‘I don’t know what else to do’: Grieving Capital Gazette journalists cover the massacre of their own newsroom – Baltimore Sun

An armored truck rumbled outside the Capital Gazette newspaper office in Annapolis. Police with assault rifles walked the street. Yellow crime tape cordoned off the newsroom where the journalists were fatally shot.

And across the street, their colleagues — two reporters, one photographer — were working to report the story of the day, the massacre of their friends and co-workers.

“I don’t know what else to do except this,” reporter Chase Cook said, the grief showing in his eyes.

A state politics reporter for The Capital newspaper, Cook had worked 16 hours on Election Day. So he was home Thursday afternoon when a gunman shot his way inside the Capital Gazette newsroom. Armed with smoke grenades and a shotgun, police say, the attacker killed five people and wounded two others — reporters, editors, saleswomen.

Just that morning, assistant editor Rob Hiaasen had called Cook. A reader had complained about a headline.

“We worked it out,” Cook said. “I haven’t spoken to him since.”

Hiaasen was among those killed.

Thursday afternoon, Cook’s cellphone rang again. Editor Rick Hutzell called to say something had happened in their newsroom — a shooting. Hutzell was hurrying back from vacation in Ocean City. Cook sped to the newsroom across from Westfield Annapolis Mall.

In the street outside, he saw photographer Joshua McKerrow, a 14-year veteran of the newspaper. The two embraced.

McKerrow had started his workday at sunrise, photographing the induction of the newest class at the U.S. Naval Academy. By afternoon, he was driving home to celebrate his daughter’s birthday. He had promised her a snowball.

Hutzell had called him, too.

“He said he’d heard there had been a shooting,” McKerrow said. “He couldn’t get in touch with anyone in the newsroom.”

While driving, McKerrow heard sirens.

“Literally, that same moment, I saw dozens of emergency vehicles. … My heart sank.”

Arriving at the mall parking garage, Cook and McKerrow met reporter Pat Furgurson.

Furgurson spent the morning at the doctor’s office then decided to lunch at the mall before work. His cellphone rang with an editor at The Baltimore Sun warning him: stay away.

“He said, ‘There’s been a shooting in The Capital building,’” Furgurson said. But he was in disbelief, his mind racing back to a former newsroom a few miles away.

“The old one?” he asked.

Now, the three journalists had come together to begin reporting on the crime in their newsroom.

Those who escaped the gunman were at the police station and unreachable. Cook scrolled through their tweets, those glimpses of chaos: “Please help us … gunman shot through the glass door … opened fire on multiple employees … nothing more terrifying.”

Furgurson’s pickup truck — the one he had driven back and forth across Anne Arundel County in his 19 years with the paper — became their makeshift office. There was a Jesus figurine on the dash, a blues CD in the radio, and laptops in the truck bed where McKerrow was filing photos from the scene. Leaning against the tailgate, and with a reporter’s notepad in his back pocket, Cook was typing updates on his cellphone. They knew few details, and were tracking updates from police.

Before them, a swarm of national media had descended on their office, home to a pair of local newspapers tracing back nearly 300 years.

“Jeff did say we’re putting a paper out?” Cook asked.

McKerrow adjusted the camera strap on his shoulder.

“He did,” the photographer said firmly. “We are.”

Between their news stories and photos, they texted messages to family, friends and colleagues. The phone calls poured in. Journalists who left the newspaper years ago offered to return and help. They asked, how are you?

Cook was OK, he answered. But what else does one say?

“The words ‘OK’ and ‘good,’ they don’t really mean anything right now,” he said.

His eyes turned back to his phone, and writing his next assignment — biographies of his five slain colleagues.

Furgurson’s wife arrived and they watched police work the crime scene across the street.

“How many of you are there to put out a paper?” Becky Furgurson asked her husband.

“We don’t have any editors, except Rick,” he told her.

When Hutzell arrived, they hugged in the parking garage. Then the editor left to speak with the police.

Hours passed, and at 8 p.m. police and reporters gathered for a news conference. Cook and Furgurson squeezed through the crowd of journalists from NBC, CNN, The New York Times, The Wall Street Journal.

In the barrage of reporters’ questions to police, Cook managed to get one in. He wanted to know about his colleagues who escaped.

“Can you just tell us a little bit about the people who were not injured?” Cook asked police. “What their status is? How they’re doing?”

“We have people here who have met with them,” said Lt. Ryan Frashure, the Anne Arundel County police spokesman.

The reporter and lieutenant had spoken countless times at crime scenes, but never like this.

“It’s very important that they’re taken care of,” Frashure said. “Our hearts go out to them.”

Afterward, Furgurson found himself called out as a Capital reporter. In moments, he was mobbed by national news cameras.

He doesn’t remember what he said, but felt his words were imperfect.

“I should have told them to buy a local newspaper.”

[email protected]

twitter.com/ssdance

 

Source: ‘I don’t know what else to do’: Grieving Capital Gazette journalists cover the massacre of their own newsroom – Baltimore Sun

‘Fix the user experience first’: GroupM won’t pay for ads forced on ad blockers – Digiday

No means no when it comes to ad blockers, according to GroupM.

The media-buying giant is closing off a growing alternative for publishers beset by ad blocking: ad reinsertion, a method by which publishers can deliver ads to users who have ad blockers installed. Publishers often work with vendors like Secret Media and Sourcepoint to re-insert ads that ad blockers block. In fact, sometimes those ads can fetch a premium since ad-blocking users are thought more valuable. But GroupM, which controls roughly a third of global ad spend, literally isn’t buying it.

“Our concern is that this is kind of an opaque way to reach consumers who have explicitly said they don’t want to be advertised to by virtue of them using ad blockers,” said John Montgomery, chairman of GroupM Connect.

Currently, the ad-buying giant is “strongly discouraging” publishers from ad reinsertion. Part of the reason for this is because it’s nearly impossible to tell the difference between a standard ad impression and one that was delivered to someone by circumventing their ad blocker. Eventually, GroupM plans to take a harder stance by contractually requiring publishing partners to not reinsert any of its clients’ ads that are being blocked by users. The agency will also make it a requirement for publishers that want to be in its private marketplace.

“It’s addressing the symptom, not the cause,” said Montgomery. “Let’s fix the user experience first, and then we can engage with consumers and tell them that we’ve fixed the UX, we made the experience as light as possible, and ask them to consider whitelisting [the site] or switching off the ad blocker.”

It’s only here, after the consumer-friendly options have been exhausted, should a publisher consider a “denial of service,” said Montgomery.

This is not the first time GroupM has thrown its weight around to get publishers to change their behavior. Its controversial stance on viewability, which calls for more stringent standards than the industry norm, remains a thorny issue for many publishers.

Publishers are indeed losing out on ad revenue due to the rise in ad blocking. The rate of adoption for U.S. desktop users was 9.7 percent in May, according to comScore. Adoption was higher among younger users, with 16.5 percent of users aged 18 to 24 employing an ad blocker. Other studies, such as one conducted last year by Secret Media and JW Player, found that 26 percent of time spent watching video on desktops in the U.S. was not monetized due to ad blockers. That number is above 32 percent today, according to Secret Media CEO Frédéric Montagnon.

Subscribe for an exclusive, inside look at what’s actually happening in the video industry delivered to your inbox weekly.

One way publishers feel they can combat — or circumvent — the issue is by employing companies like Secret Media, PageFair and SourcePoint, which offer technology that helps publishers bypass ad blockers and reclaim revenue. Secret Media said it has more than 500 publishers using its technology, a rapid increase from just 15 in January.

These companies argue that they’re providing a needed service for publishers and that the rise of ad blocking is something agencies have had a hand in. “Agencies are using a ton of different software and tools to collect data and measure inefficiencies,” said Montagnon. “It’s one of the reasons why people are installing ad blockers today.”

Even so, GroupM wants no part of ad reinsertion. At an ad-blocking conference hosted by the Interactive Advertising Bureau this week, GroupM got the sense that more and more top publishers are at least considering experimenting with ad reinsertion, said Montgomery.

“There were suggestions that ad reinsertion is a bit like an ad blocker putting you on a whitelist,” he said. “It’s reprehensible that AdBlock Plus does that. But whether or not that’s being done, that doesn’t mean ad reinsertion is any better.”

The Washington Post is one top publisher that’s experimenting with ad reinsertion with a small set of users, but it’s not advocating the practice. Its goal with the experiment, instead, is to survey ad blockers and see if they are willing to accept a lighter advertising experience.

“Just because you can doesn’t mean you should,” said Jed Hartman, CRO of The Washington Post. “If that was the primary philosophy in the ad ecosystem for the last decade, there wouldn’t be a demand for ad blockers today.”

Even if it’s early days for ad reinsertion and even if publishers accept that it won’t save the industry from ad blocking, Montgomery said GroupM wants to nip it in the bud.

“We need to get out there early and establish that this is an unacceptable practice,” said Montgomery. “If you’re thinking about doing this, don’t. You may regain revenue in the short term, but it’s a bad long-term solution.”

 

Source: ‘Fix the user experience first’: GroupM won’t pay for ads forced on ad blockers – Digiday

The biggest lies that the martech and adtech worlds tell themselves | The Drum

This is an edited version of a talk that marketing keynote speaker and The Drum’s Promotion Fix columnist, Samuel Scott, gave last week at the Synergy Digital Forum in Moscow. The deck with related links and source material is here.

I do not remember PPC ads, display ads, social media ads, programmatic ads, or anything else created by adtech that I saw yesterday. But even 20 years after seeing this advertisement, I still want to shave my legs whenever I hear the song Venus. And in case you have not noticed, I’m a guy.

In this talk, I will go through six myths in the martech world today: that consumers want personalised ads, mediums do not matter, short-term results are the most important, targeting solves the problem of waste, adtech saves money by cutting out the middlemen and brand building can be ignored.

Martech presentations sometimes start with the martech landscape by Scott Brinker that shows the more than 5,000 martech platforms that we can use or not use.

It would take too long to discuss the myths and realities of all of these different types of platforms. So I will instead focus on some of the types that are used in marcom – specifically, in direct response marketing and sales activation.

Over the past 20 years, digital marketing has gone all-in on direct marketing. It’s why I see online marketers imprecisely using the word “advertising” to refer to “direct marketing” campaigns – too many do not understand the subtle but important differences.

We had direct mail; now, we have email marketing. We had infomercials; now, we have online videos that want us to click. We had advertorials; now, we have blog spam or “content marketing.” We had fliers that would appear on walls and posts; now, we have pop-up ads. Today, we have direct response ads that interrupt our conversations with friends and family on social media as well as others that follow us around the Internet.

The ultimate goal of direct marketing is to deliver the “right ad to the right person at the right time.” It’s really not anything new. We have always been able to track direct ROI for direct marketing campaigns over many offline channels such as telemarketing or direct mail.

Today, martech is all the rage, but it’s just another way to execute that direct marketing idea. Take this clip from the 2002 film Minority Report that probably is a depiction of what most martech platforms would love to become.

Now, a lot of people who work for martech companies probably watched that and thought, “Wow! When can we do that?” But remember: The 99.9% of people who are not marketers saw Tom Cruise getting scanned for ads and were horrified. Remember, the world in Minority Report is a dystopia. It is a reflection of everything in the world going to hell – including the marketing.

And, sadly, we are actually moving closer to that reality. Here is a clip from a Spanish TV news report that featured Bismart’s Magic Mirror at this year’s Mobile World Congress in Barcelona.

Again, it looks cool. But we see that this martech platform uses facial recognition, stores and displays personal data, and even analyses his emotional state. My question: why do we think people actually want this? That leads to the first myth in martech that I will discuss today: that consumers want personalised advertising.

People do not want personalised ads

The martech world thinks so much about if it can do something that it forgets about whether consumers actually want it. To quote Jurassic Park, we are so preoccupied with whether or not we could that we don’t stop to think if we should.

It’s important to start with personalisation because the entire concept of this category of martech in the marcom world is based on the collection and use of private and personal consumer data. Personalisation cannot happen without personal data.

Now, even for decades before the internet, we have always had “information”. We have had focus groups and surveys and whatnot to see what people think. But today we have “data” – which is nothing but platforms like Facebook taking a vacuum to the internet and sucking up every single piece of personal information that they can find. Sometimes people give it willingly, but all to often companies collect the data through disingenuous and nefarious methods. And then they they sell it.

And we marketers buy into it. Every day, I see dozens of articles by marketers who advocate for personalisation and claim that it is important in marcom campaigns. But spoiler alert: many of them work for martech platforms and are selling something. And yet, I never see anyone asking for evidence of whether personalisation is actually a good thing or if consumers actually want it. Well, ladies and gentlemen, I have found it.

Direct marketers love using martech because it is trackable. But people hate it for the exact same reason. Starting way back in 2009, a University of Pennsylvania study in the US found that 66% of Americans do not want direct marketing that is tailored to their interests. When told how marketers collect their data to tailor the ads, the percentage increases to 86%.

This month, a Harvard study found that if you track people and then tell them about it, then that admission “poisons” the ads. Obviously, Facebook and other martech platforms will never disclose what they do completely and fully.

Doc Searls, the editor of Linux Journal, used Google Trends data to show in the Harvard Business Review that the rise of ad blocking has specifically correlated with the appearance of retargeted advertising. If anyone here uses retargeting, then it is your fault that people are blocking online ads.

Retargeting was the straw the broke the web’s back. People hate it. Retargeting has turned the marketing industry into drug addicts on the path to suicide. We like the constant highs of the purchases and conversions, but all of those hits are eventually going to kill us once consumers have had enough and block ads altogether.

People do not want to be tracked. The more that marketing tracks people, the more that it will annoy people. Imagine how you would feel if the exact same piece of junk mail appeared in your mailboxes at home and work every single day. Now, do you still think retargeting is a good idea?

Digital marketers forget the principle of negative externalities. As Searls wrote elsewhere:

“Annoying people personally with calls to action, especially when only a tiny percentage will actually respond, creates no brand value and has other negative externalities, such as associating the brand with annoyance.”

Here’s an example: you constantly target the same people with direct-response ads or or other martech. Say that you get 3% to respond, buy, or ‘convert’. You will annoy the other 97% – and they will never buy in the future as a result. Is that truly a good way to build a brand over the long term?

