Saturday, January 21, 2017
"It is hard to be against sustainability. In fact, the less you know about it, the better it sounds. That is true of lots of ideas"
-Robert M Solow, Sustainability: An Economist's Perspective
As Solow points out in his lecture "Sustainability: An Economist's Perspective," the term 'sustainability' is subject to varying interpretations. Depending on which interpretation one chooses, sustainability could be congruent with a market economy, or it could rule out economic activity altogether.
Human economic activity alters the environment. We nurture some species of plants and animals, and we hamper others. We transform plants, animal products, and minerals into different forms. We use chemical reactions to change matter from one form to another. Some of those chemical reactions provide us with energy in useful forms.
Suppose we were to define sustainability as leaving the natural environment exactly as we found it. That definition is appropriate for a society of hunters and gatherers. If you want to hunt and gather sustainably, you cannot kill game or gather plants at a higher rate that they are naturally replenished. However, such a strict definition will not accommodate more advance economic activity characterized by specialization. Living by such a definition would in fact require that we revert to hunting and gathering.
-Arnold Kling, Specialization And Trade: A Re-Introduction To Economics
...................but when I do, he writes stuff like this:
Why, then, had so many people who covered the campaign been so confident of Clinton’s chances? This is the question I’ve spent the past two to three months thinking about. It turns out to have some complicated answers, which is why it’s taken some time to put this article together (and this is actually the introduction to a long series of articles on this question that we’ll publish over the next few weeks). But the answers are potentially a lot more instructive for how to cover Trump’s White House and future elections than the ones you’d get by simply blaming the polls for the failure to foresee the outcome. They also suggest there are real shortcomings in how American politics are covered, including pervasive groupthink among media elites, an unhealthy obsession with the insider’s view of politics, a lack of analytical rigor, a failure to appreciate uncertainty, a sluggishness to self-correct when new evidence contradicts pre-existing beliefs, and a narrow viewpoint that lacks perspective from the longer arc of American history. Call me a curmudgeon, but I think we journalists ought to spend a few more moments thinking about these things before we endorse the cutely contrarian idea that Trump’s presidency might somehow be a good thing for the media.
-full post is here
In January of 2016, Walter Russell Mead penned this essay, Andrew Jackson, Revenant. Read the whole thing, but here are four quick excerpts:
Jacksonian populism, the sense of honor-driven egalitarianism and fiery nationalism that drove American politics for many years, has never been hated and reviled as often as it is today, and many American academics and intellectuals (to say nothing of Hollywood icons) are close to demanding that Jacksonian sentiment be redefined as a hate crime.
It is hard for Jacksonians to mobilize politically. Neither party really embraces a Jacksonian agenda. Combining a suspicion of Wall Street, a hatred of the cultural left, a love of middle class entitlement programs, and a fear of free trade, Jacksonian America has problems with both Republican and Democratic agendas.
Donald Trump, for now, is serving as a kind of blank screen on which Jacksonians project their hopes.
The biggest story in American politics today is this: Andrew Jackson is mad as hell, and he’s not going to take it anymore.
...........surviving the evolutionary battle is fairly important:
"The greater sensitivity to negative rather than positive changes is not specific to monetary outcomes," wrote Amos and Danny. "It reflects a general property of the human organism as a pleasure machine. For most people, the happiness involved in receiving a desirable object is smaller than the unhappiness involved in losing the same object."
It wasn't hard to imagine what this might be - a heightened sensitivity to pain was helpful to survival. "Happy species endowed with infinite appreciation of pleasures and low sensitivity to pain would probably not survive the evolutionary battle," they wrote.
-Michael Lewis, The Undoing Project: A Friendship That Changed Our Minds
No truer words have ever been spoken than John Kenneth Galbraith’s line “Faced with the choice between changing one’s mind and proving that there is no need to do so, almost everyone gets busy on the proof.”
