Something I've never been able to wrap my head around is the scale at play with the Supermicro story.
If the story is that a small handful of motherboards that were destined to be shipped to cloud providers from Supermicro had some remote monitoring / control capabilities (of varying types opportunistically applied) added to them at the behest of the Chinese government that sounds completely plausible and incredibly hard to verify and/or defend against.
I say plausible as we know that US intelligence agencies have conducted similar actions:
It’s often impossible to prove something didn’t happen. (Overused example: you beat your wife, prove you didn’t.) But when all parties involved universally denied the event (unusually strongly in this case), and the journalists couldn’t produce a single piece of solid evidence, especially considering the attack surface was pretty big (14 companies they say?), I’d say at least the story failed pretty epically as far as journalism goes.
Also take into account the fact that when the story first broke, people were quick to point to past reports by the same journalists that are provably false but never retracted.
Btw, last I heard about this story, it was said (IIRC) that Bloomberg assigned different journalists to re-investigate it. Did anything ever come of it?
It's easy to look at Jeff Bezos and say ego-driven billionaire jealous of Elon Musk. That's a fun narrative.
On the other hand, why should Amazon leave money on the table to be happily scooped up by other companies. Forget Tesla, Washington state was giving billions of dollars in subsidies to Boeing, while Boeing was cutting jobs in Washington. The city council of Seattle was feuding with Amazon for "for making the city too expensive". The city is complaining that Amazon is making some of their citizens too rich.
I think his frustration would be understandable as businessman, and not as envy.
Of course the whole system is perverse and corrupt, but hate the game, not the player.
> The city is complaining that Amazon is making some of their citizens too rich.
The city would prefer that Amazon's presence has benefits for citizens as a whole - or at least didn't make their live worse - rather than enriching a few. Seems reasonable to me.
And it does: "anchor" industries are what brings in wealth in general to a city or metro area. Wages for unrelated jobs in Seattle are still higher than average.
That said, the problem is that average wages don't rise as fast as the cost of living does. But that housing is so expensive is a failure of local government policies, and by extension, the voters who support those policies. Housing doesn't have to be super expensive; voters actively choose policies that make it so.
People are getting what they voted for, and they're mad as hell about it.
Then the reasonable solution is for the city to tax the enriched citizens and distribute the taxes to the rest of the citizens so that they benefit as a whole.
But, what really happens, is the "city" or "city council" wants is to score political points, because a tax would also impact themselves and their friends and family. Everyone wants someone else to pay to benefit citizens as a whole, when obviously the fairest way is to pass a tax applicable to all "enriched" citizens.
It brings to mind the stupid perfect enemy of the good of judging those who try to do better worse than those who don't even try in complete lack of proportion.
It is like reacting to a give away of free shoes to orphans with "Those orphan shoes aren't organic, the bastards!" while ignoring the others make luxury shoes /out of/ orphans because "Blood of the Innocent" brand Cobblers always does that sort of thing.
Amazon's mistake was not that they sought government incentives--it was that they did so in an ostentatious, tone-deaf way and turned it into some sort of strange game show.
They did not play the game by the (unspoken) rules.
"Employees with experience negotiating deals around the country anticipated problems, but their red flags were ignored by those eager to please Bezos"
... this is eerily similar to one of the major drawbacks of an authoritarian regime, where everyone tries to please the Great Leader while no-one dares to express any unpleasant truth.
One person's "ignored" is another person's "accounted for." It could easily be that the folks who made the decision recognized this risk, but decided it was worth it. That looks about the same as ignoring the risk to someone who is not privy to the machinery that makes the decision.
I see this happen all the time in the organization I work for. Some folks say that X won't work, product team tries X, and if it ends up not working, they say, "You ignored our feedback on X!" But you just can't really know whether they ignored your feedback, or whether they considered it and decided not to act on it for any of a number of reasons. IMO, the "ignored" narrative is pretty uncharitable, even if it is the natural and easy one to assume. It feels good to be vindicated. It feels less good to think about how teams are dealing with vast numbers of competing constraints, and sometimes have to take gambles (a central feature of which is the possibility of loss).
It seems like this type of thing happens all the time. Almost every time something bad happens, there was some naysayer who predicted it. But you never hear about the cases where the critics were wrong. The classic Slashdot comment r.e. the iPod is the counterexample that proves the rule. It's such a notable comment because naysayers are almost never so blatantly and visibly cited for their incorrect calls.
Anyway, it's not even clear that the team was wrong to discard this feedback. They got their tax break, didn't they? Along with a bunch of bad PR at the time. But I had totally forgotten that this thing even happened until this article brought it up. I'll probably forget again by next week, and so will most everyone else.
