Hiltzik: Narratives that turned their believers into idiots

It’s the holiday season, when we experts look back at the most heartwarming moments of the past year and what may gladden our hearts in the coming one.

Not this time.

2022 was a year when financial, political and social observers saw their most cherished narratives explode at every turn. It was, in short, the year of the Great Falla.

If you are incompetent you have to be honest, and if you are crooked you have to be smart.

– The game rule allegedly ignored by Sam Bankman-Fried of FTX fame

I’ll take a page from esteemed money manager Barry Ritholtz, who published his list of narrative failures of 2022 a few weeks ago, noting ruefully that he had limited himself to 10 because “otherwise the list would have become too long and difficult to handle.” direct “I know you feel it.

My list overlaps a bit with yours, though I have a few options of my own. let’s dig

The mythology of musk: The idea that to be a billionaire you must be brilliant or at least smart has been reduced to a smoldering ruin, thanks to Elon Musk’s misadventure as Twitter’s buyer and tweeter-in-chief.

Not only did its erratic decision-making and sedulous embrace of far-right politics send countless users and advertisers fleeing the social media platform, but it appears to be eroding its support among mainstream car buyers electric cars made by Tesla, whose shares are his main personal asset.

Until this year, Musk’s role as Tesla’s CEO was the key factor in the company’s buoyancy, despite its questionable profitability and persistent problems with delivery schedules and product quality. His behavior on Twitter has opened the floodgates of long-overdue insights into his management capabilities, as my colleague Russ Mitchell laid out in November.

In the last week alone, some of Tesla’s most trusted cheerleaders in the financial world have turned against Musk, surprisingly suggesting that Tesla’s board should rein him in or even find a new CEO.

That’s unprecedented but not surprising, as the automaker’s stock, once valued more than the country’s legacy automakers, has plunged a nauseating 65.5% this year .

Goodbye to crypto: In an episode of the great 1980s Britcom ‘Yes, Prime Minster’, banker Sir Desmond Glazebrook explains ‘the basic rule of the City’ (i.e. London’s Wall Street): ‘If you’re incompetent you must be honest, and if you’re crooked you’ve got to be smart.”

Sam Bankman-Fried, founder of collapsed cryptocurrency firm FTX, appears to have broken the rule on both ends. According to an indictment filed in New York federal court, a bankruptcy court filing by the company’s trustee and charges brought against him by federal regulators, he was dishonest. i incompetent

It may be wrong to call FTX a Ponzi scheme, which is a particular kind of scam game, but it certainly looks like a scam based on the Justice Department’s indictment; evidence and admissions by Bankman-Fried indicate that customer deposits that were supposed to be seized were used to bail out the firm’s hedge fund.

FTX claimed to have the most sophisticated computer-driven accounting system in all of crypto, but in fact its system was run by “a very small group of inexperienced, unsophisticated and potentially compromised individuals,” in John’s words Ray, who is Acting as a bankruptcy receiver.

However, much of the coverage of the FTX collapse is making a category mistake. Treat FTX as an aberration in the field of cryptography, as if cryptography were fundamentally sound, except for Bankman-Fried and their merry band.

This is wrong. Cryptocurrencies are a scam. They are assets with no intrinsic value other than what their holders can persuade some fool to pay for them.

Bankman-Fried is represented as a billionaire who lost his fortune; In fact, he never had a fortune – the claim was always based on false values ​​of his self-created and other cryptocurrencies.

True, he was able to briefly convert his crypto holdings into dollars in time to make lavish political contributions and pay for stadium naming deals and a Super Bowl ad, but the values ​​were built on quicksand and now has swallowed him up..

Will the fall of FTX take away the myth of crypto? Unfortunately, this is doubtful. The legion of gullible brands never goes away. Count on crypto traders to find a way to portray FTX as an outlier and maintain their efforts to persuade investors and politicians that it is real. they are not

A watchdog falls for a COVID conspiracy: The independent journalism organization ProPublica spent years building a reputation for smart and thorough investigations.

That reputation collapsed in October, when he inexplicably teamed up with a conspiracy theorist in Vanity Fair to push a long-debunked claim that the COVID virus escaped from a Chinese biology lab before spreading -se all over the world. This claim is at odds with the prevailing scientific opinion, which holds that the virus entered the human population via infected wildlife.

