Showing posts with label econ-astrology. Show all posts
Showing posts with label econ-astrology. Show all posts

Friday, October 1, 2010

Harvard Business School Has No Clothes.

I have a little epiphany for you. One that hit me as I was driving across multiple states recently, observing our world.

It's summed up in a blindingly oblivious "Op-Ed" piece, in today's New York Times. From the author's blurb:

"William D. Cohan, a former investigative reporter in Raleigh, N.C., writes on alternate Fridays about Wall Street and Main Street. He worked on Wall Street as a senior mergers and acquisitions banker for 15 years. He also worked for two years at GE Capital. He is the author of 'House of Cards: A Tale of Hubris and Wretched Excess on Wall Street' "

In his piece entitled "The Elizabeth Warren Fallacy", Mr Cohan asks (and he's serious) "Why create an expensive bureaucracy to “protect” consumers from their own stupid decisions?"


The mind boggles. Mine does, anyway, and mine is not all that easily boggled. And this is from an author who writes elsewhere about wretched behavior on Wall Street.

Literally going back to the Code of Hammurabi, the very existence of all law is justified by the fact that, yes, innocent persons need to be protected from predatory humans.

But here, a scion of the Business World, slickly suggests that sheep exist to be sheared, and that this is how the world works. This is what they teach MBAs, these days. Any means to a profit - not specifically forbidden by law or (silly) regulations- is entirely fair. Reap all you can, before the regulators catch on.

Which behavior has put our culture where it is- virtually all the "real" capital in the "real" economy has been skimmed off, via slick marketing of easy credit - e.g.;

"
Borrow $10,000 on your credit card today! Just use this EasyCheck {Same as cash!} - And for this Special Limited Time Offer, this loan will be at only 1.99% until paid off!"


(Until you sneeze, then it goes into the default rate of 30%...)


With the real capital sucked out of the Real Economy into the bizarre fantasy world of The Financial Sector (which owes itself trillions of dollars more than actually exist anywhere) - we're broke. And breaking further. All of us.

In my opinion, the best, most solid economic statistic available is the rate at which CEOs and top corporate executives buy and sell their own stock in their own companies. Through a grotesque oversight, this is public information. At the moment, those who know the most about their own futures are selling their own stocks at a rate of 1,400 to 1.

No, that's not good.

The epiphany?

Gradually, over the years, our societally accepted definition of "business" has changed.

It used to be; and we still teach our children, that "business" happens when: you have a need; I fill it; you pay me for my work; and we both benefit.

Now what we teach our MBAs is, if there is no need; create one; and if you can trick your opponent out of an extra penny, good for you. Mutual benefit, in fact, is literally no longer in the definition.

What you have there- is precisely - the definition of sociopathy.

We teach Sociopathy as "Business". We really, really, really do.

-------------------------------------------------------------------------------------------

There are multiple sites on the web that deal with definitions of sociopath, and lists of character traits. They don't all agree, but take a look; and compare the traits to those flaunted by "business" professionals.
(If you're a movie fan, take a look at Gordon Gekko this way.)

For the last many decades, the business world has very effectively insinuated huge respect for themselves into every aspect of our culture. All good things flow from business; without it, we will all perish. There you have a truth beyond examination. To question it, even, is punishable. The metaphors quickly reach to religious dogma; heresy; and excommunication.

---------------------------------------------------------------------

Maybe you already knew this. I've always known there were slimy characters here and there; but it was a new idea, hitting me with force, that we actually accept, and teach, a group of behaviors and attitudes we also recognize as incredibly destructive and dangerous. Genuinely pathological. Sick.

Try saying "Harvard School Of Sociopathy" a few times; see how it fits.

Today; it's to the point where a respected writer can suggest, in a respected forum, that stupid people deserve to be tricked, and "we" should waste no money to save them. (Never mind that the public will then, provably, pay for their prisons, hospitals and funerals, and sociopathic children.)

What happened to the idea that business should not involve traps and tricks, in the first place?

------------------------------------------------------------------------------

Manifestly, The American Way Of Business now thrives - survives- on tricks and traps. The entire model is sociopathic. And is run by trained sociopaths.

Spread the word. So far, sociopath is still a label most would like to avoid. It's a very bad thing to call someone. A very hard word. Maybe it needs to be spray-painted all over Wall Street.

Saturday, July 25, 2009

Proof !!


SciFi writer Larry Niven, in his younger days, proliferated "Finagle's Law", which is basically Murphy's Law (Anything that can go wrong, will.) re-written for geeks.

My recollection is "The perversity of the Universe tends towards a maximum."

