Category Archives for Culture

Head Games

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In any competition against actual human beings, winning is seldom about utterly destroying your opponent. Granted, utterly destroying your opponent almost always will grant you the win. But it’s seldom necessary. Rather, the necessary condition for victory is destroying your opponent’s will to fight. Once your opponent stops fighting, it’s done. Sure, there’s often a bit of cleanup left. But once the enemy breaks it’s over.

Toward that end, elite players in all kinds of competitions – from chess to sports to war to politics – make heavy use of head games. Getting inside your opponent’s head – and keeping him out of yours – is crucial to competition. It is not sufficient, but it is absolutely essential in every respect.

First, maintaining your own confidence is important. If you do not have confidence in your own ability to win, you will not act decisively. Lack of decisive action is deadly. So you must maintain confidence. On the flip side, you will work to destroy your enemy’s confidence. One aspect of this is projecting your own confidence outward. If you do not appear confident to your enemy, it will embolden him. Conversely, an external appearance of supreme confidence can often cause your competitor to doubt his own.

For the most part this is not a rational process. The heavy part of it is instinctive. With that said, elite level competitors of all kinds know the game and exercise conscious techniques to honestly maintain their own confidence, project a higher confidence than they feel, and defend against attempts by their opponents to undermine their confidence. They will also exercise other techniques deliberately designed to sabotage their opponent’s confidence: deception, misdirection, intimidation.

Often it isn’t even your opponent’s confidence you must destroy. Quite often destroying the confidence of his allies is sufficient. Destroy their confidence and they withdraw their support. Without their support, quite often your opponent honestly cannot win.

For a concrete example we’ll turn to – where else? – the current Presidential election. Yesterday I pointed out that Donald Trump does not need to hit 51% of the popular vote in order to win a majority of delegates and secure the nomination. I covered the delegate math in excruciating detail to hammer home the point.

But the reality is even harsher for his opponents than it seems, because there’s one more key detail that I didn’t cover: funding. Donald Trump doesn’t have to worry about funding. He can self fund his campaign for as long as he needs to. And his spending levels have been so low that he doesn’t even really need to spend all that much on it (measured as a percentage of his actual income and assets).

His opponents, on the other hand, need cash. Lots and lots of cash. They can’t provide it themselves, so they must raise it from donors. And this will be the final nail in their coffins. Trump doesn’t have to destroy the other candidates. All he has to do is destroy their fundraising.

Nearly a dozen candidates have already dropped out of the GOP race. Ultimately their decision to leave came down to funds. Look at John Kasich today. His poll numbers are now actually measurable – not because he suddenly became more popular but solely because he managed to survive long enough to have a smaller field to compete against. Do you honestly think that Christie or Jindal or even Scott Walker wouldn’t have found a similar polling boost if they’d found themselves in Kasich’s survivor shoes? Of course they would have. But they didn’t survive this long because ultimately they ran out of money. Their donors no longer saw them as having a viable path to the nomination and so the money dried up.

By all accounts, Jeb Bush is very close to a similar fate. I hedged yesterday and assumed he’d stay in the game longer. I still think he would if the choice were solely his. His confidence is, at this point, supremely irrational and apparently unflappable. But his donors feel differently, and they appear to be jumping ship. Odds now look extremely good that he’s out after a resounding defeat in South Carolina tomorrow.

Where does this leave yesterday’s analysis? Not much altered, frankly. But there is one extra wrinkle. Today Nate Silver is again insisting on the mathematical fallacy that Trump needs to hit 51% of the electorate to win.

Perhaps the single most important question in the Republican race is how high Trump’s ceiling is and whether he can eventually get to 50+ percent of the GOP electorate.

Here’s his path to 50%, Nate: intimidate the donors until his opponents can’t afford to continue in the race. Gather enough delegates before the winner take all states to ensure that his opponents can’t amass a majority, and then scare away the donors with head games. The candidates would love to take the fight all the way to the convention floor. Their donors will be far more reluctant to bankroll it. Most of them will find themselves far better off making their peace with Trump instead.

By Wednesday, March 2nd – the day after Super Tuesday – this will officially be a three man race. By March 15th we will know for certain if either Cruz or Rubio still has a realistic path to the nomination. My suspicion is that both will be out by the end of March due to donor support drying up.

Look for Trump to continue playing the head games he’s already become famous for. Why? Because they work.

Preference Cascade

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As I mentioned at the end of yesterday’s post, I believe Bernie Sanders will win the Democratic party’s presidential nomination. I also believe that Donald Trump will win the Republican nomination. That second prediction isn’t much of one given the polls of the last few weeks. So let me add another one: I believe he’s going to have a much larger victory margin than current polls show. I believe each race will feature a massive preference cascade.

What is a preference cascade? The classic example involves totalitarian states – say, the Soviet Union or Iraq circa 2002. Residents in the totalitarian state really, really dislike their government. But the secret police abound, and anybody who doesn’t like the current regime suffers terrible consequences: imprisonment, torture, execution of themselves or their families. Saying you don’t like the current regime carries terrible consequences. If you have half a brain you lie about it, and tell everyone that you love it.

The thing is, your family, friends, and neighbors all hate it, too. But they’re also afraid to tell everyone about it, and for all the same, good reasons that you are. So everyone tells each other that the current regime is wonderful and amazing. Meanwhile, they secretly all hate it. But if you took a poll in the society, it would look like you have 97-99% approval ratings of the current regime (some people are too stupid to live, apparently).

