The Internet Is Broken, and the IT Team Is Nowhere Close

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Today’s Agenda

• Web3 die-hards need a reality check, writes Parmy Olson
• Investors refuse to cheer wage gains
• China’s people are chafing at lockdowns
• America’s factories are building new supply chains

Web3 Dreams Vs. Reality

Giving up on a dream is hard. When it’s built on billions of dollars, it’s even harder.

The tech world was locked in a debate this week about the potential for Web3, a decentralized version of the internet underpinned by digital currency that proponents would like to see replace the current, corporate-dominated Web2. 

Rarely will you see geeks argue with such a religious fervor on social media as when the topic is web architecture.

On the Web3 side are believers in blockchain and NFTs, who have said the internet should be rebuilt in ways that redistribute power held by giants such as Alphabet Inc. and Meta Platforms Inc. to individual users. 

That typically prompts Web2 folks to say, “Sounds great, but that’s just like communism: It won’t work in practice and will destroy a lot of hard-earned wealth in a crash.” Web3 backers say the Web2 forces are just feeling threatened. “Scam,” responds the Web2 camp.

Into this mess stepped Moxie Marlinspike, the dreadlocked  and cryptographic icon who built the encryption protocol underpinning Facebook’s Messenger years ago. If anyone understands the fundamentals of crypto, it’s Marlinspike.

Marlinspike tried building a few Web3 apps himself, and realized none of them actually gave people access to the blockchain. Apps such as wallets and marketplaces were gatekeepers. In a blog post, he walked through several examples of how power had already coalesced among a few early companies, just like it did with Web2.

The Web3 crowd said Marlinspike was . This is just like when people hated on the mobile internet before it overtook PCs,  a venture Web3 investor. He was retweeted by Chris Dixon, whose firm, Andreessen Horowitz, recently raised $2.2 billion for a new crypto fund. The numbers get bigger. Investors spent roughly $27 billion on NFTs in 2021, according to Chainalysis. And the value of all cryptocurrencies is said to be around $2 trillion.

Hard logic won’t deter believers of the Web3 dream. Only a crash will. — Parmy Olson

Labor Vs. Investors

There are fewer reliable sources of cognitive dissonance than the way investors take good economic news like it’s a nuclear disaster. For example, stagnant wages have been the bane of the U.S. economy for more than a decade. But now that pay is jumping, all markets can do is sweat corporate profits and the threat of inflation.

There is some legit reason to worry, John Authers suggests: Inflation lately has outpaced wage gains for most workers. They may use their newfound, and welcome, bargaining power to ask for even more wage gains, which could cause companies to raise prices. Rinse, repeat, relive the 1970s. Still, maybe we could take a moment to appreciate that this chart is nice to see, at least in the abstract:

Investors are having no such sappy nonsense. They even hammered the stocks of big U.S. banks today after those institutions reported handing out raises to keep bankers from running away to GameStop or crypto or whatever, Paul J. Davies writes.

Jamie Dimon today said businesses “shouldn’t be crybabies” about higher wages. He’s right. And as long as inflation can be controlled, investors might want to stop whining, too. 

China Vs. Omicron

Speaking of things that are hard to contain: the omicron variant. Even China, which has so far managed the pandemic by playing the world’s most brutal game of Whac-a-Mole, is struggling with it. And at this point, people in China are getting fed up with harsh lockdown measures, Adam Minter writes. They’re even venting about it on social media, and Beijing is, surprisingly, letting them.

The whole world should hope China can at least strike a nice balance between protecting people and keeping its trains, factories and container ships running on time. David FicklingAnjani Trivedi point out Chinese factory output has held up pretty well through the pandemic so far. If that changes, the supply-chain nightmares of the past couple of years could look like kids’ birthday parties in comparison. 

Telltale Charts

America’s industrial sector is starting to look for in-house solutions to those supply-chain hang-upsBrooke Sutherland writes. They’ve improved lately, but too slowly and unpredictably for comfort. 

Sarah Bloom Raskin is a good candidate to get Fed bank supervision back on track after years of slacking, Bloomberg’s editorial board

Further Reading

Supreme Court is wrong about emergency management; it can’t just be left to the states. — Tim O’Brien 

James Madison saw today’s threat to democracy coming. — Jonathan Bernstein 

Here’s what it will take for Boris Johnson to survive his latest scandal. — Martin Ivens 

Iran’s economy isn’t as resilient as it claims. The U.S. should use this as leverage. — Bobby Ghosh 

Putin’s Kazakhstan intervention is part of a troubling trend of autocrats helping autocrats. — Hal Brands 

We need to restore balance to the workweek by letting workers blow off steam at times. — Conor Sen 

house listings are getting scarce

Omicron is less severe even for the unvaccinated, a study has shown.

Omicron is pretty severe for restaurants, however.

Kickers

Epstein-Barr virus may be a factor in causing multiple sclerosis

Being in space gives people anemia

Homo sapiens may be even older than we thought.

We could always just stop being quite so available

Notes: Please send house listings and complaints to Mark Gongloff at [email protected].

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To contact the authors of this story:

Parmy Olson[email protected]

Mark Gongloff[email protected]

To contact the editor responsible for this story:

Brooke Sample[email protected]