I can now add a corollary (that is, in addition to the one I've already added; Greenpa's Law: "Everything can go wrong. Just wait.")

Right now I'm spending a lot of time mowing grass. This is in preparation for our harvest- it's really hard to pick stuff off of bushes when the quackgrass and thistles are taller than the bushes; and it's also great cover for rodents down there. You gotta get rid of the grass. So I mow.

The guineas, you understand, are part of our long-term plan for the grass. A) they eat some. and B) they are phenomenal "watch" animals. If we wind up with sheep, or calves- the guineas should be all over, and will alert the dogs to any intruders. Theoretically.

Anyway. Partly I mow up on the John Deere, using a following flail. And, I mow using the Grillo walking tractor, with the Ferrari sickle bar; 7.5 hp Yanmar diesel, and the best sickle bar ever made. I'm in love. But you still gotta walk; for miles, holding on to a jerking, vibrating noisemaker.

So, it's, like- THIRSTY work. For reasons probably connected with Finagles Law, my JD 70 hp 4WD utility tractor (open, no cab) has NOWHERE to put or hang a water container. Apart from improvised places, which always result in tearing off a signal light on a tree branch, or the metal water container being dropped into the mower. So- no water. Likewise, the Grillo is a water-free zone; you just don't want to be carrying a canteen; it'll beat you to death, and a "camel" pack is a hilarious idea- you'll sweat out twice the water you can carry because it cuts off air circulation on your back, completely.

THIRRRRSTY.

Having done this a time or two, of course you can plan for work loops that end up somewhere where you can get water. Obviously.

One of them is our 80 year old Aermotor windmill, which pumps all the water for the Little House. When the wind is blowing, of course. But I do usually try to avoid mowing on windless days (which we have plenty of in summer) - because I'll sweat and die.

So- today the wind is blowing, VERY steady; 12 mph from the NNW. A good clear direction; pumps water great.

I get off the tractor, cool it down, turn it off; pull out my earplugs; and walk to the windmill, which is pumping just as steady as can be.

I bend down, pick up the hose from it- and...

The wind dies.

This is ABSOLUTELY reliable. I've been keeping track; for 25 years (we didn't have the windmill for the first 5).

No kidding. In 25 years, here are the data.

No. of times I've taken a drink directly from the pumping mill (or tried to): 264.
No. of times the wind has died when I picked up the hose: 248.
No. of times the wind quit completely, and I gave up: 197.

Fool that I am; today the wind was so steady, I thought I could sneak in a drink.

Nope. Gave up.

Here is the new corollary to Finagle's Law:

The Aermotor Corollary:

If you really need a drink from your windmill, the wind WILL die immediately, and water pumping will cease for as long as you wait for it to restart.

Those are hard data folks.

Somebody IS out to get us.


Sunday, May 31, 2009

The Problem Is: Men.


Ok, not exactly. But sort of. :-)

The problem I want to discuss here is actually quite complex; ancient; and widely misunderstood. Which means what follows below may seem rambling, and irrelevant from time to time. Hang in there- it all comes together eventually.
----------------------------------------------------------------------------------

There was a really good discussion about the "informal economy" over on Sharon's. Some of it got sidetracked into a little discussion on feminism, and some into problems with nomenclature. I got well tangled up in both of those, and even stirred the pot a bit. So here we are, with a little expansion and pot stirring on my own recognizance.

Sharon's post title was "Reinventing the informal economy", and has loads of thoughts that are well worth pondering. There's little she says there that I would quibble with. Part of the subsequent discussion though got off into definitions and names- and there I have something to add, I think.

Names are important. Really really important. We've all seen what a total disaster "Global Warming" and "Swine Flu" have been. They allow endless attacks and diversions from the parties whose interests are threatened - or excursions into nonsense. The people responsible for those names are, ultimately responsible for a great many human deaths. Sorry- but that's true. People are dying right now (300,000/year, according to one estimate) - because obstruction was facilitated by the bad name. And farmers, and all middlemen, have lost millions because of the idiot repetition of "swine flu" for a human disease.

Could it have been done better? Of course. "Climate Change" is much less open to attack; and "New Flu" would serve headlines perfectly. The Climate Change alternative has been around since the outset- but it was too late, the "journalists" (ha) had already fixated on Global Warming! which sounds sexier. And the CDC tried to implement "Novel influenza A (H1N1)", but again, too late, and in this case that was an idiot alternative, doomed to failure as any marketing wonk could have told them (that, I'll guarantee, is a name chosen by a committee of scientists- with no public relations personnel present.)

