130 - Echo Chamber

After going over a particularly severe problem with societal-scale impact under a magnifying glass for more than the past year, I've had a chance to examine many facets of it. The issue is that investors are consistently making terrible decisions, and those decisions are growing worse. At the same time, governments are leaving virtually everything to investors and companies, merely eating whatever they're served while keeping up the pretense of authority. However, that pretense falls flat when they consult with foxes to build the hen house, fooling nobody.

This can be broken down into a few dynamic points:

• The volume of mediocre ideas and spam directed at investors is quickly increasing, thanks in part to "generative AI".

• Investors are becoming increasingly siloed, making themselves almost entirely inaccessible, as a means of coping with this increased volume of junk.

• The few who are able to reach these heavily siloed investors are also the least innovative, and a disproportionately large number of them are bad actors.

• With greatly reduced and still decreasing access to investors, and bad actors increasingly monopolizing them, actual progress is being replaced with delusions and snake oil.

• Governments are being fed a steadily increasing diet of snake oil, poisoning their attempts at regulation.

• These poisoned regulations give bad actors further opportunities to sell "new and improved" snake oil that caters to the fiction baked into those poisoned regulations.

• This noose continues to tighten with each subsequent feedback loop.

Corporations have long been known for being where innovation goes to die thanks to Silly Con Valley, with the repeated pattern of major companies buying out startups to supply themselves with the innovation that they themselves can no longer generate. They also take this approach as a means of reducing the R&D burden associated with trial and error, merely buying the "winners", and allowing the rest to collapse.

However, big tech companies are even deeper into the hole of siloed connections than many investors are. Statistics like 70% of new hires coming from employee referrals at several companies paint the clear picture of a fraternity, which plays a subsequent and potent role in why they consistently fail to innovate.

Investors, big tech companies, and to a lesser degree governments are all eating their tails right now. Just as LLMs repeatedly trained on LLM-generated data move steadily toward "model collapse", so too do each of these groups. From each of their perspectives, this degeneration may be very difficult to see, as a falling tide lowers all boats, and any picture a group desires may be painted with statistics.

The ideal time to wake up and invest wisely was 2 years ago, but the second-best time is today.