Writing: August 2008 Archives

Why are Democrats in sequence so bumfuzzled and then so smug and soft-headed? There's just never the sense with them that they can simply make a decision, establish a conviction, and then follow it through. Always there is the handwringing and the worry, asking themselves "oh, is this a good idea". And when they get what they want, all they can do is be smug - feel good about themselves. They're like an Alzheimers patient in a whorehouse. Every 4 years the same things happen - they constantly get screwed, and they don't want to pay for it. They wake up the day after the election and wonder to their self-righteous selves, "how did this happen?" "Somehow the evil Republicans stole the electon from us with their evil evil evil-doing."

They can never imagine how they are wrong. They can never admit that the ideals they put forward are in some way fundamentally, and unequivocally, flawed. It may make them feel all warm and fuzzy to say that jobs must stay in America and not be outsourced, but that doesn't make their conviction in any way right or in any way justified. And when they get uppity about tolerance for other people, they seem to have no notion of how much people are tired of being called racist or predjudiced just for getting up in the morning. As long as Democrats think they are constantly on the brightest white side of Good, and the Republicans are somehow inherently evil, they will never have the muddy pragmatic realism to win with people who don't give themselves the luxury of being too good to come in first.

Obama can preach his gospel all he wants, but as long as his oratory is used to serve the base crassness of decieving yourself as right in order to play on the irrational fears of populist sentiment, he can take his "new politics" and shove it up his ass. You are not being "right" when you insist still on not telling the truth about how things are. And to pretend that you are telling the truth while lying and distorting is surely a larger sin than simple pandering. If you're going to pander at least have some shame in it. Hillary and McCain are held back a little each time they have to push out crap in order to get themselves elected. It doesn't mean they're not going to do it, but at least they don't seem so proud of themselves having done it.

Say what you want about McCain on the attack - he is always principled enough to sign his name at the end of everything he does. He has at least that much pride. Obama has taken to being shy and hiding his ownership of his negative attacks. McCain tags all his ads at the end, so that even after the knife is stuck in, you know who did it. Obama's been doing it up front, so that by the end, you're not sure who did what. And know who does what is the fundamental step you follow in language and in narrative in order to be honest to how things are. If you're going to attack, you can't be shy about soiling your lily white hem with your opponent's blood. Stop pretending to be self-righteous and admit you're playing the same game everyone else is, rather than pretending to stand above it all. You are not a fucking saint. Your party is not a party of saints. At least Republicans have no shame in being who they are.

Decrying the politics of personal destruction, and still playing the gotcha game (saying McCain thinks people aren't rich till their income is $5 million) is fine if you're a normal politician - but not when you think you're the second coming of Christ. No one is better than the game. If you can play, then you surrender yourself to the compromises you have to make. Acting better than how you are is the real presumptuosness.

As for the speech, I've seen this movie before. It worked the first time. But fool me once, shame on you. Fool me twice, shame on me. If you're not willing to offer realistic, substantive, concrete ideas devoid of hyperbole and outsize rhetoric, you are not being honest to the people you're talking to. Let your ideas be dramatic, rather than the way you couch it. Say you want affirmative action to be based on economic status rather than race. Admit that allowing people to invest their private savings accounts rather than paying into a failed Social Security system is not "gambling your money on the stockmarket", but rather ensuring for themselves a higher rate of return than the opportunity cost of capital.

Barack Obama is fundamentally irresponsible. These are the most fundamental things I taught my students when I taught them writing: 1) Be clear on who is doing what. Do not obfuscate the agency of a given action. 2) Do not exhalt with melodrama something that is paltry. If something is important, all the more it should be presented in the clarity of prose so that the emergency of what is happening can be appreciated for what it is, rather than exaggerated beyond any accurate of realistic sense.

Barack Obama is fundamentally irresponsible.

Jaimy Gordon said something particularly memorable to me once. She was rightfully reacting to my frequent and strenuous complaints about sentimentality in the writing we were reading for workshop. She described a New Yorker cartoon in which a man is reading a book. As the panels progress, he gets more and more engaged, more and more distraught, more and more moved by what he's reading. But as we get to the last panel, we see him sitting in front of a typewriter, stoney faced with a ballon showing what he's typing - "what a load of sentimental bullshit" - or something similar.

I very much sympathise with that cartoon, because it's a process I find myself repeating very often. I remember even when I was much younger, when I watched Titanic in the cinema, how I wept while watching it - though to be accurate to what went on, there were personal aspects that led up to that event. Once it was over, of course I felt completely manipulated by filmmaking that's the equivalent of pushing an elevator button. Of course over the years I've come to understand at least in part how the percolation of a Marxian perspective very much assists in creating this odd sentiment. This dictates that we should always strive to be able to understand what is going on by looking at it from the outside rather than from the inside (to put it rather simplistically) - not inhabiting the emotion, but rather questioning why that emotion is evinced. This does not necessarily undercut the sincerity of all emotion per se - but it curses us to always question the nature of our being affected by something we watch or observe.

