All About 'The Blob'

Read it and weep.

Video: Steve Jobs 2005 Commencement Address at Stanford

Video: Why Is There a Nobel Prize in Economics?

Video: Ethics in Economics

More on this topic here and here.

Video: Robert Shiller on Why Housing Has Not Bottomed

Book Review: The Bed Of Procrustes By Nassim Nicholas Taleb

'Most people write so they can remember things, I write to forget' - The Bed of Procrustes: Philosophical and Practical Aphorisms

Nassim Taleb's latest book is a collection of miscellaneous memorable thoughts (aphorisms), many of which relate to Taleb's disagreement and frustration with the academic economics practiced and publicly promoted by many Nobel prize winning economists.

There are two aspects of the title which warrant further discussion.

First, the term 'aphorism' comes from the classical Greek writings of Hippocrates. Given the various ills in economics which Taleb would like to see fixed, the appeal of referencing the father of medicine is quite clear.

The second aspect of the title, the 'Procrustean Bed', is also borrowed from classical Greece. The mythological figure of Procrustes would cut or stretch people to make them fit into his iron bed. Taleb's view is that many leading economists basically do the economic equivalent by framing the world in a way so that it fits into their quantitative models, rather than the other way around.

Continue reading the full review at SeekingAlpha here.

Quote of the Day: Paging Mr. Oliver Cromwell

Oliver Cromwell

Putting aside his controversies for a moment, the below words Oliver Cromwell used during his address to the Long Parliament in 1653 feel appropriate for today:

"It is high time for me to put an end to your sitting in this place, which you have dishonoured by your contempt of all virtue, and defiled by your practice of every vice. Ye are a factious crew, and enemies to all good government; ye are a pack of mercenary wretches, and would like Esau sell your country for a mess of pottage, and like Judas betray your God for a few pieces of money. Is there a single virtue now remaining among you? Is there one vice you do not possess? Ye have no more religion than my horse; gold is your God. Which of you have not bartered your conscience for bribes? Is there a man among you that has the least care for the good of the Commonwealth? 

Ye sordid prostitutes, have you not defiled this sacred place and turned the Lords temple into a den of thieves by your immoral principles and wicked practices. Ye are grown intolerably odious to the whole nation. You who were deputed by the people to get grievances redressed, are yourselves become the greatest grievance. Your country therefore calls upon me to cleanse this Augean stable, by putting a final period to your iniquitous proceedings in this House; and which by God`s help, and the strength he has given me, I am now come to do. 

I command ye therefore, upon the peril of your lives, to depart immediately out of this place; go, get you out! Make haste! Ye venal slaves, be gone! So! Take away that shining bauble there, and lock up the doors. In the name of God, go!"

Are there any politicians out there today who can deliver similar words with conviction and credibility?

The SEC: Just When You Think You've Run Out of Outrage...

SEC Commissioner Mary Schapiro

Things were starting to look up for the beleaguered-since-Madoff  U.S. Securities and Exchange Commission (SEC) with its spate of successful prosecutions of high-profile insider trading criminals. But for the U.S. stock market cop it continues to be a case of one step forward, four steps back.

Rolling Stone's Matt Taibbi delivers the latest bombshell:

For the past two decades, according to a whistle-blower at the SEC who recently came forward to Congress, the agency has been systematically destroying records of its preliminary investigations once they are closed. By whitewashing the files of some of the nation’s worst financial criminals, the SEC has kept an entire generation of federal investigators in the dark about past inquiries into insider trading, fraud and market manipulation against companies like Goldman Sachs, Deutsche Bank and AIG. With a few strokes of the keyboard, the evidence gathered during thousands of investigations – “18,000 … including Madoff,” as one high-ranking SEC official put it during a panicked meeting about the destruction – has apparently disappeared forever into the wormhole of history. 

It goes without saying that no ordinary law-enforcement agency would willingly destroy its own evidence. In fact, when it comes to garden-variety crooks, more and more police agencies are catching criminals with the aid of large and well-maintained databases.

Much has been made in recent months of the government's glaring failure to police Wall Street; to date, federal and state prosecutors have yet to put a single senior Wall Street executive behind bars for any of the many well-documented crimes related to the financial crisis. Indeed, Flynn's accusations dovetail with a recent series of damaging critiques of the SEC made by reporters, watchdog groups and members of Congress, all of which seem to indicate that top federal regulators spend more time lunching, schmoozing and job-interviewing with Wall Street crooks than they do catching them. As one former SEC staffer describes it, the agency is now filled with so many Wall Street hotshots from oft-investigated banks that it has been "infected with the Goldman mindset from within."