But then a funny thing happens. The regime gets some cracks in it. The government starts collapsing losing its power as the Soviets did in the late 1980s; or the US invades and promises to kill your dictator, as in Iraq in 2003. It’s not quite so dangerous to voice how much you hate the regime anymore. So a few people get a little braver and speak out. Then their family, friends, and neighbors notice that those people didn’t get sent to Siberia, and they get a little braver, too. Then it grows, and grows some more, and eventually nobody’s afraid anymore and everybody’s telling each other how much they hated that evil regime the whole time.

That’s a preference cascade.

I think we will see two of them in this primary season. First, Donald Trump. I keep hearing people say that they don’t understand how he’s doing so well in the polls because they don’t know any Trump supporters. I see it in the news, from the typical left media types who don’t actually know any conservatives. But I also see it in my Facebook feed.

The thing is… I know a lot of Trump supporters, both personally and online. And I also know that a great many of them are afraid to admit it. I’m pretty confident that once it becomes clear how many others are also Trump supporters, they’re going to start speaking out more. I also think these people are afraid to tell even pollsters about it. They’re not afraid they’ll go to Siberia – they’re just afraid they won’t have any friends anymore. Scott Adams claims that Trump will persuade huge majorities by the end. I think he already has, at least of Republican voters. They’re just afraid to admit it still.

I think Hillary Clinton is in the opposite situation. The Democratic party consists of voters who are strongly feminist. They want to support a female candidate. But even more strongly they want to be seen supporting a female candidate. Hillary’s the only one they’ve got. And this time around, they can’t deflect criticism by supporting a minority candidate, either. It’s her or the old white dude.

Yet Clinton is a lying liar and they know it. She’s one of the most untrustworthy people ever to enter politics. Her politics are cold and calculating, shifting with the wind. Perhaps worst of all, the set of people who actually like her, even among strongly Democratic voters, basically consists of my sister and… my sister.

But Democratic voters are afraid to admit that they aren’t supporting the feminist cause, so they’re telling everyone they’re for her. All the while, her poll numbers keep slipping… and slipping… and slipping. Check out the chart below from the Washington Post. Hillary’s poll numbers are falling faster – and earlier – in 2016 than they did in 2008.

Hillary's preference cascade, visualized.

Hillary’s preference cascade, visualized.

Looking at current poll numbers, Hillary might still pull out the win in Iowa. If she manages it, expect a repeat of 2008: a long, hard fight for the nomination that carries on almost to the end before it becomes mathematically impossible for her to win.

I’m skeptical, though. I think Sanders just might pull it off in Iowa. He’s within spitting distance, and his polls are moving in the right direction (hers aren’t). Centrist democratic voters are afraid of the S-word (socialism). A caucus environment is the perfect one for them to lose that fear, as their friends start standing for Bernie – and their more conservative friends are across town at the Republican caucus, and won’t see them.

If Bernie wins Iowa and New Hampshire, then look for the preference cascade to hit fast. Expect him to get  a huge boost heading into the Nevada caucuses – enough to enter that state in a position very similar to where he now finds himself in Iowa. If he pulls that one out, too, then expect Hillary’s support to break, and to break hard.
Trump, meanwhile, will be riding his own preference cascade straight into the Republican nomination.

Why Nate Silver Will Fail Big

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Nate_Silver_2009Nate Silver first made a name for himself by using statistics to make sports predictions. But like most, I became aware of him after he accurately called 49 out of 50 states in the 2008 Presidential election. His fame rose when he called the 2012 election accurately as well, despite many on the right not quite having faith in his numbers.

The core of his technique is nothing magical, although neither will I shortchange him by calling it “obvious” as so many people are wont to do after somebody clever does something new. It’s obvious in hindsight; it wasn’t so obvious before he did it. He’s published a general outline of his methodology after every Presidential election, and you don’t have to be an actual statistician to follow what he’s doing. You do, however, need to have a basic understanding of the underlying statistical methodology. Any undergraduate stats course should let you follow along – conceptually, at least, if not in the details.

Before I dive into my main point, let me emphasize that Mr. Silver’s methodology will work brilliantly the vast majority of the time. His methodology is just about as truly data driven as it’s possible to be. He uses the best data that’s out there. And given his reputation, he can now get access to that data easily. He also uses standard and sound statistical methods.

However, the day will eventually come when Nate Silver will fail – and when it does, he will fail big.

To understand why, we first need to have a basic understanding of his methods. A decade or two ago, somebody had the keen insight that although any individual poll taken during an election season had to be taken with a huge grain of salt, if you average all the polls together you end up with numbers that are pretty reliable. I’m not sure who had the eureka moment first, but Real Clear Politics popularized the concept with their RCP poll average in the early 2000s and it’s been a staple of politics ever since.

Mr. Silver took the concept even further and improved upon it in several ways.

First, he realized that in Presidential politics it was the state polls that mattered – not the national polls. So he computed polling averages for each individual state.

Second, he did historical analysis of each polling company and concluded that some were more reliable than others. He quantified this using standard statistical techniques, and then adjusted his averages by weighting each poll according to its historical reliability. This alone is a big improvement to the RCP model, and its validity shouldn’t be discounted.

