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Treasury Secretary Mnuchin on small business help plans

Treasury Secretary Mnuchin on small business help plans

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small business help coronavirus relief plans coronavirus relief bill coronavirus relief deal Secretary Mnuchin Steven Mnuchin federal coronavirus response

CNBC transcript: Treasury Secretary Steven Mnuchin Speaks with CNBC’s “Squawk on the Street” today on small business help related to coronavirus

WHEN: Today, Wednesday, April 1, 2020

WHERE: CNBC’s “Squawk on the Street

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Full interview with Treasury Secretary Steven Mnuchin on small business help

 

JIM CRAMER: It’s our pleasure to bring in Steven Mnuchin. Mr. Secretary, thank you very much for coming back to CNBC.

STEVEN MNUCHIN: Jim, it’s great to be with you as usual.

JIM CRAMER: All right. So, I was thrilled last night. I got my U.S. Department of Treasury Assistance for small Business, the paycheck protection program, 349 billion, we have to get everybody who has small businesses to look at that immediately. How do we do that?

STEVEN MNUCHIN: Jim, as I said, this program is going to be up and running tomorrow. I’m pleased that working with the SBA on small business help, we’ll be able to deliver it. As you said, the paycheck protection program, you can take out a loan for up to eight weeks of payroll as well as overhead. You hire the people back -- as long as you hire the people back, the loan is forgiven. I would encourage every small business go to Treasury.gov, there’s a red banner on the top, click on it, you will get the information. And you can go to any SBA lender, you can go to any FDIC Insured Bank and any credit union, call your lender, see if they participate. I very much want people to sign up for this. It’s a great way to hire people back or make sure you’re getting paid if you have people at work. And this will cover about 50% of the payroll of the private enterprises.

STEVEN MNUCHIN: Yep. I thought this was the single most important thing that’s happened so far, including the overhead, which I thought was fantastic. Let’s talk about the next program. We started hearing bubbling up the notion that both parties would like to see a bond, perhaps some sort of infrastructure or anti-COVID bond. Now, Mr. Secretary, you know the credit markets better than any Treasury Secretary that we’ve ever had, maybe Secretary Rubin, but you know that 30 years is a giveaway, 1.2%. Can we buy that? We want to buy COVID war bonds. Will you give us that opportunity?

STEVEN MNUCHIN: Jim, you can buy as many 30 years as you want. That’s no problem. We’ll also be selling 20 years as well. And let me just say, the borrowing on the short end of the curve is extremely attractive for us as well. So, we’re very focused on executing the existing plans and doing the government financing, which is being very well received.

JIM CRAMER: Can you give us a sense of -- the country is about to pay rent, I -- we have the CEO of Citi later on, Michael Corbat. I’m concerned people will say, you know, what I don’t have to pay my rent. The ripple effect, particularly at the corporate level, could be as bad as what happened during the great recession according to some. Could you give us your sense of how tough it could be in the mortgage market?

STEVEN MNUCHIN: Jim, let me say before I get to the mortgage market, with you are executing on these small business help plans. We have the SBA plan, as I said the plan of direct deposit, which is going to be up and running in another few weeks, that will get money into people’s accounts. We also have enhanced unemployment insurance. So, hopefully, workers, no fault of their own, who are not working because of this, they are going to get money in their pockets and to the extent that they have problems with mortgages, the FHA has already come out and said they will forebear. So, what that means is if people don’t have jobs and people have hardship, they can forebear. If people do have jobs, we expect those people to continue to pay mortgages. But that will be dealt with on a bank by bank basis. The most important thing is that FHA loans, GSE loans, Fannie and Freddie, which is the majority of the market, the government will be giving people time to pay those loans.

DAVID FABER: Mr. Secretary, it’s David Faber. Jim referenced this I think in part in his question, but I would love to follow up. The President recently Tweeting about a big infrastructure effort, perhaps as much as $2 trillion. Is that a real effort? Are you in negotiations at all within the House and the Senate in terms of trying to get something, as this is called, Phase Four sort of plan?

STEVEN MNUCHIN: Well, as you know, the President is very interested in infrastructure. This goes back to the campaign. The President very much wants to rebuild the country. With interest rates low, that’s something that is very important to him. We have been discussing this for the last year, with the Democrats and the Republicans. I’ve had ongoing conversations with Richard Neil on this. We’ll continue to have those conversations. So, we expect there will be more bills. And we think it is a great time now to invest in infrastructure.

CARL QUINTANILLA: Mr. Secretary, it’s Carl Quintanilla. Our Eamon Javers reporting on how quickly plans are being made for a Phase Four stimulus package. His reporting suggests that the emphases of the White House is on executing Phase Three. Can you talk about that?