According to Page Fair’s 2017 Adblock Report, 12% of people in central Europe, eastern Europe, and Russia are using ad blockers. In Russia specifically, it is 6% on average and 3% specifically on mobile devices. In terms of future trends, 63% of millennials use ad blockers on at least one device. 14% use them on both mobile and desktop.

So why are we marketers still so comfortable with harvesting people’s personal and private data? The more that people are learning how their personal data is being collected and used, the more they are opting out.

Collecting data on people, tracking them, and hitting them with cheap, individualised messages en masse is not advertising – it is direct response marketing. And people hate it.

But the problem with martech is far greater than that. When I visited TechCrunch recently, I saw that the website attempted to load 22 different martech trackers that were all trying to collect my personal data. My script blockers rendered all of those platforms useless. Good for me, bad for them.

Good ad blockers stop not only advertising but also most martech platforms. Adblock Plus stops almost all advertising and social media tracking by default. Google Analytics and other martech can be blocked with just a few quick customisations.

Ghostery blocks all of these martech platforms by default. So does uBlock Origin. When you run the numbers and look at it the opposite way, you’ll see in one example that more than 220 million people in western Europe and North America are blocking Google Analytics. And the more technical your audience, the more likely it is that they are using blockers.

It doesn’t stop with adtech and martech blocking. GlobalWebIndex found that 25% of people in the world are using VPNs to create impostor data because they do not want to be tracked by martech. In Russia, it is 24%. SimilarWeb found that visits to DuckDuckGo, the search engine that does not track people or collect any data, have increased to 200m per month. Apple’s new Safari 11 browser last year uses what it calls Intelligent Tracking Prevention, which deletes tracking cookies after 24 hours.

The European Union’s GDPR regulation has come into effect. That means that companies will no longer be able to collect and use the personal data of anyone in the EU without their explicit, opt-in consent. And PageFair found that only 5% of people will opt-in to the same level of unrestrained tracking that exists today. 5%. So much for people wanting tracking and personalisation.

Now, why are the numbers so low? Again, people do not want to be tracked. In the UK, a Guardian reporter used privacy laws and a lawyer to obtain all of the data that Tinder had on her. What did she receive? 800 pages of data. 800 pages from a silly dating app. I can think of no better example of how people do not want to be tracked and targeted by martech platforms. Because this is what they get.

The medium always matters

Now, onto the next myth in this type of martech: the medium does not matter.

Of course, the traditional model of advertising is that marketers develop a list of the publications and websites that their target audiences are reading. You contact the publication, send the creative, and the ad appears.

Now, this type of martech aims to cut out the publication to save money and target people directly.

When I was studying journalism in America in the late 1990s, my first internship was at a weekly Boston newspaper, The Beacon Hill Times, that serves an affluent part of the city. Former US secretary of state John Kerry lives there.

The Beacon Hill Times, the local residents, and the businesses that serve them all have an interdependent, symbiotic relationship. The newspaper covers the residents’ pressing concerns such as the opening of a new luxury jewelry store and the need for a greater presence of taxis. Businesses such as the jewelry store place advertisements.

The business owners are proud to appear in a recognised and quality-controlled publication with a deep community presence. They clip the articles and advertisements and hang them on their walls. The publication itself is central to the brand of the advertisers – and vice versa – in a way that makes them partners and two sides of the same marketing coin.

Now, imagine how business owners felt when their ads appeared next to this in last year’s brand safety scandal. If the medium is not important and the brand does not matter, then why did companies pull millions of dollars in ad spend from Google and YouTube last year until their concerns were met?

As Faris Yakob put it this month, “we judge brands, like people, by the company they keep”. The mediums in which we choose to advertise our products themselves reflect on our products. The medium affects the brand in an important way.

After all, if you want to brand and sell a premium, luxury product, where are you going to put it? Some martech ad network that fills the internet with crap? Or luxury, print magazines that cater to your audience? Adtech platforms always proclaim that they cut out the middleman, but the middleman is what builds the brand.

And in my least favorite example of martech, we have so-called “marketing automation” and “inbound marketing” – which are often just prettier words for email spam. Again, the goal of this type of martech is to hit people with targeted direct marketing as cheaply and efficiently as possible.

But not all advertising impressions are created equal. I would take one real person looking at my ad in a quality print magazine like these over 1,000 impressions on a martech ad network.

Adtech doesn’t really cut out out the middlemen

Now, onto the next myth, which is related to the previous one: that adtech also saves money by cutting out the middlemen.

Let’s go back to the traditional model. You contact a publication. Someone there takes and processes your order. Someone else creates the ad. Someone else puts it in the newspaper or website. Someone else prints the newspaper and uploads the website. Someone else sells the newspaper. Then, maybe, someone else who buys the newspaper will see your ad. That is a lot of people in the middle who, of course, cost a lot of money.

Adtech uses automated platforms to remove all of those middle men. You write an ad, pick a target audience, and push a button. The ads – in theory – are then directly sent to websites and mobile devices for display in front of anyone who fits that profile regardless of where they go online. This should save a lot of money. In theory.

Digital marketers have always assumed that reaching perfect individuals returns a better ROI than reaching broad marketing segments. But that has never been proven. Adtech did not cut out the middlemen. Adtech merely replaced one set of middlemen with another. And those new middlemen cost money.

Bob Hoffman, the retired CEO of two independent US advertising agencies, now writes The Ad Contrarian blog. He deserves full credit for this breakdown because he was one of the first people to uncover digital advertising fraud over the past several years.

Say you start with $1. According to Hoffman’s analysis from data from the World Federation of Advertisers (WFA) here’s what happens next.

First, your media agency takes about 5¢ in service fees. Then their trading desk takes about 15¢. Then their demand-side platform (DSP) takes about 10¢. Next, some other adtech middlemen take about 25¢ for targeting, data, and verification. Then an ad exchange takes about 5¢.

In other words, you have lost more than half of your investment before the ad even appears on the website. You have 40 cents left of your $1. But only 50% of that spend is on ads that are “viewable”. That leads us with 20 cents. After accounting for ad fraud such as bot activity and deceptive publishers, we have 16 cents.

But only two-thirds of resulting “viewable” impressions are actually seen by someone, leaving us with 11 cents. And among those ads that are actually seen by human eyeballs, 75% of the time, people do not look at them for more then a second – rendering those “impressions” useless.

So, after we account for all of these new middlemen in this type of martech, we get three cents of real value for every dollar that we spend. So, please, keep telling the world that adtech is saving the world money.

Of course, that is a hypothetical example based on average data. Here’s a real world example, in a related context, of how much publishers lose from using ad networks. In 2016 in the UK, the Guardian newspaper bought it own online advertising space in a test. And what did the newspaper determine? That only 30% of ad spend actually goes to the publisher.

According to the finding, “a host of adtech businesses operating within the supply chain are extracting up to 70% of advertisers’ money without being able to quantify the value they provide to the brand”.

Short-term results are not everything

Now, onto the fourth myth in martech: that short-term results are all that matter.

The five different marketing tactics within the promotion mix are done for different purposes and are measured in different ways.

Some examples: direct sales and sales promotions can be measured by sales revenue. Advertising can be measured by brand lift. PR can be measured by brand sentiment. These are only a few examples. Now, direct marketing is measured by direct ROI.

Look at the martech world of mobile. When was the last time that you saw a good, creative brand advertising campaign on mobile? I don’t remember the last time I saw one. Everything is direct response – push notifications, banner ads that want me to click, and nudges to make in-app purchases.

What happens is that too many marketers, especially in the digital world, get hooked on short-term, direct response metrics. People assign direct response metrics to all promotional activities, even though that is completely wrong. It is why I get questions from marketers and even CFOs such as “What is the direct ROI of PR?” Well, direct ROI is not the goal of PR. Those who ask such questions do not understand traditional marketing theory. Not everything important in marketing can or should result in an immediate, trackable response in an analytics platform.

Direct response is picking the fruit – those people have grown, are ripe, are down in the funnel, and ready to buy. Brand advertising is watering the tree so that more fruit will grow in the future. If you focus too much on direct response, you will sell a lot today but go bankrupt tomorrow when no more fruit has grown. If you focus too much on brand advertising, you will go broke today because are not selling any fruit.

Short-term direct response campaigns lead to limited short-term returns. But long-term profit growth comes mainly from long-term brand advertising. More on that in a bit.

“Waste” is actually a good thing

Now, onto the fifth myth in martech: that targeting solves the problem of waste.

People in the martech world frequently cite this quote as proof that traditional advertising is a waste because it is spent on a mass audience that includes people who will not immediately make a purchase. But that idea of waste is completely wrong.

When I was in sixth grade in the midwestern United States in 1992, every kid wanted a pair of Umbro shorts. It was the big fad because football – and the associated clothing – had flooded suburban America from the UK in the eighties and nineties. However, I grew up in a modest household that could rarely afford the latest, expensive fashions.

My cool mother, seeing how much I wanted them, eventually put aside enough money to buy a pair. The next morning, I put them on and walked to school. I was nervous because I had never worn such a stylish brand and was wondering what was going to happen.

After I arrived on the basketball court where everyone hung out in the mornings before first period, all of my classmates turned to look at me. The boys from wealthy families walked over, looked at my neon, nylon shorts, and gave me high-fives. “Niiiiiiice, dude!” they said.

In sixth grade, everyone was impressed by my Umbro shorts because everyone had developed the same brand association. Each of us subconsciously knew that everyone else had all seen the same marketing and had internalised the same brand messages. That is how brands are built for the long-term. If I had seen a random, individually targeted online direct response ad for Umbro clothing in 1992, I would not have given it a second thought.

The so-called “waste” is what makes the campaigns effective because of the principle of signaling. What brands you choose to buy is in part due to what you want people to think about you. Only brand advertising, not martech, can influence that

Brand is always important

And now, ladies and gentlemen, the final martech myth of the day: that brand advertising can be ignored because it is not directly measurable in the short-term. This is the big-picture message that I hope everyone will remember.

Not everything that is important in marketing can be measured and not everything that can be measured is important. Not every activity in marketing can or should aim to receive an immediate, trackable response. This is why promotion consists of many different types of marketing activities.

According to BBH in London, 84% of the value of S&P 500 companies in the US comes from “intangible assets” – which is in part another term for the brand.

And how do you both build a brand in the long term and generate sales and revenue in the short term? Classic theory states that 60% of your spend should be on long-term brand advertising and 40% on short-term direct response and sales activation. Of course, the best percentages for every company will be a little higher or lower, but the general rule remains.

The reason is that sales activation brings quick but small results while brand advertising brings slow but large results.

Here is another way to look at it. Every time that you do a direct response or sales activation campaign, you will see a spike in revenue. But that spike will never grow past that upper limit unless you grow the brand as well. When you add the two together, you will see how both brand and direct response lead to the best long-term results.

Most importantly, companies with strong brands can charge up to a 13% price premium – which leads to the greatest revenue for the long term.

Now, you might think that tech companies might focus more on direct response and marketing technology. But tech is actually the sector that spends the most on brand advertising on television. In the US, Apple and Netflix, for example, grew in the beginning mainly through television ads.

And on average across all industries, brand value represents 20% of total market capitalisation.

Martech platforms and the marketers who use them focus so much on how to transmit and target ads that they never think anymore about how to create good ones.

Communication channels may change, but human beings do not. The best method to reach inside peoples’ minds and maximise long-term sales is through creative, emotional brand campaigns. And where are the good ideas in the martech world?

And now, I will leave you with one question: what is the best way to sell more razor blades in the long term? Tracking, targeting, and hitting people with cheap, martech-created direct response? Or, to bring this talk full circle, the Venus of today?

The Promotion Fix is an exclusive biweekly column for The Drum contributed by global marketing and technology keynote speaker Samuel Scott, a former journalist, consultant and director of marketing in the high-tech industry. Follow him on Twitter and Facebook. Scott is based out of Tel Aviv, Israel.

 

Source: The biggest lies that the martech and adtech worlds tell themselves | The Drum

Star Citizen Gets Backlash For Copying EVE Online Ship Design

Fans of the popular space-themed MMO role-playing game EVE Online have frequently claimed that the long-awaited video game Star Citizen was borrowing heavily from the earlier franchise, if not outright ripping-off aspects. The argument found new ammunition this week, when EVE Online fans noticed a striking resemblance between the Drake Vulture – a new unique ship for use in Star Citizen’s solo-player mode, which costs $140 – and EVE Online‘s Venture.

This is only the latest of many controversies involving the content created for Star Citizen. The ultimate goal of the design team, under legendary game designer Chris Roberts, was to craft a space simulation that allowed for multiple forms of gameplay. The finished game would have solo and multiplayer modes, allowing players to explore the galaxy, manage resources, establish trade routes, and fight other players in a first-person-shooter, not to mention engage in ship-to-ship combat and play through a cinematic adventure game akin to Roberts’ Wing Commander series. Many have decried the game as being too ambitious at best and some have accused Roberts of running a scam, delaying Star Citizen‘s release date as he continues to raise millions of dollars from fans paying in advance for special privileges, in-game money, and rare ships to be used once the game finally comes out.

Related: Why A Player Spent $30,000 on Star Citizen

Eurogamer reported on the controversy, which quickly led to pot-shots being fired by fans of both franchises. Star Citizen players contend that the resemblance is an unfortunate coincidence, pointing to spaceships from other science-fiction franchises boasting a similar look. EVE Online players contend the similarity goes far beyond the basic design and points out  the similarity between the ship’s names.

EVE Online commented on the controversy with a tweet on their official Twitter account. The tweet included a picture of both ships, side by side, and the comment, “They say that imitation is the sincerest form of flattery.” Cloud Imperium Games – the publisher of Star Citizen – have yet to respond to the charges one way or the other.

It remains to be seen if the developers of EVE Online will pursue legal action against the makers of Star Citizen. The frame-by-frame pictures of the two ships and the similarities of their names do offer a compelling case for a copyright challenge. Then again, if the theories regarding Star Citizen being history’s most expensive vaporware are accurate, EVE Online has nothing to worry about.

Get Your Free Access Now!

 

Source: Star Citizen Gets Backlash For Copying EVE Online Ship Design

The Birth of the New American Aristocracy – The Atlantic

1.

