Neoliberals are killing us

The TED talk, techno-utopian, Thomas Friedman-economy is a lie

Neoliberal fantasy world is filled with daring entrepreneurs competing in a meritocracy. Do you recognize that?

Neoliberals are killing us: The TED talk, techno-utopian, Thomas Friedman-economy is a lie

A turkey and Thomas Friedman (Credit: Reuters/Lucas Jackson/panbazil via Shutterstock/Salon)

Last week, 295,000 Americans filed for unemployment benefits. Economists called it good news, as the number was less than 300,000; that’s the line they say separates good news from bad. But it isn’t much less, and other news seems very bad. In February, housing starts plunged 17 percent. Inventories are high. Demand is low. Job growth is anemic. Still, economists say things are going so well we can raise interest rates. They call that good news — though they don’t say for whom.

There’ll be more news this week: home prices, consumer confidence, new growth figures. In our casino economy we hang on these reports like blackjack players waiting for a dealer to turn the next card. Republicans and Democrats alike believe growth will cure all our ills. President Obama and Hillary Clinton call it their No. 1 economic priority. Despite all evidence to the contrary, they still believe a rising tide lifts all boats.

Some call Obama’s and Clinton’s economic worldview ‘neoliberal.’ Like ‘liberal’ or ‘conservative,’ it’s an imprecise word meant to signify a cluster of opinions; among them that globalization is inevitable and benign and that the revolution in information technology is fast democratizing commerce and politics. Neoliberals love fiscal austerity and free trade and are suckers for privatization, deregulation and ‘education reform,’ which they say will keep us competitive.

Like the neoconservatives with whom they often ally on military matters, neoliberals seem to regard our present political and economic arrangements as civilization’s final flowering, as close to perfect as one can get in a fallen world. It’s the faith that made Bush think Iraqis would greet us as liberators–who wouldn’t want to be us– and why Obama bet his presidency on economic recovery rather than reform. It’s our establishment orthodoxy, the ‘bipartisan consensus’ we’re forever chasing. It’s killing us.

In the neoliberal narrative, geniuses reinvent the world in their garages; risk takers invest in innovation; technology and trade spawns endless opportunity. It’s a land without ideology; a true meritocracy where anyone with pluck and grit is sure to rise. (So long as they’re really, really smart.) Above all it’s an engine of prosperity, the only sure means by which to broaden and strengthen the middle class.

Real life is nothing like the neoliberal narrative. As PayPal’s Peter Thiel says, our overhyped innovations tend toward mere gadgetry and away from such vital areas as health and transportation. One reason: those stories about geniuses in garages and their angel investors are mostly made up. In 2014 venture capital funding hit $48.3 billion, but just $700 million of it went to ‘seed stage’ projects. Who really funds the little guys? The same folks who brought you the microchip, the Internet and GPS. Last year the federal government’s Small Business Innovation Research Program alone lent or gave the real pioneers $2.4 billion; more than triple their take from ‘venture capitalists.’

If the story of our not-so-bold investors disappoints, it may matter less than you think, in that technology and trade never really lived up to their billing. In 2005, Tom Friedman, the Candide of globalization, said “the world is flat”; meaning technology was a great leveling force that would soon topple the old political and economic oligarchies and give everyone a chance to be an entrepreneur, or at least work in a call center. America has since grown more economically stratified and politically corrupt and has fewer jobs than it did eight years ago.

Early critics who said the new information technology would lay waste to labor were dismissed as Luddites. Twenty years on it still kills more jobs than it creates; even ‘serious people’ now say this could be the first new technology wave to result in a net job loss. As for trade, the tide let in by NAFTA sank more middle-class boats than it lifted, which accounts for the resistance to Obama’s fast track scheme.

In real life, we’re a nation of middle men and corporate toll collectors, where health insurers get 20 cents on the dollar for services done everywhere else for a nickel or less; where big banks shun small business while raking in merger fees and taking a cut of every purchase charged to a credit card; where Comcast’s pipeline is worth more than NBC’s oil; where Google gorges on ad revenues that once supported world-class journalism. We’re about cartels, not startups, not bound to the future but mortgaged to the past.

In real life, the middle class is in limbo. In the seven years since Wall Street’s crash, stocks, profits and CEO pay are at historic highs, but wages haven’t budged and we’re still years away from adding back all the jobs we lost. Millions of older Americans who lost their pensions and the equity in their homes will retire broke. Millions of younger Americans fear they’ll never have their parents’ opportunities. They all know it will take more than a bailout or a stimulus to get our economy, or their lives, back on track. You can’t prime a broken pump. We need real reform and everybody knows it; everybody, that is, except those in charge.*

The gap between elite and popular opinion on these issues is wide. Tension boiled over on the right long ago, but Democrats have mostly kept mum. It reflects their fear of Republicans, and the fact that Obama and Clinton are staunch neoliberals. Bill Clinton, more than anyone, made the consensus bipartisan. Hillary’s rhetoric has a more populist hue now, but changing her actual views won’t be easy for her.

The backlash against neoliberalism cuts across all political categories. If the Democrats resist debating it, progressives must force a debate. But they too may be reluctant, not because of any risk—there’s greater risk in silence—but because they don’t know what to say. Many progressive critics of neoliberalism are just like Republican critics of Obamacare; they hate it, but can offer no alternative.

It’s understandable. The very purpose of a political debate is to test our ideas. We progressives knock Democrats who duck debates but it’s been a while since we’ve had one of our own. I don’t mean the daily squabbles we all seem to enjoy, but a big debate that draws our whole community and eventually the nation in. We know we’d raise the minimum wage and tax the rich. But do we know our bottom line? We reject soulless, mindless globalization, but can we picture a more just and humane order? If so, we can start to frame policies to support it. I’ve only a few fragments of a vision, but hoping to extend the conversation, I’ll describe them.

Right now, before our eyes, a new economy struggles to be born. It’s more democratic than the one we have. It prizes smallness, permanence and community. It favors cooperatives and other collaborative forms of ownership and production. It reclaims the commons we own in trust for future generations. It’s local and sustainable. It both needs and fosters civic renewal. It’s growing now despite great resistance, but its final success or failure is up to us. I’ll offer some examples, first a less exotic one. It’s of an old familiar institution readapting to changing times.

I speak of independent bookstores. By 2009 the big chains had nearly wiped them out. They hit rock bottom: 1,651 stores. Then to everyone’s surprise, they revived. The number of stores has since grown to 2,094, a 25 percent increase in six years. Sales are up, and at a brisk 8 percent annual rate. It turns out that in the age of information overload, thoughtful curation means more, not less. The Internet that nearly killed them also provided a cheap way to advertise. And by expanding their activities, they built community and played to their great strength, their customers’ love of books and bookstores. To many the future of small-scaled enterprises looks bleak, but the independent booksellers’ story is one of many that suggests that in the new economy, small is beautiful.

The new economy favors forms of ownership and production that foster democracy and collaboration. You may recall George W. Bush’s blather about an ‘ownership society,’ a greedy scam to privatize Social Security and Medicare. For many years real reformers have been building a real ownership society. A familiar tool is the employee stock ownership plan. (ESOP) Often underestimated, today 11,000 ESOPs now employ nearly 11 million workers. Benefits range from higher job satisfaction and wages to improved productivity and in hard times, fewer layoffs.

