorial directors there are even sloppier than those at Sports Illustrated:

Sometimes TheStreet’s efforts to remove the fake writers can be sloppy. On its review section’s title page, for instance, the site still proudly flaunts the expertise of AI-generated contributors who have since been deleted, linking to writer profiles it describes as ranging “from stay-at-home dads to computer and information analysts.” This team, the site continues, “is comprised of a well-rounded group of people who bring varying backgrounds and experiences to the table.”

People? We’re not so sure.

The “stay-at-home dad” linked in that sentence above, for instance, is a so-called Domino Abrams — “a pro at home cleaning and maintenance,” at least until he was expunged from the site — whose profile picture can again be found on that same site that sells AI-generated headshots.

Or look at “Denise McNamara,” the “information analyst” that TheStreet boasted about — “her extensive personal experience with electronics allows her to share her findings with others online” — whose profile picture is once again listed on the same AI headshot marketplace. Or “Nicole Merrifield,” an alleged “first grade teacher” who “loves helping people,” but whose profile is again from that AI headshot site. (At some point this year, Abrams, McNamara, and Merrifield were replaced by bylines whose profile pictures aren’t for sale on the AI headshot site.)

As with Sports Illustrated, it’s not only the fake biographies that are galling; it’s also the utterly insipid and haphazard bot prose:

This article about personal finance by the AI-generated Merrifield, for example, starts off with the sweeping libertarian claim that “your financial status translates to your value in society.”

After that bold premise, the article explains that “people with strong financial status are revered and given special advantages everywhere around the world,” and launches into a numbered list of how you can “improve your finance status” for yourself. Each number on what should be a five-point list, though, is just number one. Mistakes happen, but we can’t imagine that anyone who can’t count to five would give stellar financial advice.

In fairness, the Arena Group has in other circumstances been open about their use of artificial intelligence. Back in February, when the company first announced that they would be using AI as a way to pitch story ideas to journalists and to create a small amounts of content, CEO Ross Levinsohn insisted that there would be ethical limits on how the emerging technology would be used, which would fall well short of using AI bots to generate entire stories. Clearly the Arena Group has failed in that endeavor, as have other web-heavy outlets such as CNET and Bankrate, both owned by Red Ventures; Gizmodo and The A.V. Club both owned by G/O Media; and the infamously horrid BuzzFeed, all of whom have failed to keep their pompous promises to use AI to sharpen content, not to generate it. Even more traditional publishing outfits like Gannett Company, publishers of USA Today and hundreds of local newspapers have been caught publishing AI-written garbage content instead of giving the job to real reporters who are trained by our nation’s finest journalism schools to produce human-generated garbage content.

Futurism sums up the problem with news outlets trying to pass off this sort of nonsense without at least disclosing the source to the readers:

Needless to say, neither fake authors who are suddenly replaced with different names nor deplorable-quality AI-generated content with no disclosure amount to anything resembling good journalism, and to see it published by a once-iconic magazine like Sports Illustrated is disheartening. Bylines exist for a reason: they give credit where it’s due, and just as importantly, they let readers hold writers accountable.

The undisclosed AI content is a direct affront to the fabric of media ethics, in other words, not to mention a perfect recipe for eroding reader trust. And at the end of the day, it’s just remarkably irresponsible behavior that we shouldn’t see anywhere — let alone normalized by a high-visibility publisher.

This sort of mess is another thing to remember next time some blowhard journalist tries to lecture the public about how his industry is the gatekeeper of democracy or is run by the highest ethical standards imaginable. At least a whorehouse can usually be counted upon for quality piano playing.

[UPDATE]
The Arena Group, via SI’s Twitter account, assures us that this is an issue with a third-party supplier who will no longer be retained. Again SI, as noted above, according to Futurism, never disclosed on their site that these product reviews and other licensed content came from a third party.

– JVW

12/21/2021

Then: Silly, Mailing Free Rapid Tests To Americans Would Be ‘Costly and Wasteful’. Now: Free Tests Mailed To Americans Requesting One

Filed under: General — Dana @ 9:11 am



[guest post by Dana]

[Ed. Because it’s Christmas week and visions of sugar-plums dancing in our heads are so deliciously distracting, posting may be light.]

What a difference two weeks makes…

The good news:

President Joe Biden will announce a plan on Tuesday to distribute 500 million free at-home rapid tests to Americans beginning in January as part of an attempt to double down on the spread of a transmissible variant that has hit the U.S. distressingly close to the holidays.

Biden’s new efforts come as the omicron variant became the most dominant COVID strain in the country Monday, accounting for nearly three-quarters of all cases, and just as travel kicks off at nearly pre-pandemic levels for the holiday season.

The free at-home rapid tests will be delivered by mail to Americans who request them, a senior administration official told reporters…marking a slightly different approach from European countries that chose to send tests to all residents.

Americans will need to request the tests via an official website which will be available in January. While this is good news, many are wondering why this hasn’t already been a priority for the administration. They certainly had been warned about what was to come:

Dr. Sam Scarpino, managing director of pathogen surveillance at the Rockefeller Foundation and a member of their Pandemic Prevention Institute, said the government could have seen this coming.

“Scientists have been warning about the potential for new variants to come along for a year now or more. And we’ve known about omicron since the day before Thanksgiving. It’s been weeks at this point,” he said.

And as recently as two weeks ago, Press Secretary Jen Psaki scoffed at the suggestion of every American having a rapid test mailed to their home because it would be “costly and wasteful”:

Q And I have one quick question on testing. Last week, obviously, the President explained some ramp-up in testing, but there are still a lot of countries, like Germany and the UK and South Korea, that basically have massive testing, free of charge or for a nominal fee. Why can’t that be done in the United States?

MS. PSAKI: Well, I would say, first, you know, we have eight tests that have been approved by the FDA here. We see that as the gold standard. Whether or not all of those tests would meet that standard is a question for the scientists and medical experts, but I don’t suspect they would.

Our objective is to continue to increase accessibility and decrease costs. And if you look at what we’ve done over the course of time, we’ve quadrupled the size of our testing plan, we’ve cut the cost significantly over the past few months, and this effort to push — to ensure — ensures you’re able to get your tests refunded means 150 million Americans will be able to get free tests.

Q That’s kind of complicated though. Why not just make them free and give them out to — and have them available everywhere?

MS. PSAKI: Should we just send one to every American?

Q Maybe. I’m just asking you — there are other countries —

MS. PSAKI: Then what — then what happens if you — if every American has one test? How much does that cost, and then what happens after that?

Q I don’t know. All I know is that other countries seem to be making them available for — in greater quantities, for less money.

MS. PSAKI: Well, I think we share the same objective, which is to make them less expensive and more accessible. Right?

Ultimately, though, this:

–Dana

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