The Aristocracy Is Dead …

For about a week every year in my childhood, I was a member of one of America’s fading aristocracies. Sometimes around Christmas, more often on the Fourth of July, my family would take up residence at one of my grandparents’ country clubs in Chicago, Palm Beach, or Asheville, North Carolina. The breakfast buffets were magnificent, and Grandfather was a jovial host, always ready with a familiar story, rarely missing an opportunity for gentle instruction on proper club etiquette. At the age of 11 or 12, I gathered from him, between his puffs of cigar smoke, that we owed our weeks of plenty to Great-Grandfather, Colonel Robert W. Stewart, a Rough Rider with Teddy Roosevelt who made his fortune as the chairman of Standard Oil of Indiana in the 1920s. I was also given to understand that, for reasons traceable to some ancient and incomprehensible dispute, the Rockefellers were the mortal enemies of our clan. Only much later in life did I learn that the stories about the Colonel and his tangles with titans fell far short of the truth.

To hear more feature stories, see our full list or get the Audm iPhone app.

At the end of each week, we would return to our place. My reality was the aggressively middle-class world of 1960s and ’70s U.S. military bases and the communities around them. Life was good there, too, but the pizza came from a box, and it was Lucky Charms for breakfast. Our glory peaked on the day my parents came home with a new Volkswagen camper bus. As I got older, the holiday pomp of patriotic luncheons and bridge-playing rituals came to seem faintly ridiculous and even offensive, like an endless birthday party for people whose chief accomplishment in life was just showing up. I belonged to a new generation that believed in getting ahead through merit, and we defined merit in a straightforward way: test scores, grades, competitive résumé-stuffing, supremacy in board games and pickup basketball, and, of course, working for our keep. For me that meant taking on chores for the neighbors, punching the clock at a local fast-food restaurant, and collecting scholarships to get through college and graduate school. I came into many advantages by birth, but money was not among them.

I’ve joined a new aristocracy now, even if we still call ourselves meritocratic winners. If you are a typical reader of The Atlantic, you may well be a member too. (And if you’re not a member, my hope is that you will find the story of this new class even more interesting—if also more alarming.) To be sure, there is a lot to admire about my new group, which I’ll call—for reasons you’ll soon see—the 9.9 percent. We’ve dropped the old dress codes, put our faith in facts, and are (somewhat) more varied in skin tone and ethnicity. People like me, who have waning memories of life in an earlier ruling caste, are the exception, not the rule.

By any sociological or financial measure, it’s good to be us. It’s even better to be our kids. In our health, family life, friendship networks, and level of education, not to mention money, we are crushing the competition below. But we do have a blind spot, and it is located right in the center of the mirror: We seem to be the last to notice just how rapidly we’ve morphed, or what we’ve morphed into.

The meritocratic class has mastered the old trick of consolidating wealth and passing privilege along at the expense of other people’s children. We are not innocent bystanders to the growing concentration of wealth in our time. We are the principal accomplices in a process that is slowly strangling the economy, destabilizing American politics, and eroding democracy. Our delusions of merit now prevent us from recognizing the nature of the problem that our emergence as a class represents. We tend to think that the victims of our success are just the people excluded from the club. But history shows quite clearly that, in the kind of game we’re playing, everybody loses badly in the end.

2.

The Discreet Charm of the 9.9 Percent

Let’s talk first about money—even if money is only one part of what makes the new aristocrats special. There is a familiar story about rising inequality in the United States, and its stock characters are well known. The villains are the fossil-fueled plutocrat, the Wall Street fat cat, the callow tech bro, and the rest of the so-called top 1 percent. The good guys are the 99 percent, otherwise known as “the people” or “the middle class.” The arc of the narrative is simple: Once we were equal, but now we are divided. The story has a grain of truth to it. But it gets the characters and the plot wrong in basic ways.

It is in fact the top 0.1 percent who have been the big winners in the growing concentration of wealth over the past half century. According to the UC Berkeley economists Emmanuel Saez and Gabriel Zucman, the 160,000 or so households in that group held 22 percent of America’s wealth in 2012, up from 10 percent in 1963. If you’re looking for the kind of money that can buy elections, you’ll find it inside the top 0.1 percent alone.


A Tale of Three Classes (Figure 1):  

The 9.9 percent hold most of the wealth in the United States.

Saez / Zucman

Every piece of the pie picked up by the 0.1 percent, in relative terms, had to come from the people below. But not everyone in the 99.9 percent gave up a slice. Only those in the bottom 90 percent did. At their peak, in the mid-1980s, people in this group held 35 percent of the nation’s wealth. Three decades later that had fallen 12 points—exactly as much as the wealth of the 0.1 percent rose.

In between the top 0.1 percent and the bottom 90 percent is a group that has been doing just fine. It has held on to its share of a growing pie decade after decade. And as a group, it owns substantially more wealth than do the other two combined. In the tale of three classes (see Figure 1), it is represented by the gold line floating high and steady while the other two duke it out. You’ll find the new aristocracy there. We are the 9.9 percent.

So what kind of characters are we, the 9.9 percent? We are mostly not like those flamboyant political manipulators from the 0.1 percent. We’re a well-behaved, flannel-suited crowd of lawyers, doctors, dentists, mid-level investment bankers, M.B.A.s with opaque job titles, and assorted other professionals—the kind of people you might invite to dinner. In fact, we’re so self-effacing, we deny our own existence. We keep insisting that we’re “middle class.”

As of 2016, it took $1.2 million in net worth to make it into the 9.9 percent; $2.4 million to reach the group’s median; and $10 million to get into the top 0.9 percent. (And if you’re not there yet, relax: Our club is open to people who are on the right track and have the right attitude.) “We are the 99 percent” sounds righteous, but it’s a slogan, not an analysis. The families at our end of the spectrum wouldn’t know what to do with a pitchfork.

We are also mostly, but not entirely, white. According to a Pew Research Center analysis, African Americans represent 1.9 percent of the top 10th of households in wealth; Hispanics, 2.4 percent; and all other minorities, including Asian and multiracial individuals, 8.8 percent—even though those groups together account for 35 percent of the total population.

One of the hazards of life in the 9.9 percent is that our necks get stuck in the upward position. We gaze upon the 0.1 percent with a mixture of awe, envy, and eagerness to obey. As a consequence, we are missing the other big story of our time. We have left the 90 percent in the dust—and we’ve been quietly tossing down roadblocks behind us to make sure that they never catch up.

Let’s suppose that you start off right in the middle of the American wealth distribution. How high would you have to jump to make it into the 9.9 percent? In financial terms, the measurement is easy and the trend is unmistakable. In 1963, you would have needed to multiply your wealth six times. By 2016, you would have needed to leap twice as high—increasing your wealth 12-fold—to scrape into our group. If you boldly aspired to reach the middle of our group rather than its lower edge, you’d have needed to multiply your wealth by a factor of 25. On this measure, the 2010s look much like the 1920s.

If you are starting at the median for people of color, you’ll want to practice your financial pole-vaulting. The Institute for Policy Studies calculated that, setting aside money invested in “durable goods” such as furniture and a family car, the median black family had net wealth of $1,700 in 2013, and the median Latino family had $2,000, compared with $116,800 for the median white family. A 2015 study in Boston found that the wealth of the median white family there was $247,500, while the wealth of the median African American family was $8. That is not a typo. That’s two grande cappuccinos. That and another 300,000 cups of coffee will get you into the 9.9 percent.

Video: America’s Class Problem

 

None of this matters, you will often hear, because in the United States everyone has an opportunity to make the leap: Mobility justifies inequality. As a matter of principle, this isn’t true. In the United States, it also turns out not to be true as a factual matter. Contrary to popular myth, economic mobility in the land of opportunity is not high, and it’s going down.

Imagine yourself on the socioeconomic ladder with one end of a rubber band around your ankle and the other around your parents’ rung. The strength of the rubber determines how hard it is for you to escape the rung on which you were born. If your parents are high on the ladder, the band will pull you up should you fall; if they are low, it will drag you down when you start to rise. Economists represent this concept with a number they call “intergenerational earnings elasticity,” or IGE, which measures how much of a child’s deviation from average income can be accounted for by the parents’ income. An IGE of zero means that there’s no relationship at all between parents’ income and that of their offspring. An IGE of one says that the destiny of a child is to end up right where she came into the world.

According to Miles Corak, an economics professor at the City University of New York, half a century ago IGE in America was less than 0.3. Today, it is about 0.5. In America, the game is half over once you’ve selected your parents. IGE is now higher here than in almost every other developed economy. On this measure of economic mobility, the United States is more like Chile or Argentina than Japan or Germany.

The story becomes even more disconcerting when you see just where on the ladder the tightest rubber bands are located. Canada, for example, has an IGE of about half that of the U.S. Yet from the middle rungs of the two countries’ income ladders, offspring move up or down through the nearby deciles at the same respectable pace. The difference is in what happens at the extremes. In the United States, it’s the children of the bottom decile and, above all, the top decile—the 9.9 percent—who settle down nearest to their starting point. Here in the land of opportunity, the taller the tree, the closer the apple falls.

All of this analysis of wealth percentiles, to be clear, provides only a rough start in understanding America’s evolving class system. People move in and out of wealth categories all the time without necessarily changing social class, and they may belong to a different class in their own eyes than they do in others’. Yet even if the trends in the monetary statistics are imperfect illustrations of a deeper process, they are nonetheless registering something of the extraordinary transformation that’s taking place in our society.

A few years ago, Alan Krueger, an economist and a former chairman of the Obama administration’s Council of Economic Advisers, was reviewing the international mobility data when he caught a glimpse of the fundamental process underlying our present moment. Rising immobility and rising inequality aren’t like two pieces of driftwood that happen to have shown up on the beach at the same time, he noted. They wash up together on every shore. Across countries, the higher the inequality, the higher the IGE (see Figure 2). It’s as if human societies have a natural tendency to separate, and then, once the classes are far enough apart, to crystallize.


The Great Gatsby Curve (Figure 2): Inequality and class immobility go together.

Miles Corak

Economists are prudent creatures, and they’ll look up from a graph like that and remind you that it shows only correlation, not causation. That’s a convenient hedge for those of us at the top because it keeps alive one of the founding myths of America’s meritocracy: that our success has nothing to do with other people’s failure. It’s a pleasant idea. But around the world and throughout history, the wealthy have advanced the crystallization process in a straightforward way. They have taken their money out of productive activities and put it into walls. Throughout history, moreover, one social group above all others has assumed responsibility for maintaining and defending these walls. Its members used to be called aristocrats. Now we’re the 9.9 percent. The main difference is that we have figured out how to use the pretense of being part of the middle as one of our strategies for remaining on top.

Krueger liked the graph shown in Figure 2 so much that he decided to give it a name: the Great Gatsby Curve. It’s a good choice, and it resonates strongly with me. F. Scott Fitzgerald’s novel about the breakdown of the American dream is set in 1922, or right around the time that my great-grandfather was secretly siphoning money from Standard Oil and putting it into a shell company in Canada. It was published in 1925, just as special counsel was turning up evidence that bonds from that company had found their way into the hands of the secretary of the interior. Its author was drinking his way through the cafés of Paris just as Colonel Robert W. Stewart was running away from subpoenas to testify before the United States Senate about his role in the Teapot Dome scandal. We are only now closing in on the peak of inequality that his generation achieved, in 1928. I’m sure they thought it would go on forever, too.

3.

The Origin of a Species

Money can’t buy you class, or so my grandmother used to say. But it can buy a private detective. Grandmother was a Kentucky debutante and sometime fashion model (kind of like Daisy Buchanan in The Great Gatsby, weirdly enough), so she knew what to do when her eldest son announced his intention to marry a woman from Spain. A gumshoe promptly reported back that the prospective bride’s family made a living selling newspapers on the streets of Barcelona. Grandmother instituted an immediate and total communications embargo. In fact, my mother’s family owned and operated a large paper-goods factory. When children came, Grandmother at last relented. Determined to do the right thing, she arranged for the new family, then on military assignment in Hawaii, to be inscribed in the New York Social Register.

Sociologists would say, in their dry language, that my grandmother was a zealous manager of the family’s social capital—and she wasn’t about to let some Spanish street urchin run away with it. She did have a point, even if her facts were wrong. Money may be the measure of wealth, but it is far from the only form of it. Family, friends, social networks, personal health, culture, education, and even location are all ways of being rich, too. These nonfinancial forms of wealth, as it turns out, aren’t simply perks of membership in our aristocracy. They define us.

We are the people of good family, good health, good schools, good neighborhoods, and good jobs. We may want to call ourselves the “5Gs” rather than the 9.9 percent. We are so far from the not-so-good people on all of these dimensions, we are beginning to resemble a new species. And, just as in Grandmother’s day, the process of speciation begins with a love story—or, if you prefer, sexual selection.

The polite term for the process is assortative mating. The phrase is sometimes used to suggest that this is another of the wonders of the internet age, where popcorn at last meets butter and Yankees fan finds Yankees fan. In fact, the frenzy of assortative mating today results from a truth that would have been generally acknowledged by the heroines of any Jane Austen novel: Rising inequality decreases the number of suitably wealthy mates even as it increases the reward for finding one and the penalty for failing to do so. According to one study, the last time marriage partners sorted themselves by educational status as much as they do now was in the 1920s.

For most of us, the process is happily invisible. You meet someone under a tree on an exclusive campus or during orientation at a high-powered professional firm, and before you know it, you’re twice as rich. But sometimes—Grandmother understood this well—extra measures are called for. That’s where our new technology puts bumbling society detectives to shame. Ivy Leaguers looking to mate with their equals can apply to join a dating service called the League. It’s selective, naturally: Only 20 to 30 percent of New York applicants get in. It’s sometimes called “Tinder for the elites.”

