The Feds Were Asleep at the Switch for Crypto, AI Could Be Much Worse

An annoying part about getting older is that you realize how cyclical things are and that much of life is the same hustles and hassles with new names and labels. Whatever your thoughts about cryptocurrency (I'm a skeptic but also own a small amount), it's indisputable the sector is rife with scams, rugpulls, and unregulated securities. As a result, billions were lost in crypto hacks and scams over the last two years (see table below). This isn’t counting the firms like FTX, Celsius, and Voyager that went under, wiping out an additional 200 billion dollars from retail investors and people who trusted the shadow banks called crypto exchanges.

The Securities and Exchange Commission (SEC) finally woke up from its multi-decade slumber this month and issued massive fines against several crypto exchanges and the influencers shilling for them. Retired NBA star Paul Pierce was fined 1.4 million dollars for promoting a token called Ethereum Max. EMax was a pump & dump scheme where new investors were served up as exit-liquidity for the founders. EMax currently trades at $0.00000000099 per worthless token. Kim Kardashian was fined a similar amount for touting the same token in December. Regulators have stablecoins in their sights. Crypto exchange Kraken agreed to a 30 million dollar fine and agreed to shut down their staking program (if you don’t know what crypto staking is, you’re probably better off that way). Kraken’s rival Binance is expecting a massive fine as well.

2022 was a record year for hackers in crypto - Source: Decrypt, data from Chainalysis

The handwriting was on the wall for years about crypto scams but federal authorities waited over a decade before acting. In the interim millions of people were harmed. A regulatory framework for crypto exists and has existed since before the first token came to market. We can't afford to wait fourteen or even four years for the government to set the ground rules for AI. The potential for society wide harm is incalculably larger. 

After-the-fact debates are biased toward the expansion, rather than limitation, of a practice. In 2016, the city of Dallas had to reckon with the question of whether they would allow police to kill a barricaded shooter with a remote operated drone. They decided "yes" this is an acceptable use of force. Unfortunately, they decided it retroactively, months after the police had killed their target (with a Remotec Androx Mark V A-1, manufactured by Northrup Grumman). The police department refused to release documents related to the decision to use the robot and the city absolved the chief and the entire chain of command after the incident. The police chief, David Brown, now runs the police department in Chicago and there’s now a precedent regarding the use remote operated robots to kill people.

As venture capital abandons crypto projects, opting to fund cowboy AI projects, policymakers can't be passive. The potential harm from AI in journalism, financial markets, deep-fake aided scams, and law enforcement use of force have the potential to do far more damage than the crypto bros. Letting the DARPA and Boston Dynamic chips (see video) fall where they may is societal malpractice. If my concerns here seem alarmist to you, imagine trying to explain in-flight wifi to someone in 1994.

We can't wait to make the decision about the limits we will put on the use of AI until after they’re deployed. If you don't think there's people in law enforcement salivating to deploy AI robots and drones in low-income and Black neighborhoods, you don't know American history.

The Canaries are Dead and No One Wants to Go into the Mine

Coming out of grad school, I considered various options for where to begin my teaching career. I ended up working in my hometown of Tacoma, remaining there for thirteen years before moving overseas. But somewhere in the multiverse, there are alternate Nates that followed other paths. 

I completed my masters in 2006. The seminal news event of my two years in grad school was the failed government response to Hurricane Katrina (just nudging out our failures in Iraq). Millions of us watched as the citizens of New Orleans were abandoned by every level of government and left to fend for themselves in agony. The hurricane was a form of ethnic cleansing, wiping out entire mostly Black neighborhoods, replaced largely by real estate speculators and their AirBnBs. In some ways, it feels like we’ve collectively memory-holed the largely preventable deaths of nearly 2000 people. We must “never forget” 9-11, but it seems we never remember Katrina. 

The hurricane did more than destroy much of New Orleans. It reshaped  neighboring urban centers as people were forced to resettle: 84,000 evacuees to Atlanta; 50,000 to Baton Rouge; and a staggering 150,000 to Houston. In late 2005, enrollment in Houston area schools swelled as families resettled from NOLA. I have family in the area and Houston ISD flung a wide net trying to hire teachers to meet the soaring need. I was offered a job but ended up not taking it. I’ve always kept an eye on news and events in Houston ISD. It’s February 2023 and they currently have 282 unfilled positions.  

Another option I considered was moving to Nevada. Vegas’ population has soared in my lifetime, from 438,000 in 1980 to 2.8 million people today. The footprint of the area has grown to match (see video below). Vegas’ schools have struggled to keep pace but in 2006, before the housing collapse, they, like Houston, were casting a wide net.

Clark County was more of a possibility for me than anything. As with Houston, I’ve kept tabs. They have a MAGA/Sarah Palin school board member, ​​Katie Williams. She ridicules teachers, is hostile toward immigrant families, and is a Covid denier. It’s February 2023 and there are currently 1,079  teacher, counselor, and nurse openings in Vegas. 