If we were to do a practical criticism, a close analysis, of why we are affected by the ending of great expectations - especially when we are in the courtroom with pip and magwitch and we understand there to be no "help or pity in all the world" - we would perhaps dissect with awe the way dickens constructs scene, uses language etc.

In a political context though, when the sentiments you have to put forward have to be repeatable (in a stump speech) or reproducible (in the sentimental medium that is television) or is in fact the translation and repetition of affections past - it is no less able to bring about emotion. But in the context of such a direct appeal to persuasion - to vote one way or another, rather than to simply nudge people towards a more nuanced understanding of how things are or a particularly focused world view - you question whether it really should be about emotion as a means of persuasion.

The more I think about it, the more I think persuasion should be about facts. About rationality. If you want to help poor people, the question is not how do we make people feel for poor people, it is what are the best policies to lift those people out of poverty. And unfortunately sometimes those policies can seem counterintuitive - like taxing the rich less. It might not make any conventional or emotional sense - certainly not as much as giving the poor money (though that's a good idea too, via the EITC) - but if it's borne out by the facts, how it feels shouldn't make a difference.

But I'm a sucker, whether Adeena would believe it or not, and I'm a sucker for a reality distortion field. That's why I'm emotionally entertained by Steve Jobs, and why I can't help but be emotionally entertained by Michelle Obama's speech.

But so what if you feel the pain of the common people? So what if you are "like them"? Will it stop you from enacting policies simply because you think they'll work and hope they'll work, rather than counterintuitive policies that smart people can measurably and verifiably tell you will work? Because I can never help but worry that Democrats are too soft-headed not to damn the people they are trying to help, just because they can't help themselves from giving in to what people want rather than standing up for what is in those people's long term best interests. You can try and protect people all you want from the pain of free trade and lost industry, but all you're doing is delaying and magnifying the inevitable, rather than doing the hard and radical work required to create a situation where the impact of these changes would be minimised.

Jaimy also helpfully points out that people have every right to be surprised when they find out I'm not an only child.

Much has been said, not least in the popular media and even in intelligent literate writing, that decries the goal of profit maximisation as the stated goal of industry. Just off the top of my head, I think of Michael Moore's Roger and Me, where he rails against the fact that profitable industries are still closing plants and moving manufacturing to countries other than the US in the 80s and 90s (a process that, as far as I'm aware is largely complete nowadays). But even more recently The Wire - or more specifically the introduction the the 5th season - talks about how with journalism and the funding of newsrooms, it wasn't that they weren't making profits, it's just that they weren't making enough profits.

I've come to realise this to be true: that profit maximisation indeed is not a sufficient means of defining what companies should strive for. But of course my objection has little to do with agreeing with the discourse I've cited, and more to do with explaining exactly why "profitable" companies still desire to make sometimes large and drastic changes.

Much of this has to do with my having been contacted by The Christman Group, an investment bank that has an internship opening that I'm hoping to fill. But the less said about that the better, I'm sure - I don't have unrealistic expectations. Suffice to say between recieving an e-mail that expressed interest in me and arranging a phone interview, I decided to do what any responsible job-seeker would - find out as much as possible about my potential employer. Aside from reading their President Richard Jackim's very accessible book "The $10 Trillion Opportunity," (I bought the e-book online) about their company's focus on Exit Planning for mostly privately held middle market companies, I was also looking at what seems to be the beginners bible of MBA finance, Brealey-Myers' Principles of Corporate Finance. 

Brealey-Myers makes an intriguing and really rather stunning assertion about the brief managers should recieve from shareholders - exactly that profit maximisation is not the most appropriate objective of professional managers. This is in part because profit maximisation as a principle is needlessly vague - it is not time specific, it does not say for what period profit is being maximised - whether this year, next year or 5 years hence, each perhaps at the expense of the other, or of other longer term periods of profit. It makes no sense to have one year have the largest profits imaginable at the expense of profits for the next ten years. Similarly owners do not want to sacrifice profits for the next ten years in the hope that at the end of that period there will be one year of huge profits.

The answer is Net Present Value. I find it a little difficult to explain in totality the concept of Net Present Value except mathematically, and I don't wish to go into too much detail - you can read the wikipedia article on it, and download a copy of Brealey-Meyers (isn't piracy grand?). But suffice it to say it is the beginners holy grail of corporate finance. The maximisation of Net Present Value argues that given the same level of risk, the return on investment of a given amount of capital must exceed what that same capital would earn through the capital markets (buying govenment securities or shares of similar risk as the investment), or else the investment cannot be justified since it does not create more value than the opportunity cost of capital.

I'll try and make that a little more concrete. When you have a given amount of money, and you don't do anything with it other than stuff it under your mattress, you are losing money. Not just because of inflation, that makes your money less valuable, but because you are not investing it in order to create more wealth. This investment is not "funny money" - on the contrary it is very real. Whenever you put money into capital markets, that is the money that business users borrow to fund their businesses - to make more and better widgets. It's the money that people borrow to buy a house or car. These are things those people couldn't otherwise do, and you are allowing them to get those things done, for which they are paying you back your investment plus interest. That return on investment is the base level at which someone who doesn't stuff their money under the mattress operates. If you have $100 and you do nothing with it, at the end of one year you have $100 (before inflation). If you put that $100 towards buying government securities that give a 7% return at the end of one year, at the end of one year, you have $107.