It is misleading to think that assortative mating is symmetrical, as in city mouse marries city mouse and country mouse marries country mouse. A better summary of the data would be: Rich mouse finds love, and poor mouse gets screwed. It turns out—who knew?—that people who are struggling to keep it all together have a harder time hanging on to their partner. According to the Harvard political scientist Robert Putnam, 60 years ago just 20 percent of children born to parents with a high-school education or less lived in a single-parent household; now that figure is nearly 70 percent. Among college-educated households, by contrast, the single-parent rate remains less than 10 percent. Since the 1970s, the divorce rate has declined significantly among college-educated couples, while it has risen dramatically among couples with only a high-school education—even as marriage itself has become less common. The rate of single parenting is in turn the single most significant predictor of social immobility across counties, according to a study led by the Stanford economist Raj Chetty.

None of which is to suggest that individuals are wrong to seek a suitable partner and make a beautiful family. People should—and presumably always will—pursue happiness in this way. It’s one of the delusions of our meritocratic class, however, to assume that if our actions are individually blameless, then the sum of our actions will be good for society. We may have studied Shakespeare on the way to law school, but we have little sense for the tragic possibilities of life. The fact of the matter is that we have silently and collectively opted for inequality, and this is what inequality does. It turns marriage into a luxury good, and a stable family life into a privilege that the moneyed elite can pass along to their children. How do we think that’s going to work out?

This divergence of families by class is just one part of a process that is creating two distinct forms of life in our society. Stop in at your local yoga studio or SoulCycle class, and you’ll notice that the same process is now inscribing itself in our own bodies. In 19th-century England, the rich really were different. They didn’t just have more money; they were taller—a lot taller. According to a study colorfully titled “On English Pygmies and Giants,” 16-year-old boys from the upper classes towered a remarkable 8.6 inches, on average, over their undernourished, lower-class countrymen. We are reproducing the same kind of division via a different set of dimensions.

Obesity, diabetes, heart disease, kidney disease, and liver disease are all two to three times more common in individuals who have a family income of less than $35,000 than in those who have a family income greater than $100,000. Among low-educated, middle-aged whites, the death rate in the United States—alone in the developed world—increased in the first decade and a half of the 21st century. Driving the trend is the rapid growth in what the Princeton economists Anne Case and Angus Deaton call “deaths of despair”—suicides and alcohol- and drug-related deaths.

The sociological data are not remotely ambiguous on any aspect of this growing divide. We 9.9 percenters live in safer neighborhoods, go to better schools, have shorter commutes, receive higher-quality health care, and, when circumstances require, serve time in better prisons. We also have more friends—the kind of friends who will introduce us to new clients or line up great internships for our kids.

These special forms of wealth offer the further advantages that they are both harder to emulate and safer to brag about than high income alone. Our class walks around in the jeans and T‑shirts inherited from our supposedly humble beginnings. We prefer to signal our status by talking about our organically nourished bodies, the awe-inspiring feats of our offspring, and the ecological correctness of our neighborhoods. We have figured out how to launder our money through higher virtues.

Most important of all, we have learned how to pass all of these advantages down to our children. In America today, the single best predictor of whether an individual will get married, stay married, pursue advanced education, live in a good neighborhood, have an extensive social network, and experience good health is the performance of his or her parents on those same metrics.

We’re leaving the 90 percent and their offspring far behind in a cloud of debts and bad life choices that they somehow can’t stop themselves from making. We tend to overlook the fact that parenting is more expensive and motherhood more hazardous in the United States than in any other developed country, that campaigns against family planning and reproductive rights are an assault on the families of the bottom 90 percent, and that law-and-order politics serves to keep even more of them down. We prefer to interpret their relative poverty as vice: Why can’t they get their act together?

New forms of life necessarily give rise to new and distinct forms of consciousness. If you doubt this, you clearly haven’t been reading the “personal and household services” ads on Monster.com. At the time of this writing, the section for my town of Brookline, Massachusetts, featured one placed by a “busy professional couple” seeking a “Part Time Nanny.” The nanny (or manny—the ad scrupulously avoids committing to gender) is to be “bright, loving, and energetic”; “friendly, intelligent, and professional”; and “a very good communicator, both written and verbal.” She (on balance of probability) will “assist with the care and development” of two children and will be “responsible for all aspects of the children’s needs,” including bathing, dressing, feeding, and taking the young things to and from school and activities. That’s why a “college degree in early childhood education” is “a plus.”

In short, Nanny is to have every attribute one would want in a terrific, professional, college-educated parent. Except, of course, the part about being an actual professional, college-educated parent. There is no chance that Nanny will trade places with our busy 5G couple. She “must know the proper etiquette in a professionally run household” and be prepared to “accommodate changing circumstances.” She is required to have “5+ years experience as a Nanny,” which makes it unlikely that she’ll have had time to get the law degree that would put her on the other side of the bargain. All of Nanny’s skills, education, experience, and professionalism will land her a job that is “Part Time.”

The ad is written in flawless, 21st-century business-speak, but what it is really seeking is a governess—that exquisitely contradictory figure in Victorian literature who is both indistinguishable in all outward respects from the upper class and yet emphatically not a member of it. Nanny’s best bet for moving up in the world is probably to follow the example of Jane Eyre and run off with the lord (or lady) of the manor.

If you look beyond the characters in this unwritten novel about Nanny and her 5G masters, you’ll see a familiar shape looming on the horizon. The Gatsby Curve has managed to reproduce itself in social, physiological, and cultural capital. Put more accurately: There is only one curve, but it operates through a multiplicity of forms of wealth.

Rising inequality does not follow from a hidden law of economics, as the otherwise insightful Thomas Piketty suggested when he claimed that the historical rate of return on capital exceeds the historical rate of growth in the economy. Inequality necessarily entrenches itself through other, nonfinancial, intrinsically invidious forms of wealth and power. We use these other forms of capital to project our advantages into life itself. We look down from our higher virtues in the same way the English upper class looked down from its taller bodies, as if the distinction between superior and inferior were an artifact of nature. That’s what aristocrats do.

Craig Cutler

4.

The Privilege of an Education

My 16-year-old daughter is sitting on a couch, talking with a stranger about her dreams for the future. We’re here, ominously enough, because, she says, “all my friends are doing it.” For a moment, I wonder whether we have unintentionally signed up for some kind of therapy. The professional woman in the smart-casual suit throws me a pointed glance and says, “It’s normal to be anxious at a time like this.” She really does see herself as a therapist of sorts. But she does not yet seem to know that the source of my anxiety is the idea of shelling out for a $12,000 “base package” of college-counseling services whose chief purpose is apparently to reduce my anxiety. Determined to get something out of this trial counseling session, I push for recommendations on summer activities. We leave with a tip on a 10-day “cultural tour” of France for high schoolers. In the college-application business, that’s what’s known as an “enrichment experience.” When we get home, I look it up. The price of enrichment: $11,000 for the 10 days.

That’s when I hear the legend of the SAT whisperer. If you happen to ride through the yellow-brown valleys of the California coast, past the designer homes that sprout wherever tech unicorns sprinkle their golden stock offerings, you might come across him. His high-school classmates still remember him, almost four decades later, as one of the child wonders of the age. Back then, he and his equally precocious siblings showed off their preternatural verbal and musical talents on a local television program. Now his clients fly him around the state for test-prep sessions with their 16-year-olds. You can hire him for $750, plus transportation, per two-hour weekend session. (There is a weekday discount.) Some of his clients book him every week for a year.

At this point, I’m wondering whether life was easier in the old days, when you could buy a spot in the elite university of your choice with cold cash. Then I remind myself that Grandfather lasted only one year at Yale. In those days, the Ivies kicked you out if you weren’t ready for action. Today, you have to self-combust in a newsworthy way before they show you the door.

Inevitably, I begin rehearsing the speech for my daughter. It’s perfectly possible to lead a meaningful life without passing through a name-brand college, I’m going to say. We love you for who you are. We’re not like those tacky strivers who want a back-windshield sticker to testify to our superior parenting skills. And why would you want to be an investment banker or a corporate lawyer anyway? But I refrain from giving the speech, knowing full well that it will light up her parental-bullshit detector like a pair of khakis on fire.

the skin colors of the nation’s elite student bodies are more varied now, as are their genders, but their financial bones have calcified over the past 30 years. In 1985, 54 percent of students at the 250 most selective colleges came from families in the bottom three quartiles of the income distribution. A similar review of the class of 2010 put that figure at just 33 percent. According to a 2017 study, 38 elite colleges—among them five of the Ivies—had more students from the top 1 percent than from the bottom 60 percent. In his 2014 book, Excellent Sheep, William Deresiewicz, a former English professor at Yale, summed up the situation nicely: “Our new multiracial, gender-neutral meritocracy has figured out a way to make itself hereditary.”

The wealthy can also draw on a variety of affirmative-action programs designed just for them. As Daniel Golden points out in The Price of Admission, legacy-admissions policies reward those applicants with the foresight to choose parents who attended the university in question. Athletic recruiting, on balance and contrary to the popular wisdom, also favors the wealthy, whose children pursue lacrosse, squash, fencing, and the other cost-intensive sports at which private schools and elite public schools excel. And, at least among members of the 0.1 percent, the old-school method of simply handing over some of Daddy’s cash has been making a comeback. (Witness Jared Kushner, Harvard graduate.)

The mother lode of all affirmative-action programs for the wealthy, of course, remains the private school. Only 2.2 percent of the nation’s students graduate from nonsectarian private high schools, and yet these graduates account for 26 percent of students at Harvard and 28 percent of students at Princeton. The other affirmative-action programs, the kind aimed at diversifying the look of the student body, are no doubt well intended. But they are to some degree merely an extension of this system of wealth preservation. Their function, at least in part, is to indulge rich people in the belief that their college is open to all on the basis of merit.

The plummeting admission rates of the very top schools nonetheless leave many of the children of the 9.9 percent facing long odds. But not to worry, junior 9.9 percenters! We’ve created a new range of elite colleges just for you. Thanks to ambitious university administrators and the ever-expanding rankings machine at U.S. News & World Report, 50 colleges are now as selective as Princeton was in 1980, when I applied. The colleges seem to think that piling up rejections makes them special. In fact, it just means that they have collectively opted to deploy their massive, tax-subsidized endowments to replicate privilege rather than fulfill their duty to produce an educated public.

The only thing going up as fast as the rejection rates at selective colleges is the astounding price of tuition. Measured relative to the national median salary, tuition and fees at top colleges more than tripled from 1963 to 2013. Throw in the counselors, the whisperers, the violin lessons, the private schools, and the cost of arranging for Junior to save a village in Micronesia, and it adds up. To be fair, financial aid closes the gap for many families and keeps the average cost of college from growing as fast as the sticker price. But that still leaves a question: Why are the wealthy so keen to buy their way in?

The short answer, of course, is that it’s worth it.

In the United States, the premium that college graduates earn over their non-college-educated peers in young adulthood exceeds 70 percent. The return on education is 50 percent higher than what it was in 1950, and is significantly higher than the rate in every other developed country. In Norway and Denmark, the college premium is less than 20 percent; in Japan, it is less than 30 percent; in France and Germany, it’s about 40 percent.

All of this comes before considering the all-consuming difference between “good” schools and the rest. Ten years after starting college, according to data from the Department of Education, the top decile of earners from all schools had a median salary of $68,000. But the top decile from the 10 highest-earning colleges raked in $220,000—make that $250,000 for No. 1, Harvard—and the top decile at the next 30 colleges took home $157,000. (Not surprisingly, the top 10 had an average acceptance rate of 9 percent, and the next 30 were at 19 percent.)

It is entirely possible to get a good education at the many schools that don’t count as “good” in our brand-obsessed system. But the “bad” ones really are bad for you. For those who made the mistake of being born to the wrong parents, our society offers a kind of virtual education system. It has places that look like colleges—but aren’t really. It has debt—and that, unfortunately, is real. The people who enter into this class hologram do not collect a college premium; they wind up in something more like indentured servitude.

So what is the real source of this premium for a “good education” that we all seem to crave?

One of the stories we tell ourselves is that the premium is the reward for the knowledge and skills the education provides us. Another, usually unfurled after a round of drinks, is that the premium is a reward for the superior cranial endowments we possessed before setting foot on campus. We are, as some sociologists have delicately put it, a “cognitive elite.”

Behind both of these stories lies one of the founding myths of our meritocracy. One way or the other, we tell ourselves, the rising education premium is a direct function of the rising value of meritorious people in a modern economy. That is, not only do the meritorious get ahead, but the rewards we receive are in direct proportion to our merit.

But the fact is that degree holders earn so much more than the rest not primarily because they are better at their job, but because they mostly take different categories of jobs. Well over half of Ivy League graduates, for instance, typically go straight into one of four career tracks that are generally reserved for the well educated: finance, management consulting, medicine, or law. To keep it simple, let’s just say that there are two types of occupations in the world: those whose members have collective influence in setting their own pay, and those whose members must face the music on their own. It’s better to be a member of the first group. Not surprisingly, that is where you will find the college crowd.

why do America’s doctors make twice as much as those of other wealthy countries? Given that the United States has placed dead last five times running in the Commonwealth Fund’s ranking of health-care systems in high-income countries, it’s hard to argue that they are twice as gifted at saving lives. Dean Baker, a senior economist with the Center for Economic and Policy Research, has a more plausible suggestion: “When economists like me look at medicine in America—whether we lean left or right politically—we see something that looks an awful lot like a cartel.” Through their influence on the number of slots at medical schools, the availability of residencies, the licensing of foreign-trained doctors, and the role of nurse practitioners, physicians’ organizations can effectively limit the competition their own members face—and that is exactly what they do.

Lawyers (or at least a certain elite subset of them) have apparently learned to play the same game. Even after the collapse of the so-called law-school bubble, America’s lawyers are No. 1 in international salary rankings and earn more than twice as much, on average, as their wig-toting British colleagues. The University of Chicago law professor Todd Henderson, writing for Forbes in 2016, offered a blunt assessment: “The American Bar Association operates a state-approved cartel.”

Similar occupational licensing schemes provide shelter for the meritorious in a variety of other sectors. The policy researchers Brink Lindsey and Steven Teles detail the mechanisms in The Captured Economy. Dentists’ offices, for example, have a glass ceiling that limits what dental hygienists can do without supervision, keeping their bosses in the 9.9 percent. Copyright and patent laws prop up profits and salaries in the education-heavy pharmaceutical, software, and entertainment sectors. These arrangements are trifles, however, compared with what’s on offer in tech and finance, two of the most powerful sectors of the economy.

