What we talked about
Kyle Bowman, Senior Technical Product Manager at Amazon leading the Climate Pledge-Friendly Program, joins host Federico Ramallo on the PreVetted Podcast for a wide-ranging conversation that starts with problem-solving in unfamiliar industries and quickly evolves into deeper topics.
Show notes
Kyle Bowman spent four hours trying to get an AI-generated script to download a single table from a document, and that experience became a precise illustration of why starting with the solution rather than the problem is the defining mistake of the current technology moment. The conversation ranges from vibe coding to hyperinflation to Argentinian labor union reform, connected by a consistent thread: how you measure whether you’ve actually solved anything.
What we covered
- Kyle’s career has moved through industrial engineering consulting, Amazon Robotics, international aviation supply chains, and now software product management, and he argues the unifying skill across all of them is defining the problem before reaching for a solution. He points to the Six Sigma “five whys” framework as one useful structure, but emphasizes that the methodology matters less than getting a crisp problem definition first.
- On GenAI, an MIT study he cited found that 98% of enterprise GenAI integrations over a recent three-month period failed to generate revenue. His diagnosis: companies are throwing a solution at everything without first identifying which problem it actually solves, the same trap as “vibe coding” a website nobody will visit.
- He recounts a real attempt to vibe-code a simple Quip-to-Word conversion script: it worked for basic text but couldn’t handle images or tables, and he spent four hours trying to fix one table. His point is not that AI tools are useless but that someone with engineering fundamentals would have spotted the structural problems in the generated code immediately, and that core skills become scarcer and more valuable as solutions become cheaper to produce.
- A security researcher demonstrated how an AI model could be poisoned by seeding GitHub with repositories containing backdoored code and a description that matched common security problem patterns, when the model retrained on GitHub, it learned to recommend the compromised code. Kyle called it “social engineering, but with large language models.”
- The conversation moves into economics through the lens of Argentina’s hyperinflation, 70,000% projected annual inflation in late 2023, with prices changing between morning and evening on the same day. Kyle connects Javier Milei’s approach to the core product management discipline of picking one metric, putting in tough solutions, and watching whether the number actually moves.
- On free markets and monopoly, Kyle observes that competitive markets naturally trend toward monopoly as winners keep winning, which is why the debate isn’t really about free markets versus regulation, but about where to draw the line. He and Federico trace this from 19th-century mining company violence to Argentina’s labor unions conducting 9,700 strikes in 2022.
About Kyle
Kyle Bowman is a Senior Technical Product Manager at Amazon, where he leads the Climate Pledge-Friendly Program, focusing on making sustainable shopping more accessible through product standards and AI/ML-powered discovery of environmentally friendly products.
- LinkedIn: http://www.linkedin.com/in/kyle-bowman-49125544
- Website: https://amazon.com
Episode 82 of the PreVetted Podcast.
Full transcript
Federico Ramallo (00:00) Welcome back to the PreVetted Podcast where we spotlight extraordinary people and remarkable talent reshaping our world. Today, Kyle Bownman join us. Hello, Kyle. He’s the Senior Technical Product Manager at Amazon where he leads the Climate Pledge-Friendly Program. His work focuses on making sustainable shopping more accessible by developing product standards.
Kyle Bowman (00:12) Howdy.
Federico Ramallo (00:24) and leveraging AI slash ML to highlight environmentally friendly products. Kyle, welcome to the show.
Kyle Bowman (00:32) Thanks, Federico. How’s it going today? How you doing?
Federico Ramallo (00:35) I am doing great. I was talking before camera. I’m in the city today in San Francisco, enjoying the cold weather. So yeah, it’s great.
Kyle Bowman (00:45) Yeah,
same here, freezing, but you know what? It just stimulates the brain, I guess. I don’t know, I’m from California, I’m from San Francisco, but like not the cold part of the city. So I still 15 years later living here in Boston, haven’t figured out how to do cold as I am wearing three layers indoors. So we’ll see.
Federico Ramallo (01:02) Right. For
me, the issue is change of scenery, right? Because, Guadalajara is much warmer. So now I’m here, and it takes me a few days to get used to, and then I kind of get used to. yeah. But it’s fine. So how do you approach a problem in a new industry where you’re not an expert?
Kyle Bowman (01:15) I get it.
That’s a good question. think over the course of my…
it sort of business career. I’ve worked in a whole bunch of totally non sequitur type industries and jobs and things. I started working as an industrial engineering consulting, like a consultant, right? And then I moved into Amazon robotics. So I worked focused more on logistics and robotics and automating tasks and then decided, you know what, let’s focus actually on international aviation and how do you build supply chains internationally and then left that all behind. And now I’m working more honestly as a software development technical product manager.
or not using my mechanical engineering degree, maybe this much. ⁓ And so it’s a good question because I find in each of the different roles that I’ve had sort of the core underlying theme.
