Too Good to Be True? The Magnifying Powers of Technology


by Chris Cote

From remotely flown Predator drones to deepwater oil drills and from financial derivatives to Twitter, America’s engineers and scientists continue to bring imagination to life. Each invention allows us to get more: security, oil, wealth, information. We are also able to achieve our goals from a distance, with more automation and less personal connectivity. Often, especially in the case of these four—predator drones, deepwater technology, financial derivatives, and social media—the tools are more powerful than we realize. The upsides of these technologies are well known and that is why we use them. But they are only beneficial to a point. Often, the consequences of an accident far outweigh the initial benefits. The problem does not lie in the technology itself, but in our irresponsibility and incapability of using it properly.

from the Los Angeles Times

Increasingly Distant

Seeing the Afghan men jammed into the flat bed of the pickup, he added, “That truck would make a beautiful target.” At 5:37 a.m., the pilot reported that one of the screeners in Florida had spotted one or more children in the group. “Bull—. Where!?” the camera operator said. “I don’t think they have kids out at this hour.” He demanded that the screeners freeze the video image of the purported child and email it to him. “Why didn’t he say ‘possible’ child?” the pilot said. “Why are they so quick to call kids but not to call a rifle.” The camera operator was dubious too. “I really doubt that children call. Man, I really … hate that,” he said. “Well, maybe a teenager. But I haven’t seen anything that looked that short.” A few minutes later, the pilot appeared to downplay the screeners’ observation, alerting the special operations unit to “a possible rifle and two possible children near the SUV.”

This excerpt is taken from a must-read Los Angeles Times piece, “Anatomy of an Afghan War Tragedy,” that clearly relates a February 21, 2010, US military attack on Afghan civilians who were mistaken for soldiers.  Surveillance was done by two crafts: (1) from 7,000 miles away in a Nevada air force base via a Predator drone’s camera feed, shot from over 3 miles above in the sky and (2) from an AC-130 in the area. By the time the attack took place, after 4 1/2 hours of deliberation, the soldiers were miles farther away from the Afghani group when the drone and AC-130 first raised concern, but no one took notice. Ultimately, it was the decision of the groundtroop (led by an experienced Army captain) to engage.Two Kiowa attack helicopters, accompanied by the AC-130 aircraft and the Predator drone—in position to protect a group of special-ops soldiers—fired on a convoy of three cars of Afghanis traveling to another city to, among other reasons, get a pharmaceutical license. The death toll was disputed:

By the U.S. count, 15 or 16 men were killed and 12 people were wounded, including a woman and three children. Elders from the Afghans’ home villages said in interviews that 23 had been killed, including two boys, Daoud, 3, and Murtaza, 4.

I believe that military members must make difficult decisions and quick judgments and often must do so with an unclear picture and unreliable facts. This was hardly the case here. With no immediate danger and an acknowledged uncertainty over the presence of children and whether there were weapons, this should not have happened. Yet it did. Overeager trigger fingers contributed. It’s much easier to fire than it is to evaluate. And the seemingly reliability of surveillance only compounds this.

“Technology can occasionally give you a false sense of security that you can see everything, that you can hear everything, that you know everything,” said Air Force Major Gen. James O. Poss, who oversaw the Air Force investigation. “I really do think we have learned from this.”

After the attack, General McChrystal–at the time leading the US war effort in Afghanistan–made adjustments to the military’s overall operating procedures, (small) amounts of money were delivered to victims’ families, and six officers were disciplined (but none face court-martial). Correcting operating procedures and recognizing past mistakes do help, and perhaps the risk of senseless killing occurring again will decrease slightly, but these fixes apply gauze to a wound in need of a tourniquet. If people are put in place with the mission to kill, but their information is unreliable, which way will they lean?

Increasingly Deep
Two months after this killing in Afghanistan, an oil rig exploded in the Gulf of Mexico, killing 11 people and allowing 200 million gallons of oil to flow into the ocean from a sea-floor gusher for the summer.  Blame was pushed around for months among the oil company, the company who built the platform, and the company managing the rig.