Anyone seen the latest Intrade odds on SEC head Mary Schapiro keeping her job?

Full Taibbi article here. 

Video: Our Political and Economic Problems Are Fundamentally a Crisis in Virtue

Marcus Aurelius

George Friedman of STRATFOR gets to the heart of the current political and economic malaise in a brief and succinct video interview here.

He's spot on about the point that all the new regulation in the form of Dodd-Frank, Basel III, etc. do zero good without enforcement.

And why aren't both existing and new regulations being enforced? In Dr. Friedman's view, it comes down to a lack of virtue among our current elite.

The good news is that this is not an insolvable problem for two reasons: First, virtue, in my opinion, is unlike height, raw intelligence, or good looks, in the sense that it is not something that one is by-and-large born with. Virtue is both learned and cultivated over time.

But how much attention do we currently place on the development of virtue? The classics in the western world on this topic include the works by Marcus Aurelius, Benjamin Franklin, Adam Smith, Thomas Aquinas, Aristotle, among others. To perhaps unfairly single out two disciplines, what room is made for those works in our current economics and business curriculum? From my personal observations, zip.

The idea of a renaissance education has been steadily pushed aside through the years in favor of the poly-technical practicalness of the 1-minute manager MBA and quant-PhDs. Today's economic and political conundrum is arguably a by-product of this de-prioritization of the study and development of virtue.

The second reason I am optimistic we can solve this problem is that when our leaders first fail society in such an epic fashion, and then next fail a second time by not fixing the root-cause of the problem, then those of us in representative democracies often make change.

Here's to hoping we get the change right this time.

Playing it Safe, Losing it All

Two facts worth highlighting from Drew Westen's controversial NY Times piece titled 'What Happened to Obama':

1. Obama published nothing (except his autobiography) during his twelve years as a faculty member at the University of Chicago
2. Before joining the Senate he voted 'present' (instead of 'yea' or 'nay') 130 times

What is one to make of this?

I won't speculate on Obama's not publishing anything in an academic journal, but one thing presidential candidates are often attacked on is their voting record. During a heated political campaign a candidate's previous legislative votes are scrutinized and picked over for any possible controversy (see John Kerry). As an astute observer of political history and campaigns, Barrack Obama would be well aware of this.

Was his voting 'present' strategy all about playing it safe and as Westen puts it "dodging difficult issues"? Or is there another explanation all together?

From Westen:

Perhaps those of us who were so enthralled with the magnificent story he told in “Dreams From My Father” appended a chapter at the end that wasn’t there — the chapter in which he resolves his identity and comes to know who he is and what he believes in.

One of the hallmark qualities of Barrack Hussein Obama's rise to the presidency has been his exceptional risk aversion. That strategy worked well in the campaign but is not serving President Obama or the country well at a time when bold, visionary political leadership is needed.

Like many, I've been scratching my head trying to put my finger on what it is about Obama that just doesn't seem right. And then I remembered a comment made by fashion designer Karl Lagerfeld when he was asked to describe himself: "I don't want to be real in other people's minds. I want to be an apparition."

I completely agree with Westen that right now the U.S. desperately needs the gregarious optimism and energy of a Franklin Delano Roosevelt or Teddy Roosevelt type personality in the White House, and not the Lagerfeld-esque 'complete improvisation' we seem to have at present.

I will never wholly forgive and forget the missed opportunity in 2009 to conduct a perhaps once-in-a-century overhaul of the global financial system, along with Obama's decision to reappoint many of the same people who led us into the crisis - Larry Summers, Tim Geithner, and Greenspan protege Ben Bernanke.

With the way things are going at Bank of America and the Eurozone we may soon get a second bite at the financial system overhaul apple. Fighting to keep Timothy Geithner on as Secretary of the Treasury doesn't exactly instil in one a sense of optimism, but there is still time for President Obama to do what is necessary to restore American optimism.

The Xinjiang 13 and Chinese Appeasement

A disturbing report from Bloomberg about several elite U.S. universities not standing up to Chinese suppression of academic research freedom and free speech:

They call themselves the “Xinjiang 13.” They have been denied permission to enter China, prohibited from flying on a Chinese airline and pressured to adopt China- friendly views. To return to China, two wrote statements disavowing support for the independence movement in Xinjiang province. 

They aren’t exiled Chinese dissidents. They are American scholars from universities, such as Georgetown and Massachusetts Institute of Technology, who have suffered a backlash from China unprecedented in academia since diplomatic relations resumed in 1979. Their offense was co-writing “Xinjiang: China’s Muslim Borderland,” a 484-page paperback published in 2004. 