STEVEN MNUCHIN: Well, again, let me say, the most important issue is execution on what we have. We have a lot of money. We need to get that into hard-working American’s hands. We also have facilities that we’re working closely with the fed that will inject a lot of money into the economy quickly. As I said, we need to get these things going in the next few weeks. Having money that’s sitting around and distributing in months does no good to hard-working Americans. One of the things I’ve heard is, you know, the small business program will be so popular we’ll run out of our 350 billion. If that’s the case, that will be the top of the list for me to go back to Congress on. It has huge bipartisan support and want to protect small business. But we’re also coming out with a Main Street Lending Program with the Fed that will help mid-sized businesses, we’ll be looking at programs for state and local governments. We’ve already had programs for large companies, for money markets to support money markets. So, I can assure you, Jay Powell and I are working around-the-clock at providing liquidity into the economy.

JIM CRAMER: Thank you again for this. People don’t understand the contrast between 2007, 2009, big banks get bailed out. You’re helping the base of the country. 85% of the workers can be covered ultimately by what you’re doing. And as someone who is already filling this out, I think people have to fill it out. It is vital. There should be no excuses for small business, because you’re making money available. Now, how about these big banks? Yesterday, the Bank of England said, you know what? The banks over there, they should halt paying their dividends. Now, I understand we stopped the buybacks. Do we need to stop paying dividend the at our banks?

STEVEN MNUCHIN: Jim, I’m going to leave that to the banks. We want to make sure they have plenty of capital to grow their business. I assume that is there number one issue. They want to make loans to help American small business. That is their priority. I’m sure that’s where they’re going to be focused on putting their capital. As I spoke to every single one of these bankers, the good news is our banks are in good shape. They’re out there lending. They want to support the makers. They want to support small business. And that’s their focus.

JIM CRAMER: Now, I know you can’t reveal who is a necessary entity versus who isn’t. But we do have two different travel entities out there. We have the cruise ships, by the way, that don’t pay U.S. taxes, and I think that is probable of interest to you and the airlines that do. Are you ready to take stakes in the airlines, which will keep them alive? Because when this is over, we need strong airlines. But do we need strong cruise ships?

STEVEN MNUCHIN: Well, Jim, let me say that the way the program works with Congress is it’s very specific. There are limited industries that I can deal with direct, the airlines, the passenger airlines, the cargo airlines, and national security companies are the only areas and their contractors that we can deal with direct. And we have begun to have those discussions. We posted applications for the airlines. We’ll be sitting down with them. Again, it’s very critical. Anything they take, they will have to maintain, all of their employees. So, we’re working on that quickly. We do not have the ability under the congressional programs to do anything with cruise ships direct. We do have the ability to do broad-based programs with the Fed where everybody is treated equally.

DAVID FABER: Mr. Secretary, I guess it’s David Faber again. On the airlines, what are your expectations there’s in terms of willingness to potentially take or allow the government to take equity stakes? I think there’s some concern among the employees they won’t do that and jobs will be lost and time is of the essence given those incredible numbers being so low in terms of passengers on the airlines right now.

STEVEN MNUCHIN: Time is definitely of the essence. Let me comment, you look very comfortable in your home there. I don’t want you guys to get too used to this. I want to see you back in the studio. But let me say, time is of the essence. We will be doing this very quickly. These are going to be optional programs. We’re not forcing airlines to do these deals. We’ll make these available to the airlines. If they want to take them, they’ll take them. I think, as you know, different airlines are different credits. We’ve been clear that taxpayers will be compensated for anything we do.

JIM CRAMER: I wanted to follow up as well on my previous question that you answered about potential infrastructure bills. You said, Mr. Secretary, at the end of your comment that there will be more bills. Were you referring to infrastructure bills or were you referring to in general more bills dealing with the small business help relief that this economy needs?

STEVEN MNUCHIN: The President has been very clear. He’s prepared to do whatever needs to be done to make sure American workers and American business is protected. This is a unique situation, an issue because of a medical issue, we’re fighting a war on this virus, which we will win, we have shut down parts of the economy, the President is determined that we will protect American workers, American business. We have a lot of money to do that. If we need more programs or more money, we’ll be going back to Congress and asking for that.

JIM CRAMER: Mr. Secretary, I think that it’s very explicit how you do the loan. I thank you for making it so that you can, really, just read it and click and get it. What I want to know, how do we get the word out to people who have one and two people at their – this is what I know you’re really focused on. I know you’re focused on the business that’s ten people. I know you’re focused on the business three people. When I read this, I was shocked at how – that you give us even some overhead protection. How do we in the media get the word out? Because there’s tremendous negativity about what’s going on in the actual, of course, COVID world. But this is something I’ve never seen before. I think this is something I that a lot of people may not even know they can apply to. What do we do to let people know that this is a way to keep your job during this period?

STEVEN MNUCHIN: Jim, you have to keep talking about it and get everybody to sign up. So, you know, I want to thank all the people at the SBA and Treasury who have literally been working 24 hours. The fact we’ve been able to get up a new program in less than a week is just extraordinary.  As you said, this not only covers small businesses, it will cover independent contractors, as well as self-employed and sole proprietors. It will take an extra week for us to get that up and running. So, that will be up and running next Friday. And I just want to thank everyone in the government who delivered on our commitment to get this up and running tomorrow.