Depths of 5,000 feet (the depth of this well) are considered ultra-deep in the oil industry. Drilling this deep is expensive and was long too cost inefficient to attract the industry, but rising oil prices and declining reserves have pushed companies to explore new shelves. Brazil’s Petrobras, considered the world’s premier deepwater driller,  has a number of well’s as deep as 22,000 feet (just over 4 miles) in their new pre-salt fields off their southeast coast. Drilling that deep is unprecedented. While some companies have the technology, few have substantial experience, and fewer can claim a clean safety record.  Risks have always been present in the oil and gas industry, and we must continue to run the economy as we’ve constructed it, but the further we push to gain more resources the more disasters will occur. And the slower we will transition to an economy based on more available and obtainable resources.

The entire scope of the spill’s environmental effects remains unknown. White House energy advisor Carol Brown called it the “worst environmental disaster the US has faced,” and over 400 species are at risk. Tarballs remain on the seafloor and underwater plumes of oil have not dissolved.  32 miles of coastline were affected and regional maritime industries closed. Last week, BP, the company declared responsible for the spill by the US government, requested to begin drilling again in the Gulf of Mexico. The Financial Times reported that, with more US government oversight, BP could restart its work as early as July.

Increasingly Rich
Economists and the US government generally agree that low interest rates and deregulation led to the 2007-2008 financial criss. Low interest rates drove people to purchase new homes with adjustable-rate mortgages they could never pay. Lenders ignored credit histories and feasted on incoming business. Mortgage aggregators—most notably Fannie Mae and Freddie Mac—then bundled these mortgages together int groups and sold these packages (mortgage-backed securities) to investors to trade.

These investors—Lehman Brothers, Goldman Sachs, Bear Sterns, Merrill Lynch—then repackaged the securities as derivatives, redividing them into smaller groups, each with their own interest rate and credit rating. Credit rating agencies—Moody’s, Fitch, Standard and Poor’s—rated the packages on their quality–low quality securities–or junk–were likely to fail because of mortgage bankruptcy. The rating agencies did not do their job however, and rated them highly, no matter their real worth.  Many homebuyers, who had poor credit ratings and never should have been given the mortgages in the first place, were unable to pay their mortgages when the Federal Bank raised interest rates and defaulted. This started a disastrous chain of failure that eventually burst the housing bubble and sank Lehman Brothers, made AIG unable to pay on its insurance policies, and started the slide down into the abyss we are now clawing our way out of.

The length and diffuseness of this chain—from American homebuyer to Wall Street and back—is the underlying problem. Testifying before the Financial Crisis Inquiry Committee on whether financial derivative instruments caused the crisis (and ardently arguing they didn’t), Berkeley professor and former Wall Street derivatives executive Steve Kohlhagen said:

The largest cause of the overvaluation, and thus the magnitude of the eventual collapse, in values of CDO’s [collateralized debt obligation—another type of security to be traded] has received little, if any press. Namely a fatal lack of communication within the origination/distribution/investment community.

“A lack of communication.” American homebuyers defaulted on mortgages they couldn’t afford from the beginning, credit rating agencies did not regulate properly, and pressure and deceit from investment firms trying to earn more amplified the effect. The eventual official blame was stuck on the failure of the regulator, the credit rating agencies whose job it was to oversee the process, and an environment of deregulation. Blaming the credit rating agencies is akin to blaming the babysitter for the wicked behavior of miscreant children, especially when those children are felons. The distance and disconnect that financial derivatives offer allow investment banks to focus solely on profit (and generate enormous wealth) without acknowledging its effects on other links in the chain.
Increasingly Connected
We at this blog have already touted Twitter and Facebook for its positive role they played in the Arab uprisings and revolutions. But these same tools can also be used to connect people with less valiant purposes. We cheered for Egypt’s rebels and hope that Libya’s are successful. But what if a less justifiable rebellion took hold and organized via Twitter? Would we be championing these tools then?

Technology is often viewed as a panacea, an “x-factor.”  Adding a limited amount of human capital, land, money, and trade only gets you so far. But new technology allows big, quick gains in productivity and accessibility to new markets; it pushes big societal changes and economic advances. However, we must constantly ask ourselves what we are really achieving with each new invention or device: how is it changing our lives and is it really for the better? We are still bound by our own human limitations. Technology is a magnifying glass that amplifies all of human nature; it will not save us from ourselves.
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