Names are important. In the present case, I started off by gratuitously mentioning in the discussion at Sharon's that I'm launching a movement (YOU are invited!) to eradicate the word "consumer". It reduces, actually, to "Hi! I'm an alimentary tract! Holes at both ends! Eat and sh*t, that's my life! And I love it!"

It's a pretty stunning insult, but one we've just accepted without evaluation or protest. At this point, though, I'll be damned if anyone will call me a consumer. Call me "citizen", if necessary to point out my most basic role in the community.

Where does the word come from? From the fantasy world of "economics", which everyone should understand by now is a world of wish fulfilment, rationalization, dream, and nightmare; with no actual basis in any reality. Except we have somehow allowed these self deluded charlatans to become "professors", and establish "departments" in universities. So way back there, they started talking about "producers" and "consumers". And we just accepted it- they must know, right? They're professors!

------------------------------------------------------------------

Which is where "the problem is: men" comes in.

What follows is my own analysis, built up over years of pondering history, human behavior, and anthropology. I think it has a lot to recommend it; though inevitably, some will not like it.

Can we agree that much of the history of Christianity has strayed quite far from anything the founder(s) of the religion intended?

The evidence, I think, is pretty good that original Christian communities were quite egalitarian- and women were included on an equal- power- basis. But that changed.

The most common situation among primal peoples (that word choice, vs "primitive" was explained to me by my friend Jack Gladstone; Blackfeet troubadour and storyteller, and double philosophy and anthropology major...) is that men and women have nearly equal power in the community- but- men's power, and women's power are different, based on different "magic".

I think that in primal situations, equal power of men and women is the situation that will most often win out, in competitions between cultures. Generally- equal partners will compete harder, and contribute more, than any arrangement where one sex is subjugated.

But in settled "civilized" circumstances- other factors may come into play which make that aspect of the culture less compelling. With the rise of the cities- women started to be subjugated more and more- and military power rose in importance.

The trend is older than Christianity; but most visible there, I think. Judaism also shifted in antiquity from a matriarchal system to patriarchal (thank you, oh lord, that you did not make me a woman...! feel free to correct me, Sharon!). And Islam also; while women still have great power in the household; they are allowed no role in larger community concerns. And yes, I'm talking just about Western cultures here- because that's the one most of the readers here live in.

As Christianity moved into the Middle Ages, women's power was stripped from them by the Church- and "women's magic" became a matter of warfare- "wise women"- witches - were systematically eradicated, in very ugly fashion.

About the same time, two new endeavors arose- "universities"- and "history". These arenas, I contend, were launched entirely as men's enterprises- no women allowed. And they dealt solely with men's "magic"; or power, concerns. "History", for most of its course, has been just a list of men's power achievements; wars and governments. "Universities" became machines to train men for power- and to develop new paths to power; that is why kings built and funded them.

Medicine; typically a women's magic in the West, was stolen by men, and installed in the universities. "Doctor", in fact, is not a term originally applied to physicians; but to professors. When barbers sought higher credibility, they stole the term for the respect it conveyed. The theft has been so complete and successful that PhD's now can be heard apologizing that they aren't a "real" doctor, but only a PhD; not even knowing the history of the term themselves.

---------------------------------------------------------------

What does this have to do with the "informal economy" question?

When "economics" was launched, universities were still entirely men's enterprises- and it was so unquestioned as to be unnoticed (by men...)

Consequently; when men first started to think about analyzing how resources move in a culture, and what is important, and what is not- they thought, of course, entirely in terms of men's concerns.

Of course their own parts were the most important- and the bits that had to do with what are traditionally women's enterprises were - not important.

Hence- they named the monetary economy "formal"; and the household economy- "informal" - which means, in case you can't tell- unimportant; negligible; not worth thinking about. And for lack of any alternative analysis- we still call it so today.

-------------------------------------------------------------------

Back to anthropology for a moment.

I am one of those who always looks to the primal peoples; the hunter-gatherers; for clues to our present behavior. Homo lived as hunter-gatherers for the great majority of our existence; all species of Homo lived that way- until sapiens. That would mean some 2 million years as hunter-gatherers, and perhaps 15,000 as pastoralists and agriculturalists; even less time as city dwellers. Our genes are full of adaptations for the hunter-gatherer life.

While huge variations in cultural specifics exist among hunter gatherers, there are a few things that stand as reliable generalities.

Men hunt- women gather.
Women bear children. Men don't.
Women run the household, tend the fire- anchored by small children.
Women contribute most of the calories, in small game, vegetables, fruits, nuts, grains.
Men contribute most of the protein, much of the fat, in huge chunks when a kill is made.
Men contribute protection for the family- to the point of cheerfully dying when necessary - to protect - the household.