Naysayers can CYA by saying “X will be difficult because of A, B, and C” rather than “X is impossible.” Seriously, it isn’t just CYA, but the former provides useful and perhaps actionable context while the latter doesn’t. The main issue with discarded feedback is when someone said X would be a problem, it was ignored, and X turned out to be a surprise problem (rather than an unsurprising one).
And then there is the opposite CmdrTaco comment, where he thought the lack of X (WiFi, larger storage) would be a problem and it wasn’t.
The article states that "red flags" raised by "Employees with experience" "were ignored" by court jesters.
If objective, it states that knowledgeable folks critics were not neglected as "OK but let's go ahead anyway in order to check the limits".
I only see 2 contexts where it may be adequate:
A/ periodically poking the limits may be useful in order to be sure they didn't disappear,
B/ to search for a way to overcome them.
If active experts immediately "raise red flags" one may think that A/ isn't pertinent, because by definition they (right now) cope with the limits and therefore know that they aren't changing/crumbling down (for any reason).
B/ is only really pertinent if there is at least a vague new idea about the approach, about a way to tackle the challenge. "Let's try because if we succeed our Great Leader will be happy" isn't a plan, not even wishful thinking.
There’s a standard solution for this problem, namely numeric probabilities and prediction markets. If an internal prediction market had given an 80% chance of this happening, that’s meaningful in a way that individual ambiguous naysayings are not.
"But you just can't really know whether they ignored your feedback, or whether they considered it and decided not to act on it for any of a number of reasons."
Considering feedback and not truly taking the time to understand the risk and to discuss the decision with the origin of the feedback is ignoring the feedback. People with the power to make decisions in an organization often follow this pattern. It's the mindset of a fool to think that they know better than the people closest to and most impacted by a decision. Good leadership enables those who are closest to the problem to make the decision or minimally discuss the pros and cons of the decision providing any missing information before making it.
I can't begin to count the number of times that those in leadership roles have made decisions only to walk back on them after they failed citing the exact same reason of feedback they received prior to making the decision. Often the language is spun to obfuscate this but when pressed the reality is made clear.
Worse case, I have witnessed vindictive measures taken by leadership against those who, correctly after the outcome of the decision was realized, criticized the decisions being made.
It's not always about a single naysayer. It's also the bizarre perception that one needs to "have all the answers" when they make it to leadership. We should not ignore the reality that incompetent leadership is real and happens more often than people think.
Amazon's internal principles explicitly demand expressing disagreement until a decision is made. While I'm seven levels below Jeff, in five years at Amazon, I have never seen any hint of people being reluctant to express disagreement with leadership. I have seen people at my level contradict VPs in company forums, and be thanked for it. Unwarranted generalized cynicism does not advance our understanding.
Billionaires trying to out-compete each other in the size of the public handouts they're receiving :))
I never understood why in the US (and in more and more other places as well) it's considered legitimate to give billions to private profit-seeking corporations so they can do the kind of stuff that private profit-seeking corporations do anyway: hire people, build stuff etc.
Because there are positive externalities to a company choosing to do that in your city. If a big corporation chooses to place a HQ in your city, you get an influx of people into the housing market, of consumers into your service industry, of tax payers into your district, etc. While I agree, a lot of these payoffs end up being small compared to the giant sums offered, the theory behind incentivizing companies to come to your district absolutely makes sense, and is exactly what politicians and government workers should be doing. Their job is to plan for the next 30+ years, not the next 6 months where the price point for the incentives is all negative.
If you're going to make $5B in the next 10 years because of a corporation, and giving them $1B now to incentivize them to come to New York instead of Chicago makes a ton of sense. I'm making those numbers up, but that's the thinking.
Except politicians don't stick around for 30+ years, nor do voters or their memories, and it's impossible to make any accurate calculation about how much one is going to make over the next however many years.
So now you have a few people in control of a big pot of future taxpayer money who have the ability to make up numbers however they see fit. There's only one way that story ends.
Not to mention the race to the bottom it causes as time goes on since there are fewer and fewer big organizations being courted by more and more desperate governments.
Where does the 5B come from? They dont pay federal tax, they are getting state and local tax breaks, and providing jobs that have suffered wage stagnation since the bailouts. Politicians do this because they get their pockets stuffed, and then in turn Amazon and Bezos make bucket fulls of cash too. It is crazy to allow tax breaks for company's that largely don't pay taxes to start with, especially extremely profitable companies.
> there are positive externalities to a company choosing to do that in your city.
I get that that's the theory, but does it ever actually work in practice? Do you know instances when massive subsidies attracted big corporations that actually created enough jobs, externalities etc. to compensate for the handouts they received?
It is because of a provincialism and incentives resulting in the culture of "bringing home the bacon" selfishly seeking local benefits without regards to their impact on others. It lets politicians claim benefits where just private corporations doing stuff that helps they can't even if being hands off lead to it.