ESOPs are most typically born via conversion of an established business on its owner’s retirement. Chris Mackin, a leader in the field, says coming retirements of so many baby boomers offer a chance for rapid growth. Mackin also urges use of other forms of employee ownership and seeks new government policies, including possible set asides for employee owned businesses. Having worked in the field for thirty years, he feels its best days are not only ahead of it, but imminent.

Some very innovative thinking concerns the public commons. The phrase has always meant y resource owned and used by the public but it applies in new ways to new things, from public lands to the internet and the airwaves. One goal is to preserve priceless public assets; another is to compensate the public for private use of its resources.

Peter Barnes, a journalist, activist and public spirited entrepreneur, has called for a dividend fund patterned after the Alaskan fund that distributes state oil revenue to all citizens on a pro rata basis. He’d first target companies that pollute the air and says the government could collect enough money from all sources to write every American a check every year for $5,000.

The commons may refer to peer to peer production, a process by which people collaborate as equals to produce things of value, often with little or no pay. It may sound arcane but examples include Linux, Mozilla Firefox, and Wikipedia. David Bollier, a brilliant strategist of the commons, says the challenge is to protect such work from rapacious monetization by corporate actors. Another challenge for all cooperatives is to preserve an ethos of public spiritedness as enterprises scale up.

In their different ways, independent booksellers, ESOP owner/ employees and open source programmers are helping to engineer our next economy our next new economy. The 11million who work in ESOPs enjoy good wages, benefits and job security. The booksellers are among the 14 million Americans who work for very small businesses. The programmers may be among the 6 million Americans who work from home or the 10 million who are independent contractors. For income and benefits, most of them are pretty much on their own.

All have these things in common: Their government doesn’t think much about them. They don’t think much of it. Their needs are ill-served by current economic policies or by having both major so closely tied to the old order. You can count them different ways and never with confidence, but it’s likely they comprise as much as 15 percent of the workforce — and they grow by the hour. They haven’t a sense of themselves as a political force but one party or the other soon will. When that happens, I hope they hold out for real answers.

Bill Curry was White House counselor to President Clinton and a two-time Democratic nominee for governor of Connecticut. He is at work on a book on President Obama and the politics of populism.

http://www.salon.com/2015/04/29/neoliberals_are_killing_us_the_ted_talk_techno_utopian_thomas_friedman_economy_is_a_lie/?source=newsletter

 

An entire industry is dedicated to getting your privacy back.

The Anti-Surveillance State: Clothes and Gadgets Block Face Recognition Technology, Confuse Drones and Make You (Digitally) Invisible

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Last spring, designer Adam Harvey hosted a session on hair and makeup techniques for attendees of the 2015 FutureEverything Festival in Manchester, England. Rather than sharing innovative ways to bring out the audience’s eyes, Harvey’s CV Dazzle Anon introduced a series of styling methods designed with almost the exact opposite aim of traditional beauty tricks: to turn your face into an anti-face—one that cameras, particularly those of the surveillance variety, will not only fail to love, but fail to recognize.

Harvey is one of a growing number of privacy-focused designers and developers “exploring new opportunities that are the result of [heightened] surveillance,” and working to establish lines of defense against it. He’s spent the past several years experimenting with strategies for putting control over people’s privacy back in their own hands, in their pockets and on their faces.

Harvey’s goal of “creating a style that [is] functional and aesthetic” has driven several projects and collaborations, including a method for “spoofing” DNA, and via the Privacy Gift Shop, his drone-thwarting Stealth Wear line (clothing he claims “shields against thermal imaging…[which is] used widely by military drones to target people,” seen below) and the OFF Pocket phone sleeve, able to keep out unwanted wireless signals.

His CV Dazzle designs for hair and makeup obscure the eyes, bridge of the nose and shape of the head, as well as creating skin tone contrasts and asymmetries. Facial-recognition algorithms function by identifying the layout of facial features and supplying missing info based on assumed facial symmetry. The project demonstrates that a styled “anti-face” can both conceal a person’s identity from facial recognition software (be it the FBI’s or Facebook’s) and cause the software to doubt the presence of a human face, period.

Harvey’s work is focused on accessibility in addition to privacy. “Most of the projects I’ve worked on are analog solutions to digital challenges,” he said. His hair and makeup style tips – a veritable how-to guide for how to create “privacy reclaiming” looks at home – are “deliberately low-cost.” His current project – software to “automatically generate camouflage…that can be applied to faces” – will allow a user to “create [their] own look and guide the design towards [their] personal style preferences.”

Other low-tech protections against widespread surveillance have been gaining ground, too. Though initially designed as a tongue-in-cheek solution to prying eyes and cameras, Becky Stern’s Laptop Compubody Sock offers a portable, peek-free zone to laptop users, while the CHBL Jammer Coat and sold-out Phonekerchief use metal-infused fabrics to make personal gadgets unreachable, blocking texts, calls and radio waves. For people willing to sport a bit more hardware in the name of privacy, the Sentient City Survival Kit offers underwear that notifies wearers about real-life phishing and tracking attempts, and its LED umbrella lets users “flirt with object tracking algorithms used in advanced surveillance systems” and even “train these systems to recognize nonhuman shapes.”

Large companies are also getting in on the pushback against increasing surveillance. Earlier this year, antivirus software leaders AVG revealed a pair of invisibility glasses developed by its Innovation Labs division. The casual looking specs use embedded infrared lights “to create noise around the nose and eyes” and retro-reflective frame coating to interfere with camera flashes, “allowing [the wearer] to avoid facial recognition.” In early 2013, Japan’s National Institute of Informatics revealed a bulky pair of goggles it had developed for the same purpose.

A spokesperson for Innovation Labs claims its glasses represent “an important step in the prevention against mass surveillance…whether through the cell phone camera of a passerby, a CCTV camera in a bar, or a drone flying over your head in the street.” Innovation Labs says that, with a person’s picture, facial recognition software “coupled with data from social networking sites can provide instant access to the private information of complete strangers. This can pose a serious threat to our privacy.” Though AVG’s glasses are not scheduled for commercial release, Innovation Labs said that individuals can take a number of steps to prevent their images from being “harvested”:

“First and foremost, make sure you’re not allowing private corporations to create biometrics profiles about you. When using social networks like Facebook, be aware that they are using facial recognition to give you tag suggestions. Facebook’s DeepFace was already tested and trained on the largest facial dataset to-date (an identity labeled dataset of more than 4 million facial images belonging to thousands of identities).”

Holmes Wilson of nonprofit Fight for the Future, which works to defend online privacy and freedoms on various fronts, is more concerned with other types of privacy invasion than real-life image harvesting. “It’s pretty unlikely in most of the world that you’ll get followed around using a network of street cameras with face recognition,” he said. “It’s probably pretty likely, though, that you’ll get filmed by police at a protest. But [there’s] not much you can do about that other than wearing a mask.”

Wilson advises people concerned about privacy breaches through surveillance to first focus on the ways in which their gadgets are supplying info to third parties. “The place where it’s easiest to fight back against surveillance is in protecting the security of your messages,” he said, adding that message security “can be a problem for activists, too.” He said apps like Textsecure, Signal, and Redphone can make it “a lot harder for people to spy on you.” Wilson added:

“Phones are the biggest thing. Lots of people think of smartphones as the big privacy problem, but old-fashioned phones are just as bad, and worse in some ways. All cellphones report on your location to the network as you move around. That’s just how they work, and they need to send that information or the system won’t know where to send your call. There’s no way to turn that off, other than by turning off the phone and, for good measure, taking the battery out.”