Federico Ramallo (02:03) Hahaha
Kyle Bowman (02:14) Is people need to solve big, hard problems. Right. and so I, I find oftentimes, especially coming from, from San Francisco and looking there, people want to start with the solution. Here’s this cool tech that I’ve made. Here’s this really cool thing. Here’s AI, here’s ML, here’s LLMs. You’re starting with a solution and people are then trying to sort backwards and find what problems does it, does it solve? I actually think the reverse mindset tends to, from my experience, be more helpful in terms of delivering results that,
that last and that people really sort of pay attention to, which is how can you really truly define the problem that you’re trying to solve and whether that’s through going through some of the, I’ll call them more fixed mindsets of defining problems, just that you have the five Y’s, you have some of the like six sigma type problem solving methodologies, or you can go about it on your own, use your own framework, really getting a crisp understanding of what I need to solve first before you go into actually solving it. feel like it’s…
Federico Ramallo (02:42) Thank
Kyle Bowman (03:07) The right first step at least. I think I answered the question.
Federico Ramallo (03:10) Yeah, I think you did,
which I think is important, the context you gave about all things that you’ve been doing. Yeah, and I think that’s a great, great way to solve it. I mean, way that I see it is there are always going to be problems in any industry.
our capacity to solve them with the tools that we have. You were talking about your degree. I haven’t graduated from college, to be honest, but I’ve been doing software engineering for 30 years or so. But that gives you the basic tools. You’re a generalist. You have general knowledge of everything on the particular fields. But what I’m trying to convey is this idea of, well,
Now that you have these tools, then you can go and approach a company and industry or whatever. And then you say problem, then with the tools that you have, how can I solve the problem?
Kyle Bowman (04:06) What I think is interesting in the world that we’re moving towards right now with everybody’s favorite buzzword with GenAI and ChatGPT and all of these different folks that are out there, solutions are getting to be cheap. You can go and make something overnight, right? Like vibe coding was the Merriam Webster’s word of the year, right? Which like having tried it a couple of times myself, you go in, you say, hey, make me a script that’s going to, I don’t know, open up a new webpage, design a website and do-
and you click enter and it just it’s like magic right it just happens but that doesn’t mean that the website that I just made up to you right now is useful whatsoever it doesn’t mean anybody’s gonna go there they’re gonna pay anything for it all these things right solutions are cheap but is it the right solution are you actually solving a problem is anybody going to be willing to pay you for what you’ve just vibe-coded I think that’s the the world that we’re moving towards
Federico Ramallo (04:41) Okay.
Right. This reminds me of a story I used to joke with a friend of mine back in college. And I said, I have an answer. I have an answer for any question. And I would say, yes. And we would just joke about that. But it’s this idea of I have a solution.
Kyle Bowman (05:14) you
Federico Ramallo (05:23) You can put whatever answer you want. So I agree with you. The Gen.AI is great for a lot of things. But there are a few things that we miss. One is that it has a limited context and cannot abstract the solution. When you’re building software, you’re abstracting. You’re taking a problem in the real domain, and then you figure out how can you code it in a way that represents
Kyle Bowman (05:25) Yeah.
Federico Ramallo (05:47) what the real domain is going on. So it can provide garbage code, and it’s going to work based on the behavior. But try to make one single change, a very little change, and it’s going to be a mess. Yeah. It’s the reason why don’t code in binary.
Kyle Bowman (06:02) You
Yeah.
I was going say, just sort of on, on that point, I tried making a like super simple, solution on my side, just to like test, to see how all these things work. Like, can I just take, use an internal tool called Quip. I think it’s made myself Salesforce. but like for just like notes and scrapbooking and those kinds of things when you’re trying to generate ideas. And then I wanted to put it into Word, a very simple, simple thing. Right. And I clicked it. said, okay, like make this script. did it. It downloaded, created a new Word document. Amazing. and it didn’t know how to do images. It didn’t know how to
tables,
any of these things. I spent the next four hours just trying to get it to download a single table, just one. And it’s one of those things where I know like someone with a software engineering degree of what you’re talking about looks at the script goes, this is garbage code. Like I need to think about these, this, this, this, need to consider these couple of things and can make it in a couple of seconds, just based on sort of some abstract contextual understanding of what’s going on on both sides. But for someone without sort of that deeper knowledge, I have no idea how to.
Federico Ramallo (06:51) Yeah.
Kyle Bowman (07:05) write a script to download anything from a website and open up a Word document, right? We can just end up sort of spinning in circles, creating more and more and more spaghetti code until, yeah, maybe it works. And then Quip changes one thing, their table changes format, and I’m back to my four hours of spinning in place. anyhow, mostly just saying like, yeah, it’s a strange new world out there and we’ll…
Federico Ramallo (07:07) Right.
Kyle Bowman (07:34) We’ll see what happens, but if you know what problem you actually want to solve, think that at least helps get you in the right place to start with.
Federico Ramallo (07:42) Yes. Yes. And the other thing I was going to talk about is this idea of when you’re building, you’re learning. So even if you have a perfect GEN.AI, you can snap your fingers, have the solution.
Kyle Bowman (07:50) 100%.
Federico Ramallo (07:57) You have a solution, you haven’t learned. Which is great if you know one language and you want to build something another language. It can be good enough, right? For that things, I spent weeks learning Bash. It’s a hard environment to work. But it’s amazing the things you can do with it. You can actually build applications with it.
Kyle Bowman (08:05) Right.
Mm.