Third, he added other factors into his model: the general state of the economy and how it favors the incumbent; endorsements; experience of the candidate; and several other factors. The predictive value of these factors is less, so they’re weighted less in his model – but their value counted.

Fourth, he improved the whole thing by running Monte Carlo simulations. This is also a giant improvement over the RCP average. Basically, it works like this: you write a simple computer program that takes the poll numbers given and, using the model you’ve devised (in this case, points 1 through 3 above) you simulate a given election. With the polls, endorsements, etc as given, you also account for some randomness in the actual results. To do this, you account for the historical error of the polls – if a candidate is polling at, say, 45% then history might suggest that his actual vote could be anywhere from 40% to 50%, and you can compute a probability curve that matches that range.

Then you run this simulation – a lot. Thousands of times or tens of thousands of times. Let’s say you run it ten thousand times, and out of those ten thousand times, Candidate A wins the election five thousand times: exactly half. You then say that candidate has a 50% chance of winning the election.

The methodology is pretty sound. But it has some serious flaws, and because of these, eventually Nate Silver will fail. Here are the problems.

First, the model requires that the input polling data be good. If the polls aren’t good, then Silver’s model isn’t any good either. Note that it doesn’t require any individual poll to be perfect. But it does require a few things. Each poll should be generally within or close to it’s historical margin of error. The polls should be canceling out each others’ errors. In other words, if one poll gets Candidate A’s share of the vote too high, the competitor’s poll should get it too low. If both polls are wrong in the same direction then averaging them doesn’t help.

There is strong evidence – even documented by Silver himself – that the polls are getting worse. Indeed, the polling companies are having so much trouble that Gallup has stopped polling the Presidential races altogether. There’s also evidence that the polls have started to weight their data so that they match more closely to other polls. That skews their value and makes them less reliable. So the polls themselves are a problem – and a growing one.

Second, polling long before an election is hugely inaccurate. Accuracy increases greatly the closer a poll is taken to the actual election. This is why Mr. Silver’s 2008 and 2012 predictions weren’t magic: the “predictions” relied on polls taken within days of the election. With respect to Mr. Silver, this accomplishment isn’t as big as many made it out to be. At that point, the polls are generally pretty accurate. His achievement was simply to look at the right polls.

To be fair to Mr. Silver, he’s quite aware of this problem and has discussed it at some length. He refrains from even making predictions before certain points in the campaign, and he’s the first to tell you that they’re of little value even when he begins them. However, having his predictions become accurate only days or a very few weeks before the actual election robs them of much of the value of a prediction. It doesn’t make them worthless, mind you, just of small utility for most of us.

But the real problem isn’t even those issues, as bad as they might be. The real problem is that the map is not the territory. Mr. Silver has constructed a wonderful model of elections. But it’s just that: a model. It is not the reality.

The biggest area where this will eventually bite him is in the non-polling factors that he includes. For instance, months ago Mr. Silver was claiming that Donald Trump’s low favorability ratings put a cap on the support he’d manage to get at the polls. He made the claim in several places, but this piece from July 2015 is the one I managed to find with a few seconds of Googling. In it he claims that candidates with Trump’s net favorability ratings rarely grow beyond 20 or 30% of the vote. As of this writing, the RCP average has Trump at 29% in Iowa (about to break that ceiling), 32.2% in New Hampshire (broke the ceiling) and 34.8% nationally (shattered it). A poll released today shows that he’s nearing 50% in Florida.

What happened? Trump’s favorability changed – a lot. Gallup last week showed him at +27% among Republicans, up 23 points from where Silver had him in the July piece listed above. That’s yuge.

Again, as I noted above – the map is not the territory. Silver’s model, as good as it is, doesn’t account for this kind of thing to happen. Now, it’s easy to say, “let’s update the model to allow for the off chance of someone increasing his favorability.” Fine. But the underlying problem is that favorability doesn’t directly predict anything. It’s a proxy.

Think of it this way: there’s no ironclad law of physics that says that a candidate with low favorability ratings can’t win. Mr. Silver has merely observed that so far, in the election’s we’ve seen, this hasn’t happened. It seems to have a strong correlation with the winner. But correlation does not equal causation. In this particular case, the variables are probably weakly linked. That is, how favorably the electorate views a candidate probably does have some impact on how they eventually vote. But it’s not a perfect match.

Mr. Silver will readily admit this, and that’s why the value is weighted relatively small compared to other data. But the problem is that all of Mr. Silver’s data is intrinsically a proxy, including the actual polling data. How people say they’ll vote is not the same thing as how they’ll actually vote. The correlation is high, but it’s not a causation.

Someday we’ll hit a point in the territory where the map doesn’t agree with it. For that case, we’ll have no choice but to conclude that the map is wrong. As they say in sports, there’s a reason they play the games.

There’s good reason to suspect that this election cycle may be it. Mr. Silver has been giving Mr. Trump roughly 5% odds of winning the nomination, based mostly on his model. Personally, I think his model is wrong in this specific case. “This time is different” is called a lot and is rarely true. But… sometimes it’s true, this time really is different. By all outside appearances, this election certainly seems to be one of those cases. I believe that Mr. Silver has too much invested in his model for him to be able to step back and honestly admit that it may not cover this case. Again, to be fair to Mr. Silver, I don’t believe this is a conscious choice. But I think it’s real.