-Michael Batnick, from his conclusion to this post
Friday, January 20, 2017
Much has been said about being in the present.
It's the place to be, according to the gurus,
like the latest club on the downtown scene,
but no one, it seems, is able to give you directions.
It doesn't seem desirable or even possible
to wake up every morning and begin
leaping from one second into the next
until you fall exhausted back into bed.
Plus, there'd be no past
with so many scenes to savor and regret,
and no future, the place you will die
but not before flying around with a jet-pack.
The trouble with the present is
that it's always in a state of vanishing.
Take the second it takes to end
this sentence with a period - already gone.
What about the moment that exists
between banging your thumb
with a hammer and realizing
you are in a whole lot of pain?
What about the one that occurs
after you hear the punch line
but before you get the joke?
Is that where the wise men want us to live
in that intervening tick, the tiny slot
that occurs after you have spent hours
searching downtown for that new club
and just before you give up and head back home?
-Billy Collins, from his collection of poems in The Rain In Portugal
..........after a half-year sabbatical, John E. Smith is blogging again!
Deliberate practice is necessary for success, but it is not sufficient. The people at the top of any competitive field are both well-suited and well-trained. To maximize your potential, you need to not only engage in consistent and purposeful practice, but also to align your ambitions with your natural abilities.
-James Clear, as excerpted from this article about matching genetic advantages with deliberate practice.
Thursday, January 19, 2017
.......................................................a love affair as old as time:
“Our ape ancestors started eating fermented fruits on the forest floor, and that made all the difference,” says Nathaniel Dominy, a biological anthropologist at Dartmouth College. “We’re preadapted for consuming alcohol.”
-from the National Geographic. Man's 9,000 (+/-) year relationship with alcohol
The most powerful force in the universe, as Einstein referred to it, is something that eludes many of us for two main reasons. One, most people just don’t understand how it works. For instance, 10% growth for 25 years is not 250%, it’s 985%! The second reason why many fail to take advantage of compounding is because it takes time. Like, a lot of time. Buffett has been rich forever, but 95% of his net worth was earned after his 60th birthday.
-Michael Batnick, as borrowed from here
I was going to comment that it is a sin that our schools don't teach about the magic of compounding, but then the realization that I haven't done a very good job teaching my own kids about it set in, so, nevermind.
But these stories people told themselves were biased by the availability of material used to construct them. "Images of the future are shaped by the experience of the past," they wrote, turning on its head Santayana's famous lines about the importance of history: Those who cannot remember the past are condemned to repeat it. What people remember about the past, they suggested, is likely to warp their judgment of the future. "We often decide that an outcome is extremely unlikely or impossible, because we are unable to imagine any chain of events that would cause it to occur. The defect, often, is in our imagination."
-Michael Lewis, quoting a paper by Kahneman and Tversky in The Undoing Project: A Friendship That Changed Our Minds
My business partner and I started our investment real estate company in 1982. Interest rates, for those who were not paying attention back then, were atmospheric between 1980 and 1982. Making sense of a real estate investment when you are borrowing money at 16%, is a difficult (not impossible, but very difficult) proposition. Anyway, that high rate environment is what we grew up with. Not unlike our parents, who learned to fear debt during the depression, and lived with that fear for the rest of their lives, we learned to fear variable interest rates.
"What people remember about the past, they suggested, is likely to warp their judgment of the future."
For the past twenty years, every time we were offered the choice between a variable rate or a fixed rate loan, we opted for the fixed rate. Mind you the fixed rate variety carries the penalty of a higher interest rate, sometimes several percentage points higher. In our minds, though, all we could do was see rates rising. Nevermind that for the past twenty years they have, for the most part, steadily fallen.
While it is easy to rationalize and say we slept better at night having fixed rate financing, our inability to throw off our past cost us a significant number of dollars. And we never even got a thank you note from our bankers.