Federico Ramallo (08:17) It was one of the exercises that I would give to my trainees. Basically, we will do a multi-dimensional calculation. They will build a multi-dimensional matrix to find the solution of, don’t remember what it was. But it’s hard to build on Bash because the language is very, I don’t want to say garbage, but.
But it’s symbols and it’s hard to… it’s dense. Because it’s not garbage, it’s actually really powerful. But it’s hard to interpret. And that was kind of the challenge. And then they were amazed what they could do with that. Anyway, but if I had to do it again now, if I had to build something like that, I would just ask ChatGPT and it would work for small little things.
Kyle Bowman (08:42) It’s It’s dense Yeah.
Right.
Federico Ramallo (09:03) But you have to provide the, be very specific and provide the thinking, you know, what are things that you want to do, right? Iterate like this, do this, take the variable like this, right? Yeah. And the same thing with JavaScript, right? The semicolon at the end, you know, the syntaxes, all those types of things, you know, yeah. Because eventually, you know, I, well, it happens to me that I lose that, you know, sensitivity on the syntax. And I just say, ChatGPT please fix it for me.
Kyle Bowman (09:19) Exactly.
Federico Ramallo (09:30) and it’s good enough.
Kyle Bowman (09:31) Yeah,
and I feel like there’s also like, I don’t think anybody.
is going to like miss the capability of remembering to put a semicolon at the end of a line. Like it’s not like that was a, a, like a key human input that they were putting in there. That’s like really like, Hey, my magnum opus is that I know how to put a semicolon at the end of the line. Like, no, right. Like that’s, just made the thing work. And so like offloading that mental load to some other system that does it automatically for you. Like, cool. Makes total sense. The, feel like the like sort of core creative thinking that’s happening before.
Federico Ramallo (09:41) Hehehe.
Kyle Bowman (10:04) that of like okay here’s the order of operations that I want to follow, here’s the things that I need you to do, and the like exception handling that I want you to have and like I’m gonna write it this this this this please format it so that it runs in bash for example like I’m
Federico Ramallo (10:17) Right.
Kyle Bowman (10:19) to your point of learning as I’m going, I know what’s going to work. I know how it should work. I’m understanding what I’m building. And yes, the formatting in the end looks different between bash, Python, sort of C++, whatever I’m going to write it in. But I don’t know that I’m losing any semantic knowledge there as opposed to just having it translate.
Federico Ramallo (10:37) Yeah, and for that, think it’s great. It’s a great tool because it allows you to free. I mean, it allows you to focus on higher purpose problems, right?
And then the minutia of the syntax, can delegate it to the LLM. So I think that’s great. I’m looking forward to see what’s going to happen in the future with GenAI, because it seems that it’s improving so fast.
Kyle Bowman (10:52) Exactly.
Yeah, but then I read a really interesting article from MIT that was saying 98 % of GenAI integrations over the past, I think it’s like a three month old article at this point, 98 % of these integrations in major businesses failed to make any money. People would be like, yes, we need GenAI. And they would go and they would implement it they do these things, whatever. And then their team would be like, cool, we can make pictures of dogs automatically. Yay.
Federico Ramallo (11:18) Hahaha
Kyle Bowman (11:32) Which is nice, but like it didn’t, it didn’t drive the things that they were using it to the point that I was making earlier of like, it’s easy to make a solution. How do you make sure it’s solving the right problem? People were just throwing the solution out there at everything and 98 % of them were not going anywhere. And then you’re, you’re just spending a ton of money to stay in the same place.
Federico Ramallo (11:52) I see what you’re saying. I see what you’re saying. If you build it, they will not come. Right? I mean, it’s…
Kyle Bowman (12:01) I think that if you build it, will come. Mantra is no longer necessarily true. Right. think maybe for some things, like if you go and you build an amusement park, right. Okay. Cool. I could see that being a thing. You probably have to still do a lot of marketing and a lot of thought behind it. And anybody out there who makes amusement parks don’t come after me. but I do think.
now that we can build anything so quickly. And really sort of, I think there’s some internal metrics that we’ve been looking at here where I can’t share the numbers, but it’s a pretty significant percentage of time that has been reduced in terms of the amount of.
folks are spending on syntax and coding and code reviews and these kinds of things. Like you can crank out a prototype, a review, a something in an amount of time that’s way shorter to find out if I did have something, would they come? And I think that’s the key answer that you can get ahead of time, right? Instead of spending three years building this one app, this native platform, this one thing, and then hoping people come, you can spend three weeks
Federico Ramallo (12:36) So, I’m to presentation.
Kyle Bowman (13:02) vibe-code it, put it together. Yeah, it’s gonna be horrible. You’re not gonna understand everything behind things. There’s gonna be all sorts of bugs in it. But you can at least test your hypothesis and understand, would people come to my amusement park if I built it? You know what I mean?
Federico Ramallo (13:14) Right, right. I mean, I think that there is some value on that phrase in the sense that when you envision something, you’re building something that didn’t exist before. So you need a little bit of dreaming.
Kyle Bowman (13:25) Mm.
Federico Ramallo (13:27) right? ⁓ So there is some value in that. But then on the other hand, you also need to validate your assumptions, validate that what you’re doing is going to be useful for somebody. And then you have to promote it so people will come.
Kyle Bowman (13:28) Definitely.
