> And I know exactly what that costs: Before I was an economist, I was a teenager working for bookies on Australian racetracks. I once took five dollars from a coworker who “didn’t bet” and put it on number one in the next race. Six months later he was betting thousands a race and stealing from his own family. Compulsive gambling destroys lives — and the families it wrecks have no lobbyists.
> I don’t claim to know the exact right policy answer for America. But I know we never even had a grown-up debate.
If you've seen the destruction caused by something and can't figure it out, maybe you have a problem?
And let's be honest: the idea of "debating" things that are obvious is often one of the primary ways by which indefensible things are legitimized.
> I don’t mean that as a slight against him, lots of great people are insane...
This guy's comments here are consistent with a person going through a serious mental health crisis, not eccentricity. Hopefully someone who knows him personally will see this and get him some help.
Your network is not on HN but you submitted this and asked "please go upvote or leave your comments here:" with a link to HN?
Anyone in your "network" who sincerely wants to help would give you the simple advice I'm going to give you: grow up. This post and all of your replies here are cringey and immature, and don't bode well for your employability no matter how smart you are (or think you are).
What leads you to believe this post would make you attractive to another employer?
You even publicly posted your Separation Agreement, which contains a confidentiality clause in which you "agree[d] to maintain in complete confidence the existence of this Agreement."
It hurts to be let go and in these economic times, it can be scary. But this post is actually doing the opposite of what you want it to.
In the US in particular, topics such as law, accounting and medicine are heavily gatekept to the point where many people believe that unless you're a lawyer, accountant or doctor, you shouldn't even be able to discuss these subjects in any meaningful way.
> For contracts, I was thinking of the more complex deals where a battle-tested template is unavailable
But this is the exception, not the rule because most people are not engaging in "complex" deals that require completely bespoke contracts. The average individual or company needs roughly the same things almost every other individual or company needs and a LegalZoom template is going to be perfectly usable for the 99%, ideally with a final pass by an experienced attorney.
What you're paying for when you do have a "complex" deal is the negotiation and structuring, and that's where the experience of the attorney is all the value.
> The issue about halting the training pipeline is an interesting one. In law firms, a lot of "training" of young lawyers is really glorified bates-stamping charged out at professional rates. I think we could find that the work just gets more substantive and interesting.
You can't run before you know how to walk. I don't know how a new associate becomes the next Clarence Darrow, Johnnie Cochran, or David Boies without thorough exposure to the often-boring basics: legal research, document drafting, document review, organizing and sorting documents, sitting in on calls and depositions, etc.
If clients aren't willing to subsidize these types of activities and firms have to look to automate more to maintain their profitability in the face of cost pressures, the development model breaks down long-term.
> But—lawyers are a transaction cost and it’s good for the economy to automate as much of it as we can!
I guess it depends on how you look at it.
I don't think anyone would argue that spending money on lawyers is an ideal use of capital. But if AI-driven automation reduces overall demand for legal services (as measured by billable hours) and/or erodes the pricing power of lawyers/law firms, it doesn't mean that the "savings" will benefit all participants in the economy.
The biggest beneficiary will be corporations, as reduced legal expenditure can boost corporate profits. But that is a boon for the wealthy shareholder class, not the worker class. "Lawyer" has been one of the highest-paying white collar jobs available so the question becomes: as all of these high-paying white collar jobs become less plentiful, how do young people not born into wealth develop opportunities to get ahead economically?
> How would you know? Unless you have expertise in this area, you can't really know if you have a good contract until you have to litigate it.
I ran multiple businesses for over 20 years, and during that time had to deal with countless contracts involving commercial transactions, leases, funding events and employment. I worked closely with outside counsel, and had to deal with numerous disputes and lawsuits.
Many contracts are boilerplate to begin with, which is why firms like Cooley and Orrick provide free document libraries and generators. They know that a huge segment of the people who might retain them aren't going to pay $10,000 for an NDA or a simple commercial contract. So they give documents away as a marketing tool, hoping that it might get them more complex work in the future.