By now we’re thankfully done with the tech-sector fairy tales in which whip-smart cowboys innovate the heck out of a stodgy status quo. The reality is that five monster companies—you know the names—are worth about $3.5 trillion combined, and represent more than 40 percent of the market capital on the nasdaq stock exchange. Much of the rest of the technology sector consists of virtual entities waiting patiently to feed themselves to these beasts.

Let’s face it: This is Monopoly money with a smiley emoji. Our society figured out some time ago how to deal with companies that attempt to corner the market on viscous substances like oil. We don’t yet know what to do with the monopolies that arise out of networks and scale effects in the information marketplace. Until we do, the excess profits will stick to those who manage to get closest to the information honeypot. You can be sure that these people will have a great deal of merit.

The candy-hurling godfather of today’s meritocratic class, of course, is the financial-services industry. Americans now turn over $1 of every $12 in GDP to the financial sector; in the 1950s, the bankers were content to keep only $1 out of $40. The game is more sophisticated than a two-fisted money grab, but its essence was made obvious during the 2008 financial crisis. The public underwrites the risks; the financial gurus take a seat at the casino; and it’s heads they win, tails we lose. The financial system we now have is not a product of nature. It has been engineered, over decades, by powerful bankers, for their own benefit and for that of their posterity.

Who is not in on the game? Auto workers, for example. Caregivers. Retail workers. Furniture makers. Food workers. The wages of American manufacturing and service workers consistently hover in the middle of international rankings. The exceptionalism of American compensation rates comes to an end in the kinds of work that do not require a college degree.

You see, when educated people with excellent credentials band together to advance their collective interest, it’s all part of serving the public good by ensuring a high quality of service, establishing fair working conditions, and giving merit its due. That’s why we do it through “associations,” and with the assistance of fellow professionals wearing white shoes. When working-class people do it—through unions—it’s a violation of the sacred principles of the free market. It’s thuggish and anti-modern. Imagine if workers hired consultants and “compensation committees,” consisting of their peers at other companies, to recommend how much they should be paid. The result would be—well, we know what it would be, because that’s what CEOs do.

It isn’t a coincidence that the education premium surged during the same years that membership in trade unions collapsed. In 1954, 28 percent of all workers were members of trade unions, but by 2017 that figure was down to 11 percent.

education—the thing itself, not the degree—is always good. A genuine education opens minds and makes good citizens. It ought to be pursued for the sake of society. In our unbalanced system, however, education has been reduced to a private good, justifiable only by the increments in graduates’ paychecks. Instead of uniting and enriching us, it divides and impoverishes. 
Which is really just a way of saying that our worthy ideals of educational opportunity are ultimately no match for the tidal force of the Gatsby Curve. The metric that has tracked the rising college premium with the greatest precision is—that’s right—intergenerational earnings elasticity, or IGE. Across countries, the same correlation obtains: the higher the college premium, the lower the social mobility.

As I’m angling all the angles for my daughter’s college applications—the counselor is out, and the SAT whisperer was never going to happen—I realize why this delusion of merit is so hard to shake. If I—I mean, she—can pull this off, well, there’s the proof that we deserve it! If the system can be gamed, well then, our ability to game the system has become the new test of merit.

So go ahead and replace the SATs with shuffleboard on the high seas, or whatever you want. Who can doubt that we’d master that game, too? How quickly would we convince ourselves of our absolute entitlement to the riches that flow directly and tangibly from our shuffling talent? How soon before we perfected the art of raising shuffleboard wizards? Would any of us notice or care which way the ship was heading?

Let’s suppose that some of us do look up. We see the iceberg. Will that induce us to diminish our exertions in supreme child-rearing? The grim truth is that, as long as good parenting and good citizenship are in conflict, we’re just going to pack a few more violins for the trip.

5.

The Invisible Hand of Government

As far as Grandfather was concerned, the assault on the productive classes began long before the New Deal. It all started in 1913, with the ratification of the Sixteenth Amendment. In case you’ve forgotten, that amendment granted the federal government the power to levy a direct personal-income tax. It also happens that ratification took place just a few months after Grandfather was born, which made sense to me in a strange way. By far the largest part of his lifetime income was attributable to his birth.

Grandfather was a stockbroker for a time. I eventually figured out that he mostly traded his own portfolio and bought a seat at the stock exchange for the purpose. Politics was a hobby, too. At one point, he announced his intention to seek the Republican nomination for lieutenant governor of Connecticut. (It wasn’t clear whether anybody outside the clubhouse heard him.) What he really liked to do was fly. The memories that mattered most to him were his years of service as a transport pilot during World War II. Or the time he and Grandmother took to the Midwestern skies in a barnstorming plane. My grandparents never lost faith in the limitless possibilities of a life free from government. But in their last years, as the reserves passed down from the Colonel ran low, they became pretty diligent about collecting their Social Security and Medicare benefits.

There is a page in the book of American political thought—Grandfather knew it by heart—that says we must choose between government and freedom. But if you read it twice, you’ll see that what it really offers is a choice between government you can see and government you can’t. Aristocrats always prefer the invisible kind of government. It leaves them free to exercise their privileges. We in the 9.9 percent have mastered the art of getting the government to work for us even while complaining loudly that it’s working for those other people.

Consider, for starters, the greatly exaggerated reports of our tax burdens. On guest panels this past holiday season, apologists for the latest round of upwardly aimed tax cuts offered versions of Mitt Romney’s claim that the 47 percent of Americans who pay no federal income tax in a typical year have “no skin in the game.” Baloney. Sure, the federal individual-income tax, which raised $1.6 trillion last year, remains progressive. But the $1.2 trillion raised by the payroll tax hits all workers—but not investors, such as Romney—and it hits those making lower incomes at a higher rate, thanks to a cap on the amount of income subject to the tax. Then there’s the $2.3 trillion raised by state and local governments, much of it collected through regressive sales and property taxes. The poorest quintile of Americans pays more than twice the rate of state taxes as the top 1 percent does, and about half again what the top 10 percent pays.

Our false protests about paying all the taxes, however, sound like songs of innocence compared with our mastery of the art of having the taxes returned to us. The income-tax system that so offended my grandfather has had the unintended effect of creating a highly discreet category of government expenditures. They’re called “tax breaks,” but it’s better to think of them as handouts that spare the government the inconvenience of collecting the money in the first place. In theory, tax expenditures can be used to support any number of worthy social purposes, and a few of them, such as the earned income-tax credit, do actually go to those with a lower income. But more commonly, because their value is usually a function of the amount of money individuals have in the first place, and those individuals’ marginal tax rates, the benefits flow uphill.

Let us count our blessings: Every year, the federal government doles out tax expenditures through deductions for retirement savings (worth $137 billion in 2013); employer-sponsored health plans ($250 billion); mortgage-interest payments ($70 billion); and, sweetest of all, income from watching the value of your home, stock portfolio, and private-equity partnerships grow ($161 billion). In total, federal tax expenditures exceeded $900 billion in 2013. That’s more than the cost of Medicare, more than the cost of Medicaid, more than the cost of all other federal safety-net programs put together. And—such is the beauty of the system—51 percent of those handouts went to the top quintile of earners, and 39 percent to the top decile.

The best thing about this program of reverse taxation, as far as the 9.9 percent are concerned, is that the bottom 90 percent haven’t got a clue. The working classes get riled up when they see someone at the grocery store flipping out their food stamps to buy a T-bone. They have no idea that a nice family on the other side of town is walking away with $100,000 for flipping their house.

But wait, there’s more! Let’s not forget about the kids. If the secrets of a nation’s soul may be read from its tax code, then our nation must be in love with the children of rich people. The 2017 tax law raises the amount of money that married couples can pass along to their heirs tax-free from a very generous $11 million to a magnificent $22 million. Correction: It’s not merely tax-free; it’s tax-subsidized. The unrealized tax liability on the appreciation of the house you bought 40 years ago, or on the stock portfolio that has been gathering moths—all of that disappears when you pass the gains along to the kids. Those foregone taxes cost the United States Treasury $43 billion in 2013 alone—about three times the amount spent on the Children’s Health Insurance Program.

Grandfather’s father, the Colonel, died in 1947, when the maximum estate-tax rate was a now-unheard-of 77 percent. When the remainder was divvied up among four siblings, Grandfather had barely enough to pay for the Bentley and keep up with dues at the necessary clubs. The government made sure that I would grow up in the middle class. And for that I will always be grateful.

6.

The Gilded Zip Code

From my Brookline home, it’s a pleasant, 10-minute walk to get a haircut. Along the way, you pass immense elm trees and brochure-ready homes beaming in their reclaimed Victorian glory. Apart from a landscaper or two, you are unlikely to spot a human being in this wilderness of oversize closets, wood-paneled living rooms, and Sub-Zero refrigerators. If you do run into a neighbor, you might have a conversation like this: “Our kitchen remodel went way over budget. We had to fight just to get the tile guy to show up!” “I know! We ate Thai takeout for a month because the gas guy’s car kept breaking down!” You arrive at the Supercuts fresh from your stroll, but the nice lady who cuts your hair is looking stressed. You’ll discover that she commutes an hour through jammed highways to work. The gas guy does, too, and the tile guy comes in from another state. None of them can afford to live around here. The rent is too damn high.

From 1980 to 2016, home values in Boston multiplied 7.6 times. When you take account of inflation, they generated a return of 157 percent to their owners. San Francisco returned 162 percent in real terms over the same period; New York, 115 percent; and Los Angeles, 114 percent. If you happen to live in a neighborhood like mine, you are surrounded by people who consider themselves to be real-estate geniuses. (That’s one reason we can afford to make so many mistakes in the home-renovation department.) If you live in St. Louis (3 percent) or Detroit (minus 16 percent), on the other hand, you weren’t so smart. In 1980, a house in St. Louis would trade for a decent studio apartment in Manhattan. Today that house will buy an 80-square-foot bathroom in the Big Apple.

The returns on (the right kind of) real estate have been so extraordinary that, according to some economists, real estate alone may account for essentially all of the increase in wealth concentration over the past half century. It’s not surprising that the values are up in the major cities: These are the gold mines of our new economy. Yet there is a paradox. The rent is so high that people—notably people in the middle class—are leaving town rather than working the mines. From 2000 to 2009, the San Francisco Bay Area had some of the highest salaries in the nation, and yet it lost 350,000 residents to lower-paying regions. Across the United States, the journalist and economist Ryan Avent writes in The Gated City, “the best opportunities are found in one place, and for some reason most Americans are opting to live in another.” According to estimates from the economists Enrico Moretti and Chang-Tai Hsieh, the migration away from the productive centers of New York, San Francisco, and San Jose alone lopped 9.7 percent off total U.S. growth from 1964 to 2009.

Craig Cutler
It is well known by now that the immediate cause of the insanity is the unimaginable pettiness of backyard politics. Local zoning regulation imposes excessive restrictions on housing development and drives up prices. What is less well understood is how central the process of depopulating the economic core of the nation is to the intertwined stories of rising inequality and falling social mobility.

Real-estate inflation has brought with it a commensurate increase in economic segregation. Every hill and dale in the land now has an imaginary gate, and it tells you up front exactly how much money you need to stay there overnight. Educational segregation has accelerated even more. In my suburb of Boston, 53 percent of adults have a graduate degree. In the suburb just south, that figure is 9 percent.

This economic and educational sorting of neighborhoods is often represented as a matter of personal preference, as in red people like to hang with red, and blue with blue. In reality, it’s about the consolidation of wealth in all its forms, starting, of course, with money. Gilded zip codes are located next to giant cash machines: a too-big-to-fail bank, a friendly tech monopoly, and so on. Local governments, which collected a record $523 billion in property taxes in 2016, make sure that much of the money stays close to home.

But proximity to economic power isn’t just a means of hoarding the pennies; it’s a force of natural selection. Gilded zip codes deliver higher life expectancy, more-useful social networks, and lower crime rates. Lengthy commutes, by contrast, cause obesity, neck pain, stress, insomnia, loneliness, and divorce, as Annie Lowrey reported in Slate. One study found that a commute of 45 minutes or longer by one spouse increased the chance of divorce by 40 percent.

Nowhere are the mechanics of the growing geographic divide more evident than in the system of primary and secondary education. Public schools were born amid hopes of opportunity for all; the best of them have now been effectively reprivatized to better serve the upper classes. According to a widely used school-ranking service, out of more than 5,000 public elementary schools in California, the top 11 are located in Palo Alto. They’re free and open to the public. All you have to do is move into a town where the median home value is $3,211,100. Scarsdale, New York, looks like a steal in comparison: The public high schools in that area funnel dozens of graduates to Ivy League colleges every year, and yet the median home value is a mere $1,403,600.

Racial segregation has declined with the rise of economic segregation. We in the 9.9 percent are proud of that. What better proof that we care only about merit? But we don’t really want too much proof. Beyond a certain threshold—5 percent minority or 20 percent, it varies according to the mood of the region—neighborhoods suddenly go completely black or brown. It is disturbing, but perhaps not surprising, to find that social mobility is lower in regions with high levels of racial segregation. The fascinating revelation in the data, however, is that the damage isn’t limited to the obvious victims. According to Raj Chetty’s research team, “There is evidence that higher racial segregation is associated with lower social mobility for white people.” The relationship doesn’t hold in every zone of the country, to be sure, and is undoubtedly the statistical reflection of a more complex set of social mechanisms. But it points to a truth that America’s 19th-century slaveholders understood very well: Dividing by color remains an effective way to keep all colors of the 90 percent in their place.

With localized wealth comes localized political power, and not just of the kind that shows up in voting booths. Which brings us back to the depopulation paradox. Given the social and cultural capital that flows through wealthy neighborhoods, is it any wonder that we can defend our turf in the zoning wars? We have lots of ways to make that sound public-spirited. It’s all about saving the local environment, preserving the historic character of the neighborhood, and avoiding overcrowding. In reality, it’s about hoarding power and opportunity inside the walls of our own castles. This is what aristocracies do.

Zip code is who we are. It defines our style, announces our values, establishes our status, preserves our wealth, and allows us to pass it along to our children. It’s also slowly strangling our economy and killing our democracy. It is the brick-and-mortar version of the Gatsby Curve. The traditional story of economic growth in America has been one of arriving, building, inviting friends, and building some more. The story we’re writing looks more like one of slamming doors shut behind us and slowly suffocating under a mass of commercial-grade kitchen appliances.