Yeah, totally great. It’s a brave new scary world out there for all of us and we’ll see how we survive.
Federico Ramallo (13:48) Yeah, but I mean, this idea of AI is going to take so many jobs. I’ve been kind of working on talking about this a lot and I’m getting to a conclusion that that’s not necessarily true. mean, jobs are going to be transformed. I believe more on the augmentation. People with AI are going to take, you
your job if you don’t work with AI, right? For that, I think that’s a better way to put it. But then on the other hand, the idea of replacing people with AI works up to a certain point. I mean, you can do some administrative, manual work, basic data transformation jobs, right?
Kyle Bowman (14:14) Yeah.
Federico Ramallo (14:37) I think that could work, right? there’s so many calories that you need to put around it to make it work that right now it’s not worth it, right? Maybe in the future.
Kyle Bowman (14:46) I mean, that’s like the joke that I don’t even know if it’s a joke anymore that people have been opening positions for vibe code checker where somebody else’s vibe code at something and that you go in and make sure that it actually like does what it is that they’re thinking it should do.
Federico Ramallo (14:54) Hahaha
Kyle Bowman (15:00) I think it might actually become a thing to your point of like, it’s the person with AI that makes the thing. like, now we need some other guardrails and systems and people to be able to like, package it and make sure that the rocket actually launches instead of exploding on the launch pad. know? Yeah. The debate we were having with some of our leadership recently is like, okay, we have sped up our…
Federico Ramallo (15:06) Ahem.
Bye.
Kyle Bowman (15:25) like code review process by X percent by like implementing AI. Amazing. If we start to like take that same mindset, can we just start to replace? So if you like replace the bottom level of checks and then you replace the secondary level of checks with another set of AI and then another level of that and all the way up, do you just eventually start having AI all the way down to where?
Nobody actually knows what’s happening. And like one change can propagate all the way up without any like, I’ll call it common sense being involved in the, in the process. And like, while maybe it works for 95 % of cases, what are the 5 % of cases where it doesn’t? And how can you implement something that’s going to, to catch those 5 %?
Federico Ramallo (16:03) that will be interesting. Yeah. And if the…
If the process can improve itself, then it can go rampant and go crazy.
Hehehehehe
Kyle Bowman (16:12) And an interesting, another interesting article on this I read was about a security flaw that got introduced into, gosh, it was one of the big models and I don’t remember which one, but basically the core of the idea was people who were not actually malicious, they were just testing whether they could do this, realized that this model was pulling a lot of its coding knowledge from GitHub. So they went into GitHub and created a whole bunch of repositories saying, Hey, if you’re solving this type of security problem,
you want to use this type of code and they put it in here. So then when the model re-upped and trained itself, it knew, I’m trying to solve this type of security problem. I should use this type of code and in that code, they had inserted a backdoor.
Federico Ramallo (16:41) So.
Kyle Bowman (16:52) And so then when somebody’s system went and did the AI created code and created their security code using the information that was basically summarized, large language model pulled from this GitHub, they were able to just backdoor their way straight in through like essentially like social engineering, but with large language models, which I just thought was a fascinating problem.
Federico Ramallo (17:11) Wow,
social AI engineering.
Kyle Bowman (17:16) Exactly.
Federico Ramallo (17:16) That’s amazing. connecting to what we were discussing at the beginning, that’s what I think that the core skills are going to become much more scarce throughout the following years. And people are going to be higher based on the core skills. Because this experience…
Kyle Bowman (17:21) scary and amazing.
Federico Ramallo (17:38) When you automate, you don’t know what’s going on. You don’t have control of what’s going on. And then eventually this thing could happen.
Kyle Bowman (17:46) 100 % agreed.
Federico Ramallo (17:48) Yes, yes, I love an old show called Star Trek. And they have these machines that basically convert energy into materials. And basically, you can say, give me a hot coffee or hot tea. It materializes. But then you have this issue of people forget how to cook things ⁓ because this is so convenient.
Kyle Bowman (17:53) You
Right.
Yeah
Federico Ramallo (18:13) right?
Yeah.
Kyle Bowman (18:14) 100%. 100%.
And what happened, it’s kind of like me with Google Maps, right? I use Google Maps to get everywhere. And then if I ever find myself lost in my own town, I’m like, I’ve done this drive 100 times. How do I not know which way to go? It’s like, because every time, I’m just following the map. Jeez.
Federico Ramallo (18:31) Yes, yes. It actually happened to me recently, something like that. I was in Argentina. I went to renew my passport, and then my phone died. So I was at the airport with no local cash. I have a few dollars maybe, but you know.
But so I live in Mexico, but I’m Argentinian. So I had Argentinian pesos. I didn’t need anything because I had my card, which I could use to get some money eventually. But my phone was dead. OK, where is the Airbnb? I have no idea. Where am I staying? I know the neighborhood, but I don’t know exactly. Yeah, yeah, yeah.
Kyle Bowman (18:59) Right.
or the name of it is easy to forget because it’s a new city. Yeah, totally.
⁓
Federico Ramallo (19:22) So,
but you know, I kind of know the city, so I kind of know where I am, right? You know, but I can point the direction of where is the house, but that’s it, right? So it was funny. It was interesting. It was an interesting experiment, right? I was hungry, so started walking and find a place to eat. And I said, okay, I will figure it out, right? Yeah.