But this may not be the time, either. It may well be that this time Mr. Silver is right again and I am wrong. I fully accept that, and I’ll admit it here if it’s the case. But even if this time isn’t the one, sooner or later Nate Silver will fail – and it will be yuge.

Falling Into Empire

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List-Why-Rome-Fell-ENate has signed and sealed the death certificate of the United States.

Seems a bit early to be writing this… but the fact is the history is already written.  The nails are in the coffin.   Its already happened.  The US is down 34 to 10  and there are only 2 minutes to go.  There is no time for a come back.

If you saw the post last night or heard the show you know our friend Rycamor brought a great essay on the life cycle of nations.  This essay is called The Fate of Empires and Search for Survival.  It is written by Sir John Glubb.

I first read the essay Nate refers to several years ago, based on a thread at Vox Popoli. It may well have been Nate who posted the link, or it might have come from Vox himself. It’s been long enough that I honestly don’t recall. It’s a powerful essay, and it’s well worth the read. It’s also quite simple and easy to follow. On the whole, the essay makes a very strong case. But I do have a few issues with it, and I think they’re important.

First, the Sir John’s decision to split the Roman period is a glaring data point. Indeed, the author notes this himself:

(3) The division of Rome into two periods
may be thought unwarranted. The first, or
republican, period dates from the time when
Rome became the mistress of Italy, and ends
with the accession of Augustus. The imperial
period extends from the accession of
Augustus to the death of Marcus Aurelius. It
is true that the empire survived nominally
for more than a century after this date, but it
did so in constant confusion, rebellions, civil
wars and barbarian invasions.
However, this only partially deals with the issue. To be clear, I don’t object to his breaking of Rome into distinct periods. I do, however, object to him leaving out the third distinct period of the Roman empire – the time that we commonly refer to as the Byzantine Empire. It’s important to note that my objection comes not because I think this makes his case weaker, but rather because I think it makes his case generally stronger.
First, the divisions that he does include – the period of the Republic and the period of the Empire – represent a valid and distinct division. We must note that Sir John did not make this distinction arbitrarily – historians have made this distinction for centuries, and for good reason. The Empire was a very different beast from the Republic, and it’s correct to recognize them as so. Indeed, it is also correct to represent the Byzantine Empire as a separate period of its own. All three represent distinctly separate beasts, and although we might quibble about the exact dates of when one became another became the third, we can easily agree that they are, in fact, no longer the same beast.
And yet at one and the same time they clearly are one logical entity. The transition from Republic to Empire to Byzantine Empire honestly is a direct continuum. Roman citizens didn’t just go to sleep one considering their government a Republic and wake up the next morning singing the praises (or curses) of their new Empire. The early Roman emperors, especially Augustus, went to great trouble to maintain all of the outward appearance of the Republican government that they’d replaced. This continued, to one degree or another, all the way through the Byzantine Empire. Until the fourteenth century the citizens continued to call themselves Romans and the Senate – though completely powerless – continued to exist.
The division between the Republican and Imperial periods of Rome makes a nice split that aids Sir John’s theory. At first glance, the existence of the Byzantine Empire – and its thousand year reign – seems to cause the theory some problems.
I submit, however, that it doesn’t. People are fond of saying that every theory has its exceptions, by which they usually mean a glaring counterfactual that doesn’t conform to the theory at all. In reality, however, most real-world exceptions look a lot more like the case of Rome – they kind of fit the theory, but differ in important ways. And that’s why I think the case of Byzantium actually bolsters the theory.
Rome is the exception that proves the rule.
Because make no mistake about it, Rome is an exception – at every level. The very fact that it makes Sir John’s list twice, and with no gap between the periods, demonstrates that. But it’s not just on this list that Rome is the exception. Rome’s exceptional status has been well known for centuries. Indeed, until the current wave of globalism swept our educational system, Rome took center stage in history classes precisely because it was so exceptional.
What made it so exceptional? Lots of things, but here are a few.
  1. Rome built a level of infrastructure that had never before been seen. Their roads and aqueducts ran the length of the empire.
  2. They built to last. A non-trivial amount of that infrastructure still stands today, including some roads and aqueducts but especially a large number of buildings. Some are still even in use.
  3. At their peaks, they weren’t just a power, or even one of a few great powers – they were the great power.
  4. The empires around them had immolated each other (or in some cases self-immolated) so thoroughly that even as Rome’s power waned, there was nobody else to seriously challenge it.

I am hardly the first person to note the parallels between the modern United States and ancient Rome. The comparisons are so obvious that my college history professors had to push people away from making the too-easy notes and force them to look deeper. Yet they are there, and they are real. In looking deeper, we must not forget that they exist. But more than anything, I’d like to call attention to point #4 on my list above.

As the US declines, nobody else is ready to take up the mantle.

The fact remains: on the open battlefield – be it land, sea, or air – no other military on earth can touch ours. Every other military is at least one full generation of technology and doctrine behind. That includes our western European allies. During the initial invasion of Afghanistan, our allies offered their aid. In most cases we either turned it down or imposed limits on it because their generation-old tech made it too difficult to integrate them effectively.

No other nation can even come close to the logistical capability that the US provides. It is often pointed out that we spend many multiples of the Europeans on our defense budget. It is equally often forgotten that they can spend so little because our European allies completely rely on the US for logistical capabilities. Indeed, this was official NATO doctrine for decades.