Attorneys can add value when you have a unique wrinkle and of course when there's a dispute, but, as an example, if you need an employment contract for California, you don't need to pay someone $500/hour to draft one from scratch and frankly for many contract categories, you'd probably be taking on more risk by having a bespoke contract drafted than modifying a solid, widely-used template.
> Your attorney can make better use of AI than you can. A growing time sink for lawyers (and I assume, physicians) is having to explain to clients that "yes, I understand this is what Claude told you," and "no, that's not actually how X works in practice."
You're not wrong, but I think you're misunderstanding what I'm saying.
First, as far as contracts are concerned, the leading AIs are more than capable of producing pretty decent ones for many categories because they've been trained against all the real contracts that are out there. Your "yes, I understand this is what Claude told you but..." scenario is real, but it applies less and less than attorneys want to believe, especially when the subject is mundane.
Second, the bigger issue is that AI is fundamentally hindering the development of the next generation of lawyers. It's great that senior associates and partners can use AI to be more efficient, but the economic pressures AI creates mean that it's far harder for law firms to have clients subsidize the training of the next generation of lawyers.
So the question isn't whether an experienced attorney today can make better use of AI than you can, it's whether a new attorney today will be able to become a "good" lawyer when AI is eroding their firms' ability to have clients subsidize their training.
> Similarly to the changes I expect to see in any kind of white collar job where AI replaces a lot of the data analysis/data transformation work, leaving people to do more human interaction.
Taking law as the example, I'm not sure I agree.
Legal is largely a distress purchase. Very few clients actually want to spend time interacting with outside corporate counsel, a divorce lawyer, a personal injury lawyer, etc.
The real value of an attorney is accountability. A person with a license and reputation who is on the hook for the advice they provide. But accountability is only worth buying if the judgment behind it is sound, and that judgment takes years to build.
The problem is that much of what makes a "good" lawyer comes from years of doing unglamorous work as a junior, financed by clients. If AI reduces the ability of firms to subsidize training the next generation of lawyers, you get fewer "good" lawyers and the whole market keeps eroding.
From what I've seen, the top AI models can now produce contracts that are on par with what I would have had to pay thousands of dollars for a decade ago, and the agents/chatbots are capable of collaborating with you to address fairly complex issues. If you have the money, you still run everything by a real attorney of course for the accountability piece, but the future is not bright for contract attorneys because people know even they're probably using AI to do half their work.
How can you determine if a thank you note is genuine or not if you don't read it in good faith?
One person might send a generic thank you that tells you nothing, and another might send a thoughtful message that in some specific way reiterates their interest and excitement in the job.
> ...and has no impact on anything...
Sure it does. I hired lots of people in my career and things like this helped me determine if the candidate was thoughtful, professional and interested. On multiple occasions, I hired people who didn't technically meet my ideal requirements but explained why they were interested in the role and gave me greater confidence that they were up for the challenge and worth taking a chance on.
Cynicism by default does not serve you well in any aspect of life.
> Wouldn't the lender now also be in harms way and in turn have issues financing themselves?
Yes, they could be. There are potential multipliers here, and one failed project could cause other projects to be marked down, even if they're not failing.
But the mechanisms by which $1 trillion in data center debt could become multi-trillion dollar write downs just doesn't exist the same way it did with subprime mortgages.
In the mortgage market, credit default swaps let the same collateral be referenced without limit, CDO-squared structures re-tranched the losses into concentrated wipeouts, and the paper was on the balance sheets of firms funding 30 year assets with overnight repo.
A derivative market for individual SPVs where there's a mismatch between the debt term and the asset just doesn't exist in the data center market.
Pensions funds that are involved have 30 year liabilities and no redemption pressure. Insurers don't have run risk. Banks hold the debt against capital buffers and they have access to the discount window. The riskiest debt holders are levered private credit and semi-liquid retail vehicles, but even in these cases, you're looking at leverage around 2:1, not 30:1.
None of this is to say that an AI bust couldn't cause widespread pain. Just look at how much of US equities are dominated by AI-linked companies. But the issue is that Zitron is just wrong about the mechanisms and magnitudes. He's trying to paint a 2008-like scenario because it's much scarier.