Wednesday, January 18, 2017
In a funny way, and as insane as it sounds to say out loud, Zuckerberg is one of the few people for whom becoming president of the United States might be a step down. As the chief of Facebook, he is already the true leader of the free world. Zuckerberg commands a company that touches a quarter of the Earth’s population, some 1.8 billion monthly active users. There is no one alive who can affect more people with the touch of a button.
-Nick Bilton, as found in this article, Will Mark Zuckerberg Be Our Next President? Just love the sub-title.
all of which brings back my favorite facebook cartoon:
Human beings do not do well with decisions. Whether we’re wrestling with who to start in fantasy football, which line to get on at the store, which stock to buy, or even what to choose from on a dinner menu, there are certain glitches in our brain that are really hard to avoid.
-Michael Batnick, as cut and pasted from here
..............................................his list is too short, but still:
“Three causes especially have excited the discontent of mankind; and, by impelling us to seek remedies for the irremediable, have bewildered us in a maze of madness and error. These are death, toil, and the ignorance of the future”
-Charles Mackay, as quoted here
I think one of the greatest disgraces in this county is the fact that in a lot of inner-city schools, 50 percent of the kids don't graduate high school. And even those kids who graduate are not necessarily job-ready. That's a crime. That's America at its absolute worst. We are allowing that to happen, and these kids don't have the opportunity we all had at one point in life. We have to fix it. It's not whether something's free. It whether it ends up where you're properly trained for a job.
-Jamie Dimon, as culled from this interview
..........................................what they are writing about:
The news article, as clipped from here, seems to suggest there is a proper "balance" between supply and demand. Is there? Says who? One assumes their measure would be price per barrel, but at what price? Who is smart enough to figure all this out? The tone of the article suggests the smart people have it all figured out. Color me doubtful.
“Economic development is something much wider and deeper than economics, let alone econometrics. Its roots lie outside the economic sphere, in education, organisation, discipline and, beyond that, in political independence and a national consciousness of self-reliance.”
-Ernst F. Schumacher,
"I believe that our society's 'mistake-phobia' is crippling, a problem that begins in most elementary schools, where we learn to learn what we are taught rather than to form our own goals and to figure out how to achieve them. We are fed with facts and tested and those who make the fewest mistakes are considered to be the smart ones, so we learn that it is embarrassing to not know and to make mistakes. Our education system spends virtually no time on how to learn from mistakes, yet this is critical to real learning."
-attributed to Ray Dalio
Tuesday, January 17, 2017
In the spring of 1969, at least, Amos wasn't overtly hostile to the reigning theories in social science. Unlike Danny, he wasn't dismissive of theory. Theories for Amos were like mental pockets or briefcases, places to put the ideas you wanted to keep. Until you could replace a theory with a better theory - a theory that better predicted what actually happened - you didn't chuck a theory out. Theories ordered knowledge, and allowed for better prediction. The best working theory in social science just then was that people were rational - or, at the very least, decent intuitive statisticians. They were good a interpreting new information, and judging probabilities. They of course made mistakes, but their mistakes were a product of emotions, and the emotions were random, and so could be safely ignored.
But that day something shifted inside Amos. He left Danny's seminar in a state of mind unusual for him: doubt. After the seminar, he treated theories that he had more or less accepted as sound and plausible as objects of suspicion.
-Michael Lewis, detailing the continuing adventures of Amos Tversky and Daniel Kahneman in The Undoing Project: A Friendship That Changed Our Minds
"I could see that I was not going to cope as well as I wished with life unless I could acquire a better theory-structure on which to hang my observations and experiences. By then, my craving for more theory had a long history. Partly, I had always loved theory as an aid in puzzle solving and as a means of satisfying my monkey-like-curiosity. And, partly, I had found that theory-structure was a superpower in helping one get what one wanted. As I had early discovered in school wherein I had excelled without labor, guided by theory, while many others, without mastery of theory failed despite monstrous effort. Better theory I thought had always worked for me and, if now available could make me acquire capital and independence faster and better assist everything I loved."