The bringing home the bacon culture is a larger toxic phenomenon given the "bandit towns" doing things like lowering highway speed traps and the town being vastly composed of traffic cops.
To misquote Ronald Wright's apocryphal quote of John Steinbeck, capitalism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.
More seriously, the problem is one of moral hazard: The politicians making these decisions aren't playing with their own money. The people whose money it is aren't buying seats at their $500-a-plate fundraising breakfasts, either.
> The politicians making these decisions aren't playing with their own money.
Exactly. This applies no matter who else is involved.. whether it's billionaires looking for incentives, city unions looking for better deals, or candidates offering to pay for college, healthcare, and cell phones.
When you're spending someone else's money, cost isn't a problem and accountability is punted to someone else.
I think the difference here is that it's easy to name & shame one entity than millions.
That's still better than the injustices people will allow to take root and endure when they view themselves as a temporarily embarrassed bolshevik central planner.
> The politicians making these decisions aren't playing with their own money.
True that!
Btw, the (apocryphal) Steinbeck quote I think is about socialism/communism. I don't think we need to go as far as that to figure out that giving billions in subsidies to mega corporations is maybe not a good thing.
They literally had to cancel 50% of their plans and they likely would have gotten the incentives through the traditional route anyway. The stupid way they handled the negotiations not only ruined their plans for NY it also turned a huge number of people against them.
I live 1.5 miles from the Crystal City HQ2 site in Alexandria, VA. Are there affordable housing, transportation, and public safety issues we have to address? Of course. Will we benefit from addressing these problems to add 25,000-35,000 jobs? Far more than the cost/difficulty of solving these problems.
We are thrilled to have them. We would much rather contend with growth problems than a loss of tax revenues, reduced property values, list employment, or low quality jobs. We have subsidize part of their expansion, but the growth will pay back that investment in 5-7 years. We can live that ROI.
What a beautiful illustration of how ego-driven decision making can be at the highest levels—both Bezos’ decision to solicit incentives to compete with rivals, and local NYC officials’ plan to torpedo the deal out of spite for being left out of the process.
I think it's interesting how other states have to fight so hard to get companies to move there and yet, CA one of the least business friendly places, can take it's growth completely for granted.
Readit News
Until then, I would take anything you read in Bloomberg w/ a grain of salt.
If the story is that a small handful of motherboards that were destined to be shipped to cloud providers from Supermicro had some remote monitoring / control capabilities (of varying types opportunistically applied) added to them at the behest of the Chinese government that sounds completely plausible and incredibly hard to verify and/or defend against.
I say plausible as we know that US intelligence agencies have conducted similar actions:
https://arstechnica.com/tech-policy/2014/05/photos-of-an-nsa...
And that's without even direct access to the manufacturing floor (as in the Supermicro case).
Also take into account the fact that when the story first broke, people were quick to point to past reports by the same journalists that are provably false but never retracted.
Btw, last I heard about this story, it was said (IIRC) that Bloomberg assigned different journalists to re-investigate it. Did anything ever come of it?
On the other hand, why should Amazon leave money on the table to be happily scooped up by other companies. Forget Tesla, Washington state was giving billions of dollars in subsidies to Boeing, while Boeing was cutting jobs in Washington. The city council of Seattle was feuding with Amazon for "for making the city too expensive". The city is complaining that Amazon is making some of their citizens too rich.
I think his frustration would be understandable as businessman, and not as envy.
Of course the whole system is perverse and corrupt, but hate the game, not the player.
The city would prefer that Amazon's presence has benefits for citizens as a whole - or at least didn't make their live worse - rather than enriching a few. Seems reasonable to me.
That said, the problem is that average wages don't rise as fast as the cost of living does. But that housing is so expensive is a failure of local government policies, and by extension, the voters who support those policies. Housing doesn't have to be super expensive; voters actively choose policies that make it so.
People are getting what they voted for, and they're mad as hell about it.
But, what really happens, is the "city" or "city council" wants is to score political points, because a tax would also impact themselves and their friends and family. Everyone wants someone else to pay to benefit citizens as a whole, when obviously the fairest way is to pass a tax applicable to all "enriched" citizens.
It is like reacting to a give away of free shoes to orphans with "Those orphan shoes aren't organic, the bastards!" while ignoring the others make luxury shoes /out of/ orphans because "Blood of the Innocent" brand Cobblers always does that sort of thing.
They did not play the game by the (unspoken) rules.
That's how they got to where they are. Not surprised they felt untouchable.
In an ideal world, there wouldn't be any money on the table.
... this is eerily similar to one of the major drawbacks of an authoritarian regime, where everyone tries to please the Great Leader while no-one dares to express any unpleasant truth.