In collaboration with the Electronic Frontier Foundation, Fight for the Future recommends a variety of options for encrypting messages, password-protecting accounts and securing a user’s various communication and browsing activities via Reset the Net. Wilson encouraged those with specific privacy concerns to check out tutorials, resources and break-downs of privacy issues from Surveillance Self-Defense.

Last year, Facebook announced that its DeepFace facial recognition technology can detect a person’s identity from photos with 97.25 percent accuracy, only a hair below the 97.5 percent success rate for humans taking the same test. Currently, a congressional front is preparing to extend surveillance powers granted to legal bodies by Section 215 of the Patriot Act—the NSA’s legal foothold of choice with regard to mass collection of US phone records since 2006, and set to expire on June 1—with the light-on-reform USA Freedom Act.

It seems likely that a growing number of both tech-wary and tech-savvy people will continue weighing how best to ensure their personal privacy, whether by putting stark makeup on or by turning their phones off.

Janet Burns is a writer in Brooklyn, NY. Her website is warmlyjanetburns.com.

http://www.alternet.org/news-amp-politics/anti-surveillance-state-clothes-and-gadgets-block-face-recognition-technology?akid=13037.265072._uEekz&rd=1&src=newsletter1035368&t=5

Obama’s drone warfare: Assassination made routine

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25 April 2015

Perhaps the most extraordinary aspect of President Obama’s announcement Thursday that two hostages of Al Qaeda, an American and an Italian, were killed in a US drone missile strike in Pakistan is the lack of any significant reaction from official political circles or the media.

There was a certain amount of tut-tutting in the press and expressions of sympathy for the family of Dr. Warren Weinstein, the longtime aid worker in Pakistan who was kidnapped by Al Qaeda in 2011 and killed by the US government in January 2015.

But there was no challenge to the basic premise of the drone missile program: that the CIA and Pentagon have the right to kill any individual, in any country, on the mere say-so of the president. Drone murder by the US government has become routine and is accepted as normal and legitimate by the official shapers of public opinion.

Obama’s own appearance Thursday was chilling. He made perfunctory expressions of regret, but only because the latest victims of US drone strikes included an American and an Italian who were being held hostage. It was a transparently poor acting performance, convincing no one but the editors of theNew York Times, who praised Obama’s “candor and remorse.”

After blaming the deaths of Weinstein and Giovanni Lo Porto on “mistakes” made because of “the fog of war,” Obama declared, “But one of the things that sets America apart from many other nations, one of the things that makes us exceptional, is our willingness to confront squarely our imperfections and to learn from our mistakes.” He had decided to admit responsibility for the deaths because “the United States is a democracy, committed to openness, in good times and in bad.”

What a farce! Far from admitting “mistakes,” Obama, the political front man for the military-intelligence apparatus, was making clear that the drone assassination program would continue and no one would be held accountable for the latest atrocity.

Today’s America is “exceptional” only in the degree to which the entire ruling elite has embraced a policy of reckless violence around the globe that includes murder, torture and aggressive war. The United States is run by criminals.

A major test of any American president is readiness to approve state killings in his or her capacity as the political representative, not of the American people, but of a cabal of generals and CIA assassins. How much longer before such actions are carried out not just in remote parts of Afghanistan or Yemen, but in major urban centers of major countries, including, ultimately, the United States itself?

The drone strike in Pakistan’s Shawal Valley that killed Weinstein and Lo Porto is part of an unending campaign of death and destruction. Obama did not even have to sign off on this particular missile strike, since he has given the CIA blanket authority to conduct such operations in the predominately Pashtun-populated Federally Administered Tribal Areas of Pakistan.

The claim that drone attacks target individuals designated by the US military-intelligence apparatus as “terrorists” is hardly a limitation, given the indiscriminate application of this term to anyone offering significant resistance to US foreign policy, as well as the cynical practice of posthumously applying the label of “enemy combatant” to any military-age male killed by a US drone-fired missile.

Moreover, as events in Syria and Libya demonstrate, yesterday’s anti-American “terrorist” can become today’s “rebel” or “freedom fighter,” the recipient of US cash, military training and weaponry. Similarly, today’s “freedom fighter” or ally in the “war on terror” can become tomorrow’s target for overthrow or assassination.

The CIA recruited Al Qaeda sympathizers for its overthrow of the Libyan regime and murder of Muammar Gaddafi, formerly an ally, and for the ongoing regime-change operation against President Bashar al-Assad in Syria. The latter effort gave rise to the Islamic State in Iraq and Syria, in which terrorists turned “rebels” were subsequently branded terrorists, in accordance with the twists and turns of US foreign policy.

Obama administration officials have confirmed that the drone missile attack that killed Weinstein and Lo Porto was a “signature strike,” in which targets are not identified by name, but selected on the basis of a pattern of activities supposedly consistent with those of a terrorist group. The CIA carried out a drone missile attack that killed six people, including Weinstein and Lo Porto, based on aerial observation of the comings and goings at the building targeted, without actually knowing who was there or what their relation, if any, was with Al Qaeda or the Taliban.

Such attacks are in flagrant violation of international law. The US is trampling on the sovereignty of Pakistan, Yemen, Somalia and other countries where it carries out such strikes.

Drone missile murders are war crimes under the Geneva Conventions, which forbid deliberate attacks on civilians or military operations that recklessly endanger civilians. According to a study by the human rights group Reprieve, US drone missile strikes targeting 41 supposed terrorists killed a total of 1,147 people, including many women and children.

Not a single significant voice in the US political or media establishment has been raised against the elevation of assassination to a major element of American foreign policy. In the 1970s, when the US Senate’s Church Committee held hearings on CIA assassination plots against a handful of foreign leaders, its revelations had the capacity to shock. There was a reaction even at the highest levels of the political establishment, and the White House was compelled to issue an executive order disavowing murder as a tool of government policy.

Today there is no such reaction. On the contrary, earlier this month the Timesrevealed that congressional leaders had put pressure on the White House and CIA for more acts of drone missile murder. Describing discussions about whether to kill or capture a Texas-born Islamist who had joined Al Qaeda in Pakistan, Mohanad Mahmoud Al Farekh, the Times reported: “During a closed-door hearing of the House Intelligence Committee in July 2013, lawmakers grilled military and intelligence officials about why Mr. Farekh had not been killed.” (See: “US targeted second American citizen for assassination”).

The American media is well aware of the drone missile death toll, but covers it up. An article Friday in the Times noted that the White House refuses point-blank to discuss civilian victims of drone missile attacks when they are Pakistani or Yemeni. “When Americans have been killed, however, the Obama administration has found it necessary to break with its usual practice and eventually acknowledge the deaths, at least in private discussions with reporters,” the newspaper wrote.

The lack of any significant protest of the latest revelations of US war crimes is a warning to the working class, both in the United States and internationally. As the WSWS has consistently warned, the war drive of imperialism is inseparably linked to a frontal assault on democratic and social rights.

The struggle against war and in defense of democratic rights requires a turn to the working class, the only social force capable of disarming the ruling elite. That is the purpose of the International May Day Online Rally called by the International Committee of the Fourth International for Sunday, May 3. We urge all readers and supporters of the WSWS to register for the rally today.

Patrick Martin

 

http://www.wsws.org/en/articles/2015/04/25/pers-a25.html

Economic stagnation, financial parasitism dominate IMF-World Bank meeting

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18 April 2015

The spring meeting of the International Monetary Fund and World Bank being held in Washington this weekend takes place under conditions of continuing stagnation in the real economy, combined with unprecedented levels of financial parasitism and social inequality.