Because schools are run by each state, as each state sees fit, data reporting on the number of unfilled positions nationwide vary. But at least forty states and territories are reporting teacher shortages this year (left) and the numbers are far more grave when you look at STEM, world languages, ELL, and teachers serving students with special needs (right). But it is more complicated than that. The shortages have local twists and permutations. States and districts with lower pay and states with so-called “right-to-work laws,” offering fewer job protections, unshockingly have it worse. More affluent communities (and states that permit unionization) are seeing fewer shortages, meaning low-income students and students in flyover country are more likely to have a revolving door of subs, combined classes, or severely limited course offerings

Left - an image from ABC news showing states, in red, facing a teacher shortage (spoiler: most of the map is red). Right - An image from Yahoo!: Data on school staffing shortages by position and the reasons for the shortage (Again, lots of red here indicating a lack of applicants).

There are no reinforcements in the pipeline - Enrollment in teacher prep programs dropped by ⅓ between 2010 and 2018. I promise you the pandemic made this situation worse, not better. During the period when the country shifted to online schooling, much of the country showed teachers their behinds, and people rightfully left the profession in droves. Worsening all of this, teaching is more complicated than it was in the past. I am not a “history teacher.” I teach a college-level US government course, another college-level course comparing the systems of government in the UK, Iran, Mexico, China, Nigeria, and Russia, and a blended ninth grade course: a mish-mash of macro econ, international studies, world geography, and post-WWII world history standards. My job description isn’t atypical. Unless we deeply narrow course options or swell already crowded classes, there will not be enough capable people willing to be subjected to the vicissitudes of teaching in many US schools.  

Over the last decade there’s been a push to get more students into STEM classes and higher-level classes in the Humanities. That’s cool and all but what happens when no one shows up to teach because they have far better options? It feels like we’re about to find out.   

No, Michael—Your Book Actually Didn’t Need THAT Scene

I have rarely been more frustrated by a book as much as I was by Michael Mann’s Heat 2. Mann’s 1995 classic, Heat, is in my movie Pantheon. For folks of my vintage—who like three hour heist films—it is the holy grail. There is no The Town, Den of Thieves, Triple 9, without Heat. Even the opening bank robbery in the Dark Knight is derived from Mann’s stylized downtown LA robbery scene (below). 

The film stars Robert De Niro, in his acting prime, as Neil McCauley, the leader of a gang of highly-disciplined bank robbers in Los Angeles. Heat came out one month after Scorsese’s Casino, giving De Niro among the best back-to-backs in cinema history. Mann’s cast is full of actors who later fell on hard times or are now too old or broken to reprise their roles: Val Kilmer before his throat cancer; Danny Trejo before he was Machete; Tom Sizemore before he lost his career to substance, prostitutes, cocaine, and sex abuse allegations; and Jon Voight before he went MAGA. In the film, McCauley’s gang is pursued by an out of control LAPD lieutenant named Vincent Hannah, played by an extremely over-the-top (to the point of parody) Al Pacino. Watch the clip below and tell me I’m wrong. 

Heat was the first time Pacino and De Diro appeared on screen together. For 90s movie heads it was like Messi and Mbappe lining up together for Paris Saint Germain. Their scenes were electric—Pacino a trigger happy lunatic with a crumbling life and marriage and De Niro his ever precise, cautious, and calculating prey. In our age of sequel culture a Heat sequel was inevitable. But in doing so, Mann was faced with a choice: recasting the iconic (and some disgraced) actors or using de-aging technology, like Scorsese had done with the Irishman. He opted for neither and decided to make the sequel a 470 page tome. When I heard that Mann was going to make a sequel, albeit a novel, I was ecstatic. The book functions as a prequel, looking at the lives of characters from the film and a sequel, telling the story of Val Kilmer’s character, Chris Shiherlis, who survived the climatic heist in the film but is gravely wounded in the firefight. 

As I have discussed in prior editions of the newsletter, as of late I am consuming copious of southern noir novels. If you’re unfamiliar with the genre, think about Timothy Oliphant's show Justified,  most Cormac McCarthy novels, or any number of the classics by Elmore Leonard. Obviously, Heat isn't Southern noir. It's set in LA but it follows all the tropes of the genre. Here’s the thing, maybe the book was amazing. I don’t know because I stopped reading it after a deeply unnecessary violent sexual assault. In the book, during a home invasion the “Big Bad” assaults an underaged girl. The assault was discussed in passing as it happened but then for God knows why, recounted in technicolor detail later in the text. It was gross. It was gratuitous. It ruined the book for me. 

There are better ways of building up a villainous character. I am deeply weary of seeing violence against women as a plot device to show that a guy who is clearly a scumbag is indeed a scumbag. Sexual assault isn’t a plot device. Stop treating violence against women as the new mustache twirling when you want to prove your “Big Bad” is bad. 

It’s gross and I’m over it. If authors and filmmakers can’t tell a story without a woman being victimized they can count me out.  

Exactly zero books and films have been improved by the inclusion of graphic depictions of sexual assault. It was lazy from Mann and ruined the entire book for me.

As an aside, I think it’s worth mentioning that I feel the exact same way about white characters casually using the n-word without consequence. This is a major reason I think Pulp Fiction, and most Tarantino films are unwatchable but that’s for another day.