I see this happen all the time in the organization I work for. Some folks say that X won't work, product team tries X, and if it ends up not working, they say, "You ignored our feedback on X!" But you just can't really know whether they ignored your feedback, or whether they considered it and decided not to act on it for any of a number of reasons. IMO, the "ignored" narrative is pretty uncharitable, even if it is the natural and easy one to assume. It feels good to be vindicated. It feels less good to think about how teams are dealing with vast numbers of competing constraints, and sometimes have to take gambles (a central feature of which is the possibility of loss).
It seems like this type of thing happens all the time. Almost every time something bad happens, there was some naysayer who predicted it. But you never hear about the cases where the critics were wrong. The classic Slashdot comment r.e. the iPod is the counterexample that proves the rule. It's such a notable comment because naysayers are almost never so blatantly and visibly cited for their incorrect calls.
Anyway, it's not even clear that the team was wrong to discard this feedback. They got their tax break, didn't they? Along with a bunch of bad PR at the time. But I had totally forgotten that this thing even happened until this article brought it up. I'll probably forget again by next week, and so will most everyone else.
And then there is the opposite CmdrTaco comment, where he thought the lack of X (WiFi, larger storage) would be a problem and it wasn’t.
The article states that "red flags" raised by "Employees with experience" "were ignored" by court jesters.
If objective, it states that knowledgeable folks critics were not neglected as "OK but let's go ahead anyway in order to check the limits".
I only see 2 contexts where it may be adequate:
A/ periodically poking the limits may be useful in order to be sure they didn't disappear,
B/ to search for a way to overcome them.
If active experts immediately "raise red flags" one may think that A/ isn't pertinent, because by definition they (right now) cope with the limits and therefore know that they aren't changing/crumbling down (for any reason).
B/ is only really pertinent if there is at least a vague new idea about the approach, about a way to tackle the challenge. "Let's try because if we succeed our Great Leader will be happy" isn't a plan, not even wishful thinking.
Considering feedback and not truly taking the time to understand the risk and to discuss the decision with the origin of the feedback is ignoring the feedback. People with the power to make decisions in an organization often follow this pattern. It's the mindset of a fool to think that they know better than the people closest to and most impacted by a decision. Good leadership enables those who are closest to the problem to make the decision or minimally discuss the pros and cons of the decision providing any missing information before making it.
I can't begin to count the number of times that those in leadership roles have made decisions only to walk back on them after they failed citing the exact same reason of feedback they received prior to making the decision. Often the language is spun to obfuscate this but when pressed the reality is made clear.
Worse case, I have witnessed vindictive measures taken by leadership against those who, correctly after the outcome of the decision was realized, criticized the decisions being made.
It's not always about a single naysayer. It's also the bizarre perception that one needs to "have all the answers" when they make it to leadership. We should not ignore the reality that incompetent leadership is real and happens more often than people think.
People who negotiate these deals are in a completely different camp to the average employee, they are basically direct hires/fires of the CEO
I never understood why in the US (and in more and more other places as well) it's considered legitimate to give billions to private profit-seeking corporations so they can do the kind of stuff that private profit-seeking corporations do anyway: hire people, build stuff etc.
If you're going to make $5B in the next 10 years because of a corporation, and giving them $1B now to incentivize them to come to New York instead of Chicago makes a ton of sense. I'm making those numbers up, but that's the thinking.
So now you have a few people in control of a big pot of future taxpayer money who have the ability to make up numbers however they see fit. There's only one way that story ends.
Not to mention the race to the bottom it causes as time goes on since there are fewer and fewer big organizations being courted by more and more desperate governments.
I get that that's the theory, but does it ever actually work in practice? Do you know instances when massive subsidies attracted big corporations that actually created enough jobs, externalities etc. to compensate for the handouts they received?
The bringing home the bacon culture is a larger toxic phenomenon given the "bandit towns" doing things like lowering highway speed traps and the town being vastly composed of traffic cops.
More seriously, the problem is one of moral hazard: The politicians making these decisions aren't playing with their own money. The people whose money it is aren't buying seats at their $500-a-plate fundraising breakfasts, either.
Exactly. This applies no matter who else is involved.. whether it's billionaires looking for incentives, city unions looking for better deals, or candidates offering to pay for college, healthcare, and cell phones.
When you're spending someone else's money, cost isn't a problem and accountability is punted to someone else.
I think the difference here is that it's easy to name & shame one entity than millions.
True that!
Btw, the (apocryphal) Steinbeck quote I think is about socialism/communism. I don't think we need to go as far as that to figure out that giving billions in subsidies to mega corporations is maybe not a good thing.
We are thrilled to have them. We would much rather contend with growth problems than a loss of tax revenues, reduced property values, list employment, or low quality jobs. We have subsidize part of their expansion, but the growth will pay back that investment in 5-7 years. We can live that ROI.
EDIT: cleanup/clarification