Stock prices in the US, Europe and Asia have hit record highs and global corporations have amassed a cash hoard of some $1.3 trillion, fuelled by cheap credit from central banks and government-corporate attacks on workers’ wages and living standards. Yet the IMF warns in its updated World Economic Outlook published this week that the world economy will remain locked in a pattern of slow growth, high unemployment and high debt for a prolonged period.

In a marked shift from previous economic projections, the IMF acknowledges that there is little prospect of a return to the growth levels that prevailed prior to the 2008 financial crash, despite trillions of dollars in public subsidies to the financial markets. This amounts to a tacit admission that the crisis ushered in by the Wall Street meltdown nearly seven years ago is of a fundamental and historical character, and that the underlying problems in the global capitalist system have not been resolved.

A sample of headlines from articles published in the past week by the Financial Times gives an indication of the deepening malaise. They include: “An economic future that may never brighten,” “IMF warns of long period of lower growth,” “Europe’s debtor paradise will end in tears,” “QE raises fears of euro zone liquidity squeeze,” and “Global property bubble fears mount as prices and yields spike.”

The IMF report focuses on a sharp and persistent decline in private business investment, particularly in the advanced economies of North America, Europe and Asia. It concludes that “potential growth in advanced economies is likely to remain below pre-crisis rates, while it is expected to decrease further in emerging market economies in the medium term.”

It goes on to note, “Unlike previous financial crises, the global financial crisis is associated not only with a reduction in the level of potential output, but also with a reduction in its growth rate… Shortly after the crisis hit in September 2008, economic activity collapsed, and more than six years after the crisis, growth is still weaker than was expected before the crisis.”

This is a stunning confirmation of the analysis of the 2008 crash made by the WSWS and the International Committee of the Fourth International. On January 11, 2008, nine months before the Lehman Brothers bankruptcy, the WSWS published a statement that began:

2008 will be characterized by a significant intensification of the economic and political crisis of the world capitalist system. The turbulence in world financial markets is the expression of not merely a conjunctural downturn, but rather a profound systemic disorder which is already destabilizing international politics.

The IMF report adds, “These findings imply that living standards may expand more slowly in the future. In addition, fiscal sustainability will be more difficult to maintain as the tax base will grow more slowly.” The meaning of this euphemistic language is that there is no end in sight to the global assault on the living standards and democratic rights of the working class.

The policies of austerity that have already thrown countless millions into poverty are not temporary. They will continue as long as capitalism continues.

The IMF’s updated Global Financial Stability Report, also released this week, acknowledges that central bank policies of holding interest rates close to zero and pumping trillions of dollars into the banking system by means of “quantitative easing,” i.e., money-printing, are having little impact on the real economy. Rather, they are increasing financial risk. According to the report, financial risks have risen in the six months since the last assessment in October 2014.

The IMF’s World Economic Outlook devotes an entire chapter to the slump in private investment. It notes that private investment in the major capitalist economies—the fundamental driving force of global growth—remains at historic lows. As a percentage of gross domestic product, it is below the level experienced in the aftermath of any recession in the post-war period.

But the report, setting the tone for the discussions this weekend among world finance ministers, central bankers and their myriad economic advisers, skirts the colossal role of financial speculation and parasitism in the investment slump and the crisis as a whole. All over the world, banks and corporations are using their massive profits and cash holdings to increase stock dividends and jack up their share prices by buying back their own stock, rather than investing in production. The speculative frenzy is compounded by near-record levels of corporate buybacks and mergers.

All of these activities are entirely parasitic. They add nothing to man’s productive forces. On the contrary, they divert economic resources from productive activity to further enrich a tiny global aristocracy of bankers, CEOs and speculators.

The IMF-World Bank meeting takes place amidst an exponential growth of financial parasitism, the likes of which has never been seen in the history of the capitalist system. In the past year alone, according to an article published this week in the Financial Times, some $1 trillion has been handed back to shareholders—many of them multi-billion dollar hedge funds and investment houses—in the form of buybacks and increased dividends.

Over the past decade, S&P 500 companies have repurchased some $4 trillion worth of shares. Major companies, including Apple, Intel, IBM and General Electric, play a central role in the ongoing buyback frenzy.

Last week alone, three corporate takeovers totalling over $105 billion were announced, including Royal Dutch Shell’s purchase of Britain’s BG Group. The value of all takeovers announced this year to date is more than $1 trillion, setting the pace for 2015 to be the second biggest year for mergers and acquisitions in history.

The result is massively inflated stock prices, the proceeds from which go overwhelmingly to the rich. Over the past year, the German DAX index has risen by 24 percent, the French CAC has increased 16 percent and Japan’s Nikkei has soared 36 percent.

Bank profits are also up. This week, JPMorgan Chase, Citigroup and Goldman Sachs all beat market expectations, announcing near-record profits for the first quarter of 2015, mainly on the basis of speculative trading activities.

As the real economy is starved of resources, leading to lower wages, declining job opportunities, rising unemployment and the substitution of casual and part-time employment for full-time jobs, fabulous fortunes are being accumulated on the financial heights of society.

The unprecedented degree to which the world economy is wedded to financial parasitism is an expression of the moribund state of the capitalist system.

There is another significant aspect to this weekend’s gathering that points to future developments. For seven decades, the IMF and the World Bank have formed two pillars of the economic hegemony of the United States. But the post-war regime is now cracking.

This week, Chinese authorities announced that some 57 countries—37 from Asia and 20 from the rest of the world—had signed up to the Beijing-backed Asia Infrastructure Investment Bank. The Obama administration bitterly opposed its strategic allies joining the bank, but the floodgates opened after Britain decided to join despite objections from Washington that the bank would undermine US-backed global financial institutions.

The fracturing of the global post-war economic order under conditions of deepening crisis is a sure sign that the major capitalist powers are determined to assert their own economic interests, if necessary against the US. Not only are the economic conditions of the 1930s returning, so are the political and economic divisions that led to world war.

Nick Beams and Barry Grey

 

http://www.wsws.org/en/articles/2015/04/18/pers-a18.html

Has Google Indexed Your Backup Drive?

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Depending on how you’ve configured the device, your backup drive may have been indexed by Google, making some seriously personal information freely available online to anyone who knows what they’re looking for. Using a few simple Google searches, CSO’s Steve Ragan discovered thousands of personal records and documents online, including sales receipts with credit card information and tax documents with social security numbers. In all cases, the files were exposed because someone used a misconfigured device acting as a personal cloud, or FTP (File Transfer Protocol) was enabled on their router.

5 Worst Things About the Techno-Libertarians in Silicon Valley

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There’s a lot wrong with the tech industry, and it’s increasingly impacting ordinary Americans.

Nowadays the Silicon Valley is either celebrated as a hotbed of creativity or condemned as a cauldron of greed and wealth inequality.

While there are certainly some talented and even idealistic people in the Valley, there’s also an excess of shallow libertarianism, from people who have enriched themselves with government-created technology who then decide they’re being held back by government. That’s shortsighted and vain. And yes, there are serious problems with sexism and age discrimination – problems which manifest themselves with some ugly behavior.

But such ethical problems aren’t solely, or even primarily, the product of individual character defects. They’re the result of self-reinforcing cultural norms at work. Anthropologists and sociologists could do worse than study the tech culture of the Silicon Valley. It would be important work, in fact, because this insular culture is having a deep and lasting impact on our economy and society.