Economically, we remain in a similar boat. Our economy dwarfs everyone. The US still provides 14% of world GDP as of 2014, despite having only 5% of the world’s population. That’s well down from our peak, but not because our GDP has declined – it’s because China and other developing nations have actually been playing some catch up. Yet even though they passed our GDP as a percentage of world GDP in 2014, China did so representing 20% of the world’s population – five times ours.

Yes, 4th generation warfare is a real thing and the US sucks at it. This causes real problems to our military dominance.

Yes, our logistical capability is much more fragile than is often realized, and has also been in decline.

And yes, our economy is built on a foundation of debt that will likely soon prove to be catastrophic.

But the reality is that every other nation on Earth fares worse on at least two of these same scores, most on all three. China’s economy has been growing like mad for the last 15 years, but there are increasing signs that the house of cards is about to come down. Russia and the Middle East have built economies that rely on oil staying at quite high prices – prices that look increasingly like they’re not long-term viable. And Europe is too dependent upon the US. If our economy collapses, theirs goes down even further.

[Side note: I’ve believed for quite a long time that the price of oil was artificially high; recent events back up that opinion. But that’s another post for another day.]

In the comments, Nate’s post already start down the road to this when commenter Susan asks what other countries are ready to step into the void. Nate responds – not incorrectly – that there doesn’t need to be anybody to step into the void. But prior to that, his response that ISIS refugees are the ones conquering territory leaves a lot to be desired. It’s a long way from “conquering territory” to “launching a new empire.”

Where am I heading with this? The short version is this. I agree with both Nate and Sir John – the time of the American Republic is just about up. But I disagree with Nate about what comes next. My personal prediction is that the true American Empire arises from the ashes. Yes, I’m well aware of how much we already resemble an Empire. And yet there are certain lines that our nation has not yet crossed.

This is more fodder for another post on another day, but for now, suffice it to say… we will cross it. The historically literate will recognize its passing when a figure very reminiscent of Augustus Caeser comes to power in the American scene. He will probably retain the outward forms of the American presidency, and most notably the title (Augustus’s official title was neither “king (rex)” nor “emperor” nor “caeser” – it was “consul,” just as the countless Republican leaders before him had been called). The most obvious distinction? When we have a President who serves for life, you will know that the line has been crossed.

The time is not yet ripe for Americans to choose to elect that man (remember: Augustus was elected to his first term as consul). But it is coming. The right man has not yet presented himself for the post. But he will.

The US is declining, but not into nothing. We are falling into empire.

Corporations Should be Owned by People

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Corporations should be owned by people. They should be owned by living, breathing people. But they’re not. As I mentioned yesterday, at least 67% of all outstanding US stocks are owned by institutional investors. This is a huge problem, and it’s a big part of why the economy of today feels so disconnected from the economy of our fathers – and even the economy of our own childhood.

This problem manifests in multiple ways. The first problem is, who’s in charge? For those who are unfamiliar with it, corporations are organized along a certain pattern that’s more or less universal. The day-to-day operations of the corporation are controlled by the officers of the corporation. These are people with titles like President and Vice President, and sometimes titles like Chief Executive Officer (CEO), Chief Financial Officer (CFO), and Chief Operating Officer (COO). But you can’t rely on title alone, because sometimes those last three aren’t officers, they’re actually directors (more on them in a minute).

Officers make daily decisions. They’re often authorized to spend corporate money – within certain budgets and up to certain dollar amounts – on their own authority. They’re in charge of hiring people. At small corporations, the officers may make all of the hiring decisions. At larger corporations, they usually hire the top managers and grant them authority to higher lesser people. They set corporate policies. They set the overall goals and strategies. They control the organization of the corporation.

They also have legal responsibilities to the corporation in most states. If the books of the corporation are wrong, the officers can be held liable. If the corporation commits a crime, the officers might be held liable (maybe – this can be murky). They have legal duties, such as preparing stock reports and filing annual (sometimes quarterly) paperwork with the state.

But they can’t just do whatever they want. Officers are appointed by the board of directors. The board of directors makes the very high level decisions of a corporation. They hire officers – and fire them. They usually set the budgets that are available for officers to spend – dictating not only how much, but also the broad categories that the money should be spent on.

Finally, the directors are appointed by the shareholders. These are the people (ahem) who actually own the company. Shareholders meet at least once per year, and usually vote at each annual meeting on some number of the board of directors (some companies elect directors every year; some stagger the elections and have directors serve multi-year periods).

Although they usually exercise little day-to-day influence, shareholders have ultimate control over a corporation. If they don’t like the way a corporation is run, they have the power to change it. In theory, the board of directors acts as a stand-in for the shareholders. Ideally, the shareholders say they don’t like something, the directors tell the officers to fix it, it gets fixed. In extreme cases, the shareholders fire the directors and appoint new ones and the new directors fire the officers and appoint new ones, and then something gets done.

But what happens when the shares aren’t owned by individuals anymore? When, instead, those shares are owned by mutual funds and investment firms? Mutual funds and investment firms are very different, but at the core, both of them pool money from multiple contributors and invest the larger pot of money as one. There can be a lot of advantages to this, but that’s a post for another day.