7.

Our Blind Spot

In my family, Aunt Sarah was the true believer. According to her version of reality, the family name was handed down straight from the ancient kings of Scotland. Great-great-something-grandfather William Stewart, a soldier in the Continental Army, was seated at the right hand of George Washington. And Sarah herself was somehow descended from “Pocahontas’s sister.” The stories never made much sense. But that didn’t stop Sarah from believing in them. My family had to be special for a reason.

The 9.9 percent are different. We don’t delude ourselves about the ancient sources of our privilege. That’s because, unlike Aunt Sarah and her imaginary princesses, we’ve convinced ourselves that we don’t have any privilege at all.

Consider the reception that at least some members of our tribe have offered to those who have foolishly dared to draw attention to our advantages. Last year, when the Brookings Institution researcher Richard V.  Reeves, following up on his book Dream Hoarders, told the readers of The New York Times to “Stop Pretending You’re Not Rich,” many of those readers accused him of engaging in “class warfare,” of writing “a meaningless article,” and of being “rife with guilt.”

In her incisive portrait of my people, Uneasy Street, the sociologist Rachel Sherman documents the syndrome. A number among us, when reminded of our privilege, respond with a counternarrative that generally goes like this: I was born in the street. I earned everything all by myself. I barely get by on my $250,000 salary. You should see the other parents at our kids’ private school.

In part what we have here is a listening problem. Americans have trouble telling the difference between a social critique and a personal insult. Thus, a writer points to a broad social problem with complex origins, and the reader responds with, “What, you want to punish me for my success?”

In part, too, we’re seeing some garden-variety self-centeredness, enabled by the usual cognitive lapses. Human beings are very good at keeping track of their own struggles; they are less likely to know that individuals on the other side of town are working two minimum-wage jobs to stay afloat, not watching Simpsons reruns all day. Human beings have a simple explanation for their victories: I did it. They easily forget the people who handed them the crayon and set them up for success. Human beings of the 9.9 percent variety also routinely conflate the stress of status competition with the stress of survival. No, failing to get your kid into Stanford is not a life-altering calamity.

The recency of it all may likewise play a role in our failure to recognize our growing privileges. It has taken less than one lifetime for the (never fully formed) meritocracy to evolve into a (fledgling) aristocracy. Class accretes faster than we think. It’s our awareness that lags, trapping us within the assumptions into which we were born.

And yet, even allowing for these all-too-human failures of cognition, the cries of anguish that echo across the soccer fields at the mere suggestion of unearned privilege are too persistent to ignore. Fact-challenged though they may be, they speak to a certain, deeper truth about life in the 9.9 percent. What they are really telling us is that being an aristocrat is not quite what it is cracked up to be.

A strange truth about the Gatsby Curve is that even as it locks in our privileges, it doesn’t seem to make things all that much easier. I know it wasn’t all that easy growing up in the Colonel’s household, for example. The story that Grandfather repeated more than any other was the one where, following some teenage misdemeanor of his, his father, the 250-pound, 6-foot-something onetime Rough Rider, smacked him so hard that he sailed clear across the room and landed flat on the floor. Everything—anything—seemed to make the Colonel angry.

Jay Gatsby might have understood. Life in West Egg is never as serene as it seems. The Princeton man—that idle prince of leisure who coasts from prep school to a life of ease—is an invention of our lowborn ancestors. It’s what they thought they saw when they were looking up. West Eggers understand very well that a bad move or an unlucky break (or three or four) can lead to a steep descent. We know just how expensive it is to live there, yet living off the island is unthinkable. We have intuited one of the fundamental paradoxes of life on the Gatsby Curve: The greater the inequality, the less your money buys.

We feel in our bones that class works only for itself; that every individual is dispensable; that some of us will be discarded and replaced with fresh blood. This insecurity of privilege only grows as the chasm beneath the privileged class expands. It is the restless engine that drives us to invest still more time and energy in the walls that will keep us safe by keeping others out.

Here’s another fact of life in West Egg: Someone is always above you. In Gatsby’s case, it was the old-money people of East Egg. In the Colonel’s case, it was John D. Rockefeller Jr. You’re always trying to please them, and they’re always ready to pull the plug.

The source of the trouble, considered more deeply, is that we have traded rights for privileges. We’re willing to strip everyone, including ourselves, of the universal right to a good education, adequate health care, adequate representation in the workplace, genuinely equal opportunities, because we think we can win the game. But who, really, in the end, is going to win this slippery game of escalating privileges?

Under the circumstances, delusions are understandable. But that doesn’t make them salutary, as Aunt Sarah discovered too late. Even as the last few pennies of the Colonel’s buck trickled down to my father’s generation, she still had the big visions that corresponded to her version of the family mythology. Convinced that she had inherited a head for business, she bet her penny on the dot-com bubble. In her final working years, she donned a red-and-black uniform and served burgers at a Wendy’s in the vicinity of Jacksonville, Florida.

8.

The Politics of Resentment

The political theology of the meritocracy has no room for resentment. We are taught to run the competition of life with our eyes on the clock and not on one another, as if we were each alone. If someone scores a powerboat on the Long Island waterways, so much the better for her. The losers will just smile and try harder next time.

In the real world, we humans are always looking from side to side. We are intensely conscious of what other people are thinking and doing, and conscious to the point of preoccupation with what they think about us. Our status is visible only through its reflection in the eyes of others.

Perhaps the best evidence for the power of an aristocracy is to be found in the degree of resentment it provokes. By that measure, the 9.9 percent are doing pretty well indeed. The surest sign of an increase in resentment is a rise in political division and instability. We’re positively acing that test. You can read all about it in the headlines of the past two years.

The 2016 presidential election marked a decisive moment in the history of resentment in the United States. In the person of Donald Trump, resentment entered the White House. It rode in on the back of an alliance between a tiny subset of super-wealthy 0.1 percenters (not all of them necessarily American) and a large number of 90 percenters who stand for pretty much everything the 9.9 percent are not.

According to exit polls by CNN and Pew, Trump won white voters by about 20 percent. But these weren’t just any old whites (though they were old, too). The first thing to know about the substantial majority of them is that they weren’t the winners in the new economy. To be sure, for the most part they weren’t poor either. But they did have reason to feel judged by the market—and found wanting. The counties that supported Hillary Clinton represented an astonishing 64 percent of the GDP, while Trump counties accounted for a mere 36 percent. Aaron Terrazas, a senior economist at Zillow, found that the median home value in Clinton counties was $250,000, while the median in Trump counties was $154,000. When you adjust for inflation, Clinton counties enjoyed real-estate price appreciation of 27 percent from January 2000 to October 2016; Trump counties got only a 6 percent bump.

The residents of Trump country were also the losers in the war on human health. According to Shannon Monnat, an associate professor of sociology at Syracuse, the Rust Belt counties that put the anti-government-health-care candidate over the top were those that lost the most people in recent years to deaths of despair—those due to alcohol, drugs, and suicide. 
To make all of America as great as Trump country, you would have to torch about a quarter of total GDP, wipe a similar proportion of the nation’s housing stock into the sea, and lose a few years in life expectancy. There’s a reason why one of Trump’s favorite words is unfair. That’s the only word resentment wants to hear.

Even so, the distinguishing feature of Trump’s (white) voters wasn’t their income but their education, or lack thereof. Pew’s latest analysis indicates that Trump lost college-educated white voters by a humiliating 17 percent margin. But he got revenge with non-college-educated whites, whom he captured by a stomping 36 percent margin. According to an analysis by Nate Silver, the 50 most educated counties in the nation surged to Clinton: In 2012, Obama had won them by a mere 17 percentage points; Clinton took them by 26 points. The 50 least educated counties moved in the opposite direction; whereas Obama had lost them by 19 points, Clinton lost them by 31. Majority-minority counties split the same way: The more educated moved toward Clinton, and the less educated toward Trump.

The historian Richard Hofstadter drew attention to Anti-intellectualism in American Life in 1963; Susan Jacoby warned in 2008 about The Age of American Unreason; and Tom Nichols announced The Death of Expertise in 2017. In Trump, the age of unreason has at last found its hero. The “self-made man” is always the idol of those who aren’t quite making it. He is the sacred embodiment of the American dream, the guy who answers to nobody, the poor man’s idea of a rich man. It’s the educated phonies this group can’t stand. With his utter lack of policy knowledge and belligerent commitment to maintaining his ignorance, Trump is the perfect representative for a population whose idea of good governance is just to scramble the eggheads. When reason becomes the enemy of the common man, the common man becomes the enemy of reason.

Did I mention that the common man is white? That brings us to the other side of American-style resentment. You kick down, and then you close ranks around an imaginary tribe. The problem, you say, is the moochers, the snakes, the handout queens; the solution is the flag and the religion of your (white) ancestors. According to a survey by the political scientist Brian Schaffner, Trump crushed it among voters who “strongly disagree” that “white people have advantages because of the color of their skin,” as well as among those who “strongly agree” that “women seek to gain power over men.” It’s worth adding that these responses measure not racism or sexism directly, but rather resentment. They’re good for picking out the kind of people who will vehemently insist that they are the least racist or sexist person you have ever met, even as they vote for a flagrant racist and an accused sexual predator.

No one is born resentful. As mass phenomena, racism, xenophobia, anti-intellectualism, narcissism, irrationalism, and all other variants of resentment are as expensive to produce as they are deadly to democratic politics. Only long hours of television programming, intelligently manipulated social-media feeds, and expensively sustained information bubbles can actualize the unhappy dispositions of humanity to the point where they may be fruitfully manipulated for political gain. Racism in particular is not just a legacy of the past, as many Americans would like to believe; it also must be constantly reinvented for the present. Mass incarceration, fearmongering, and segregation are not just the results of prejudice, but also the means of reproducing it.

The raging polarization of American political life is not the consequence of bad manners or a lack of mutual understanding. It is just the loud aftermath of escalating inequality. It could not have happened without the 0.1 percent (or, rather, an aggressive subset of its members). Wealth always preserves itself by dividing the opposition. The Gatsby Curve does not merely cause barriers to be built on the ground; it mandates the construction of walls that run through other people’s minds.

But that is not to let the 9.9 percent off the hook. We may not be the ones funding the race-baiting, but we are the ones hoarding the opportunities of daily life. We are the staff that runs the machine that funnels resources from the 90 percent to the 0.1 percent. We’ve been happy to take our cut of the spoils. We’ve looked on with smug disdain as our labors have brought forth a population prone to resentment and ripe for manipulation. We should be prepared to embrace the consequences.

The first important thing to know about these consequences is the most obvious: Resentment is a solution to nothing. It isn’t a program of reform. It isn’t “populism.” It is an affliction of democracy, not an instance of it. The politics of resentment is a means of increasing inequality, not reducing it. Every policy change that has waded out of the Trump administration’s baffling morass of incompetence makes this clear. The new tax law; the executive actions on the environment and telecommunications, and on financial-services regulation; the judicial appointments of conservative ideologues—all will have the effect of keeping the 90 percent toiling in the foothills of merit for many years to come.

The second thing to know is that we are next in line for the chopping block. As the population of the resentful expands, the circle of joy near the top gets smaller. The people riding popular rage to glory eventually realize that we are less useful to them as servants of the economic machine than we are as model enemies of the people. The anti-blue-state provisions of the recent tax law have miffed some members of the 9.9 percent, but they’re just a taste of the bad things that happen to people like us as the politics of resentment unfolds.

The past year provides ample confirmation of the third and most important consequence of the process: instability. Unreasonable people also tend to be ungovernable. I won’t belabor the point. Just try doing a frequency search on the phrase constitutional crisis over the past five years. That’s the thing about the Gatsby Curve. You think it’s locking all of your gains in place. But the crystallization process actually has the effect of making the whole system more brittle. If you look again at history, you can get a sense of how the process usually ends.

9.

How Aristocracies Fall

For months, Colonel Robert W. Stewart dodged the subpoenas. He was in Mexico or South America, undertaking business negotiations so sensitive that revealing his precise location would jeopardize the national interest, or so said his lawyer. Senator Thomas J. Walsh of Montana at last dragged the lawyer to the stand and presented him with clippings from the gossip columns of the Havana newspapers, complete with incriminating photographs. The Colonel, always known to appreciate a good horse, was apparently quite the fixture at the Jockey Club. His smile had also flashed for the cameras at an impressive round of luncheons and dinners, and an evening ball at the Havana Yacht Club.

When the senators finally roped the Colonel in for questioning about those shell-company bonds that had spread like bedbugs through the political ecosystem, he let them know just who was in charge. “I do not think that the line of interrogation by this committee is within the jurisdiction of the committee under the laws of the United States,” he declared. Even so, he added, as if proffering a favor, he did not “personally receive any of these bonds.” Which was not, on any ordinary construction of the English language, true.

The twilight of the fabled Stewart dynasty was not glorious. A fancy lawyer got the Colonel “aquibbled” from charges of contempt, as one journalist sneered, but Rockefeller Jr. wasn’t ready to forgive him the public-relations fiasco. After an epic but futile battle for the hearts of shareholders, the Colonel hung up his spurs and retreated for life to the family compound in Nantucket.

None of which changed the reality that the Teapot Dome scandal, with its bribes and kickbacks and sweetheart deals for rich oilmen, made plain. Under the immense pressure of the Gatsby Curve, American democracy was on the ropes. The people in charge were the people with the money. Ultimately, what the moneymen of the 1920s wanted is what moneymen always want. And their servants delivered. The Calvin Coolidge administration passed a huge tax cut in 1926, making sure that everyone could go home with his winnings. The rich seemed to think they had nothing else to worry about—until October 1929.

Where were the 90 percent during these acts of plunder? An appreciable number of them could be found at Ku Klux Klan rallies. And as far as the most vocal (though not necessarily the largest) part of the 90 percent was concerned, America’s biggest problems were all due to the mooching hordes of immigrants. You know, the immigrants whose grandchildren have come to believe that America’s biggest problems now are all due to the mooching hordes of immigrants.

