Monday, July 28, 2008

Echo Chambers

While working on reporterist over the past year, one of the things that I keep yapping about is the need for an antipersonalization of sorts...

The business models of the web thrive by showing you more and more information that echoes exactly what you want to hear - because it's probably easier to sell you something that way. But one of the things we lose in an ever-more-personalized world is exposure to information and views that challenge our mental model of the world in a thoughtful way.

The ink-and-paper world is not immune to this - you can probably tell something about me by the fact that I subscribe to the Wall Street Journal and the Economist, and often pick up a copy of Harpers in airports. Those publications definitely have a certain bias that is reflected in the stories they run. At the same time, I rely on those editors to give me a certain slice of the world which I might not otherwise be exposed to.

For example, while I rarely would voluntarily click through to many of the WSJ stories, I love reading through the "What's News" section on the front page because I trust the Editor to give me their view of What's Important Today (actually, there are two reasons why I would rarely click through - (1) because not all of the stories are that interesting to me, and also (2) because I have different reading habits online and offline - something that the Kindle may one day change)

But no one likes taking bitter medicine. How do you get people to look outside their comfort zone? How do you get people to see the value in doing so? I always talk about wanting to read more about what republicans think, but I've never really gone out and done so. It's just hard to justify the time.

My gut feel is that you first have to bring people to a safe and comfortable environment, and then let them interact in a structured way with different people and views. It reminds me of a documentary about Mauritius that I saw a long time ago. I can't find the reference, but the following quote is related, as it captures the same metaphors I remember:

In the fruit salad, the components are clearly distinct; ethnic boundaries are intact, and reflexively "rooted" identites are secure and stable. In the fruit compote, on the other hand, the different fruits are squashed and mixed together with substantial use of force.
He himself therefore supports the fruit salad variety.... In order to have a dialogue, Souchon argues, one needs a firm position to conduct it from. ( Multiculturalism, individualism and human rights:Romanticism, Enlightenment and lessons from Mauritius, by Thomas Hylland Eriksen)

I'm currently working on an experiment to bring this, and some related ideas, to the web. I've been working with Jambool - creators of the Send Good Karma facebook application - and my first contribution has been a pair of politics apps : I Vote 4 Obama and I Vote 4 McCain.

They're still nascent, and we will be adding many more features over the coming weeks. However, they're the beginnings of an experiment to try to punch a few holes in the echo chambers on the web. I'm not going to give away any of the goodies just yet about how we're planning on doing that - but I encourage you to add one of the applications (depending on who you support) - and and use it at least a few times as we introduce new features.

The Giant Pool of Money

Thoughts on The Giant Pool Of Money - a "This American Life" special on the 2008 Credit/Mortgage meltdown.

I heard the show today while working. I'm not sure that I can place the blame squarely on banks.

I think rating agencies should be the ones to 'take the blame'.

- lenders borrowed as much as they thought they could get away with. the dude says "i was hoping to turn my financial situation around in 6-9 months and was able to secure that loan. If I hadn't been able to get that loan, i probably would've made some tougher choices and figured out other ways to help my situation" (paraphrase)

- mortgage brokers loaned as much as they could get away with - since they were driven by commission. they talk about some guy getting an 18K commission on a loan

- CDO's engineered their securities up so that the rating agencies would rate the bonds AAA.

- the 'global pool of money' somewhat blindly relied on the AAA ratings, and assumed that they were getting stellar returns with low-risk investments.

So everyone was inspired to keep this wheel turning. Some questions I'm left with (tell me if these were answered here or elsewhere and I just haven't been paying close enough attention to the news):

- Why did credit rating agencies give these bonds a AAA rating? What was their motivation? Was there a conflict of interest?
- Has the reputation of the credit rating companies suffered? What are the ramifications for them?
- What is the existing regulation surrounding credit ratings? Should this be a government function (I don't think so)? How transparent are they? How transparent are they required to be?