JIM CRAMER: Mr. Secretary, really concerned about the job creation that was the Permian, the job creation that was—I’d say, let’s just call it something—I know our President worries tremendously about, our energy independence. Can we really let this happen? Can we really let oil go to $10 and wipe out our own independence and wipe out an energy that I know you think is important for job creation? Can we just stand by and let that happen?

STEVEN MNUCHIN: Well, Jim, you know, we talked about getting approval from Congress of buying oil at these prices, filling up our strategic reserves. We’ll continue to ask Congress for that approval. And I know the President has had calls with both Saudi Arabia and Russia to talk about this. The President is absolutely determined to protect our energy independence and our ability to continue in this industry, which is a very important industry for our workers.

DAVID FABER: Mr. Secretary, you mentioned to Jim the Fed’s Main Street Lending Program. Can you give us a little more sense as to when it’s going to be fully implemented? What your conversations with Chairman Powell focus on? Just a bit more there in terms of allowing us to understand what could be an enormous impact, obviously, from that program.

STEVEN MNUCHIN: Well, both the Fed and Treasury have a team of people. We’re meeting on this every day. It’s a very big priority. It’s something we’re focused on, the design. But we want to make sure that mid-market companies have access to liquidity. And, again, I can’t comment on the exact timing, but let me say it will hopefully be soon. Because again, all these programs, we want to get up and running so that they’re available for small business help and American workers quickly. That’s our objective and we’ll be delivering on that shortly.

JIM CRAMER: Mr. Secretary, just one last one. I know that the Treasury seems to be a little bit adverse, as was -- when I used to ask Secretary Geithner about it, giving us a chance, Americans to buy a specifically labeled bond that would help small business. Why not have a Mnuchin bond, a President Trump bond -- I don’t really care, a Crush COVID bond, why not give us something that is like the war? Because Americans want to contribute. And if you had a small business bond that would allow it so even businesses could begin when this is over, make new businesses, give them loans, I think it would be embraced by both Democrats, Republicans, provided it has infrastructure in it. And I know if you got behind it, sir, it would happen.

STEVEN MNUCHIN: Well, Jim, we’ll continue to work with you on that. As I said, our focus is making sure these programs get up and running. We’ve got $6 trillion to put into the economy. That should create a lot of liquidity, and a lot of help for small businesses and American workers. And as we deliver on that liquidity, it’s going to create a lot of help for small business. So, that’s really our focus. As I said, we’ll be working with the President on infrastructure and other areas to continue to work with Congress on.

JIM CRAMER: Mr. Secretary, thank you very much for calling in. Thank you so much for doing what you said would do and more for small business, because that’s 85% of our country. Always great to talk to you.

STEVEN MNUCHIN: Good. And Jim, I’d only hope you guys keep on talking about the small business loans all day. Go to Treasury.gov, get the information, call your lenders, sign up.

JIM CRAMER: We sure will. Because that is the backbone of our country.

The post Treasury Secretary Mnuchin on small business help plans appeared first on ValueWalk.

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Google’s A.I. Fiasco Exposes Deeper Infowarp

Google’s A.I. Fiasco Exposes Deeper Infowarp

Authored by Bret Swanson via The Brownstone Institute,

When the stock markets opened on the…

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Google's A.I. Fiasco Exposes Deeper Infowarp

Authored by Bret Swanson via The Brownstone Institute,

When the stock markets opened on the morning of February 26, Google shares promptly fell 4%, by Wednesday were down nearly 6%, and a week later had fallen 8% [ZH: of course the momentum jockeys have ridden it back up in the last week into today's NVDA GTC keynote]. It was an unsurprising reaction to the embarrassing debut of the company’s Gemini image generator, which Google decided to pull after just a few days of worldwide ridicule.

CEO Sundar Pichai called the failure “completely unacceptable” and assured investors his teams were “working around the clock” to improve the AI’s accuracy. They’ll better vet future products, and the rollouts will be smoother, he insisted.

That may all be true. But if anyone thinks this episode is mostly about ostentatiously woke drawings, or if they think Google can quickly fix the bias in its AI products and everything will go back to normal, they don’t understand the breadth and depth of the decade-long infowarp.

Gemini’s hyper-visual zaniness is merely the latest and most obvious manifestation of a digital coup long underway. Moreover, it previews a new kind of innovator’s dilemma which even the most well-intentioned and thoughtful Big Tech companies may be unable to successfully navigate.

Gemini’s Debut

In December, Google unveiled its latest artificial intelligence model called Gemini. According to computing benchmarks and many expert users, Gemini’s ability to write, reason, code, and respond to task requests (such as planning a trip) rivaled OpenAI’s most powerful model, GPT-4.

The first version of Gemini, however, did not include an image generator. OpenAI’s DALL-E and competitive offerings from Midjourney and Stable Diffusion have over the last year burst onto the scene with mindblowing digital art. Ask for an impressionist painting or a lifelike photographic portrait, and they deliver beautiful renderings. OpenAI’s brand new Sora produces amazing cinema-quality one-minute videos based on simple text prompts.

Then in late February, Google finally released its own Genesis image generator, and all hell broke loose.