What maximising NPV argues is that if you are investing in something at the same level of risk as a govenment security, it needs to provide a return of more than 7% in order to be a rational decision. Otherwise you are not making as much money as you can given the level of risk. Put another way, you are taking on too much risk for too little reward - when the going rate of that risk is lower than that of your investment.

This brings me back to the beginning of this post, about why "profitable" companies may still move factories or streamline newsrooms. Because if you are only making the amount of profit equal or less than the amount of profit you could be making by investing in capital markets, you are not making a rational decision. For the level of risk of your endeavour, you need to be making more profit than you would otherwise be making, or you're putting in all that effort and still losing money compared to investing it.

Of course in the real world this becomes more and more complicated as more variables come in, but in general this is a useful guide in terms of how to make rational decisions regarding the allocation of capital. And the efficient allocation of capital is a good thing. Me saying why that is will have to wait for another post, but suffice to say anything less is just irrational.

Part of me just doesn't know where to begin. Just because I've become a Craigslist junkie looking for jobs, I stumbled on to this bullshit: 

Motivated Creative Solution Based Blogger

We're looking for motivated Blogger/partners with fresh ideas. We're well funded and will compensate. So feel free to explore www.bluegoosenews.com set up a profile. 

Before you send your resume please take some time and preview our site. Tell us how you can help take us to the next level. 

Thanks www.bluegoosenews.com

If you can't smell the horseshit yet, look around the site, realize how aimless and directionless it is, like any other cooperative farce, then realize why when you look at the meandering written-by-a-child "about" page:

Blue Goose is the town meeting of the digital age. It's an interactive warehouse of user-generated news and solutions where responsible citizens collaborate globally for a better tomorrow. Blue Goose creates the ultimate neighborhood one community at a time. It's where responsible citizens of the world share and discover the most powerful tool of all--collective common sense.

I'm sorry, but if you can manage to be several magnitudes less vague, Barack Obama can use you as a speechwriter. My only response to that (and especially their rather bizarre quoting of David Brooks, of all people), is this:

"Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest." 

"By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good."

Adam Smith, The Wealth of Nations.

I really don't know from where these garment-rending, cheeto-eating air-heads come from.

Getting things done requires direction. And I don't just say that because I'm a former Infantry Officer, but I am, and I'm right. But not only do these people not have any kind of direction other than a faffy notion of random do-goodery, they seem incapable of even categorizing a useful sense of the problems they wish to address. They have no heft in terms of having already attracted the mentorship or aegis of an existing useful organization, and they have no bonafides at all other than to have set up in their grandmother's basement somewhere.

Worse than that, the best they've been able to come up with is some odd kind of online panhandling, where people have "tipjars" - aside from the fact that "social entrepreneurs" should not be the equivalent of the guy behind the counter at a Starbucks, I fail to see the revenue model in hitting people up for money on the basis of hot air.

More to the point, these people are such amateurs and baseless nothings that they seem to have no notion at all about how professional their endeavour could be. This is how adults handle serious things, by actually bringing together people who know shit about shit. By which I mean something like the Copenhagen Consensus. Their about page is simple, direct and communicative, and their purpose is urgent, directive and practical:

The idea is simple, yet often neglected; when financial resources are limited, you need to prioritize the effort. Everyday policymakers to business leaders at all levels prioritize by investing in one project instead of another. However, instead of being based on facts, science, and calculations, the decisions are often made from political motives or the possibility of media coverage. The Copenhagen Consensus approach improves knowledge and gives an overview of research and facts within a given problem, which means that the prioritization is based on evidence.

Put simply, they identify what will do the most good for the least amount of money. Right now they argue that the thing to do is this:

Providing micronutrients for 80% of the 140 million children who lack essential vitamins in the form of vitamin A capsules and a course of zinc supplements would cost just $60 million per year, according to the analysis. More importantly, this action holds yearly benefits of more than $1 billion.

That is how you have the tiniest amount of effort perform an enormous amount of good. Rather than brushing cheeto-dust off your T-shirt and then taking a nap after. If they want a social network to show the good that is being done, then let them show the good of getting a return on investment that is unheard of in any other sector.

What annoys me the most is that they claim to be well funded. If someone sincerely wants to do some real good to some real effect, you don't have to look far to find the best ways to get it done. You want something to energize you? I've just given you one. Do something about it. But no, you'd rather whine and set up a talking shop of no use or consequence. I have no problem with entrepreneurial capital being wasted in pursuit of whatever, but to have it masquerade as wanting to do good is just in bad taste.

Somehow someone somewhere has to realise that the most successful of open-source efforts comes from a) having a clear mandate and direction as to principles and goals b) the engagement of people who know what the fuck they're doing, rather than the "there but for the grace of god" crowd of dilettantes who have nothing better to do than clasp at their chests as if anyone gave a damn.

Who funds this crap? No doubt voyeurs who love to watch other people masturbate - since that's what this is. Enough of a solution for you?