Kyle Bowman (19:44) Yeah, it’ll be okay.
Federico Ramallo (19:47) But it’s this, you become so dependent. And then the other concept that I was learning about this is if you can materialize anything, then if something breaks, the value of things becomes zero because you can render another one. It’s like 3D printing an object.
Kyle Bowman (19:52) 100%.
Right.
Federico Ramallo (20:10) But they can do it on the molecular level. So your phone breaks, don’t problem. You can print another one. You can take your old phone and convert it into energy again.
Kyle Bowman (20:14) Right, right, right.
Make a new phone. Yeah.
fascinating and so it’s yeah like what
Federico Ramallo (20:22) So recycling becomes,
you
Kyle Bowman (20:27) point or really easy one or the other but it’s like yeah what’s the what’s the value of a phone if I can just go generate one immediately basically zero right the only thing that’s valuable is the ability to turn energy into matter and matter into energy and so like that’s the only area where you need to be focused
Federico Ramallo (20:34) Right.
As long as you have energy, everything else is not meaningless, but the value becomes insignificant. What is the value of a Stradivarius? Because it’s unique. That uniqueness gets lost. So I think that something similar is going to happen with the age of AI. Solutions are becoming less and less value. It’s about…
Kyle Bowman (20:50) Yeah. Yeah.
Right. Right.
Federico Ramallo (21:06) you know, how it’s impacting the world, right?
Kyle Bowman (21:09) Yeah. There’s some like fun economics questions in there. And like, I read a book recently in which, it was a fantasy series, like similar type of exploration. There were people who, if they got their hands on this one thing, they could suddenly create gold, infinite amounts of gold out of nowhere, exactly what you’re saying. And the question is like,
who benefits when money becomes irrelevant? Like, is it the people at the top, the people at the bottom? Like, if they’re like gold suddenly?
doesn’t matter, you could, like, if someone is able to control that capability, like what you’re saying with your Star Trek example, if one person is the one, you pay me $5 and I will make anything out of Matter for you, is very different than anybody can go to the Matter Creator and can just generate a new iPhone. So it’s, you control all sorts of fun economics questions. We don’t have to get into it, but it was interesting.
Federico Ramallo (21:59) Well, actually, there are two books written about Star Trek economy. ⁓ Because on the show, they say this idea of, we are beyond.
Kyle Bowman (22:04) Yeah.
Federico Ramallo (22:10) What is the word? When things are missing, Like, it’s not puberty. Beyond scarcity, right? Our society evolved beyond scarcity, and now we are in pursuit of exploration and higher purpose activities, right? But then there are a few books written about,
Kyle Bowman (22:14) Beyond One.
there you go. Yeah.
Hmm. Mm-hmm.
Federico Ramallo (22:35) how that should work, because in the show they don’t talk about it. It’s a great, on the stories it sounds great, but specifically, how it works. And there are a few theories, and one of them is people have an energy quota that they can use. Because there is no currency, then energy becomes a currency.
Kyle Bowman (22:38) you
Right. Yeah.
Interesting.
Yeah. How much energy did you generate such that you can turn around and use that much energy? Cause otherwise you have to, like, if everybody’s pulling two energies and putting in one energy, you’re going to run out of energy. It’s like theoretically not an infinite resource. So.
Federico Ramallo (23:11) Right.
Energy becomes the money, or the currency. And I don’t know if you know this, but currency can exist without government. It actually exists before government.
Kyle Bowman (23:17) Yeah. Fascinating.
Federico Ramallo (23:25) We tie, yeah, I mean, it’s the same thing of Bitcoin. mean, we, used to use salt as currency, right? Because it’s basically a commodity. But then, you know, I don’t remember exactly when, know, 17th century or whatever. The government said, okay, we have to regulate currency. And then they build this idea of, well, the currency is this piece of, first it was gold, it was, you know,
Kyle Bowman (23:25) Hashtag Bitcoin or…
Federico Ramallo (23:52) metal and then eventually it was paper. But this idea of the government is the only one that can issue currency. Where before that was not the case. And we grew up in that idea that currency and government is one thing.
Kyle Bowman (23:53) Silver, yeah exactly. Yeah.
Yeah.
Right?
And instead theoretically if everybody outside of the government all agrees that this piece of paper is worth one chicken.
Cool. We can all pass the chicken around. No problem. You can trade back and forth with, with Ian one another. doesn’t require a government to set the value of $1 to one, to one chicken, right? But the, do understand the role of government in this way. If you try to set up that system and then suddenly somebody comes in with a whole bunch of new dollars and they just created it. now like they have $5 to spend on a chicken. So everybody of course is going to want them to buy their, their chicken. You flood the market, you devalue the value.
Federico Ramallo (24:22) Right.
Kyle Bowman (24:48) thing of country collapses everybody’s sad like I get the point of regulation but
Federico Ramallo (24:51) Right.
Yeah, mean,
there’s value in that, right? But then eventually, ⁓ the government got used to be the dollar was connected to gold. And then at one point, they were like, we’re going to disconnect it. yeah. So the currency is tied to people’s faith, how much faith people have on the currency, whatever it is, Yeah.