Here, to star them off, are five socially destructive aspects of Silicon Valley culture:

1. Tech products become the byproducts of a money-making scheme rather than an end unto themselves.

It’s almost inevitable when big money enters the picture: Smart or talented people are drawn to a field for the chance to get rich, not necessarily because it’s where their greatest talents or dreams lie.  The same thing has happened to fields as diverse as film, pop music, and the financial sector.  There’s nothing wrong with getting rich, but it should be the byproduct of a happy marriage between talent and  inspiration.

But here’s how it works instead: The goal of entrepreneurs and innovators was once summed up in the cliched phrase, “build a better mousetrap.” But for  many Silicon Valley products and services, including services like Uber and AirBnB, the goal now is to build a product which can be hyped into a multi-billion-dollar valuation – preferably by winning as much market share as possible, and then using that market position to engage in the kinds of practices usually reserved for monopolies and monopsonies (markets in which there is only one buyer). This process is described in more detail here.

Instead of building a better mousetrap, the new Silicon Valley business model works like this:

i. Give your “mousetrap” away for free, or as close to free as you can make it. (Since you’re working with digital signals transmitted over a government-invented network, that can usually be done at minimal cost. In other cases it pays to benefit from a government tax loophole (see Amazon) or make an end run around the regulations your competitors must follow (see Uber, Lyft, and AirBnB).

ii. Use these government-conferred advantages, along with your own aggressive market moves, to gain a large or decisive marketshare.  (See Amazon, Facebook, etc.) In exceptional cases, actually build brilliant and superior software to win your market share. (See Google.)

iii. Use your newfound market share to a) bend government to your will wherever possible, b) screw down your suppliers’ prices, c) hit your customers with increased prices and/or new ads or other profit-making devices, and d) manipulate your customers without their knowledge. (See Uber, Amazon, Google, Facebook, et al.)

This business model has directed much of the Valley’s efforts away from inventing genuinely creative new products – and toward the kinds of aggressive tactics that, as we’ve written before, would be very familiar to the Robber Barons of the 19th century.

2. Even inspired leaders internalize a worldview which places profits over humane behavior.

Steve Jobs is a prime example of this phenomenon. As an early innovator in the tech field, Jobs – however interested he was in making money – was not drawn to the field for the sake of money alone. Nor was he following in the footsteps of others, seeking to replicate the successes of a Zuckerberg or a Sergey Brin, as newcomers to the field are now. Jobs possessed a genuinely inspired design vision, from the earliest days of his career to his last.

And yet, for all his gifts, the pursuit of wealth led Jobs to commit some morally reprehensible deeds. As “white collar criminologist” William K. Black Jr. told me in a 2012 radio interview, Jobs’ drive to maximize profits – and his craving to get new products to market as quickly as possible – almost certainly led him to knowingly ignore abuses and safety threats to the Chinese workers who built his products.  That, in turn, led to dormitory-based workers being forced to work under extreme conditions. These unheeded warnings also led to the horrific burning deaths of several workers.

Amazon’s Jeff Bezos is also unquestionably an innovator. But the working conditions which Amazon’s warehouse workers endure would seem familiar to their Apple counterparts in China. As documented by Simon Head in his book “Mindless: Why Smarter Machines Are Making Dumber Humans” (excerpthere), Amazon’s American warehouse workers are subjected to ever-harsher production expectations and invasive measurement techniques. Head documents the case of a Pennsylvania employee who worked 11-hour shifts and was ultimately fired for “unproductive periods” which lasted only minutes. GPS devices in an England warehouse tell workers which routes they must travel – inside the warehouse – and their expected travel time.

Amazon’s German operations employed “a security firm with alleged neo-Nazi connections that … intimidated temporary workers lodged in a company dormitory … with guards entering their rooms without permission at all times of the day and night.” An Allentown facility which lacked air conditioning repeatedly reached temperatures of more than 100 degrees one summer. More than fifteen workers collapsed, but supervisors refused to open garage doors. Reports Head: “Calls to the local ambulance service became so frequent that for five hot days in June and July, ambulances and paramedics were stationed all day at the depot.”

A number of Silicon Valley CEOs were also implicated in a widespread conspiracy to illegally suppress wages and prevent job-seeking from engineers and other key employees. Mark Ames, who has reported extensively on the conspiracy, wrote that “confidential internal Google and Apple memos … clearly show that what began as a secret cartel agreement between Apple’s Steve Jobs and Google’s Eric Schmidt to illegally fix the labor market for hi-tech workers, expanded within a few years to include companies ranging from Dell, IBM, eBay and Microsoft, to Comcast, Clear Channel, Dreamworks, and London-based public relations behemoth WPP.”

These incidents are by no means exceptions in the Silicon Valley culture. The most generous way to interpret behavior like this is to assume that Steve Jobs and operated in a culture whose worldview downplayed the human impact of business practices. That, in fact, is reinforced by other aspects of Silicon Valley’s leadership society.

3. The culture encourages a solipsistic detachment from reality, even as its brute economic strength colonizes everything it touches.

A dispassionate observer might be tempted to wonder how a culture filled with so many smart people can remain so unaware of, and/or disinterested in, their effect on other people’s lives?

For many of them, the evidence is literally right before their eyes: San Francisco’s richness and diversity is being drained away, as the city becomes unaffordable for more and more of its citizens.  They are all good with numbers, so the statistics on growing wealth inequality should not be hard for them to understand. And their arguments – e.g., that the “sharing economy” will benefit struggling Americans – are easily punctured by even a superficial look at US demographics. (Are struggling Milwaukee residents going to get rich driving tourists around their battered town, or renting out their inner-city apartments on AirBnB?)

Most of the tech executives I’ve known aren’t bad guys. (To be clear, I haven’t met Uber’s leadership – with the exception of a brief encounter with former Obama advisor David Plouffe – and they certainly appear to be an exception.)   But even many of the “good” ones seem oblivious to the effect of their own behavior.

To a certain extent that’s an occupational hazard. I’ve spent just enough time hammering out software in the glow of a computer screen to see how easily a synthetic world can replace the one inhabited by other human beings.

But there are correctives for that: reading, contemplation, speaking with human beings from different walks of life. The Valley’s tech culture doesn’t seem to encourage that – to its detriment, and that of society as a whole.

4. The Valley gets fixated on lame (and sometimes antisocial) buzzwords.

“Move fast and break things,” said Mark Zuckerberg in a much-repeated quotation. Other tech types prattle on about “the next Big Idea.” And almost everyone wants to “disrupt” an existing industry.

Why is it good to “move fast and break things”? Isn’t it usually wiser to move carefully and build things? There may be times when it’s wise to act rapidly, or break with conventional ways of doing things. But there are also times when a hastily-executed rollout dooms a product. Sometimes it makes sense to improve the established ways of doing things, rather than upend them altogether.

When you think about it, what does this expression even mean? It’s only repeated because a) it sounds smart, and b) it was spoken by someone who is extremely wealthy, and such people are to be imitated whenever possible in the hope that some of their magic will rub off.

As for “Big Ideas”: do they really correlate with tech success? Google was a smarter search engine, but search engines were no longer a new or “big” idea by the time it came along. Craigslist? It’s online classified ads.  Facebook was originally conceived as the online version of the printed “facebooks” traditionally given to incoming freshmen so they could get to know their classmates. Neither Zuckerberg nor those Harvard twins knew what it would someday become.   There is surprisingly little correlation between tech success and actual “Big Ideas.”