Now think about that. The household- is worth dying for.

Most of this is generated by the fact that men are never pregnant, nor nursing- thus much more capable of unencumbered hunts or fights. The division quickly becomes a positive-feedback loop, and turns into sexual selection yielding males that are a good deal larger than females, with thicker skins and bigger muscles.

There is one other thing men contribute, but it's less well known outside the inner circles of anthropology; so, another little diversion here.

----------------------------------------------------------------------

Men, it turns out, are often jealous of women's power. Women alone create life- and what a huge power that is.

My Anthro 101 prof gleefully told us of a tribe in Africa; where the jealousy was so strong that the men made up a power of their own, to be able to compete better with the women.

When the men reach puberty; part of the coming of age ceremony included inserting a wooden plug in the anus. And the initiate never poops again, in his entire life. Cool, huh! Huge magic!

And it is, of course, a huge lie; you can't not poop. The reality is; the boys learn to go out in the bushes and do it secretly, and they pretend they don't. The women- of course - know all about this. But they pity the men, so they don't publicly expose the lie. They do laugh about it in the Women's House, though. A lot. And many of the men, while they of course know it's all a lie; do believe that they actually have the women fooled. Self-serving delusion- a phenomenon currently on display on Wall Street.

--------------------------------------------------------------------

Partly as a result of this ancient inferiority complex, and partly as a matter of biology, the other thing men contribute to their household is- status.

It's been demonstrated in many different species, from domestic chickens on up to humans, that high-status individuals have stronger offspring, and the status passes to them.

For humans, men have for millennia spent great amounts of energy to acquire status. In my own mind, I reduce that goal to - "ostrich feathers". The more ostrich feathers you have; the higher your status- the more successful your offspring.

Ostrich feathers today can easily be read as "money", and "power". Among other things, of course. A Nobel Prize is a really big feather. Etc. Women of course seek status too, and nowadays can seek it in what used to be men's arenas; but I think women have status mechanisms that are solely their own, as well. Female status has also been shown by research to contribute to offspring success.

---------------------------------------------------------------

Back to formal/informal economy. What I hope to have shown by the long discourse above is that this terminology was set up by men- for men's purposes- and to increase the number of ostrich feathers available to men in this arena. The terminology has no other reason for existing- and is not the result of dispassionate investigations into reality.

Over on Sharon's original post, two respondents had excellent suggestions for alternative names; MJ suggested "essential economy", and Leslie suggested "natural". Both of those are true, and correct. However, from my long training in marketing- I can foresee difficulties down the line for both. Briefly- "essential" suggests too strongly (intended or not) that other aspects of the economy are not- and will make enemies. "Natural" - sounds too "green" (intended or not); and you'll lose a good deal of audience there. Let me repeat- they're both absolutely accurate.

Finally!!! My suggestion:

The "informal" economy IS; and should be renamed: "the Primary Economy".

Primary does not necessarily imply more significance- just that it was first. Which is totally undeniable, I think. I also think it unavoidably sounds important; unlike "informal".

That would make the "formal economy" the "Secondary Economy". Built upon the first.

Another brief aside- what is the purpose of the Secondary Economy? Why do people leave the home, to go to work outside? Manifestly- to bring resources back to the household- and put them into the Primary Economy. It would not be unreasonable to suggest that the entire Secondary Economy was created specifically to serve the Primary Economy. I think the nomenclature is appropriate; could be acceptable to many, and far better designates the relationships.

As a humorous addition- the Wall Street wonks refer to the Secondary Economy as "the real economy." You know, the one where people make stuff, and do things. As opposed to what they do on Wall Street, the "financial sector of the economy".

I will propose, in facetious/serious tones, that the "financial sector" of the economy be renamed the "Sandbox Economy". They just push piles of stuff around, from one place to another. Make nothing; do nothing, achieve nothing of tangible value. And squabble. Over ostrich feathers.

One other point in favor of Primary Economy. As many of you already know- the words "economy", "economics", and "ecology" all stem from the same Greek root: oikos.

Which means "home"; or "household"; or "family". I maintain- the household economy, and all its "informal" connections; is the Primary Economy. And should be so designated.

---------------------------------------------------------------

If you like this suggestion- please do start to use the terms, and refer people to this post for an explanation of why. It might go viral, who knows- and it would only be a matter of justice. At this point, as you can probably tell, I find the term "informal" to be actively offensive. And outrageously misleading.