The relevant point is this: when you put your money in a mutual fund or another kind of pooled investment, you’re almost always also signing way proxy rights to any investments bought with that money. What does that mean, exactly? Think of each share as a vote in shareholder meetings (the most important vote being the selection of the board of directors). When you put your money into a mutual fund, the director of that fund now has the right to cast your votes for you on any stocks bought by that mutual fund.

So, for example, as of this writing, Vanguard Total Stock Market Index Fund controls 3,089,008,230 of stock (1.64%) in The Walt Disney Company. The director of that group has a larger say in the selection of Disney’s board of directors than any individual person does. In fact, he has more than twice the say of the top five largest individual shareholders in Disney – combined.

Who the hell is the director of the Vanguard Total Stock Market Index Fund? I don’t know. I didn’t choose him. Even if you own that fund (which is a hugely popular fund, so you might), you didn’t choose him, either. Unlike most mutual fund directors, he doesn’t even keep or lose his job based on earning profits – this is an index fund, so the investments he makes with it are almost automatic.

But most of the others who have large votes were “chosen” because their funds make money, by thousands of individual investors who have absolutely no idea what’s being done with the money they’ve invested.

When corporations are owned by people, those people have an exposure to the company’s activities. If they don’t like the way a corporation is operating, they can direct the board to change it. But in this case, who get’s to make that choice? Not the founders of the company. Not the people. Not even a handful of rich bastards who own most of it with their own money. No, the decisions are made by a handful of rich bastards who bought most of it with your money.

These people have no skin in the game. They get their (very high, often in the millions of dollars) salaries for managing the mutual funds whether or not it makes a profit. And it’s not uncommon for them to get seven figure bonuses even when the funds lose money. The company does something illegal or unethical? These guys get to shrug and point out that their only legal requirement is to make their clients money. Then they go live the high life.

Who watches the watchmen? In a word, nobody. Our corporations aren’t owned by people anymore. But they should be.

Technology Will Not Solve Privacy Issues

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Harvard Law School professor and quixotic Democratic presidential candidate Lawrence Lessig thinks that future technology will solve our privacy issues.

The average cost per user of a data breach is now $240 … think of businesses looking at that cost and saying “What if I can find a way to not hold that data, but the value of that data?” When we do that, our concept of privacy will be different. Our concept so far is that we should give people control over copies of data. In the future, we will not worry about copies of data, but using data. The paradigm of required use will develop once we have really simple ways to hold data. If I were king, I would say it’s too early. Let’s muddle through the next few years. The costs are costly, but the current model of privacy will not make sense going forward.

If I ping a service, and it tells me someone is over 18, I don’t need to hold that fact. … The level of security I have to apply … [is not] the same [that] would be required if I was holding all of this data on my servers. This will radically change the burden of security that people will have.

He’s wrong.

Back in the nineties and early aughts when the Internet was a new and wondrous beast, all of us in the tech sector believed that technology would open up society. The internet would make everyone anonymous. File sharers and pirates couldn’t be caught – but also, free speech would reign supreme and everyone could speak their mind without fear of reprisal. Web sites would give a voice to the little people, and big corporations couldn’t compete in the data sphere.

We were wrong.

What we forgot – or never knew in the first place because we were young and naive – is that technology isn’t the decisive factor in society. Human beings are. And human beings, in aggregate, are ridiculously predictable.

“People can violate the law all they want to on the Internet, because nobody can track them!” we thought. Until the government decided to get serious about it and start tracking people.

“We can say what we want without fear of the government reading it – nobody has the resources to track it back to us!” we thought. Until the NSA proved that they do have the resources to do exactly that.

“Big corporations won’t be able to lock down their data! Data wants to be free!” we thought. Until DRM and the DMCA came about.

“We can say what we want in this big free speech paradise!” we thought. Until SJWs started doxxing people and getting them fired over social media posts.

Technology will not solve the privacy problem because big corporations and big government don’t want you to have any privacy. They want all your data to be easily accessible. Standards like Lessig describes, where corporations discard your data after they’ve made use of it, won’t catch on for the simple fact that they don’t want to discard your data.

If they wanted to, they already could. There’s no reason they have to keep most of it around already. They do it because they want your data. Big government or big corporation, it makes no difference. They want to know everything about you. Big government wants to market to you in every possible way. Big government wants to milk every penny of tax revenue and regulatory compliance they can from you. Neither cares if this is to your benefit or not.

Privacy will not improve until the people who have the power to improve it want to improve it. This is not likely to happen anytime soon.

Helicopter Parents

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Megan McArdle has a post up today talking about the rise of helicopter parents. Speaking as a very relaxed parent myself, this is a real phenomenon. My wife and I regularly get crazy glares, disapproving looks, and even snide comments from other parents. To be fair, she gets a lot more of it than I do. The Mommy Wars are a real thing, too. But when I regularly watch parents tell their five and six year old children that they aren’t allowed to do things that my two year old does, because safety, there’s clearly an issue.

But why?

Vague noises are made about how the world is more dangerous for kids than it used to be (it isn’t), how parents are more anxious than they used to be (really? More anxious than they were during the pioneer days or the Great Depression?), or how liability makes institutions more attuned to parental worries than they once were (OK, but the parents of 1970 didn’t ask institutions to keep their kids from climbing trees). I grew up in a New York City where kids had a lot more freedom — and a lot more crime to contend with, a lot more pollution, and a lot less safety gear. What changed?