Disruption’s overrated, too. Sure, it can work. Instagram disrupted home photography, for example. But Twitter, one of the smarter ideas to come from the Valley in recent years, didn’t disrupt anything. Instead it created a new market and a new medium. Sometimes “disruption” is a euphemism, whose real meaning is “use tax loopholes to undercut law-abiding vendors” or “employ Robber Baron business practices to cut suppliers prices.”

Sometimes it means nothing at all.

5. Silicon Valley’s culture is hurting our economy.

Politicians like to celebrate the tech industry as a boon to the economy, but for most Americans the opposite is true. As economist Joseph Stiglitz and others have documented, monopoly practices exert a significant drag on the economy. The economy becomes increasingly capital-driven, rather than labor-driven. Monopolies suppress wages, overcharge consumers, mistreat suppliers, and drive the economy increasingly off-course.

There’s also a price to be paid for product inefficiency. Monopolies can sometimes squander human capital – that is, waste people’s time – by forcing them to struggle with inefficient products like Microsoft’s operating system or Facebook’s user interfaces. (More on this topic here.) Multiply every minute wasted on a Windows inefficiency or Facebook’s privacy settings by millions of users, and the cost begins to add up.

The Valley’s hurting our economy in another way, too. Somehow, some of the titans of tech have gotten the misguided idea that they are exemplars of libertarian self-created success. Nothing could be further from the truth. The Silicon Valley runs on government-subsidized technology, from microchips to the Internet itself. Corporations like Amazon used government-created tax breaks to build near-monopoly leverage and turn it against their suppliers.

And now, having enriched themselves through government generosity, some of the Valley’s billionaires are using their publicly-assisted wealth to back political candidates and organizations under a “libertarian” label that is better described, at least economically, as a far-right agenda. These candidates and organizations push our political dialogue in a more conservative direction – which in turn creates a political climate which tends to permit more of the things that have already wounded our economy, like deregulation and lower taxes for the wealthy and corporations.

All of the Valley’s cultural traits, from the profound to the trivial, reflect a culture that is urgently in need of maturation and change. One thing’s for sure: If I hear another tech titan say he plans to “disrupt” an industry, I’m going to move fast and break something.

Richard (RJ) Eskow is a blogger and writer, a former Wall Street executive, a consultant, and a former musician.

http://www.alternet.org/culture/5-worst-things-about-techno-libertarians-solidifying-their-grasp-our-economy-and-culture?akid=12994.265072.5R9qHL&rd=1&src=newsletter1034621&t=1

Big tech wants to mold this generation of youth into super-consumers

How YouTube, Big Data and Big Brands Mean Trouble For Kids and Parents

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The motivation for big tech is to mold this generation of youth into super-consumers.

There is a “digital gold rush” underway to cash in on young people’s passion for interactive media. Google and other media and ad companies are working to transform kids’ clicks and views into bundles of cash and burgeoning brand loyalty. While TV still dominates a great deal of kids’ media viewing, they are also consuming content (often simultaneously) on mobile devices, tablets, and through streaming or video-on-demand services. In February, Googlelaunched its YouTube Kids app for children five and under; Disney acquired leading youth-focused online video producer Maker Studios last year in a more than $500 million deal, giving it control of “the largest content network on YouTube”; Viacom’s Cartoon Network (CN) now offers CN’s “Anything,” providing mobile phone-friendly “micro” content and promising to serve a “network of devices giving a network of experiences to a network of fans”; and Amazon, Netflix, and others are sending more “kid targeted” streaming video-on-demand programming.

But unlike broadcast and cable TV, where there is at least a handful of FCC regulations that prevent some of the worst practices perfected by advertisers for targeting kids, the online world is mostly a regulatory-free zone when it comes to digital marketing. Advocates and child-health experts fought a long campaign, from the 1970’s to the 1990’s, to ensure that TV didn’t take unfair advantage of how kids relate to advertising—so that shows weren’t simply “program-length commercials” for toys, or that the “host” or star of a program—such as a cartoon character—didn’t also pitch products at the same time. There were also modest limits in how many ads could appear in so-called “kidvid” programming. These rules reflected research on children’s development and their inability to fully comprehend the nature of advertising. The FCC policies embraced an important principle: children were to be treated differently than adults when it came to TV advertising.

Such safeguards are even more important in the digital era, when sophisticated advertising techniques gather and analyze data on everything an individual does, and incorporate an array of powerful interactive features on mobile devices and PCs that have been designed to get results. Parents and others who care about children should be forewarned: For Google, Facebook, media companies like Nickelodeon, toy companies, and junk food marketers, the Internet is a medium whose primary focus is to help brand advertisers turn young people into fans, “influencers” (to spread the word via social media), and buyers of products. Although children benefit from using educational apps, and have greater access to more diverse entertainment and other content, the motivation really at work is to mold this generation of youth into super-consumers, encouraged to engage in a never-ending buying cycle of goods and services.

Children are now a key target for Google’s “monetization” strategies, helping the company cash in from the sales of toys, apps, junk food, and other products. (So-called “tweens” in the U.S. alone are said to influence some $200 billion a year in spending, including $43 billion of their own money.) With Google’s overall revenue growth slowing, with Facebook aggressively seeking to displace it as the global digital advertising leader, and with consumers flocking to mobile phones (instead of PCs) to view videos and use apps, kids—which were one of the only consumer groups not formally targeted by Google until now—are viewed as an essential new market to conquer. In February, Google unveiled a new advertiser-supported “YouTube Kids” app, its first “product built from the ground up with little ones in mind.” Google’s YouTube Kids “product manager” claimed that “the app makes it safer and easier for children to find videos on topics they want to explore.” Google also promised that ads “that aren’t kid-appropriate don’t surface.” But Google’s YouTube Kidsis filled with ads disguised as programming and product pitches that violate rules that broadcast and cable TV channels have to follow. A coalition of consumer, privacy, and children’s advocacy groups urged the FTC to investigate Google’s new YouTube Kids app, as well as how the company targets older children on YouTube itself. (Six of YouTube’s leading channels are “aimed at children.”)

Google wants to place even the youngest kids inside its powerful marketing apparatus, making sure they will help the company generate much-needed profits as they grew older. It is encouraging brands to take advantage of how young people are engaging in a “multi-screen experience,” including watching video on smart phones, and how YouTube combines the attributes of video service and social networking.

YouTube takes the most powerful medium for connecting with the heart and mind—video—and elevates it from a one-way communication to a two-way experience by inviting brands and consumers alike to connect, curate, create and form community … . On YouTube, brands have the unparalleled opportunity to connect with their most valuable audience and the creative freedom to do so in the most compelling way. The reward for the marketer is a fanbase moved not only emotionally, but also literally, to purchase, comment, share and advocate for that brand. In short, YouTube moves people to choose your brand.

As an article on the launch of YouTube Kids explained, “If YouTube can earn the trust of parents and hook a new group at an even earlier age, then that’s tapping a whole new market of users that will literally grow up with the service—and use it for a much longer portion of their lives.”

While appearing as a distribution service for many programmers, independent and professional, YouTube is a key part of an incredibly sophisticated, elaborate, and highly powerful global marketing apparatus. Google executives recently pledged that they are “listening to brands” and taking “action” to help make YouTube a more effective platform to help accomplish their goals.