Zitron is literally the worst person to raise alarms about the financials of the AI ecosystem because he's so hyberbolic and pollutes his own arguments with nonsense.
Take:
> When somebody decides to build an AI data center, they form a special purpose vehicle (much like a CDO), which then raises debt, in some cases slices it into tranches and, in most cases, sells them to institutional investors, asset managers or banks.
This is just such a weird and wrong comparison. A CDO's assets are other people's debt claims. The same mortgage bond could be split among many CDOs at once, those CDOs could be re-tranched into further CDOs, and thanks to credit default swaps, synthetic CDOs could reference bonds nobody in the deal actually owned. So basically exposure to a fixed pool of mortgages could be manufactured without limit.
A data center SPV's assets are the building, the power interconnect, the GPUs, and the customer contract. If the SPV fails, the loss is limited to what those things are actually worth. There are no multipliers as there are with CDOs.
Later in the post, Zitron even concedes this:
> What differs this from the subprime mortgage crisis is that the systemic risks aren’t driven by derivatives or complex financials but by the sheer scale of costs to build an AI data center, a catastrophic misunderstanding of the AI industry itself and the dangerous lending standards of private credit.
He claims this isn't important:
> When every single debt deal is over $500 million and usually numbering in the billions, we don’t need a vast web of different contracts to create a systemic risk, just clusters of projects that either fail to keep up with their SPVs’ debt or bonds that go unpaid by destitute or defunct data center developers.
But here's the thing: systemic risk isn't a function of how big the losses are. Instead, it's a function of who takes the losses and whether they propagate.
Equity holder losses just get absorbed by equity holders. What happened in 2008, on the other hand, was that the losses hit leveraged intermediaries funding long assets with overnight money, so one firm's distress became another firm's funding withdrawal.
Big deal sizes don't create that type of situation. A $10 billion SPV default is a $10 billion loss distributed across whoever bought the debt.
He brings up Lehman but that's literally the worst example for his argument. Lehman's losses were trivial against its $600 billion balance sheet. It failed because of a funding run. Repo counterparties refused to roll, the clearing banks demanded more collateral and prime brokerage clients pulled their balances. This doesn't happen in an SPV because SPV debt is term debt. It's sized and dated to match the asset. There are no runs on a term loan. When an SPV breaches its DSCR defaults, the lenders take the assets. It's not pretty, but it's contained. It can't spread beyond its own confines and multiply because there is no maturity mismatch, which is what killed Lehman.
Of course he didn't try to discourage them. He wanted to do this type of research/experimentation, which is almost certainly why he was known to the communities the parents were a part of (the article says the parents learned of him in a "WeChat group in which parents of children with autism and similar disorders trade advice").
This is a form of doctor shopping. If you really want something, you can find someone who is willing to provide it, even in fields like medicine where practitioners are expected to adhere to rigorous ethical standards.
> Didn't inform the family that the treatment could possibly kill their daughter
From the article:
> The parents had heard about serious side effects, including deaths, caused by other gene therapies, and knew the greatest risk would be Mei’s immune response to the massive dose of virus. Qiu said getting the dose right was critical, but infusing the viruses directly into Mei’s spinal fluid, rather than the blood, would minimize the threat of a reaction because it would bypass the kidneys and liver.
The article paints a picture of well-educated parents who were incredibly focused and dedicated to their "mission", which was basically to "cure" their daughter's condition using gene editing, something that had never been done before. They participated in groups, recorded the conversations with the doctor and ostensibly did enough research to have concerns in the first place.
The doctor violated every ethics rule in the book and should never be allowed to touch another human being, but I don't think it's fair to pretend that the parents were unwitting.
> I find it easy to envision a world, maybe 50 years from now, in which the very concept of "truth in advertising" is viewed as a lost, idyllic fantasy.
There hasn't been "truth in advertising" for many, many years. The only thing that has changed recently is that you don't even have to hide most of the lies.
> I don’t claim to know the exact right policy answer for America. But I know we never even had a grown-up debate.
If you've seen the destruction caused by something and can't figure it out, maybe you have a problem?
And let's be honest: the idea of "debating" things that are obvious is often one of the primary ways by which indefensible things are legitimized.