The toxic wave of wealth concentration that arose in the Gilded Age and crested in the 1920s finally crashed on the shoals of depression and war. Today we like to think that the social-welfare programs that were planted by the New Deal and that blossomed in the postwar era were the principal drivers of a new equality. But the truth is that those efforts belong more to the category of effects than causes. Death and destruction were the real agents of change. The financial collapse knocked the wealthy back several steps, and war empowered labor—above all working women.

That gilded, roaring surge of destruction was by no means the first such destabilizing wave of inequality to sweep through American history. In the first half of the 19th century, the largest single industry in the United States, measured in terms of both market capital and employment, was the enslavement (and the breeding for enslavement) of human beings. Over the course of the period, the industry became concentrated to the point where fewer than 4,000 families (roughly 0.1 percent of the households in the nation) owned about a quarter of this “human capital,” and another 390,000 (call it the 9.9 percent, give or take a few points) owned all of the rest.

The slaveholding elite were vastly more educated, healthier, and had much better table manners than the overwhelming majority of their fellow white people, never mind the people they enslaved. They dominated not only the government of the nation, but also its media, culture, and religion. Their votaries in the pulpits and the news networks were so successful in demonstrating the sanctity and beneficence of the slave system that millions of impoverished white people with no enslaved people to call their own conceived of it as an honor to lay down their life in the system’s defense.

That wave ended with 620,000 military deaths, and a lot of property damage. It did level the playing field in the American South for a time—though the process began to reverse itself all too swiftly.

Craig Cutler
The United States, to be clear, is hardly the most egregious offender in the annals of human inequality. The European nations from which the colonists of North America emigrated had known a degree of inequality and instability that Americans would take more than a century to replicate. Whether in ancient Rome or the Near East, Asia or South America, the plot remains the same. In The Great Leveler, the historian Walter Scheidel makes a disturbingly good case that inequality has reliably ended only in catastrophic violence: wars, revolutions, the collapse of states, or plagues and other disasters. It’s a depressing theory. Now that a third wave of American inequality appears to be cresting, how much do we want to bet that it’s not true?

The belief in our own novelty is one of the defining characteristics of our class. It mostly means that we don’t know our predecessors very well. I had long assumed that the Colonel was descended from a long line of colonels, each passing down his immense sense of entitlement to the next. Aunt Sarah’s propaganda was more effective than I knew.

Robert W. Stewart was born in 1866 on a small farm in Iowa and raised on the early mornings and long hours of what Paul Henry Giddens, a historian of Standard Oil of Indiana, politely describes as “very modest circumstances.” The neighbors, seeing that the rough-cut teenager had something special, pitched in to send him to tiny Coe College, in the meatpacking town of Cedar Rapids. It would be hard not to believe that the urgent need to win at everything was already driving the train when the scholarship boy arrived at Yale Law School a few years later. The flashbulbs at the Havana Yacht Club captured a pose that was perhaps first glimpsed in a scratchy mirror somewhere in the silent plains of the Midwest.

10.

The Choice

I like to think that the ending of The Great Gatsby is too down-beat. Even if we are doomed to row our boats ceaselessly back into the past, how do we know which part of the past that will be?

History shows us a number of aristocracies that have made good choices. The 9.9 percenters of ancient Athens held off the dead tide of the Gatsby Curve for a time, even if democracy wasn’t quite the right word for their system of government. America’s first generation of revolutionaries was mostly 9.9 percenters, and yet they turned their backs on the man at the very top in order to create a government of, by, and for the people. The best revolutions do not start at the bottom; they are the work of the upper-middle class.

These exceptions are rare, to be sure, and yet they are the story of the modern world. In total population, average life expectancy, material wealth, artistic expression, rates of violence, and almost every other measure that matters for the quality of human life, the modern world is a dramatically different place than anything that came before. Historians offer many complicated explanations for this happy turn in human events—the steam engine, microbes, the weather—but a simple answer precedes them all: equality. The history of the modern world is the unfolding of the idea at the vital center of the American Revolution.

The defining challenge of our time is to renew the promise of American democracy by reversing the calcifying effects of accelerating inequality. As long as inequality rules, reason will be absent from our politics; without reason, none of our other issues can be solved. It’s a world-historical problem. But the solutions that have been put forward so far are, for the most part, shoebox in size.

Well-meaning meritocrats have proposed new and better tests for admitting people into their jewel-encrusted classrooms. Fine—but we aren’t going to beat back the Gatsby Curve by tweaking the formulas for excluding people from fancy universities. Policy wonks have taken aim at the more-egregious tax-code handouts, such as the mortgage-interest deduction and college-savings plans. Good—and then what? Conservatives continue to recycle the characterological solutions, like celebrating traditional marriage or bringing back that old-time religion. Sure—reforging familial and community bonds is a worthy goal. But talking up those virtues won’t save any families from the withering pressures of a rigged economy. Meanwhile, coffee-shop radicals say they want a revolution. They don’t seem to appreciate that the only simple solutions are the incredibly violent and destructive ones.

The American idea has always been a guide star, not a policy program, much less a reality. The rights of human beings never have been and never could be permanently established in a handful of phrases or old declarations. They are always rushing to catch up to the world that we inhabit. In our world, now, we need to understand that access to the means of sustaining good health, the opportunity to learn from the wisdom accumulated in our culture, and the expectation that one may do so in a decent home and neighborhood are not privileges to be reserved for the few who have learned to game the system. They are rights that follow from the same source as those that an earlier generation called life, liberty, and the pursuit of happiness.

Yes, the kind of change that really matters is going to require action from the federal government. That which creates monopoly power can also destroy it; that which allows money into politics can also take it out; that which has transferred power from labor to capital can transfer it back. Change also needs to happen at the state and local levels. How else are we going to open up our neighborhoods and restore the public character of education?

It’s going to take something from each of us, too, and perhaps especially from those who happen to be the momentary winners of this cycle in the game. We need to peel our eyes away from the mirror of our own success and think about what we can do in our everyday lives for the people who aren’t our neighbors. We should be fighting for opportunities for other people’s children as if the future of our own children depended on it. It probably does.


This article appears in the June 2018 print edition with the headline “The Birth of a New American Aristocracy.”

 

Source: The Birth of the New American Aristocracy – The Atlantic

Here’s The Wild Email Exchange Between Tesla’s Alleged ‘Saboteur’ And Elon Musk

Photo: AP

Late Wednesday, after Tesla filed a lawsuit against former Gigafactory technician Marty Tripp, the ex-technician shared emails with the Washington Post that highlighted a heated back-and-forth between him and CEO Elon Musk. At first, it seemed like Musk fired off a quick jab before the suit was filed, calling Tripp a “horrible person.” But a copy of the entire exchange provided to Jalopnik offers a more illuminating dialogue—with Tripp acting first.

The story and subsequent tweets by Washington Post reporter Drew Harwell, who broke the news of the testy spat late Wednesday, implied the first missive came from Musk:

But that’s not the case. Just before noon EDT on Wednesday, shortly after news of the lawsuit broke Tripp sent Musk the first email message, which was confirmed by Tesla:

And off it went:

Finally, Musk responded:

Musk later clarified he meant “no injuries”, which is an unfortunate typo.

The email exchange was posted on Twitter today by Harwell after Jalopnik reached out to the paper for questions.

No doubt, it’s a strange move to email someone you’re suing, but since Tripp actually fired first, it gives me pause about the narrative the whistleblower is spinning publicly. (As for Musk, if you follow him on Twitter, you know he probably wasn’t going to let a message like that just slide.)

And now Tesla says it received a phone call from a friend of Tripp’s, telling him that he’d threaten to go to Gigafactory and “shoot the place up.” Tesla said it was enhancing security at the plant, but the local sheriff’s office quickly responded saying it found no credible threat.

“After several hours of investigation deputies were able to determine there was no credible threat. Further investigation into the threat’s origin continues. No additional information concerning the ongoing investigation will be released until it’s [sic] conclusion to protect the investigative process,” the police statement to CNBC said.

That, among other aspects of this weird story, has me puzzled about what’s really going on here.

‘Vastly Exaggerated’ Claims, According To Tesla

On Wednesday, Tesla lobbed a series of explosive claims against an ex-technician at its Gigafactory plant in Nevada, bolstering an otherwise paranoid email Musk fired off over the weekend about “extensive and damaging sabotage” by a former staffer.

It’s unclear if Musk was referring to Tripp in that email, but once the alleged leaker opened up to the press late Wednesday, so much of this entire saga began to seem strange—including the one offered by the defendant himself.

In the lawsuit filed in federal court, Tesla accused former Gigafactory employee Tripp of unlawfully hacking into the company’s “confidential and trade secret information” and transferring “that information to third parties.”

“Tesla has only begun to understand the full scope of Tripp’s illegal activity, but he has thus far admitted to writing software that hacked Tesla’s manufacturing operating system (‘MOS’) and to transferring several gigabytes of Tesla data to outside entities,” the lawsuit alleges.

The automaker claimed Tripp, who didn’t respond to a message for comment from Jalopnik, took confidential photographs and a video of Tesla’s manufacturings systems, and in an interview with internal investigators last week, he allegedly admitted to “writing software that hacked Tesla’s MOS and to transferring several gigabytes of confidential and proprietary Tesla data to entities outside the company.”

Tripp then leaked some of that info to the press, including the amount of scrap Tesla allegedly generates at its factories, but Tesla says in the suit his claims were “vastly exaggerated.”

Tripp disputes Tesla’s allegations, and in interviews with CNN and the Washington Post on Wednesday, says he views himsel as a legitimate whistleblower who decided to speak out after seeing “some really scary things” inside the company, including batteries with punctured cells being installed in cars. (Tesla denies this claim outright in the suit.)

But here’s several reasons why I’m lost about this situation.

Is Tesla Trying To Make An Example Of Tripp?

The lawsuit claims he was attempting to cultivate additional sources inside Gigafactory to leak confidential information, so perhaps that’s why. And though Tesla hasn’t responded to questions over whether Tripp is the alleged saboteur identified by Musk last weekend, the CEO believes more individuals could be involved.

But the company has little to gain in remediation from a civil lawsuit—if Tripp went broke as a result, for example, he could probably discharge the claims in bankruptcy—so, if it’s as serious of a situation as the company claims to be, then why is it not turning to local or even federal authorities? (Police in the city of Fremont, where Tesla’s factory is located, confirmed to Jalopnik that it responded to no calls over this, and it’s not clear if Tesla has spoken to the FBI.)

Tripp’s Access Even After A Job Reassignment

Tesla says Tripp, who joined the company in October, had numerous problems at work with other colleagues, and so, in mid-May, the company reassigned him. According to the complaint, Tripp responded by expressing “anger that he was reassigned.”

It’s then Tesla says the alleged theft took place. What was he reassigned to? And whatever the case, if he was such an unruly employee, why did he still have access to any of these materials following the reassignment?

Tesla didn’t respond to requests for comment on this.

The Alleged ‘Punctured Battery Cells’

Tripp claims he was the single source Business Insider relied upon for a story earlier this month that said:

In February, a misprogrammed robot that handles battery modules repeatedly punctured through the plastic housing (called a clamshell) and into some battery cells, the employee said, adding that instead of scrapping all the modules, some were fixed with adhesive and put back on the manufacturing line. According to internal documents Business Insider reviewed, this foible affected more than 1,000 pieces.

The story relies upon apparent internal logs to illustrate how allegedly punctured batteries ended up in cars. Tesla’s suit, however, alleges Tripp made up the punctured battery cell claim wholesale. The automaker also says, contrary to BI’s reporting that it has lost $150 million on scrap, Tripp “vastly exaggerated” the true amount Tesla has generated.

I’m never going to be one to deter whistleblowers from speaking out to the media (and I’d encourage you to speak to us), but Tripp makes it seem like he had no other options to disclose an alleged safety issue, when speaking to CNN:

The ex-employee said he contacted several media outlets about his allegations and spoke at length to one of them. But that outlet has yet to do a story about it.

If that’s so, and no reporter took him up on his intel, then why not go to safety regulators? If it’s that concerning, that’d seem like an obvious next choice in my mind.

Tripp’s Statements To The Press

Then there’s Tripp himself. In a matter of hours, he told CNN that he’d contacted several media outlets and spoke at length to one. But, CNN reports, the outlet he spoke to at length hasn’t done a story.

This directly contradicts something he says later to the Washington Post:

Speaking Wednesday night to The Post, Tripp confirmed that he provided information to Business Insider for a story the news website did earlier this month about the company’s raw-material waste.

Tripp also disputed what, on paper, appears to be Tesla’s most solid claim—that he “admitted” to hacking into the automaker’s computer system. He also said he couldn’t care less about not getting a promotion in May.

Again from the Post:

“I don’t have the patience for coding.” He also said he was not, as Tesla lawyers claimed, disgruntled about not getting a promotion. “That’s their generic excuse,” he said. “I could literally care less.”

The fact he offered two different narratives to the press on Wednesday night about his role as a source in Business Insider’s reporting gives me pause. And the direct refutation of what Tesla claims to be an explicit confession underscores another striking point: Someone’s lying here.

How Tesla Found Out

Not exactly a point to the alleged sabotage itself, but a question I’ve been wondering is how Tesla found out. The automaker hasn’t responded to questions about what tipped them off to Tripp, but a story from Business Insider earlier this month offers a possible hint:

But Business Insider reviewed an internal log that showed the parts were put into hundreds of vehicles. We sent Tesla an identification number for one of the cars, and the company would neither confirm nor deny that the piece was in a finished vehicle. It said only that if the piece were a safety concern, it would not be used.

Tesla’s notorious about ensuring employees don’t speak to the press—just this week Bloomberg reported that a severance agreement for workers laid off as part of the recently announced 9 percent reduction of Tesla’s staff is “likely to deter” them from going public with public safety concerns.

What’s Next

Tripp already makes himself seem unreliable by offering different narratives publicly about his role as a leaker in highly-publicized stories, but if this case moves forward to trial, Tesla has a lot to prove. Does it really want to open up a can of worms that could lead to the revelation of Model 3s being shipped with punctured battery cells? That’s what it’s staring down with this.