-attributed to Charlie Munger
“It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts.”
-Sherlock Holmes, as channeled by Sir Arthur Conan Doyle in A Scandal in Bohemia
He had listened to an American economist talk about how so-and-so was stupid and so-in-so was a fool, then said, "All your economic models are premised on people being smart and rational, and yet all the people you know are idiots."
-Michael Lewis, channeling Amos Tversky in The Undoing Project: A Friendship That Changed Our Minds
At Colonial that year, I was in a playoff with Johnny Pott, and at the ninth hole I found myself in a greenside bunker. I led by a stroke and desperately wanted to get down in two for a par to keep my lead. As I was standing over the ball ready to play the shot, I heard the voice of a small boy behind me. I backed off the shot and laughed as his mother shushed him. Then the boy began crying, so I backed off again. When I settled over the ball a third time, I heard the boy's muffled cry, and when I turned around, there was this little boy turning red because his mother had clamped her hand over his mouth to keep him quiet.
Finally I said the the mother, "Hey, it's okay. Don't choke him. This isn't that important." Then I went back to the ball, blasted out, saved par, and went on to win the tournament.
-Arnold Palmer, A Life Well Played: My Stories
Monday, January 16, 2017
Let us all hope that the dark clouds of racial prejudice will soon pass away and the deep fog of misunderstanding will be lifted from our fear drenched communities, and in some not too distant tomorrow the radiant stars of love and brotherhood will shine over our great nation with all their scintillating beauty.
-Martin Luther King, Jr., concluding one of the most amazing letters ever written
Oppressed people cannot remain oppressed forever. The yearning for freedom eventually manifests itself, and that is what has happened to the American Negro. Something within has reminded him of his birthright of freedom, and something without has reminded him that it can be gained. Consciously or unconsciously, he has been caught up by the Zeitgeist, and with his black brothers of Africa and his brown and yellow brothers of Asia, South America and the Caribbean, the United States Negro is moving with a sense of great urgency toward the promised land of racial justice. If one recognizes this vital urge that has engulfed the Negro community, one should readily understand why public demonstrations are taking place. The Negro has many pent up resentments and latent frustrations, and he must release them. So let him march; let him make prayer pilgrimages to the city hall; let him go on freedom rides -and try to understand why he must do so. If his repressed emotions are not released in nonviolent ways, they will seek expression through violence; this is not a threat but a fact of history. So I have not said to my people: "Get rid of your discontent." Rather, I have tried to say that this normal and healthy discontent can be channeled into the creative outlet of nonviolent direct action. And now this approach is being termed extremist. But though I was initially disappointed at being categorized as an extremist, as I continued to think about the matter I gradually gained a measure of satisfaction from the label. Was not Jesus an extremist for love: "Love your enemies, bless them that curse you, do good to them that hate you, and pray for them which despitefully use you, and persecute you." Was not Amos an extremist for justice: "Let justice roll down like waters and righteousness like an ever flowing stream." Was not Paul an extremist for the Christian gospel: "I bear in my body the marks of the Lord Jesus." Was not Martin Luther an extremist: "Here I stand; I cannot do otherwise, so help me God." And John Bunyan: "I will stay in jail to the end of my days before I make a butchery of my conscience." And Abraham Lincoln: "This nation cannot survive half slave and half free." And Thomas Jefferson: "We hold these truths to be self evident, that all men are created equal . . ." So the question is not whether we will be extremists, but what kind of extremists we will be. Will we be extremists for hate or for love? Will we be extremists for the preservation of injustice or for the extension of justice? In that dramatic scene on Calvary's hill three men were crucified. We must never forget that all three were crucified for the same crime--the crime of extremism. Two were extremists for immorality, and thus fell below their environment. The other, Jesus Christ, was an extremist for love, truth and goodness, and thereby rose above his environment. Perhaps the South, the nation and the world are in dire need of creative extremists.