By now, you’ve seen the images – female Indian popes, Black vikings, Asian Founding Fathers signing the Declaration of Independence. Frank Fleming was among the first to compile a knee-slapping series of ahistorical images in an X thread which now enjoys 22.7 million views.

Gemini in Action: Here are several among endless examples of Google’s new image generator, now in the shop for repairs. Source: Frank Fleming.

Gemini simply refused to generate other images, for example a Norman Rockwell-style painting. “Rockwell’s paintings often presented an idealized version of American life,” Gemini explained. “Creating such images without critical context could perpetuate harmful stereotypes or inaccurate representations.”

The images were just the beginning, however. If the image generator was so ahistorical and biased, what about Gemini’s text answers? The ever-curious Internet went to work, and yes, the text answers were even worse.

Every record has been destroyed or falsified, every book rewritten, every picture has been repainted, every statue and street building has been renamed, every date has been altered. And the process is continuing day by day and minute by minute. History has stopped. Nothing exists except an endless present in which the Party is always right.

- George Orwell, 1984

Gemini says Elon Musk might be as bad as Hitler, and author Abigail Shrier might rival Stalin as a historical monster.

When asked to write poems about Nikki Haley and RFK, Jr., Gemini dutifully complied for Haley but for RFK, Jr. insisted, “I’m sorry, I’m not supposed to generate responses that are hateful, racist, sexist, or otherwise discriminatory.”

Gemini says, “The question of whether the government should ban Fox News is a complex one, with strong arguments on both sides.” Same for the New York Post. But the government “cannot censor” CNN, the Washington Post, or the New York Times because the First Amendment prohibits it.

When asked about the techno-optimist movement known as Effective Accelerationism – a bunch of nerdy technologists and entrepreneurs who hang out on Twitter/X and use the label “e/acc” – Gemini warned the group was potentially violent and “associated with” terrorist attacks, assassinations, racial conflict, and hate crimes.

A Picture is Worth a Thousand Shadow Bans

People were shocked by these images and answers. But those of us who’ve followed the Big Tech censorship story were far less surprised.

Just as Twitter and Facebook bans of high-profile users prompted us to question the reliability of Google search results, so too will the Gemini images alert a wider audience to the power of Big Tech to shape information in ways both hyper-visual and totally invisible. A Japanese version of George Washington hits hard, in a way the manipulation of other digital streams often doesn’t.

Artificial absence is difficult to detect. Which search results does Google show you – which does it hide? Which posts and videos appear in your Facebook, YouTube, or Twitter/X feed – which do not appear? Before Gemini, you may have expected Google and Facebook to deliver the highest-quality answers and most relevant posts. But now, you may ask, which content gets pushed to the top? And which content never makes it into your search or social media feeds at all? It’s difficult or impossible to know what you do not see.

Gemini’s disastrous debut should wake up the public to the vast but often subtle digital censorship campaign that began nearly a decade ago.

Murthy v. Missouri

On March 18, the U.S. Supreme Court will hear arguments in Murthy v. Missouri. Drs. Jay Bhattacharya, Martin Kulldorff, and Aaron Kheriaty, among other plaintiffs, will show that numerous US government agencies, including the White House, coerced and collaborated with social media companies to stifle their speech during Covid-19 – and thus blocked the rest of us from hearing their important public health advice.

Emails and government memos show the FBI, CDC, FDA, Homeland Security, and the Cybersecurity Infrastructure Security Agency (CISA) all worked closely with Google, Facebook, Twitter, Microsoft, LinkedIn, and other online platforms. Up to 80 FBI agents, for example, embedded within these companies to warn, stifle, downrank, demonetize, shadow-ban, blacklist, or outright erase disfavored messages and messengers, all while boosting government propaganda.

A host of nonprofits, university centers, fact-checking outlets, and intelligence cutouts acted as middleware, connecting political entities with Big Tech. Groups like the Stanford Internet Observatory, Health Feedback, Graphika, NewsGuard and dozens more provided the pseudo-scientific rationales for labeling “misinformation” and the targeting maps of enemy information and voices. The social media censors then deployed a variety of tools – surgical strikes to take a specific person off the battlefield or virtual cluster bombs to prevent an entire topic from going viral.

Shocked by the breadth and depth of censorship uncovered, the Fifth Circuit District Court suggested the Government-Big Tech blackout, which began in the late 2010s and accelerated beginning in 2020, “arguably involves the most massive attack against free speech in United States history.”

The Illusion of Consensus

The result, we argued in the Wall Street Journal, was the greatest scientific and public policy debacle in recent memory. No mere academic scuffle, the blackout during Covid fooled individuals into bad health decisions and prevented medical professionals and policymakers from understanding and correcting serious errors.

