Better Offline – "The Enshittifinancial Crisis: Part One"
Host: Ed Zitron
Date: January 20, 2026
Podcast Network: Cool Zone Media & iHeartPodcasts
Episode Overview
In this inaugural part of a four-part series, tech industry veteran Ed Zitron launches a scathing, deeply researched critique of the "enshittification" of the tech industry – a term coined by Cory Doctorow to describe the inevitable decline of digital platforms as they prioritize growth and shareholder value above all else. Zitron extends this analysis to what he terms the "enshittifinancial crisis," arguing that the rot now permeates the entire financial system, with stock market analysts, investors, and the media complicit in maintaining sky-high valuations even as the underlying products degrade and the numbers become ever more detached from reality.
Key Discussion Points and Insights
1. What Is Enshittification? The Evolution of Platform Decline
- Three Phases of Enshittification [05:45]
- Stage 1: Good for users – Platforms lure in users by being free, easy, or uniquely useful.
- Stage 2: Good for business customers – Platforms shift to prioritize advertisers or business clients over end users, often degrading user experience for profit.
- Stage 3: Good for shareholders; bad for everyone else – Both users and advertisers are squeezed for every last dollar as companies chase shareholder value at the expense of all other stakeholders.
- Zitron argues we're witnessing a fourth stage, where even investors, analysts, and the financial ecosystem are being "enshittified" as companies turn on them too. [15:41]
- Notable Quote:
“We're now entering enshittification stage 4 where businesses turn on shareholders, analysts and investors have become trapped in the same kind of loathsome platform play as consumers and businesses...” — Ed Zitron [15:41]
2. The Rot Economy: How Tech Has Lost Its Way
- Hypergrowth and Its Consequences [03:40]
- The tech industry's last 15 years have been dominated by a "growth at all costs" ideology.
- Most tech products and services have gotten worse; real-world needs (housing, healthcare, schools) go unaddressed in favor of financial speculation.
- “The money does exist. It just exists for those that want to gamble.” [04:51]
- Artificial Scarcity of Investment for Ordinary People
- Enormous funds flow to risky investment vehicles and corporate ploys, while individuals are told resources 'don't exist' for basic needs.
3. How Platforms Die: Facebook/Meta as Exhibit A
- Zitron details the decay of Facebook, Instagram, and Meta:
- Ads, Fraud, and AI Slop:
- Meta (Facebook) now makes ~10% of its $16B annual revenue from scam ads and banned goods (Reuters, Nov. 2025). [08:25]
- Meta uses accounting tricks (off-balance sheet loans for data centers) to obfuscate real costs.
- Analyst reaction? Stock price targets are raised. No one in finance appears to care.
- “I can find no analyst commentary on Meta making $16 billion on fucking fraud because it doesn't matter to them. Because this is the rot economy and all that matters is number go up.” — Ed Zitron [10:37]
- Ads, Fraud, and AI Slop:
4. Stock Market Realities: “Number Go Up” and the Absurdity of Analyst Optimism
- The Disconnect Between Stock Price and Business Health
- Stock valuations are increasingly about the perceived ability to keep growing, not real product value or profitability. [17:36]
- “The value of a stock is not based on whether the business is healthy or its future even certain, but on its potential price to grow.”
- Sell-Side Analysts’ Complicity
- Analysts rarely actually analyze; they say what the market wants to hear (“AI will be big!”), prop up hype cycles, and serve two masters: institutional investors behind the scenes and the public-facing “hot takes.”
- “Any analyst who might hear this, I'm taking a lot of screenshots. I've been taking screenshots for several years.” [18:37]
- Example: Massive investments in the Metaverse produced nothing, but analysts and media spent years defending Zuck’s vision.
- “The defense appears to be give Zuck a chance. Now the Metaverse is quite dead. I should be clear…” [21:46]
5. Accounting Gimmicks and Hidden Risks
- Changing Useful Life of Servers [24:25]
- Hyperscalers (Microsoft, Meta, Google, Amazon) manipulate depreciation schedules on servers to minimize expenses, inflate reported profits, and avoid impairments.
- “This is quite literally disconnected from reality and done based on internal accounting that we are not party to...” [26:11]
- Real consequences: billions in reduced expenses, no analyst concern.
- Historical Example: The Dot-com Bubble [27:30]
- Zitron cites the WinStar/Lucent deal (“$2B equipment and finance agreement to generate $100M in revenue over five years”).
- Post-collapse, there was always an excuse: “There were a few bad apples. ... Otherwise, everything was fine.”