YouTube: “one of the biggest Big Data projects in the world”

YouTube incorporates all of Google’s expertise in gathering and analyzing consumer information, so a user, even a young one, can be effectively targeted with marketing. YouTube, it explains, “is one of the biggest Big Data projects in the world.” “At YouTube, data drives the way we make decisions,” including to help its advertisers “get closer to the holy grail of precision targeting.” YouTube, explains the company, has “one of the world’s richest datasets,” which it combines with “Google’s cutting-edge technology” to “transform insights into real-world products.” YouTube continually researches and develops ways to measure and analyze how ads can work more effectively; it identifies “new algorithms and methods for optimizing ads,” “researches new ways for modeling end user behavior,” and more. Its data fuel YouTube’s “recommendation systems,” and the company is now “pushing the boundaries of science and engineering” to make its home page deliver more revenue. It offers its users, including children, “recommended videos” as well as other products that help its advertisers. Through machine learning about us, including analyzing our data, Google plans to further strengthen how it can “introduce users to areas of their interest that many did not realize YouTube had.”

YouTube is now working to “build the next generation game-console based TV experience with YouTube video content,” which will deliver “a compelling lean back experience with monetization and e-commerce offerings” (including “pay-per stream” and ad content), as well as through partnerships that “integrate” its content. Generating revenues by attracting and targeting gamers is a key part of YouTube’s marketing-to-youth strategy. It is also positioning YouTube to be a key part of digitally connected “Living Room” devices, including “game consoles, smart TV’s, set-top boxes” to “drive distribution and user engagement.”

We “put your brand in their hand”

Through its “brand channels”—“a 24/7 broadcast center where customers can watch, share and love your brand”—YouTube helps advertisers like Red Bull and Walmart “energize” its customers. These channels can be specially configured to work well with mobile devices, explains Google, so marketerscan “put your brand in their hand.” Google also offers a “Custom Brand Channel” on YouTube, “the highest level of brand channel customization,” which incorporates special “interactive applications” designed to promote the “branding” experience more effectively. Last year, as part of its ongoing effort to work more closely with leading advertisers, Google also unveiled its “Partner Select” program, which helps its clients take advantage of its advanced data-targeting platform to run ads on its top-ranked video programming.

Google is working to have YouTube play a key role erasing what’s left of the boundaries that have separated advertising and content. Through what it calls “content marketing,” YouTube promises to help its advertisers take advantage of our “shortening attention spans” to positively respond to a brand’s message, explaining that “In a world of shortening attention spans and increasing options, advertising is undergoing a sea change. More and more, ads are becoming content that people choose to watch. … [W]e use the tools and know-how developed by a generation of YouTube content creators to help brands develop ads that will resonate with today’s consumers.” As a leader in using mobile phones to target individuals based on their actual location, Google is also in the forefront of delivering its content on smart phones and similar devices, boasting that “viewing video on smartphones is far less distracted than it is on TV.”

YouTube: “Precision Targeting at Scale”

To help its advertisers, YouTube provides “precision targeting at scale” that leverages “the sight, sound and motion of video, the most persuasive ad format every evented.” Google claims that its “targeting tools are so precise” marketers “can show your ad to folks around your corner or to anyone around the world.” One can target by age, gender, zip code, language, interest, and can “retarget” someone whose data have been (largely secretly) collected when they were on YouTube or other sites. Google offers advertisers a formidable arsenal of “3rd Party Audience Data” that can incorporate details on one’s finances, buying behavior, and many other personal details. Now reaching one billion people worldwide, YouTube identifies Hispanics, teens, those “hard to reach,” as well as adult men and women as key targets; it notes, for example, that “54% of all teens” and “59% of all Hispanics” use it. (Among the “facts” on Hispanics it lists for advertisers is that “76% currently own a pet” and “58% are grocery decision makers in their household.”)

YouTube also plays a direct role helping key advertisers achieve their goals, including through its “in-house creative team” (which it calls “The ZOO”) that “can unleash the true power of your message with a custom campaign.”

YouTube’s “Brand Nirvana” Promotes Junk Food to Kids

Google has been helping Mondelez, Pepsi, and other fast-food marketers push their products—despite concerns about the global obesity epidemic—especially on young people. Last year, Mondelez signed a deal with Google that featured the candy and snack company (Oreo, etc.) making a commitment to “accelerate” its investment in online video. The pact involved the use of Google’s advanced data-driven targeting system (known as “programmatic buying”) and the development of more “branded content.” Google and Mondelez are “partnering on content pilots through YouTube’s Brand Partner Program … [to produce] low-cost video content featuring influential digital stars with Sour Patch Kids in the U.S.” Mondelez’s YouTube channel for Oreos features an array of ads dressed up as games, in English and Spanish, which is typical of Google’s use of video to promote junk food products using the full power of its platform. Fast-food companies, including such brands as Coca-Cola, Mars, Mondelez, Wendy’s, and Post cereal, are also using advanced analytics on YouTube viewing to help refine their targeting strategies.

Frank Cooper, Pepsi’s chief marketing officer, was a keynote speaker at YouTube’s “Brandcast” 2014 event. In announcing that Pepsi has increased its spending for YouTube services by 50 percent over the last year, Cooper noted that “we live in a world where visual content in the digital space is the new center of gravity for pop culture,” and being on YouTube and related digital applications enables Pepsi to be part of a conversation that is “driving culture.” When people share “your content with their friends,” he noted, it is “brand nirvana.”

YouTube as Toy Promotion Central

Google is positioning YouTube to be a central place for children to learn about toys they want their parents or family to buy. As one toy business analyst explained, “It’s a totally new way of advertising. [The YouTube channels] are becoming more and more important.” Although Google’s terms of service (ToS) for YouTube requires users to be 13 and older, it’s clear that it is targeting kids—and violating its own policy—in order to profit from the children’s market. Its ToS states that “the Service is not intended for children under 13. If you are under 13 years of age, then please do not use the Service. There are lots of other great web sites for you. Talk to your parents about what sites are appropriate for you.”

Yet despite its own ToS banning children from signing up, YouTube is clearly targeting kids. For example, “FunToyzCollector,” which describes itself as “all about kid-friendly videos for toddlers, babies, infants and pre-school children,” recently placed first in views among all the YouTube channels (517.3 million). The channel engages in “unboxing” toys, an increasingly sought after YouTube genre that provides viewers with a “virtual tour” of kids products, such as “Sofia the First Balloon Tea Party 2-in-1 Playset with Disney Frozen Princess Anna Elsa of Arendelle.” Very popular with young kids in the U.S., the YouTube ad-supported channel made its owner an estimated $4.9 million last year. Kids either find or are shown these channels as they search for new toys to buy or to receive as presents.

DisneyCarToys,” “a fun kid friendly toy channel” produced by Disney subsidiary Maker Studios, is another example of how Google profits by permitting the targeting of children. The channel is one of five toy-related YouTube channels that Disney acquired in 2014, including “HobbyKidsTV, ToyReviewToys, AllToyCollector, and TheEngineeringFamily.” These popular “top 40 toy channels worldwide,” which integrate Disney’s characters and brands into the programming content, are now part of Disney’s “merchandising” strategy, which will include more brand tie-ins and advertising.

Maker Studios itself has a major kids marketing presence on YouTube. It describes its “Cartoontium” set of programs as “the place to find all the best kid’s entertainment on YouTube!” One of its channels is called “Messy Painting in the Dark-Neon Arcade,” where “Toys, games and financial support [is] provided by Hasbro.” Other Cartoonium programming features “classic episodes of Care Bears and Strawberry Shortcake.” “Strawberry Shortcake” and other programming include ads for toys (and some of these shows are also on the YouTube Kids app). One reason Disney acquired Maker, explained CEO Bob Iger, was to reap its “great access to data and algorithms,” which are gathered from billions of views collected through its 55,000 YouTube channels.