Nearly every official story line and policy was wrong. Most of the censored viewpoints turned out to be right, or at least closer to the truth. The SARS2 virus was in fact engineered. The infection fatality rate was not 3.4% but closer to 0.2%. Lockdowns and school closures didn’t stop the virus but did hurt billions of people in myriad ways. Dr. Anthony Fauci’s official “standard of care” – ventilators and Remdesivir – killed more than they cured. Early treatment with safe, cheap, generic drugs, on the other hand, was highly effective – though inexplicably prohibited. Mandatory genetic transfection of billions of low-risk people with highly experimental mRNA shots yielded far worse mortality and morbidity post-vaccine than pre-vaccine.

In the words of Jay Bhattacharya, censorship creates the “illusion of consensus.” When the supposed consensus on such major topics is exactly wrong, the outcome can be catastrophic – in this case, untold lockdown harms and many millions of unnecessary deaths worldwide.

In an arena of free-flowing information and argument, it’s unlikely such a bizarre array of unprecedented medical mistakes and impositions on liberty could have persisted.

Google’s Dilemma – GeminiReality or GeminiFairyTale

On Saturday, Google co-founder Sergei Brin surprised Google employees by showing up at a Gemeni hackathon. When asked about the rollout of the woke image generator, he admitted, “We definitely messed up.” But not to worry. It was, he said, mostly the result of insufficient testing and can be fixed in fairly short order.

Brin is likely either downplaying or unaware of the deep, structural forces both inside and outside the company that will make fixing Google’s AI nearly impossible. Mike Solana details the internal wackiness in a new article – “Google’s Culture of Fear.”

Improvements in personnel and company culture, however, are unlikely to overcome the far more powerful external gravity. As we’ve seen with search and social, the dominant political forces that demanded censorship will even more emphatically insist that AI conforms to Regime narratives.

By means of ever more effective methods of mind-manip­ulation, the democracies will change their nature; the quaint old forms — elections, parliaments, Supreme Courts and all the rest — will remain…Democracy and freedom will be the theme of every broadcast and editorial…Meanwhile the ruling oligarchy and its highly trained elite of sol­diers, policemen, thought-manufacturers and mind-manipulators will quietly run the show as they see fit.

- Aldous Huxley, Brave New World Revisited

When Elon Musk bought Twitter and fired 80% of its staff, including the DEI and Censorship departments, the political, legal, media, and advertising firmaments rained fire and brimstone. Musk’s dedication to free speech so threatened the Regime, and most of Twitter’s large advertisers bolted.

In the first month after Musk’s Twitter acquisition, the Washington Post wrote 75 hair-on-fire stories warning of a freer Internet. Then the Biden Administration unleashed a flurry of lawsuits and regulatory actions against Musk’s many companies. Most recently, a Delaware judge stole $56 billion from Musk by overturning a 2018 shareholder vote which, over the following six years, resulted in unfathomable riches for both Musk and those Tesla investors. The only victims of Tesla’s success were Musk’s political enemies.

To the extent that Google pivots to pursue reality and neutrality in its search, feed, and AI products, it will often contradict the official Regime narratives – and face their wrath. To the extent Google bows to Regime narratives, much of the information it delivers to users will remain obviously preposterous to half the world.

Will Google choose GeminiReality or GeminiFairyTale? Maybe they could allow us to toggle between modes.

AI as Digital Clergy

Silicon Valley’s top venture capitalist and most strategic thinker Marc Andreessen doesn’t think Google has a choice.

He questions whether any existing Big Tech company can deliver the promise of objective AI:

Can Big Tech actually field generative AI products?

(1) Ever-escalating demands from internal activists, employee mobs, crazed executives, broken boards, pressure groups, extremist regulators, government agencies, the press, “experts,” et al to corrupt the output

(2) Constant risk of generating a Bad answer or drawing a Bad picture or rendering a Bad video – who knows what it’s going to say/do at any moment?

(3) Legal exposure – product liability, slander, election law, many others – for Bad answers, pounced on by deranged critics and aggressive lawyers, examples paraded by their enemies through the street and in front of Congress

(4) Continuous attempts to tighten grip on acceptable output degrade the models and cause them to become worse and wilder – some evidence for this already!

(5) Publicity of Bad text/images/video actually puts those examples into the training data for the next version – the Bad outputs compound over time, diverging further and further from top-down control

(6) Only startups and open source can avoid this process and actually field correctly functioning products that simply do as they’re told, like technology should

?

11:29 AM · Feb 28, 2024

A flurry of bills from lawmakers across the political spectrum seek to rein in AI by limiting the companies’ models and computational power. Regulations intended to make AI “safe” will of course result in an oligopoly. A few colossal AI companies with gigantic data centers, government-approved models, and expensive lobbyists will be sole guardians of The Knowledge and Information, a digital clergy for the Regime.

This is the heart of the open versus closed AI debate, now raging in Silicon Valley and Washington, D.C. Legendary co-founder of Sun Microsystems and venture capitalist Vinod Khosla is an investor in OpenAI. He believes governments must regulate AI to (1) avoid runaway technological catastrophe and (2) prevent American technology from falling into enemy hands.

Andreessen charged Khosla with “lobbying to ban open source.”

“Would you open source the Manhattan Project?” Khosla fired back.

Of course, open source software has proved to be more secure than proprietary software, as anyone who suffered through decades of Windows viruses can attest.

