Losing the War – by Lee Sandlin

Lengthy and somewhat aged (1997) article about WW2. This part caught my eye:

The plan set the true clock time of the war. No matter what the surface play of battle was in Africa or the South Seas, the underlying dynamic never changed: every hour, every day the Allies were preparing for the invasion of Europe. They were stockpiling thousands of landing craft, tens of thousands of tanks, millions upon millions of rifles and mortars and howitzers, oceans of bullets and bombs and artillery shells — the united power of the American and Russian economies was slowly building up a military force large enough to overrun a continent. The sheer bulk of the armaments involved would have been unimaginable a few years earlier. One number may suggest the scale. Before the war began the entire German Luftwaffe consisted of 4,000 planes; by the time of the Normandy invasion American factories were turning out 4,000 new planes every two weeks.

[via Losing the War - by Lee Sandlin]

Wars test the limits of our capabilities. By refocusing in response to an imminent threat, production of aircraft soared. If we could do this in the 1940’s, I feel much more comfortable about our ability to respond to climate change. Unfortunately, we probably have to wait until the threat is much more imminent.

America has forgotten how to riot.

Man is tasered at concert for refusing to put his clothes back on. Judging by other videos of police brutality, the police here appear to be doing their best to defuse the situation with no forcible arrest before things turn nasty. I don’t know if he had been told he would be arrested subsequently. At any rate, he doesn’t cooperate. What the police should have realized is that when there are chants from the crowd rallying an individual on, it is difficult to get them to reverse course.

Halfway through the video, one of the police officers has enough of the rather comical attempts to forcibly clothe the man and readies his taser. His colleague waves him off, suggesting that at least one of them knew that would not be the right response. However after another scuffle, the officer uses it anyway. First once, and then repeatedly on different parts of the man’s body.

Naked Wizard Tased By Reality from Tracy Anderson on Vimeo.

What bothers me more than the police brutality is that the three police officers are surrounded by a sizable crowd of adolescents. Apart from collective groaning and swearing, they are restrained by nothing more than a few gruff commands (e.g. “Stand back”), as the taser is applied again and again right before their eyes. By this point, it is clear to all that the individual is a victim of ongoing police brutality. Where are those who initially cheered the man’s nudity and defiance? Why do they not act? The police don’t seem the slightest bit worried that the crowd will interfere in any way. You’d be hard pressed to find any police officer in the EU who would be bold enough to arrest someone in the middle of a crowd of adolescents, let alone brutality attack them with tasers.

Am I suggesting charging and attacking the officers? No. The real power of the crowd lies in its ability to immobilize. If everyone had raised their arms and chanted something peaceful like “this is not a riot” in a tighter and tighter circle, they would have quickly closed the available space for the police to do anything but try to escape. Of course, there is the risk that if they had fought their way out (e.g tasers, batons, guns) some people would have been injured, but I doubt that even an American police officer has the stomach to start attacking random people in a crowd.

When the people fear their government, there is tyranny; when the government fears the people, there is liberty.-Thomas Jefferson

Collateral Damage

With these sorts of people leaving, AIG is going to have a tough time building a team that will be able to repay their loans. I particularly like the analogy to a plumber who fixes the pipes but the electrician burns down the house- the plumber still needs to be paid.

[ Op-Ed Contributor - Dear A.I.G., I Quit! - NYTimes.com ]

Geeks, venereal disease and mindboggling screw-ups

Entertaining highlights from Warren Buffet’s 2008 letter to Berkshire Hathaway shareholders. The letter is worth browsing through in its entirety.

Investors should be skeptical of history-based models. Constructed by a nerdy-sounding priesthood using esoteric terms such as beta, gamma, sigma and the like, these models tend to look impressive. Too often, though, investors forget to examine the assumptions behind the symbols. Our advice: Beware of geeks bearing formulas.

Improved “transparency” – a favorite remedy of politicians, commentators and financial regulators for averting future train wrecks – won’t cure the problems that derivatives pose. I know of no reporting mechanism that would come close to describing and measuring the risks in a huge and complex portfolio of derivatives. Auditors can’t audit these contracts, and regulators can’t regulate them. When I read the pages of “disclosure” in 10-Ks of companies that are entangled with these instruments, all I end up knowing is that I don’t know what is going on in their portfolios (and then I reach for some aspirin).