Another kids’ toy–focused YouTube service is also partnering with the Disney/Maker empire. “EvanTubeHD,” involving two young children (eight and five years old) and their father, “boasts more than a billion views across” three channels. The two children “review and play with the most popular kids toys currently on shelves.” As an analyst explained why toy companies are enthusiastically seeking out relationships with kid reviewers online, “Kids trust other kids more so than they would an adult.”

Maker has a broad range of marketing services it offers brands and advertisers, including “custom pre-roll” ads (the short spots that run before a YouTube or other video content starts); channel targeting (“integrate your brand message natively into our top performing channels”); and sponsorships (“More than just a logo, our unique custom sponsorships allow you to connect with our forward leaning and deeply engaged audiences”). Maker touts its strong alliance of partners, including its “custom solutions to the world’s best brands” and “effective and hyper-targeted media solutions.” Partners include Mattel, Pepsi, Warner Bros, and parent Disney. It also works with the leading ad agencies that represent major global brands “to create unique programs across our programming and talent.”

In another example of how Google fails to protect children, it allows Disney to encourage its young viewers to connect to them using Facebook, Twitter and Instagram—despite these sites requiring users to be 13 years or older. So eager is Google to reap profits, it appears purposely to ignore how toy companies are establishing nothing more than 24/7 virtual ad channels on YouTube. For example, Spin Master, a “top-five” toy company, has created a “kid centric YouTube channel dubbed SpindoTV, aimed at children 6-11. Its shows are based on its toy line-up, including “Sick Bricks” and “Beat the Parents” board game. Many of its shows are a part of Google’s new YouTube Kids app. According to a Spin Master executive, “We know from our research that these kids are already on YouTube in massive numbers.” YouTube, of course, is just one method Google uses to help it reach and monetize young people. It is also “building successful apps and games” for its “Google Play for Education and Kids vertical,” helping developers create “commercially viable offerings to educators and students, parents and kids.”

The popularity of YouTube among children has triggered a “must-have-the-video-network” buying strategy from companies targeting the youth market worldwide. Marketers researching youth know that kids are using YouTube as a search engine because it includes pictures, videos, and other audio-visual material. It’s also “easy to navigate” for children, with reports that “kids who are into watching TV episodes on YouTube” like to see other episodes and “recommended videos” on the sidebar. More critically, digital market researchers studying children have identified YouTube as providing an important social and creative outlet for tweens, and finding cool YouTube videos to share with others is a form of social capital. … [T]weens most frequently share cool videos when hanging out (in person) with their friends and family. … [W]e call this phenomenon clustersharing. … [I]t speaks more to their desire to physically experience videos with others—to see, to feel and to share that experience, including their thoughts and emotions.

The same researchers advise marketers to take advantage of the “clustersharing” concept, and encourage ways to “enhance that in-person, social experience. Using ad content (like a group game) or finding a way to alleviate the agonizing “live” wait of a 15-second pre-roll between each video presents “an opportunity to enrich your brand experience with this very engaged audience.”

Tracking our “Consumer Journey”

Google is in the forefront of digital marketing companies promising to help its clients influence and “measure” what it calls the “customer journey.” It views itself as helping them analyze and place each consumer on a continuous “path-to-purchase” cycle, tracking us wherever we go, and using its resources to have us shop “until we drop”—online and off. Among the benefits Google promises its advertisers, for example, is that they will be able to identify and “value” their “best customers,” and “distinguish the whales from the wasted energy.” (“Whales” is a marketing industry term describing a big spender; “waste” is an ad term for a consumer deemed not valuable.)

YouTube conducts research to document how its advertisers positively impact our “recall” of various brand commercial messages. Google’s DoubleClick division, which uses data to determine the impact of video ads, offers advertisers the latest ways they can “verify” whether a person actually views a video ad on YouTube. To help its largest advertising clients measure how we respond to Google’s interactive marketing services, the company is now working with Nielsen and comScore, two of the leading global companies that assess consumer interaction with ads, including on YouTube.

There are other companies also helping marketers analyze YouTube data. For example, Outrigger’s “OpenSlate” platform “ingests, analyses and scores more than 220,000 YouTube channels on measures of engagement, consistency, influence, momentum and ad effectiveness.” (It now is up to 250,000 channels.) It “supplements YouTube data on more than 70 million videos with data from social media and proprietary demographic data. Our platform consistently incorporates brand advertising performance data to further develop video and channel level profiles.” Through its information, brand advertisers can identify “the highest-quality inventory on YouTube,” and then target them using a variety of Big Data tactics. (“Inventory,” as used by the online marketing industry, can either refer to individual users or programming content. Kids and teens are seen as highly valuable “inventory.”)

Time for Regulatory Action Against Google to Protect Kids

Google, as the dominant digital marketing company, has raised numerous concerns about its corporate practices, including from privacy regulators, civil liberties advocates, and competition regulators from around the world. (The company has led an anti-privacy-regulation agenda in both the U.S. and EU, to ensure that the flow of personal data that makes its interactive marketing system run will never end.) Its latest move to better monetize children through YouTube Kids is the first of what will be a succession of profit-generating ventures that help transform kids’ lives into a never-ending commercial. Even Facebook, which expressed interest in targeting children 13 and younger, has not yet directly entered the kids market. Google’s brazen move to cash in on our kids will likely spur Facebook to jettison any reticence to include them on its social network. After all, why should Google gain all the profits from this new, lucrative, and influential audience?

Beyond federal and state investigations into Google’s brazen targeting of children on YouTube, what’s needed now are new policies that ensure young people aren’t unfairly treated by digital marketers. This includes rules that don’t leave children and teens vulnerable to digital marketing practices and also better protect their privacy. For example, Google is at the forefront of companies using what is called “immersive” media, to make sure brands—including on YouTube—can “grab” our attention. All of the data gathered from our use of mobile phones, social media, and online video feed so-called “profiles” that are used to target us for advertising—increasingly regardless of location (think of a mobile discount coupon from a nearby fast food outlet appearing on children’s phones as they come out of school) and in real-time (right as you are in the store cereal or toy aisle). These practices are highly questionable when targeting adults, let alone young people.

Companies like Google should develop their own policies that actually protect and empower young people—not just turn them into the latest profit center. A global leader like Google, with immense profits, should only be offering kids commercial- (and data targeting-) free content. It shouldn’t be helping junk food and toy companies take advantage of kids to sell them products that don’t promote their development and health. It is doubtful, however, that Google will change course. It is, after all, primarily an advertising company whose allegiance is to the biggest brands and the marketing industry. It’s time for activist shareholders of Google and other companies to press for the adoption of new corporate policies that protect young people in the digital age.

Parents will have to decide whether Google’s corporate culture, focused as it is on promoting marketing to young kids, is incompatible with their values and goals. But it will also take a movement of parents, educators, public interest groups, and policymakers to force Google and other kids marketers to act responsibly. If we want to see the next generation grow up without being greatly influenced by the most powerful advertising apparatus yet developed, this is a fight we must join.

http://www.alternet.org/media/how-youtube-big-data-and-big-brands-mean-trouble-kids-and-parents?akid=12982.265072.Mk71Wq&rd=1&src=newsletter1034434&t=3