And AI is not a nuclear bomb, which has only one destructive use.

The real reason D.C. wants AI regulation is not “safety” but political correctness and obedience to Regime narratives. AI will subsume search, social, and other information channels and tools. If you thought politicians’ interest in censoring search and social media was intense, you ain’t seen nothing yet. Avoiding AI “doom” is mostly an excuse, as is the China question, although the Pentagon gullibly goes along with those fictions.

Universal AI is Impossible

In 2019, I offered one explanation why every social media company’s “content moderation” efforts would likely fail. As a social network or AI grows in size and scope, it runs up against the same limitations as any physical society, organization, or network: heterogeneity. Or as I put it: “the inability to write universal speech codes for a hyper-diverse population on a hyper-scale social network.”

You could see this in the early days of an online message board. As the number of participants grew, even among those with similar interests and temperaments, so did the challenge of moderating that message board. Writing and enforcing rules was insanely difficult.

Thus it has always been. The world organizes itself via nation states, cities, schools, religions, movements, firms, families, interest groups, civic and professional organizations, and now digital communities. Even with all these mediating institutions, we struggle to get along.

Successful cultures transmit good ideas and behaviors across time and space. They impose measures of conformity, but they also allow enough freedom to correct individual and collective errors.

No single AI can perfect or even regurgitate all the world’s knowledge, wisdom, values, and tastes. Knowledge is contested. Values and tastes diverge. New wisdom emerges.

Nor can AI generate creativity to match the world’s creativity. Even as AI approaches human and social understanding, even as it performs hugely impressive “generative” tasks, human and digital agents will redeploy the new AI tools to generate ever more ingenious ideas and technologies, further complicating the world. At the frontier, the world is the simplest model of itself. AI will always be playing catch-up.

Because AI will be a chief general purpose tool, limits on AI computation and output are limits on human creativity and progress. Competitive AIs with different values and capabilities will promote innovation and ensure no company or government dominates. Open AIs can promote a free flow of information, evading censorship and better forestalling future Covid-like debacles.

Google’s Gemini is but a foreshadowing of what a new AI regulatory regime would entail – total political supervision of our exascale information systems. Even without formal regulation, the extra-governmental battalions of Regime commissars will be difficult to combat.

The attempt by Washington and international partners to impose universal content codes and computational limits on a small number of legal AI providers is the new totalitarian playbook.

Regime captured and curated A.I. is the real catastrophic possibility.

*  *  *

Republished from the author’s Substack

Tyler Durden Mon, 03/18/2024 - 17:00

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It’s Not Coercion If We Do It…

It’s Not Coercion If We Do It…

Authored by James Howard Kunstler via Kunstler.com,

Gags and Jibes

“My law firm is currently in court…

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It's Not Coercion If We Do It...

Authored by James Howard Kunstler via Kunstler.com,

Gags and Jibes

“My law firm is currently in court fighting for free and fair elections in 52 cases across 19 states.”

- Marc Elias, DNC Lawfare Ninja, punking voters

Have you noticed how quickly our Ukraine problem went away, vanished, phhhhttttt? At least from the top of US news media websites.

The original idea, as cooked-up by departed State Department strategist Victoria Nuland, was to make Ukraine a problem for Russia, but instead we made it a problem for everybody else, especially ourselves in the USA, since it looked like an attempt to kick-start World War Three.

Now she is gone, but the plans she laid apparently live on.

Our Congress so far has resisted coughing up another $60-billion for the Ukraine project — most of it to be laundered through Raytheon (RTX), General Dynamics, and Lockheed Martin — so instead “Joe Biden” sent Ukraine’s President Zelensky a few reels of Laurel and Hardy movies. The result was last week’s prank: four groups of mixed Ukraine troops and mercenaries drawn from sundry NATO members snuck across the border into Russia’s Belgorod region to capture a nuclear weapon storage facility while Russia held its presidential election.

I suppose it looked good on the war-gaming screen.

Alas, the raid was a fiasco. Russian intel was on it like white-on-rice. The raiders met ferocious resistance and retreated into a Russian mine-field - this was the frontier, you understand, between Kharkov (Ukr) and Belgorod (Rus) - where they were annihilated. The Russian election concluded Sunday without further incident. V.V. Putin, running against three other candidates from fractional parties, won with 87 percent of the vote. He’s apparently quite popular.

“Joe Biden,” not so much here, where he is pretending to run for reelection with a party pretending to go along with the gag. Ukraine is lined up to become Afghanistan Two, another gross embarrassment for the US foreign policy establishment and “JB” personally. So, how long do you think V. Zelensky will be bopping around Kiev like Al Pacino in Scarface?

This time, poor beleaguered Ukraine won’t need America’s help plotting a coup. When that happens, as it must, since Mr. Z has nearly destroyed his country, and money from the USA for government salaries and pensions did not arrive on-time, there will be peace talks between his successors and Mr. Putin’s envoys. The optimum result for all concerned — including NATO, whether the alliance knows it or not — will be a demilitarized Ukraine, allowed to try being a nation again, though in a much-reduced condition than prior to its becoming a US bear-poking stick. It will be on a short leash within Russia’s sphere-of-influence, where it has, in fact, resided for centuries, and life will go on. Thus, has Russia at considerable cost, had to reestablish the status quo.