Wednesday, March 11, 2009

The Plumber Parable Proliferates


Yesterday much ado was generated by Thomas Friedman; the NYT econ-astrology (trying that out, feonix; thanx...) columnist.   Friedman has gotten lots of attention in the past year or so by advocating that we can, basically "grow" our way out of our economic maelstrom by investing in "green" technologies.  He's even written a book about it, the title of which is sometimes parodied as "Flat, Overheated, and Vacuous".  Some of his first toutings were in the NYT, and I responded to what was being called "muscular green" way back then, in some detail.

Reception by environmental thinkers of his book, and his basic "green industrialization" concept, has not been all that great.  Pretty clearly, he still was not "getting" the basic need for some limits here, somewhere.  Like all neo-classical economists, buried in his essential assumptions is the one about "perpetual growth" (it's "good", and "necessary", in order to make the models work.)

Yesterday he printed a column that many folks greeted enthusiastically - it looked, indeed, as if Friedman had "gotten religion".   And it did kinda look that way-

"We have created a system for growth that depended on our building more and more stores to sell more and more stuff made in more and more factories in China, powered by more and more coal that would cause more and more climate change but earn China more and more dollars to buy more and more U.S. T-bills so America would have more and more money to build more and more stores and sell more and more stuff that would employ more and more Chinese ...

We can’t do this anymore"

Golly jeepers!  His eyes have opened!  Hope!  Sharon, over at Casubon's Book, was downright enthusiastic.  In her special way.  :-)  

I however, wound up focusing on his later paragraphs; where- he lapsed into:

"We must have growth, but we must grow in a different way. ... Let’s grow by creating flows rather than plundering more stocks."

Semantics should not be the problem here- to an econ-astrologer, "growth" means- my factory will get bigger each year- forever.  More employees.  More profits.  More customers.

Friedman is playing with changing that definition; but I don't think he's managed, really.  I'm just not buying what he's selling.  Crank that I am.
-------------------------------------------------------------------------

So; today- he's got another column out.  Announcing to the world that, officially! - we have a real, serious problem with the economy.  "This is not a test.  This is not a test."  He says.

Yay!  He noticed.  That's good.

Alas... and hooray... he goes on to illustrate that my Parable Of The Poor Plumber has broad applicability.

Here is his answer to all our problems:

"All this will require leadership of the highest order — bold decisions, persistence and persuasion. There is a huge amount of money on the sidelines eager to bet again on America. But right now, there is too much uncertainty; no one knows what will be the new rules governing investments in our biggest financial institutions. If President Obama can produce and sell that plan, private investors, big and small, will give us a stimulus like you’ve never seen.

Which is why I wake up every morning hoping to read this story: 'President Obama announced today that he had invited the country’s 20 leading bankers, 20 leading industrialists, 20 top market economists and the Democratic and Republican leaders in the House and Senate to join him and his team at Camp David. ‘We will not come down from the mountain until we have forged a common, transparent strategy for getting us out of this banking crisis,’ the president said, as he boarded his helicopter.' "

The Answer- will come from... hold your breath, now...

#1- Leading Bankers!!
#2- Leading Industrialists! 
#3- Top! Market! Econ-Astrologers!
#4- Leading Politicians!

 Are we all rolling on the floor in helpless laughter?  Um.  Aren't these exactly the same plumbers that busted the sink in the first place- and have had no idea how to fix it?

Way to think outside the box!!   Sorry, Charlie; we need tuna that - isn't rotten?  Knee-jerks are just not going to get us out of this whirlpool.

---------------------------------------------------------------------------

Not to mention Friedman apparently hasn't heard of that (apocryphal) study by the Rand Corporation on the most effective size of committees.

He wants 20 Bankers.  20 Industrialists.  20 Econ-astrologers.  And leading donkeys and elephants from both houses of Congress- not sure how you decide how many, but obviously parity is needed - so at least another 20.  Hopefully not 20 each...

So now you have a good decision making body of at least - 80 Leading! individuals.  Who are not coming down off the mountain until they have it ALL figured out.

Hm.  On second thought.  Maybe that's a good idea.  We could put all those Leading! people up there- and never have to listen to them again.  They ain't never coming down.
---------------------------------------------------------------------------
According to the story.  After years of acquiring data.  Data analysis.  Theorizing.  Etc.

The Rand Corporation put together a well-tested equation, for the optimum function of a "committee".

Optimum number of members in a committee for best decision making?  

"Less than one."  Says so, right on the graph.


oh, yeah, and CitiBank was up- another 9¢ today!  

I'm thinking about painting the gallows in polka-dots.