6. Critical Reflection and Direct Call-Outs
- Perverse Incentives and Media Failure
- Skeptical journalists or analysts are marginalized—herd mentality reigns. [31:56]
- “A sell side analyst that tells you not to buy something is a problem. A journalist that is skeptical or critical ... is considered a hater… If you're an analyst listening to this, stop being a coward. Go read the numbers man. I've been doing it.”
- Retail Investors as Victims
- Retail investors who believe the manufactured hype will lose out when the bubble pops.
- The Rotcom Bubble: No More Growth Ideology
- AI hype is cover for a lack of real innovation or new ideas:
- “They're only doing AI because they do not appear to have any other viable ideas to continue the economy's eternal growth at all costs.” [34:58]
- Revenue claims for new “AI” products are minuscule relative to massive expenditures, yet the markets celebrate.
- “Number go up. I'm an ape. I'm a buffoon. Number higher. Yay.” [35:53]
- AI hype is cover for a lack of real innovation or new ideas:
- Unanswered Questions: Where’s the Money Going?
- Tech giants’ capital expenditures are in the hundreds of billions, but nobody knows (or asks) what exactly the money is buying or what the payoff will be. [38:55]
- Zitron goes as far as tracing hardware flows through Taiwanese server manufacturers, questioning why he alone is investigating.
7. Final Rant and Teaser for Part Two
- The financial world is in an abusive relationship with tech stocks, prioritizing “number go up” even as oversight vanishes and risk balloons.
- Recent hype cycles (AI, Metaverse, OpenAI-Oracle deals) rely on wild speculation, with financial media amplifying, not challenging, company narratives.
- “Retail and institutional investors ... all acting with the disregard for the truth that comes from years of never facing a single consequence.” [41:51]
- Heavy foreshadowing: More specific case studies and data coming in the next episode.
Notable Quotes & Memorable Moments
-
On Wall Street's Ethical Blindness:
“The free market is a fucking con... The financial system is not about an exchange of value, but whether or not you can enter into the currently agreed upon convenience by letting neoliberalism and the scourge of the free markets rule...” — Ed Zitron [05:27]
-
On Meta’s Accounting Gimmicks:
“Meta is using deliberate and insidious accounting tricks to act like a data center that it is paying to build and will be the sole tenant of is somehow an off-balance sheet operation. One would be wrong [to think investors care].” [09:41]
-
On Analyst Herd Mentality:
“Analysts, investors and even the media spend far more energy fighting the doubters than they do showing these companies scrutiny. Much like the user of an enshittified platform, investors and analysts are frogs in a pot.” [28:03]
-
On Lack of Transparency in Tech:
“We don't know where the money is going. These companies don't tell us anything. They don't tell us how many GPUs they have, or where those GPUs are, or how many of them are installed, or what their, their IT load capacity is, or how much money they cost to run, or how much money they even make.” [24:41]
-
On the Absurd Scale of Expenditures:
“Microsoft, Meta, Amazon and Google have spent $776 billion in capital expenditures in the space of three years. And even more so that analysts and investors, when faced with such egre numbers, sit back and say, oh yeah baby, oh yeah. They're building the infrastructure of the future, baby. We love this.” [40:11]
Timestamps for Key Segments
- 00:00–02:29: [Intro, Ad Skips]
- 02:29–07:00: Zitron introduces the theme, “enshittification,” and the current state of tech capitalism
- 07:00–12:42: Illustration of Facebook/Meta’s decline, advertising fraud, and investor apathy
- 15:41–21:46: How companies now prey on investors and analysts, not just users
- 21:46–27:30: Analyst/media complicity, Metaverse boondoggle, and accounting sleight-of-hand
- 27:30–31:56: Historic examples from the dot-com bubble and recurring financial errors
- 31:56–38:55: On the perverse incentives and the Rotcom bubble, AI as smokescreen
- 38:55–41:51: “Where is the money going?” tracing tech’s capital expenditures, analyst failures
- 41:51–43:55: Analysts/retail investors abused by hype, preview for Part Two
Summary and Takeaway
Zitron’s opening salvo in “The Enshittifinancial Crisis” is both damning and darkly witty—tracing how “enshittification” has metastasized from user experience to the heart of the tech-financial complex itself. The episode positions the tech industry and its enablers (analysts, investors, the business media) as complicit in a fiction where stock price and growth projections matter infinitely more than real product value, profitability, or transparency. As platforms rot and numbers become more surreal, Zitron warns that everyone—particularly the public fostered on endless growth narratives—is at risk as the cycle of hype and financial abuse continues.
Teaser:
Tune in to Part Two for concrete case studies, deeper analysis, and even more “enshittification.”