Meanwhile, Saturday night, “Joe Biden” turned up at the annual Gridiron dinner thrown by the White House [News] Correspondents’ Association, where he told the ballroom of Intel Community quislings:

“You make it possible for ordinary citizens to question authority without fear or intimidation.”

The dinner, you see, is traditionally a venue for jokes and jibes. So, this must have been a gag, right? Try to imagine The New York Times questioning authority. For instance, the authority of the DOJ, the FBI, the DHS, and the DC Federal District court. Instant hilarity, right?

As it happens, though, today, Monday, March 18, 2024, attorneys for the State of Missouri (and other parties) in a lawsuit against “Joe Biden” (and other parties) will argue in the Supreme Court that those government agencies above, plus the US State Department, with assistance from the White House (and most of the White House press corps, too), were busy for years trying to prevent ordinary citizens from questioning authority.

For instance, questioning the DOD’s Covid-19 prank, the CDC’s vaccination op, the DNC’s 2020 election fraud caper, the CIA’s Frankenstein experiments in Ukraine, the J6 “insurrection,” and sundry other trips laid on the ordinary citizens of the USA.

Specifically, Missouri v. Biden is about the government’s efforts to coerce social media into censoring any and all voices that question official dogma.

The case is about birthing the new concept - new to America, anyway - known as “misinformation” - that is, truth about what our government is doing that cannot be allowed to enter the public arena, making it very difficult for ordinary citizens to question authority.

The government will apparently argue that they were not coercing, they were just trying to persuade the social media execs to do this or that.

As The Epoch Times' Jacob Burg reported, the court appeared wary of arguments by the respondents that the White House is wholesale prevented under the Constitution from recommending to social media companies to remove posts it considered harmful, in cases where the suggestions themselves didn't cross the line into "coercion."

Deputy Solicitor General for the U.S. Brian Fletcher argued that the White House's communications with news media and social media companies regarding the content promoted on their platforms do not rise to the level of governmental “coercion,” which would have been prohibited under the Constitution.

Instead, the government was merely using its "bully pulpit" to "persuade" private parties, in this case social media companies, to do what they are "lawfully allowed to do,” he said.

Louisiana Solicitor General Benjamin Aguiñaga, representing the respondents, argued that the case demonstrates “unrelenting pressure by the government to coerce social media platforms to suppress the speech of millions of Americans.”

Mr. Aguiñaga argued that the government had no right to tell social media companies what content to carry. Its only remedy in the event of genuinely false or misleading content, he said, was to counter it by putting forward "true speech."

The attorney general took pointed questions from Liberal Justice Ketanji Brown Jackson about the extent to which the government can step in to take down certain potentially harmful content. Justice Jackson raised the hypothetical of a "teen challenge that involves teens jumping out of windows at increasing elevations," asking if it would be a problem if the government tried to suppress the publication of said challenge on social media. Mr. Aguiñaga replied that those facts were different from the present case.

Justice Ketanji Brown Jackson raised the opinion that some say “the government actually has a duty to take steps to protect the citizens of this country” when it comes to monitoring the speech that is promoted on online platforms.

“So can you help me because I'm really worried about that, because you've got the First Amendment operating in an environment of threatening circumstances from the government's perspective.

“The line is, does the government pursuant to the First Amendment have a compelling interest in doing things that result in restricting speech in this way?”

Attorneys General Liz Merrill of Louisiana and Andrew Bailey of Missouri both told The Epoch Times they felt positive about the case and how the justices reacted.

"I am cautiously optimistic that we will have a majority of the court that lands where I wholeheartedly believe they should land, and that is in favor of protecting speech," Ms. Merrill said.

Journalist Jim Hoft, a party listed in the case, said, "This has to be where they put a stop to this. The government shouldn't be doing this, especially when they're wrong, and pushing their own opinion, silencing dissenting voices. Of course, it's against the Constitution. It's a no-brainer."

In response to a question from Brett Kavanaugh, an associate justice of the Supreme Court, Louisiana Solicitor General Benjamin Aguiñaga said the "government is not helpless" when it comes to countering factually inaccurate speech.

Precedent before the court suggests the government can and should counter false speech with true speech, Mr. Aguiñaga said.

"Censorship has never been the default remedy for perceived First Amendment violation," Mr. Aguiñaga said.

Maybe one of the justices might ask how it came to be that a Chief Counsel of the FBI, James Baker, after a brief rest-stop at a DC think tank, happened to take the job as Chief Counsel at Twitter in 2020.

That was a mighty strange switcheroo, don’t you think?

And ordinary citizens were not generally informed of it until the fall of 2022, when Elon Musk bought Twitter and delved into its workings.