Participants seeking to dodge troubles face the same problem as someone seeking to avoid venereal disease: It’s not just whom you sleep with, but also whom they are sleeping with.

Sleeping around, to continue our metaphor, can actually be useful for large derivatives dealers because it assures them government aid if trouble hits. In other words, only companies having problems that can infect the entire neighborhood – I won’t mention names – are certain to become a concern of the state (an outcome, I’m sad to say, that is proper). From this irritating reality comes The First Law of Corporate Survival for ambitious CEOs who pile on leverage and run large and unfathomable derivatives books: Modest incompetence simply won’t do; it’s mindboggling screw-ups that are required.

[Letters 1977- 2008]

Work-on-demand

I’m suspecting European visitors will need some context: early in the mornings in many large US cities groups of workers (usually Hispanic) stand around certain street corners waiting for work. Contractors show up and select groups of them and then pay them at the end of the day. From a contractor’s perspective, it a great way of load balancing on a daily basis and not paying taxes/social security fees. The workers are happy because (a) they get work, (b) there is the chance that their hard work will be noticed and asked to stay on a more permanent basis.

Barry Schwartz on Wisdom

From TED 2009.

The Black Swan: Why is this new?

I have come across the term “Black Swan Event” several times in the past few weeks, mostly in reference to the recent and ongoing financial turmoil in the world markets. I hadn’t heard the term before and so searched Buzzwhack’s compendium of office jargon for a humorous definition but didn’t find anything. I did some more digging and found a brief description on wikipedia which left me puzzled. By coincidence, a coworker had just received Nassim Nicholas Taleb’s book and so I borrowed it to try to figure out what all the fuss was about.

Taleb spends over three hundred pages talking about the nature of “Black Swan” events but i couldn’t bring myself to read more than a few lines of different chapters. I kept looking for anything about the “Black Swan” theory that would make it useful above and beyond what is already known about paradigm shifts, the human mind and statistics.

In a nutshell, according to Taleb a “Black Swan” is anything that fits the following definition and corollary:

a) Significant events that cannot be predicted which have a very large impact.
a’) Humans offer post-hoc explanations of how the event might have been predicted, reducing their belief in the true randomness of the event.

That’s it. The rest of the book is a long list of anecdotes of how a+a’ have played out again and again in the history of mankind as the result of shortcomings in the way that human minds process information, i.e. cognitive biases.

Why is this useful?

For those of you that are interested, here’s the recipe on how to peddle academic pseudo-theories to the masses and make a fortune:

Step 1) Select some existing academic work in the field(s) of interest. (in this case: Kuhn’s notion of paradigm shifts and lots of work on cognitive biases)
Step 2) Choose examples from history where it is obvious the theories you chose played a role in the outcome of events.
Step 3) Find an obscure but catchy term to label your new “theory” (see The Tipping Point (debunked), long tail (problematic) for other examples of this sort of nonsense)
Step 4) Publish the book and wait to be booked as keynote speaker for conferences.
Step 5) Profit.

Just to be clear, I am not arguing that Taleb is plagiarizing, but rather that he adds precious little to our existing understanding of high impact improbable events. There’s nothing new to the term “Black Swan” because it has no explanatory power, it’s just a repackaging job. Understanding and getting better at predicting these types of events will only be helped by the underlying science (i.e. cognitive science, statistics) and not a new umbrella theory.

Leadership Decision Making

One of the most comprehensive sites on leadership decision making, based on a larger work on indecisiveness. Make better decisions now by reading up on what matters. [link]

Incidentally, we usually make bad decisions because we believe silly things.

Be the Octopus

Psychobabble

Psychobabble is something that I just can’t stand, especially when it is used in corporations. Corporations are constantly coming up against psychological phenomena, and will drag in all sorts of types to talk about ” the five steps”, “the two things”, “the keys”, “the challenges”, etc. I very much doubt this actually helps, even if their solutions intuitively seem correct. Most likely is that the reason these solutions can be classified as psychobabble in the first place is because there were not enough solid research findings available. It is therefore unlikely that in *your* company, suddenly there will be predictive validity to the theory. What a shame no one was there to record it.