The most plausible explanation I’ve heard is that we got richer, and richer people can expend more effort protecting their kids.

After settling in to explain, fairly enough, that we’re not that much richer than our parents, and surely this isn’t all of the explanation, she continues to assign much of the blame to our increasingly credentialized society and the importance of everything being perfect in a child’s life in order for them to have a good chance at a happy future.

With all due respect to Ms. McArdle, whom I read regularly and find to be regularly a great author, this is bunk. I can tell you in one word the primary driver in the rise of helicopter parents:

Numbers.

I am a father of three, with number four due early next year. Now, as it happens, my wife and I have inclined toward free range parenting from the beginning. However, I can tell you from direct experience – in a way that few Americans can these days – that helicopter parenting becomes exponentially harder with each additional child. And once you pass a certain point – probably at the birth of the fourth child, although I’m not there yet (I’ll get back to you) it becomes patently impossible.

Modern American parents are more hovery than their own parents because they can be. The smaller number of children that the average family has makes this possible. When there are only two kids (or, increasingly these days, only one kid) to ferry around, watch over, and care for, you can spend all of your time fretting over every little detail. And for women caught up in the mommy wars, there’s every incentive to do so – to signal how great of a parent you are.

Once the kids outnumber the adults, hovering over them in this way becomes very difficult – no matter how inclined toward it you may be. The kids will pull you in every possible direction, sapping your energy and attention. When the ratio hits 2 to 1, only the most die hard of helicopter parents can manage it anymore.

Today, Americans have fewer children. I believe this is detrimental for many reasons. The rise of helicopter parents is only one of them – but it’s a big one.

Flags

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The "Southern Cross" was not actually the Confederate flag.

The “Southern Cross” was not actually the Confederate flag.

I didn’t want the battle flag of the Army of Tennessee until the busybodies decided to tell me I couldn’t have one.

Wait, what was that about the flag of the Confederate States of America? Well, no – that’s not actually what this flag (aka the Southern Cross) actually was. The confusion most likely stems from the 1970s TV show The Dukes of Hazzard, in which the Duke brothers had a variant of this flag painted on their car. Because their car was named the “General Lee.” As in General Robert E. Lee, commander of the Army of Northern Virginia, which used a square version of this flag as their battle flag.

Pop culture being what it is, nobody actually remembers any of this. And, of course, I’m being a bit pedantic here. And yet it matters. It matters because there’s a lot of very loud “discourse” back and forth about this flag and what it means.

“The Civil War was about slavery!” shout some. “No, it was about states’ rights!” shout others. About 99% of these people, on both sides, honestly don’t know enough Civil War history to participate in an adult conversation about it. Here’s a hint: if all you know about it comes from high school classes, a Ken Burns documentary, and occasional conversations with friends, family and coworkers then you’re just as ignorant as the guy on the other side that you’re lambasting for being so ignorant.

Here’s the thing: denying that the Civil War was about slavery is facile and colossally ignorant. But pretending that the Civil War was only about slavery is equally facile and colossally ignorant.

There’s a lot of history between the Revolutionary War and the Civil War, and they don’t cover much of it in high school history classes. There’s also a lot of history before the Revolutionary War, much of which is also left out of high school history classes. And here’s the truth: the constitution that we so know and love was a product of massive compromise. Without that compromise, the northern and southern states never would have joined together in the first place. Yes, slavery was one of those compromises. But there were many others: representation in Congress being one of the biggest (hence our bicameral legislature).

We can’t ignore that slavery was the issue that set off the powder keg. Oh, but what a powder keg it was. The rift between southern and northern states was big enough that George Washington himself devoted significant energy during his presidency to bridging it. He never quite succeeded. In between the ratification of the Constitution in 1789 and the first shots at Fort Sumter in 1861 there were 72 years of political tension leading up to the war – much of which had little to do with slavery. That keg was ready to go.

Ultimately, though, very little of that matters. Here’s what does matter: we live in a country that has decided that we have the right to burn a flag. It’s ridiculous that we’re now trying to tell people they can’t display a similar flag. We have companies and stores that are banning this flag because they find it offensive. Yet those same companies and stores are selling plenty of other offensive material.

The political players who are setting off this chain of events will not like where it leads. If we can pressure Apple and Amazon into discontinuing battle flag products, then we can pressure them into discontinuing anti-religion products. “Oh,” you say, “but they wouldn’t do that – they’re ruled by the almighty dollar!” Go look up how much revenue comes from these battle flag products and get back to me. The pressure to remove these products cuts both ways – and the players kicking this off will be surprised to find how much pressure the other end of the spectrum can bring to bear. This is a fight that doesn’t end well for anybody.

At the same time, there is one aspect of this that is so patently obvious that I can’t believe I have to say it. This flag is also the flag of an armed uprising against the United States government. It should not be flying on any government building at any level of government within this nation. Period.

But we’re also a nation that was founded on armed uprising against our government. As citizens, we should remember that aspect of the flag as well. And we should remember that for many people who fly it, that and not race is what it’s about.To end where I began: I didn’t want one of these until people started telling me I couldn’t have one. Now I want a dozen of them, prominently displayed, only because people are saying I can’t have one. It is nobody else’s business but mine which flags I choose to wear on my clothing, display on my car, or fly over my home – or why I choose to display them.