Kyle Bowman (24:55) Yeah.
Federico Ramallo (25:18) And that’s why we can see the fluctuation of the relative value of one currency to the other one is because of that with additional steps, faith people have on and how the perception of the value there is. ⁓ In Argentina, so when I, in 2001,
Kyle Bowman (25:25) Yeah.
100%.
Federico Ramallo (25:40) The $1 was one peso, right?
Fast forward to today and it’s 10,000 pesos for one dollar.
Kyle Bowman (25:49) And is that because the inflation crisis happened in between those two? Like I think it, it went up and came back, no?
Federico Ramallo (25:55) Yeah, in 2023, I mean, this is going up, right? But in the last weeks of 2023, they had a projected inflation of 70,000%.
Kyle Bowman (26:08) That’s just insane. Yeah. Yeah.
Federico Ramallo (26:08) I mean, if you project it for the year, Yeah. It’s insane. Yeah,
yeah, And the argument was that they were printing money in other countries, right? I don’t remember the countries, but because the money is being printed outside of Argentina, then that doesn’t affect inflation. That was the argument that some people were using. But of course, right?
Kyle Bowman (26:28) Yeah, of course.
Federico Ramallo (26:31) So they got into this concept of assistance. They were giving benefits to half the population and then the other half was paying taxes to support the first half.
Kyle Bowman (26:41) Yeah, I mean, the hyperinflation and everything that goes on within hyperinflation is all, God, it’s a very hard problem to solve, because how do you tell someone where it’s like, today, the dollars that you’re holding in your hand will buy you a cheeseburger, but tomorrow, it will not buy you a cheeseburger. Do you want a cheeseburger? Like, yeah, obviously, psh, throw it in. But if everybody’s doing that, that’s what makes it so that tomorrow,
Federico Ramallo (26:43) Yeah
Kyle Bowman (27:05) it’s not worth it. The cheeseburger is worth more. So it’s like, how do you stop that cycle? For smarter people than me.
Federico Ramallo (27:11) prices will change from morning
from morning to evening
So if you go and buy the cheeseburger in the morning, it’s one price. In the evening, it’s another price. Because the inflation was so crazy. So now they have 30 % inflation. So they were able to take it down. And it was interesting. The way that you stop inflation is by reducing government spend.
Kyle Bowman (27:20) That’s crazy.
That’s insane.
It’s just…
Federico Ramallo (27:38) So if you collect more than you spend, then you stop inflation.
Kyle Bowman (27:44) You can basically put the brakes on it. Makes sense. Because people aren’t going to stop, so you have to stop the spend somewhere. As the government, that’s where you can control the spend. So, makes sense. No governments. No cheeseburgers for the government.
Federico Ramallo (27:56) Right,
right. But then the issue is the political cost that that has because, you’ve been collecting your, you know, your money from the government. Now the government says, we’re not going to give you that subsidy or whatever. Right. Sorry. So you’re going to be angry and everybody else is going to be angry. Right. So, you know, so it has a political cost that no political is willing to accept. It’s easy to keep printing money. Right. So.
Kyle Bowman (28:16) Exactly.
Federico Ramallo (28:25) So Javier Millet did a good job on explaining to people the issue, the consequences, and how he was going to stop it. then he needed, basically, the Argentinian population took a leap of faith, right? And they said, because he said, we need 48 months to see the changes, the positive changes of stopping the inflation.
Kyle Bowman (28:26) Right.
Yeah.
Federico Ramallo (28:53) And people say, we’re with you. They hold hope for food. But the thing is, in six months, he reduced inflation so much. And then he kept going and going and going. And yes, of course, you had the voices of people complaining because now they didn’t have the benefits. But yeah, it was interesting. They found.
Kyle Bowman (28:53) Dang.
Hold on for 48, Yeah.
Federico Ramallo (29:17) so many subsidies that the government was doing. And some of them are crazy. Like a university, was a social political group that was having a fully funded university by the government. And when they go and they check it out, one of the floors was a disco, a bar.
with alcohol and everything, things like that, they found a lot. So they fired a lot of employees that were not adding value to society. But they kept some of the benefits, and then they start reducing the benefits. It was interesting to see, because I had no hopes that it was going to be solved.
Kyle Bowman (29:35) Ayy. That sounds lovely.
Yeah, I mean, it’s a huge macroeconomic problem with big impacts on the lives of millions and millions of people. And there are people who obviously rely on those subsidies in order to take care of things outside of going to the disco at the university,
Federico Ramallo (30:05) Yes.
No!
Kyle Bowman (30:13) And, and then there’s also like times where it’s just getting wasted. And like, how do you find where the money being spent is actually like really benefiting people and where it’s potentially getting wasted. And obviously it’s not black or white. There’s things in the middle of like some scientific research. Do you want to fund that? Do you not want to fund it? Do you want to fund the army? Do you want to fund, like, I don’t know, pick your favorite political hot, like flash topic, right? Like there’s a, an example there, I think.
Federico Ramallo (30:31) Yeah.