Tesla also has a history of lacing previous litigation and stories with bouts of paranoia. Musk suggested sabotage when a SpaceX rocket exploded in 2016, as it was being fueled up. And he previously alleged—in an lawsuit extremely thin on details—that former Autopilot team leader Sterling Anderson stole confidential information before leaving to start his own autonomous driving startup, Aurora Innovation.

Three months later, both sides reached a settlement, and Aurora even agreed to audits to ensure any allegedly stolen data wasn’t used by the company. Aurora admitted no wrongdoing, had a third-party forensics review that concluded nothing was taken, and that report found nothing allegedly belonging to Tesla had been used by a startup. The lawsuit was completely meritless, Aurora said. Musk and Tesla sure got a lot of attention for it, though.

But Tripp’s talking a big game, too. If he indeed has documents proving Tesla shipped cars with punctured battery cells, that’s undoubtedly a safety issue, and unless Tesla voluntarily dismisses the suit or a settlement materializes, this is almost certainly going to shape up to be a case to watch in 2018—even if it makes little sense right now.

This story has been updated since its publication for clarity.

About the author

Ryan Felton

Transportation & Technology Reporter, Jalopnik

PGP Fingerprint: C2D6 26D4 7E43 ADD2 9229 23F7 CE72 0426 0831 BC76 • PGP Key

 

Source: Here’s The Wild Email Exchange Between Tesla’s Alleged ‘Saboteur’ And Elon Musk

Adblock Plus wants to use blockchain to call out fake news | TechCrunch

eyeo,  the company behind the popular browser-based ad block product Adblock  Plus, is no stranger to controversy. Which is just as well given its new “passion project”: A browser add-on that labels news content as ‘trusted’ or, well, Breitbart.

The beta browser extension, which is called Trusted News (initially it’s just available for Chrome), is intended to help Internet users spot sources of fake news when they’re exposed to content online.

And thus to help people avoid falling for scams or down into political sinkholes — at least without being aware of their inherent bias.

The system, which is currently only available for English language content, “democratically scores the integrity and trustworthiness of online news sources”, as eyeo puts it.

After being added to Chrome, the browser extension displays a small green check mark against its icon if a news source is deemed to be trustworthy.

Or you might see an orange colored ‘B’ — denoting ‘bias’ — as in the below example, for the ‘alt right’ news website Breitbart…

The extension can also deploy flags for untrustworthy, satire (denoted with a little blue smilie), clickbait, user-generated content, malicious or unknown — the latter if the site hasn’t yet been classified.

It’s not clear how many sites have been classified via the system at this stage.

So how is Trusted News classifying sites? In the first instance eyeo says it’s leaning on four third party fact-checking organizations to generate its classifications: PolitiFactSnopesWikipedia and Zimdars’ List.

“For now the way that it works is that you have these sources… and what they will do is essentially give their rating on a particular site and then, basically, if everything isn’t all the same — which they usually are — then you would just go by the [majority],” explains Ben Williams, the company’s director of ecosystems.

But the plan is to evolve this approach using user feedback and — you guessed it — blockchain technology.

eyeo has been working with MetaCert Protocol which runs an anti-fraud URL registry (that’s also headed for the blockchain), to maintain the database for the project.

And that database will be decentralized by moving it to the Ethereum blockchain — with a new protocol and built-in game mechanics to reward submissions. MetaCert tokens will also be issued to track rewards and mitigate the risk of bad actors spoiling the quality of the data.

“What we want to do, and where the blockchain comes in, is we want to move that over to incorporate users’ feedback as well,” says Williams. “So initially what we’re going to do in a few weeks is incorporate something where users can just provide feedback through the extension. And they can dispute something. They can say ‘hey I don’t feel like this site should be listed as biased because whatever’. And we’re going to use that feedback to make the product better.

“And then the next step is to decouple that from any server, and from any third party, and give it directly to the blockchain. So that that feedback can live on its own in that place and so that good feedback can be prized and rewarded among users, and people who are providing bad feedback won’t be. So that is the next step.”

Another future step would be to add more “fine-grained detail” — such as being able to say which way on the political spectrum a biased news source swings, for example.

And also easier ways for people to comment on such ratings. But that’s also yet to come.

Indeed, Williams emphasizes that eyeo is testing the waters at this stage — to see whether the approach will be something web users find useful.

To be clear, it’s also not intending to monetize the extension in any shape or form. (And, for the record, Williams confirms there will be no ‘whitelist’ for bypassing ratings, even before blockchain tech gets involved and decentralizes the project.)

“I want to stress, this is a first, humble attempt — this is a beta — we want to see how this goes. We want people to give us honest feedback on it. And we want to improve upon that. So it’s not merely a matter of where the labels are. But also is this what people want?” he says. “We think it’s a good idea but it is, again, just a start.”

Facebook has its own fake news fighting efforts now, of course, but clearly those only apply to content within its walled garden. If you want to fight fakes on the Internet as a whole the browser is the best place to do it, reckons Williams.

“There is a different between the entire Internet and Facebook. Facebook is a way to access certain things on the web and I appreciate the fact that in certain places it’s the only way, unfortunately, that people can reach the web but the web is a very vast place,” he says.

“Most people reach it through the web browsers, so being in that web browser allows users to have that sort of protection and understanding wherever they go on the web. Facebook included.”

On the privacy front, eyeo says that the Trusted News extension updates its own internal database each day so that users’ browsing activity “never touches a central server”.

Support for other browsers is planned, assuming the extension finds fans. It looks pretty safe to assume it’s not going to be popular with certain sections on the far right of the political spectrum.

Though, while Breitbart and the Daily Mail are labeled ‘biased’, Fox News and The Sun, for example, do get a trustworthy tick. Also ‘trusted’ by Trusted News’ current rating system: President Donald Trump’s favorite media target for labeling as ‘fake news’, CNN; and RT (formerly known as Russia Today), one of the Russian state-backed media organizations Twitter banned from its ad platform last year for attempting to interfere in the 2016 US elections…

“In weeks to months or so we should definitely be able to move everything over to the blockchain so it’s all not too far away. I think that the bigger question down the line for us — not months, but maybe a year or so — is if there is demand. If people like it. Again. If people are happy with the beta product then how do we or should we move to mobile? That would be the next really big question,” adds Williams.

Source: Adblock Plus wants to use blockchain to call out fake news | TechCrunch

Univision Offers Buyouts to Gizmodo Media Employees – Bloomberg

Univision Holdings Inc. has been offering buyouts to employees at Gizmodo Media Group, according to a person familiar with the matter, marking the latest case of a digital-media upstart tightening its belt.

The former Gawker Media websites, which include the sports outlet Deadspin and the woman-focused site Jezebel, began offering employees buyout packages last week, according to the person, who asked not to be identified because the deliberations are private. The idea is to reduce Gizmodo’s budget for editorial employees by 15 percent, the person said.

The New York-based company hasn’t determined how many employees need to accept buyout offers before it resorts to layoffs, the person said. The cuts don’t affect other Univision-owned properties, such as the Onion and sister website Clickhole.

Other digital-media companies, including BuzzFeed Inc. and Vox Media, have laid off employees over the past year as the industry retrenches. Facebook Inc. and Google are capturing the biggest chunk of online advertising, forcing cuts at digital publishers. Facebook also changed its algorithm recently, shrinking the audience for many online news outlets.

Gizmodo Media is one of several online media outlets that have unionized. They are represented by the Writers Guild of America East.

Months of Negotiations

The Gizmodo Media Group Union said on Wednesday that it demanded the buyout agreement, which was the result of months of organizing and negotiations with Univision about the circumstances, terms and length of severance for its members.

“The GMG Union and Writers Guild of America East are glad to have reached an agreement with the company, and believe other union newsrooms should fight for the same,” it said.

The union was bargaining on behalf of about 200 members. The total number of staffers is higher, since not everyone is a member of the guild.

Univision, the largest Spanish-language broadcaster in the U.S., faces other challenges. It’s been slimming its operations amid tougher competition from Comcast Corp.’s Telemundo and pays higher fees to Mexican broadcaster Grupo Televisa SAB for programming. Univision plans to cut more than $100 million in expenses this year, Bloomberg reported in March.

Univision bought the former Gawker Media websites for $135 million in a 2016 bankruptcy auction.

(Updates with statement from union in sixth paragraph.)

Source: Univision Offers Buyouts to Gizmodo Media Employees – Bloomberg

Red Shell ‘spyware’ caught in PC games and several studios take it out – Polygon

About 20 PC games — including The Elder Scrolls Online and Conan Exiles — have removed a piece of third-party spyware tracking users’ activity outside of the game, and dozens more are said to still have it more than a week after it came to light on Reddit and Steam forums.

Called Red Shell (yes, it’s named for the Mario Kart item), the spyware sells itself as a means for video game makers to “uncover where their players come from through reliable attribution.” It “matches” whether players with Red Shell installed on their games visited a market’s campaign, whether Facebook and Twitter, YouTube, a web page or others.

To do this, Red Shell has to follow what users are doing outside of the game. But the company said it does not collect any player’s personal information, and only collects information about their browsers and devices “for purposes of attribution.” No data is sold to a third party, Red Shell said.

On June 9, Red Shell’s presence was discovered in this thread on the Steam subreddit, and over the past 11 days, players have ferreted out about 50 games that use it. Since then, several have either pulled Red Shell’s .dll files or have posted in forum threads saying that they would do so. These include Battlerite, The Elder Scrolls Online and Conan Exiles at the outset of the controversy. Red Shell had also been in Total War games, but Creative Assembly said it would remove it. Fatshark said it would be taken out of Warhammer: Vermintide 2.

According to this list there are many more games using the tracker, some familiar, others obscure. Red Shell defended both its service and its methods in a statement to Kotaku yesterday. And to PC Gamer, Dire Wolf Digital, the former makers of The Elder Scrolls: Legends, said Red Shell was not spyware, it’s “just some under-the-hood analytics that help us understand how our advertisements perform.” Redditors generally rejected those kinds of justifications, saying such things should run with an opt-in or their knowledge.

Source: Red Shell ‘spyware’ caught in PC games and several studios take it out – Polygon

Pentagon will make room for up to 20,000 migrant children on military bases – The Washington Post

The Defense Department will house up to 20,000 unaccompanied migrant children on military bases in coming months, a Pentagon official said Thursday, the latest twist in the Trump administration’s immigration enforcement effort.

The agreement comes after the Department of Health and Human Services made the request. Army Lt. Col. Jamie Davis, a military spokesman, said Thursday that the Pentagon will support it.

In a notification to lawmakers, the Pentagon said Wednesday night that officials at HHS asked whether beds could be provided for children at military installations “for occupancy as early as July through December 31, 2018.”

The plan seemingly will have similarities to 2014, when the Obama administration housed about 7,000 unaccompanied children on three military bases. As required under the Economy Act, the memo said, the Defense Department would be reimbursed for all costs incurred.

The sites will be run by HHS employees or contractors working with them, the memo said. They will provide care to the children, “including supervision, meals, clothing, medical services, transportation or other daily needs,” and HHS representatives will be at each location.

The Fix’s Aaron Blake analyzes U.S. Border Patrol’s decision to no longer refer migrant parents crossing the border illegally with children for prosecution. 

The memo, first reported on by The Washington Post, was sent to lawmakers Wednesday after President Trump reversed his administration’s unpopular policy to separate children from their parents as the migrants arrived at the southern U.S. border.

The president’s executive order directed Defense Secretary Jim Mattis to “take all legally available measures” to provide Homeland Security Secretary Kirstjen Nielsen with “any existing facilities available for the housing and care of alien families” and the construction of new facilities “if necessary and consistent with law.”

The Trump administration spent months planning, testing and defending its family separation policy at the border, taking more than 2,500 children from their parents in the six weeks before the president signed an executive order Wednesday bringing the practice to a halt.

The U.S. government has been examining for weeks whether it can use military bases to house migrant children. Representatives from HHS visited three bases in Texas — Fort Bliss, Dyess Air Force Base and Goodfellow Air Force Base — last week to review their facilities for suitability, and they were scheduled to review Little Rock Air Force Base in Arkansas on Wednesday, Davis said.

The Obama administration set up temporary centers in 2014 at three military bases: Fort Sill in Oklahoma, Lackland Air Force Base in Texas and Naval Base Ventura County in California.

Asked about the possibility of military bases being involved again, Mattis said Wednesday that the Defense Department would “see what they come up with” in HHS, and that the Pentagon would “respond if requested.”

Mattis dismissed concerns about housing migrants on military bases, noting that the Defense Department has done it on several occasions and for several reasons.

“We have housed refugees,” he said. “We have housed people thrown out of their homes by earthquakes and hurricanes. We do whatever is in the best interest of the country.”

The secretary, pressed on the sensitivities of the Trump administration separating children from their parents, said reporters would need to ask “the people responsible for it.”

“I’m not going to chime in from the outside,” he said. “There’s people responsible for it. Secretary Nielson, obviously, maintains close collaboration with us. You saw that when we deployed certain National Guard units there, so she’s in charge.”

Sen. Jack Reed (R.I.) and Rep. Adam Smith (Wash.), the top Democrats on the Senate and House Armed Services committees, wrote a letter to Mattis on Wednesday requesting assurances that members of Congress would have access to any migrant facility established on a military base. The letter, sent before Trump dropped his administration’s family-separation policy, said it was essential to have access even in cases where only short notice is provided.

Mattis has approved temporarily detailing 21 military attorneys to the Justice Department to help with the glut of immigration cases that have emerged on the border. The order, issued this month, calls for 21 attorneys with criminal-trial experience to assist as special assistant U.S. attorneys for 179 days, Davis said. They will help in prosecuting border immigration cases, he added, “with a focus on misdemeanor improper entry and felony illegal reentry cases.”

The possibility was raised in a congressional hearing in May, and first reported as underway by MSNBC on Wednesday night. U.S. law permits a judge advocate lawyer to be assigned or detailed to another agency, including to provide representation in civil and criminal cases.

This report was originally published at 2:44 p.m. with an update at 4:39 p.m. when a Pentagon spokesman confirmed that the Defense Department will support HHS’s request.

 

Correction: An earlier version of this post incorrectly listed Rep. Adam Smith’s state. He is a representative from Washington state, not California.

Source: Pentagon will make room for up to 20,000 migrant children on military bases – The Washington Post