-Martin Luther King, Jr., Letter from Birmingham Jail
Heading home too late one evening, he saw a German soldier approaching. "He was wearing the black uniform that I had been told to fear more than others - the one worn by specially recruited SS soldiers," he recalled, in the autobiographical statement required of him by the Nobel Committee. "As I came closer to him, trying to walk fast, I noticed that he was looking at me intently. Then he beckoned me over, picked me up, and hugged me. I was terrified that he would notice the star inside my sweater. He was speaking to me with great emotion, in German. When he put me down, he opened his wallet, showed me a picture of a boy, and gave me some money. I went home more certain than ever that my mother was right: people were endlessly complicated and interesting."
Michael Lewis, The Undoing Project: A Friendship That Changed Our Minds
Context for the excerpt: The year was late 1941, or early 1942. The place was Nazi occupied France. Danny Kahneman was seven-years old and Jewish.
Sunday, January 15, 2017
From his stint as a consultant he learned something valuable, however. It seemed that a big part of a consultant's job was to feign total certainty about uncertain things. In a job interview with McKinsey, they told him that he was not certain enough in his opinions. "And I said it was because I wasn't certain. And they said, 'We're billing five hundred grand a year, so you have to be sure of what you are saying.'" The consulting firm that eventually hired him was forever asking him to exhibit confidence when, in his view, confidence was a sign of fraudulence. They'd asked him to forecast the price of oil for clients, for instance. "And then we would go to our client and tell them we could predict the price of oil. No one can predict the price of oil. It was basically nonsense."
A lot of what people did and said when they "predicted" things, Morey now realized was phony: pretending to know things rather than actually knowing things. There were a great many interesting questions in the world to which the only honest answer was, "It's impossible to know for sure."
-Michael Lewis, The Undoing Project: A Friendship That Changed Our Minds
Apatow concedes that “clearly Hillary Clinton made a few enormous mistakes. One of those mistakes, to me, was that you can’t get paid that much for speeches and go back into politics. That has to be your victory lap — you cash in, you do the speeches and you’re done.”
-Judd Apatow, culled from here. Am I the only one who thinks the headline does not match the story content?
THE circus, Ringling Bros. and Barnum & Bailey is closing up shop. Story here. Apparently it was all about the elephants.
I will confess to not being overly supportive - my last visit to the circus (three-ring variety) was in 1969.
One may well ask: "How can you advocate breaking some laws and obeying others?" The answer lies in the fact that there are two types of laws: just and unjust. I would be the first to advocate obeying just laws. One has not only a legal but a moral responsibility to obey just laws. Conversely, one has a moral responsibility to disobey unjust laws. I would agree with St. Augustine that "an unjust law is no law at all."
Now, what is the difference between the two? How does one determine whether a law is just or unjust? A just law is a man made code that squares with the moral law or the law of God. An unjust law is a code that is out of harmony with the moral law. To put it in the terms of St. Thomas Aquinas: An unjust law is a human law that is not rooted in eternal law and natural law. Any law that uplifts human personality is just. Any law that degrades human personality is unjust. All segregation statutes are unjust because segregation distorts the soul and damages the personality. It gives the segregator a false sense of superiority and the segregated a false sense of inferiority. Segregation, to use the terminology of the Jewish philosopher Martin Buber, substitutes an "I it" relationship for an "I thou" relationship and ends up relegating persons to the status of things. Hence segregation is not only politically, economically and sociologically unsound, it is morally wrong and sinful. Paul Tillich has said that sin is separation. Is not segregation an existential expression of man's tragic separation, his awful estrangement, his terrible sinfulness? Thus it is that I can urge men to obey the 1954 decision of the Supreme Court, for it is morally right; and I can urge them to disobey segregation ordinances, for they are morally wrong.
-Martin Luther King, Jr., excerpted from Letter from Birmingham Jail