Kyle Bowman (30:35) The thing that gets me interested and how we’ve like dove all the way into the end of politics is that like the majority of people actually agree on most things. Like for the most part, we all mostly agree that like, people should be able to eat food. They should be able to relax. They should have like a safe life and we should all be like friends with one another for the most part, right? It’s just a lot of the like disagreements come into little nuances of like, well, how do we get there? You know?
Federico Ramallo (30:43) Hahaha!
How do you make it happen?
Right.
Kyle Bowman (30:58) Exactly. And it’s just interesting in the current political climate that we have.
People are less inclined to like start from, we agree that we should all like live safe, happy, health, healthy lives and more focused on like, well, you want to get there like this and I want to get there like that. And therefore we are dire enemies who should never talk to one another and should like never, never be friends. It’s like that’s tough, but you know.
Federico Ramallo (31:20) Hahaha.
Yes, I mean, the talking about political climate in the US that, you know, I’ve seen people on both sides of the the, you know, of the aisle, trying to talk about is, if you don’t agree to my ideas, you’re dead to me. Right. Yeah. And because and it’s a little bit nuanced, but it’s I don’t know if you have the same ideas. I don’t want to talk with you. And then the other thing is because
Kyle Bowman (31:38) Exactly.
Federico Ramallo (31:49) your ideas are evil, then I can justify any non-social behavior because you’re evil. ⁓ And it happens on both sides, right? On different, yeah. So that’s, And I’m reading a book about, yeah. I’m reading a book about, it’s Economy in a Lesson by Henry.
Kyle Bowman (31:58) Exactly. 100 % from different angles. like circling. Oh yeah, go ahead. Sorry.
Federico Ramallo (32:17) Henry what? Henry Haslett. And it’s based on a paper as the economy to be what it is and isn’t in economy, something like that. But this book was published in 1946. And you read it and it stays relevant today.
Kyle Bowman (32:33) Hmm.
Wow.
Federico Ramallo (32:42) So it’s this idea of if you tax something, you do not see the works that has been lost. Because what you see is the person that gets a benefit. If you benefit a group, then you’re benefiting a group in detriment of the others. So the group that gets the benefit is happy. And then the other ones might not see the detriment.
Because if I’m a government, they give you money, you’re happy. But then I’m taking that money from taxes that could be spent on something else. So it’s very tempting for a political.
Kyle Bowman (33:11) Yeah.
Right. It’s all
a game of big prioritization, right? This was going to say, bringing it back to the original topic that we had, what, 40 minutes ago.
If you, if you look at some of these political problems, you sort of boil them down to like, Hey, here’s the one key knob that we want to turn. Like, how do you then measure the outcomes of what you’re doing? So you can say like, Hey, I know that the problem that I’ve solved, I’ve actually like done a, done a good job at solving it. And the solutions that I’m putting into place make sense. They’re driving what I want and they’re doing what I need because otherwise to like the point of prioritization, it’s very easy to just throw out a solution and say like,
look we’re doing something but was it the right solution like let’s say our our metric is I don’t know how much people sleep at night just to pick something that’s not controversial right and we say okay I know that people on average right now are sleeping six hours a night I’m going to spend a whole bunch of money on sleep studies well if I do the money on sleep studies and at the end of the sleep studies people are still sleeping six hours a night and I want them to get to seven hours a night
Federico Ramallo (34:11) Right.
Kyle Bowman (34:25) Was that the right answer? Maybe not. Maybe instead I should have spent money on, I don’t know, therapy or hypnotherapists. And it turns out the hypnotherapy is the right thing because now people sleep for 12 hours a day because they’re getting hypnotized. I don’t know. Making up the example, right? But the…
The point is still the same of like, you, similar to what you were talking about with Melee, like can you actually measure the outputs of what you’re doing if you’re saying like inflation is our key metric that we’re trying to drive? I’m going to put in place a few really tough solutions and we’re going to watch the inflation together. And if it doesn’t go down, we know we need to do something else. And if it goes down, we know we did a good job. And in his case, like there’s no arguing at the results that inflation has gone down.
Like, no matter sort of how you agree with him, left, right, otherwise on the political spectrum, like from a pure sort of engineering problem solution standpoint, like inflation went down, which is, I think, generally viewed as a good thing.
Federico Ramallo (35:17) Yeah, yeah, and what this book talks about is kind of this idea of the unpredictable consequences of decisions, right? I see a problem and I fix it.
right, which works for engineering, We’re kind of geared towards that, you know. But then on economics is, yes, but you have to think about the, know, the, yes, yes, right. And of course, this book is more, you know, it’s libertarian, it’s supporting the ideas of Javier Millay, you know, but it’s this idea of,
Kyle Bowman (35:29) Yeah.
Downstream impacts, yeah. Who paid?
Federico Ramallo (35:50) we can put a market in place that is going to be self-regulated to find the optimal solution for the resource problem. And I’m kind of paraphrasing, so don’t quote me on that. But that is this idea. And then Keynes proposed this idea of intervention, government intervention. Government has to be everywhere, present. So the present government, that’s how I grew up. The government is everywhere.
I was too young for this, but a few generations before me, they had the picture of Eva Perón and Perón Perón on the schools, like they were gods. So the government was present everywhere. they became these god figures.
And the issue is when you’re making a decision from top down, you don’t see all those secondary consequences. If I’m on the top, I can say, we have to build a factory there. Why? Because I have a powerful finger. There is no, you know. But if it’s a market-based, then.