The article was based almost entirely on a Chinese government document that had been translated by an American who claimed to have a unique ability to understand the complicated Mandarin of official dispatches. It led ProPublica to claim that the lab had experienced a mysterious crisis immediately before the first outbreak of COVID.

As I reported, however, many other experts determined that ProPublica’s source had translated, selectively quoted, and misinterpreted the document. ProPublica also gave undeserved credence to a US Senate committee report that concluded the virus had escaped from the lab, without properly informing readers that the report was the product of the committee’s Republican minority and a rebuttal of old disproved claims of lab leaks.

ProPublica responded to widespread criticism of its article with an editor’s note a month later saying it consulted three (unidentified) Chinese language experts. Two questioned the translation and all found the quoted passage “ambiguous.” Interestingly, ProPublica pronounced their article “sound.”

Unfortunately, it was nothing of the sort. ProPublica failed its readers by promoting what is a partisan, right-wing claim about the origins of COVID, and damaged its own reputation in the process.

The red wave that wasn’t: The idea that Democrats would surely be slaughtered in November’s midterm elections was established as an article of faith almost as soon as President Biden uttered the last words of his inaugural address.

It persisted even after the Supreme Court handed down its scathing and dishonorable decision in Dobbs vs. The Jackson Women’s Health Organization in June overturned Roe vs. Wade and thus overturns a long-standing civil law almost unique in the history of American jurisprudence.

That the ruling sparked consternation and anger across the country went unnoticed by political reporters, except to the extent that they were certain it would not affect the election. This was just one political trend that the northeast-based insular polling and reporting class overlooked; Another was that the Republican candidates’ undemocratic rhetoric and actions turned off voters.

We know the harvest. In fact, Democrats increased their majority in the Senate and maintained a strong enough minority caucus in the House to raise the stakes of the mess that emerges in the narrow Republican majority.

Donald Trump’s hold on the Republican Party was seriously eroded by the electoral losses of most of his endorsed candidates. Have political journalists woken up to this new emerging reality? Next year will tell the story.

The Roar of the Russian Bear: British journalist Andrew Cockburn identified the Russian bear as a paper tiger in his book “The Threat” — in the 1980s, when the subject was the military power of the Soviet Union. Cockburn documented how the power of the Red Army was systematically exaggerated by Western generals who needed a powerful enemy to justify their budget requests.

Contemporary events suggest that among those who did not read “The Menace” or at least ignored its lessons is Vladimir Putin. The Russian prime minister put his faith in the power of his army, imposed a myth on his people about the restoration of a vanished Russian empire, and believed his own propaganda about the meekness and cowardice of a Ukrainian population faced with overwhelming force. Clearly, his confidence was misplaced.

A couple of weeks ago I asked a Russian émigré acquaintance of mine how long she thought Putin would last in office, now that Russian families know about the invasion through the bodies of slain soldiers and the phone communications of their children . the countryside. “Days!” she exclaimed. But it’s still there.

The end of the Russian attack remains imponderable as I write. The devastating consequences of their losses on the battlefield are inescapable, as is the damage done to the Russian economy by global economic sanctions.

The best that can be said is that the attack did not go as Putin had hoped. In geopolitical terms, it is the biggest failure of 2022.

It’s tempting, if unwise, to speculate about what the biggest mistakes of 2023 might be. Here goes, anyway. My biggest expectation is the breakout of Ron DeSantis as a national figure.

Supporters of Florida’s thug Republican governor think he’s the second coming of Donald Trump. To me, he seems like a lackluster Scott Walker, a similarly cocky, sleazy culture warrior who, like DeSantis, had all the charisma of a painted wall.

Still, it’s hard to imagine DeSantis’ campaign against “wokeness” will have any legs nationally, as voters have signaled they don’t have much patience for candidates who don’t offer solutions to real problems.

Then there’s the Anthony Fauci investigation that the House Republican majority says they will release in the new year. Prediction: The effort to make this well-respected scientist a villain will evaporate into a miasma of ignorance and stupidity, as will the talk of “pursuing” him, promoted recently by that paragon of sober judgment, Elon Musk.

Also, crypto will still be dead. See you in a year, in this same place.

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