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February
08
2020

Welcome to the Bullshit Economy
David Dayen

The Iowa caucus disaster is a function of a broken economic structure that rewards con artistry over competence.

The story of Shadow, makers of the app that utterly failed to deliver in Iowa, is a perfect example of the bullshit economy.

In one sense, the Iowa caucus debacle will last just a couple of news cycles. We have the data on paper, tabulated in front of tens of thousands of witnesses, and it merely needs to be collated. Eventually it will, and though the damage to the news cycle is irreparable—Joe Biden’s disappointing outcome has been diluted in particular—the process will go on with an accurate count. Caucuses are horrible and probably a dead letter, but for different reasons than the delayed count; the real problems arise from the electoral college–style distortions between the initial percentages and the final delegates, and the tacit vote suppression from forcing people to attend a two-hour meeting on a weeknight when they might be working.

But the spectacle has highlighted a much more consequential problem in America, something I have called the bullshit economy. We’ve seen elements of it all over the place. When MoviePass offers unlimited screenings for ten bucks a month, when Uber gets an $82 billion valuation for a low-margin taxi business it has never made a dime on, when WeWork implodes after the slightest scrutiny into its numbers, that’s the bullshit economy at work. We have seen the farcical bullshit of Juicero and the consequential bullshit of Theranos.

Even at the highest levels, bullshit pervades, in fraudulent advertising metrics and fake numbers peddled to convince the world to siphon cash through Facebook and Google’s dominant platforms. So many counterfeit goods pass through Amazon that the site might get listed on the U.S. Trade Representative Office’s “Notorious Markets” list.

We have endured the more comprehensive bullshit of the financial industry marking corporate progress by manipulated stock prices and air rather than productive advances for society. We had a financial crisis based on bullshitters telling us housing prices would endlessly rise. We have the bullshit of the private equity industry extracting value from companies through the skillful use of debt and other financial engineering, without regard for whether the companies succeed or fail.

The story of Shadow, makers of the app that utterly failed to deliver in Iowa, is a perfect example of the bullshit economy. It starts by being a tech solution to a nonexistent problem. Iowa counties are compact; the largest one has a landmass of 973 square miles, and it’s close to twice the size of the average county in the state. Even there, no major city is more than a 30-minute drive from the county seat, Algona. Even with that ancient technology of the car, you could have each of the 99 counties report final results within a couple of hours of the end of the caucuses.

Somehow, the Iowa Democratic Party got sold that they needed to improve upon this, to “disrupt” the caucus reporting. Already, the party had to increase what they would keep track of and tabulate, reporting the first set of results before the 15 percent viability threshold, the second set afterward, and how that translated into delegate counts. It wasn’t clear why anyone needed to add another layer of complexity into this with the app. But the app’s backers must have been persistent, getting $60,000—really nothing for the purposes of app development—to design a tool to forward the results to a central repository.

Clearly there was no meaningful stress testing of the technology. But there also doesn’t appear to have been much training. Many caucus administrators simply didn’t bother to use the app, attempting to call a hotline to report results. That got overloaded as the app failed, with everyone from 1,600 caucus locations trying to report at once.

Shadow is a subsidiary of ACRONYM, a nonprofit with lots of connections to the Democratic consultancy, including veterans of Hillary Clinton’s presidential campaign and David Plouffe, the Obama campaign manager who sits on the ACRONYM board. MSNBC’s Chris Hayes asked Plouffe on a late-night panel about his participation, and as he swiveled in his chair uncomfortably he disclaimed any knowledge of Shadow or the app.

Similarly, ACRONYM issued a statement positioning itself as a mere investor in Shadow, without knowledge of their inner workings. But last year, ACRONYM announced it was  “launching” Shadow, as part of an effort to help Democrats “win” the internet and run better campaigns. The head of ACRONYM, Tara McGowan, is married to a Pete Buttigieg strategist.

All this doublespeak is a hallmark of the bullshit economy. Your mind doesn’t have to travel to the nether regions of conspiracy, but you can hardly blame people for doing so. This is reflective of the rolling incompetence covered by confidence within the modern economy, especially when you sprinkle on the labor-saving promise of techtopia. When the bullshit economy fails, it robs people’s belief in the basic bargain of commerce, the idea that you get what you pay for, that companies operate in good faith to provide quality service. But when placed in contact with politics, it just demolishes faith in the system. The bullshit economy spurs distrust.

So there we have it: an unnecessary app that narrows the supply chain of votes to the central tabulator, and when the supply chain fails it creates chaos. We see this all over our economy: useless services, narrow supply chains, magnified fiascos. As long as confidence men lie to the right people, they can gain entry and take on enormous responsibility, until it all falls apart. We live in a country where you can spout New Age consultant speak, charm a large foreign investor, and make off to your guitar-shaped living room with over a billion dollars, paid effectively to go away. That’s WeWork guru Adam Neumann’s story, and increasingly it’s our story.

The Iowa disaster is a sign that our economic structures are breaking down, that private enterprise has become a shell game, where who you know matters more than what you can do. The bullshit economy has bled over into politics, with the perfect president but also the perfect amount of grifting and consultant corruption and unbridled tech optimism. This has long been part of politics—anything with that much money sloshing around will invite a little corruption—but the combination of political grift, the ardor for public-private partnerships, and the triumph of ambition over talent has created a fetid stew.

The voters have a rare choice in 2020 to put clamps on the bullshit economy, to end the froth in our financial markets, to put the needs of the people ahead of inflated stock returns and boasts about revolutionizing rental housing or food delivery or juice machines. We don’t have to live in the bullshit economy. We can reject it. Or we can wait for the app to work and find out who our leaders will be.



 

David Dayen is the executive editor of The American Prospect. His work has appeared in The Intercept, The New Republic, HuffPost, The Washington Post, the Los Angeles Times, and more.

 

 

  

 

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