Kyle Bowman (36:50) Yeah.
Federico Ramallo (37:05) somebody’s going to decide to put a factory there because it’s the best place to put it. And if he’s wrong, that factory is going to close. It’s going to shut down because it’s unable to sustain itself. So I think that that’s a great mechanism. What I’m concerned is, what I haven’t figured out is what happens when you have bad actors that are exploiting the system. I don’t know how much or how little
Kyle Bowman (37:24) Yeah, exactly.
100%.
Federico Ramallo (37:30) the government should be able to put regulations there because now we’re putting regulations that were Keynesian policies. But if the media companies in the US, it went from, I don’t know, it was like 80 or something, now it’s three or four. So are they getting close to a monopoly? Are they talking to each other and sharing some tactics?
Kyle Bowman (37:40) Yeah.
Federico Ramallo (38:00) I don’t know, right? But it’s easier when you have smaller players, right? And that’s where I see the issue.
Kyle Bowman (38:01) Right.
Well, I think you give a good example with the powerful finger, right? So let’s say you have some, some industry, doesn’t matter. There’s a hundred thousand different people all competing for where to build a factory. The ones that are built in the best places will survive. Cool. Now you have those ones there. They, there’s some mergers here. There’s some mergers there. Like everybody’s buying da da da da. And in the end there’s one big company, Factory Corp, right? They own all the factories. Now what do they have? They have one big finger and they say, I want to build a factory there. And again, that’s exactly what you said.
just choosing a spot because they can.
And it’s not because there’s competition or they’re going to lose out or all these things, they’ve cornered the market. And I mean, that’s where you have the protections against monopolies and things. like where you draw the line on what is considered a monopoly and what’s not, and what do you protect against, against the government? think that’s where there’s a lot of really interesting economic debates and there’s people who sort of lean in all of these directions where I think we can all agree with the base concept of what you said of like the free market of like, let’s put a factory in a place will end up help you.
you
choose sort of the winners and losers and make the system overall more efficient. But also the free market, if you let it just run freely for a while, tends towards the monopoly because the winners will keep winning and they’ll win it all. And then off they go, right? They have sort of that advantage. So you got to figure out where you want to play.
Federico Ramallo (39:22) Right.
I was reading the story about the Pinkerton Detective Agency, And they did a lot of things. But one of the that they did is they participated on one of the strikes in a mine. And they basically hired the Pinkertons to subdue the
strike, And basically, you know, if somebody that’s strike there, they own, you know, the mining company owned the mining, the housing, you know, the little markets, everything. So basically, people that got striking, they kick them out of the house, right? So, you know, immediately, right? Because they had this little monopoly on this little area, right? But big enough to affect
family, right? And they would use violence and all that stuff. what I’m trying to say with this is this is an example where having monopoly or having the market doesn’t work because they were saying, but we’re hiring them at a salary that they agreed to. Yes, but it was during the Depression. was different situations that would…
Kyle Bowman (40:12) Right?
Federico Ramallo (40:33) It was an unfair advantage for the company. So yeah. in that case, think, yes, that was bad, and that should not have happened. But then on the other hand, the labor in Argentina is very strong. And I know I’m talking about different examples that are completely different situations. But basically, in Argentina, 5 % of salaries are used
Kyle Bowman (40:36) Exactly.
Federico Ramallo (40:57) have to go to the labor unions. So they became very powerful, so powerful that they were able to have influence on the government. They would do strikes. They would cut the streets. And in 2022, they had 9,700 strikes.
Kyle Bowman (41:00) I’ll buy union
Federico Ramallo (41:24) They cut different parts of the city, right? And they would coordinate it. So the whole city would get, the Buenos Aires would get blocked basically. Nobody could get in and out. So you’re going to work. I was going to work and then I would get strike. And this has been happening for the last 23 years. So it’s been going up and up and up, right? So then you have that and that’s an excess of power. So Mila just recently…
Kyle Bowman (41:35) ⁓ jeez.
Federico Ramallo (41:52) change a law, right? Where now every employee can choose which union they want to give their contribution and they can choose not to, right? So now the unions have to compete to get the, you know, which is, I think is a great way to take power away from people that has been 23 years.
Kyle Bowman (42:07) Mmm.
Federico Ramallo (42:17) know, leading these union organizations, right?
Kyle Bowman (42:20) Yeah, make them earn what they’re promising.
Federico Ramallo (42:23) Yes, yes. So it’s interesting having these two extremes of the coin. So Kyle, we’re running out of time. It’s been amazing speaking with you. Do you want share final remarks before we wrap it up?
Kyle Bowman (42:32) No worries.
I mean, we wandered all over the place. This was super fun. Thanks for chatting. I don’t know. I think overall, approaching life, problems with the critical eye, all these things, it can be fun. It can be interesting. You can learn a lot. And the world that we’re heading towards, who knows what’s going to happen. So to everybody else out there, Godspeed.
Federico Ramallo (43:03) That’s amazing, Kyle. Thank you very much for joining us today. I we had a great conversation. We went all over different topics. Yeah, thank you.
Kyle Bowman (43:12) Awesome, thanks Federico Talk soon.