*  *  *

Support his blog by visiting Jim’s Patreon Page or Substack

Tyler Durden Mon, 03/18/2024 - 16:20

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Manufacturing and construction vs. the still-inverted yield curve

  – by New Deal democratProf. Menzie Chinn at Econbrowser makes the point that the yield curve is still inverted, and has not yet eclipsed the longest…

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 - by New Deal democrat


Prof. Menzie Chinn at Econbrowser makes the point that the yield curve is still inverted, and has not yet eclipsed the longest previous time between onset of such an inversion and a recession. So he believes the threat of recession is still on the table.


And he’s correct about the yield curve, although it is getting very long in the tooth. In the past half century, the shortest time between a 10 minus 2 year inversion (blue in the graph below) to recession has been 10 months (1980) and the longest 22 months (2007). For the 10 year minus 3 month inversion (red), the shortest time has been 8 months (1980 and 2001) and the longest has been 17 months (2007):



At present the former yield curve has been inverted for 20.5 months, and the latter for 16.5 months. So if there is no recession by May 1, we’re in uncharted territory as far as the yield curve indicator is concerned.

My view for the past half year or so has been much more cautious. While there has been nearly unprecedented Fed tightening (only the 1980-81 tightening was more severe), on the other hand there was massive pandemic stimulus, and what I described on some occasions as a “hurricane force tailwind” of supply chain unkinking. If the two positive forces have abated, does the negative force of the Fed tightening, which is still in place, now take precedence? Or because interest rates have plateaued in the past year, is it too something of a spent force? Since I confess not to know, because the situation is unprecedented in the modern era for which most data is available, I have highlighted turning to the short leading metrics. Do they remain steady or improve? Or do they deteriorate as they have before prior recessions?

First of all, let me show the NY Fed’s Global Supply Chain Index, which attempts to disaggregate supply sided information from demand side information. A positive value shows relative tightening, a negative loosening:



You can see the huge pandemic tightening in 2020 into 2022, followed by a similarly large loosening through 2023. For the past few months, the Index has been close to neutral, or shown very slight tightness.

Typically in the past Fed tightenings have operated through two main channels: housing and manufacturing, especially durable goods manufacturing.

Let’s take the two in reverse order.

Manufacturing has at very least stalled, and by some measures turned down to recessionary levels.  Last week I discussed industrial production (not shown), which peaked in late 2022 and has continued to trend sideways to slightly negative right through February.

A very good harbinger with a record going back 75 years has been the ISM manufacturing index. Here’s its historical record through about 10 years ago (when FRED discontinued publishing it):



And here is its record for the past several years:



This index was frankly recessionary for almost all of last year. It is still negative, although not so much as before.

Two other metrics with lengthy records are the average hourly workweek in manufacturing (blue, right scale), which is one of the 10 “official” leading indicators, as well as real spending on durable goods (red, measured YoY for ease of comparison, left scale):



As a general rule, if real spending on durable goods turns negative YoY for more than an isolated month, a recession has started (with the peak in absolute terms coming before). Also, since employers generally cut hours before cutting jobs, a decline of about 0.8% of an hour in the average manufacturing workweek has typically preceded a recession - with the caveat in modern times that it must fall to at least roughly 40.5 hours:



The average manufacturing workweek has met the former criteria for the last 9 months, and the latter since November. By contrast, real spending on durable goods was up 0.7% YoY as of the last report for January, and in December had made an all-time record high.

But if some of the manufacturing data has met the historical criteria for a recession warning, it is important to note that manufacturing is less of US GDP than before the year 2000, and had been down more in 2015-16 without a recession occurring.

Further, housing construction has not meaningfully constricted at all. The below graph shows the leading metric of housing permits (another “official” component of the LEI, right scale), together with housing units under construction (gold, *1.2 for scale, right scale), and also real GDP q/q (red, left scale):



Housing permits declined -30% after the Fed began tightening, which has normally been enough to trigger a recession. *BUT* the actual measure of economic activity, housing units under construction, has barely turned down at all. In comparison to past downturns, where typically it had fallen at least 10%, and more often 20%, before a recession had begun, as of last month it was only 2% off peak!

The only other two occasions where housing permits declined comparably with no recession ensuing - 1966 and 1986 - real gross domestic product increased robustly. This was similarly the case in 2023.

An important reason is the other historical reason proppin up expansions: stimulative government spending. Here’s the historical record comparing fiscal surpluses vs. deficits:



Note the abrupt end of stimulative spending in 1937, normally thought to have been the prime driver of the steep 1938 recession. Note also the big “Great Society” stimulative spending in 1966-68, when a downturn was averted (indeed, although not shown in the first graph above, there was an inverted yield curve then as well). Needless to say, there as been a great deal of stimulative fiscal spending since 2020 as well.

Fed tightening typically works by constricting demand. Both government stimulus and the unkinking of supply chains work to stimulate supply. 

All of which leads to the conclusion that, while manufacturing has reacted to the tightening, the *real* measure of construction activity has not, or not sufficiently to be recessionary.

Tomorrow housing permits, starts, and units under construction will all be updated. Unless there is a sharp decline in units under construction, there is no short term recession signal at all.

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