The Case for Reading Shakespeare

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In response to a recent Washington Post article arguing against teaching Shakespeare, Megan McArdle asks a simple question:

What I’d like to hear more of — and have failed to see so far in any of these essays — is a coherent theory of why we bother to teach any writers at all. It seems to me that we need to know that before we can decide whether Shakespeare is one of the writers we ought to teach, or whether we ought to give up on the project entirely and just let the students spend their time watching YouTube videos, or reading Shakespeare, as they please.

702px-ShakespeareIt’s a fair question. Sadly, it’s also a question with a rather obvious answer. Even more sadly, the answer is so obvious that previous generations internalized it too well. As a result, they did a very poor job of teaching us the answer. As usual, our generation has to learn it all over again, unable to learn from the mistakes of the past.

And that, in a nutshell, is the answer. As Nassim Taleb points out repeatedly in his various works, an older book that is still widely read is more likely to have real truth in it than a widely read modern book. The classics are valuable not because they are old but because they have withstood the test of time.

Of course, the list of “classics” is not immutable. It changes over time. But the longer that a work has been on that list, the longer that it’s continued to be read, the more likely it is that the truths contained therein are universal rather than specific.

There’s a reason that some of our older classics never go stale. Shakespeare is a slog, no doubt about it. I’m a voracious reader with an oversized IQ and a master’s degree level education. To put it bluntly, I still have to work at it to read Shakespeare. I don’t fill my entertainment hours with nothing but Shakespeare because it’s too much work. But I do continue to read the bard because the bard speaks to the truth of the human condition – not the truth of the early twenty-first century American condition.No, we won’t absorb every bit of this truth on every reading – and certainly not on a single reading in our teenage years. But that was never the point. The point is to ensure that the future is at least exposed to it, so that when the need for that truth arises they know where to find it. That’s why our children should still be reading Shakespeare.

Christian Forgiveness

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forgivenessLast week I closed with a discussion of the power of forgiveness. I think it’s worth following that up with some thoughts about Christian forgiveness – specifically, what it is and what it isn’t. The modern western culture has adopted some pretty specific ideas of forgiveness, claiming that this is the “Christian” ideal. It’s not. It bears no relation to any historical version of true Christian forgiveness that ever existed in any major culture… until the modern day.

First, the modern misconception of Christian forgiveness. The modern idea is that “true Christians” should forgive anything, anywhere, anytime, always and forever. As is typical of most modern misconceptions of Christianity, this isn’t completely off base… it’s just missed some of the details that turn out to actually be rather important. Amusingly, this version of Christian forgiveness is pushed the most heavily by non-Christians – very often the exact same non-Christians I derided last week for not wanting to ever forgive anything

But, you say, they’re not Christian – they don’t have to. But us, us Christians, oh, we have to. Well, no – they are dictating the rules of our own faith to us in an attempt to disarm us in the culture wars. And, as usual, they completely misunderstand our faith. Unfortunately, so do many Christians, which is why they can get away with it.

The nugget of truth is that, yes, by Christian dogma nothing is unforgivable. Literally nothing. It doesn’t matter how evil your deeds were. It doesn’t even matter if you’ve lived an entire life of evil and repent only right before death. By two thousand years of Christian dogma, God will forgive you. Those of us who are practicing Christians are supposed to also strive for this ideal – although the other part of Christianity, largely forgotten in the modern culture as well, is that we are fallen humans. We are expected to strive for it. We are also expected to fail.

Even so, there is another part to this that is completely forgotten (or, mostly, purposefully ignored) in modern attacks on Christians supposedly acting in an un-Christian way. The forgiveness isn’t free, and it isn’t automatic. Forgiveness requires three things:

  1. An acknowledgement that one has, in fact, sinned [or, in the case of forgiveness from someone other than God, acknowledgement that you’ve committed a grievance; for brevity, I will just say sin from here on out]. That implies a further requirement: acknowledging that what you did was, in fact, wrong. Being a good Christian does require that you try not to judge others, and that you forgive them if you do judge them. It does not require you to pretend that what they did was right.
  2. Contrition – an honest regret for the sin. You have to actually be sorry for having done it. As we learn in grade school, being sorry for “getting caught” isn’t enough. Neither is it enough to be sorry merely because our sin had a bad effect. We must be sorry for the actual commission of the sin.
  3. We must make an honest and true attempt to turn away from the sin. You can’t acknowledge your sins, confess them to God, and totally plan on doing it again tomorrow and expect to be forgiven – even if you’re really, really sorry. It doesn’t work that way. If you’re going to just go out and cheerfully do it again, well, don’t expect your forgiveness. Now, God does know that we’re merely fallen mortals. If we really mean to be good, we try to be good, and we screw up… well, he expects that. But we have to try.

Now, God’s forgiveness is infinite – and it’s not subject to our rules. If he chooses to, God can forgive us even if we don’t meet these requirements. But the entire history of Church dogma tells us that we’re only assured of it if we meet these requirements. In turn, we are not under any obligation to forgive others who don’t meet them. If we choose to do so anyway, that’s our business and good for us. But honest Christian forgiveness doesn’t require it.

This is the true nature of Christian forgiveness. The modern version of “forgive everybody everything even if they’re not sorry, don’t view it as sin, and plan to keep doing it forever” isn’t Christian at all.