It's Happening Again, But This Time It's Worse

We have reached the moment in the AI bubble when everyone knows it's a bubble. It's now unmistakable in The Discourse, stories about the valuations that make no sense, accounting gimmickry, financial forecasts untethered from reasonableness and objective reality generally.

Craig Calcaterra – publisher of Cup of Coffee, one of the better baseball/antifascist newsletters currently available – summed up this new zeitgeist well (subscription required), keying off of three recent stories in The Wall Street Journal that seem intended to communicate the newspaper's increasing conviction that the AI bubble is both very real, very susceptible to popping and very likely to cause immense harm when the popping occurs.

I am no financial expert. I am no technology expert. But I am a person who was 35 years old when the last big speculative bubble burst, dragging the entire economy down with it and resulting in the biggest financial hit to this country since The Great Depression. Then, as now, I was reading financial news and listening to my friends who did know a good bit about markets and the economy at large. And folks, this is exactly the sort of talk that preceded the multifaceted economic collapse that led to the 2008 Financial Crisis. The reports about the increasingly convoluted means by which businesses were structuring their real estate investments. Reports about just how dependent upon one sector the whole U.S. economy had become. Reports about investors sort of panic-laughing about how, while everything was still going OK, if just one or two things changed, there would be serious trouble ahead. It's giving me a profound sense of déjà vu.

I know how journalism works way better than I know how the financial markets work, and one thing I know about journalism is if that a newsroom puts out multiple stories about the same thing in a very short period of time it's not some editorial coincidence. It's because they are trying to communicate something specific. It's because they want to be seen as having been on top of a story before it became huge. In this particular case I think it's a big deal because the Wall Street Journal is a key apparatus of the business and finance sectors and it doesn't do itself any favors by dooming about things. But it's worse for the WSJ if it's seen as being caught flat-footed. Which makes me believe that this new push to describe and define an AI bubble is a harbinger of some very bad things.

As The Giant ominously said in Twin Peaks: It is happening again.

Why is it happening again? I don't know. As I've mentioned here previously, I am but a simple country lawyer from Darke County. As far as I can tell, we are simply hellbent as a nation on burning the whole thing down at semi-regular intervals because we can't help ourselves. The money's too good. The bubble's too beautiful. If we look at it just right, we can convince ourselves that this time it will be different, that this time there won't be a balance due from our unquenchable, myopic greed.

The kicker is that while this bubble feels familiar – combining the heady euphoria of the dot-come bubble with menacing hints of pre-Great Recession financial engineering – this time it's worse because this time the source of the bubble is a technology that is the embodiment of our worst impulses and our collective helplessness at the hands of the billionaire class.

We're inflating this bubble, for what?

For technology that helps us kills ourselves, makes us dumber, steals our words and our work, cheapens our humanity.

For what?

For a technology that spreads across the land like cancer, eats all of the electricity and drinks all of the water, increases costs, kills more jobs than it creates.

For what?

For a technology owned and controlled by the worst people in the world, who make more money the more pliant we become, who don't care a lick about you or a lick about me, who won't stop until they've sucked every last bit of marrow from our bones.

It's one thing to set the world ablaze because greed got the better of us yet again, quite another to set it ablaze in the service of a technology that seems designed to end us. Why would we choose to do that? Why wouldn't we do everything in our power to stop it?