“I wound up doing the stupidest thing, bringing all of the experts in the field into one room and having the Chinese take us all out,” said Justin Rudelson, a college friend of U.S. Treasury Secretary Timothy Geithner and former senior lecturer at Dartmouth College, who helped enlist contributors to the book and co-wrote one chapter.
The sanctions, which the scholars say were imposed by China’s security services, have hampered careers, personal relationships and American understanding of a large, mineral- rich province where China has suppressed separatist stirrings. Riots and attacks in Xinjiang in July left about 40 people dead.

In the race to embrace China's riches the leaders of elite U.S. academic institutions (who should know better) seem to have forgotten that China is run by a brutal, freedom-suppressing dictatorship. Yet Stanford, the University of Chicago, Duke and NYU have or are in the process of building branch campuses in mainland China. Have many of the U.S.'s best universities forgotten that history has not looked kindly on those who have cozied-up to regimes like China's current one?

The Xinjiang 13 incident also smacks of the same problem in academia which Oscar Winning Director Charles Ferguson documented in his must-watch film Inside Job. Has the academy not learned anything about the importance of professional ethics these past few years?

Full article on the Xinjiang 13 here.

Evil on Display: Anders Brievik and Insane Acts Committed by Sane People

Perhaps it would be easier to understand the horrific Norwegian killings if they were committed by someone with a history of mental illness and/or violence.

Or perhaps we could more quickly file away this tragedy into a tidy, little mental compartment if the killing was conducted by someone with far less skill and fewer economic advantages.

And perhaps over time more details will emerge to reveal a picture of someone with a history of hate or unsound mind.

But early portraits painted by people who knew him suggest a rather disturbing alternative, which is that Anders Brievik was a seemingly 'normal' Norwegian.

From one of his classmate friends of four years:

I do not know what drove Anders. But, unfortunately, I do not think he is crazy. It would have created a comfortable distance between us if I thought he was. Nothing I know about him from our school days or what I have read in his so-called manifesto suggests that. Rather, he is cold, intelligent and calculating. The Anders I knew was not a monster. 

And as the saying goes, he was not an island. He was product of our society. He was one of us.

Sadly, There is Nothing New Here

If in fact he is a sane, even likeable person as some suggest, who also can kill without concern for those he slaughters, what are we to make of Anders Brievik?

Any student of history is well aware of the unfortunate reality that people like Brievik are nothing new. Many, particularly here in Europe, had hoped the ideologies which fuel Brievik-like personalities, capable of inflicting immense harm to a great number of people not personally known, had been buried decades ago. But the carefully orchestrated supernova of violence conducted by Brievik reminds us that this flame has not in fact gone out yet.

In the wretched corner of history occupied by the Brieviks of the world resides Nazism, which, for better or for worse, has received the lion's share of attention. I say for better or worse because the Nazi-like crimes committed under Stalin, Mao, and others often do not receive the same level of emphasis as those committed under Hitler.

Some who studied the Nazi leadership on trial at Nuremberg stated that the single most important personal quality which contributed to the ability of these humans to try and exterminate Jews (and others) was a lack of empathy. In place of a sense of caring about individuals and collective humanity, which exists in varying degrees in the vast majority of us, instead resided a bottomless black hole devoid of the ability to feel what others feel.

Harm-justifying venom can be easily poured into such minds. Rather than rejecting ideas which you and I would find unconscionable, harming others can seem logical. Seemingly sophisticated moral philosophies, justifications, and ends-means rationalizations enable such people to shoot kids "not just once, but twice, to be sure".

The Anti-Change

Brievik's bomb and gun shots were basically an attack on change. Put simply, Brievik didn't like the way things were going in Norway and decided to effectively sacrifice his freedom of movement for at least 20+ years-to-life (Norway doesn't have the death penalty) to let the world know about it.

For those who don't have the time or inclination to read his 1,000+ page 'manifesto', the change he lashed out against goes by the name of globalization. Brievik would probably prefer that we refer to it as multiculturalism, but globalization and multiculturalism are inextricably linked. Reductionist arguments which try and isolate multiculturalism from globalization are idiosyncratic and counter-productive.

The purpose of this post is not to debate the merits of globalization, but it was interesting to note the stark contrast between Brievik's hate for Norway's immigrants with a recent talk on the contribution of immigrants to Britain's intellectual history. One quarter of Britain's Nobel prize winners were born abroad, as were a large number of America's. Is freedom of movement what the Brieviks of the world would have end, or are they ok with allowing just the Albert Einsteins in?

What is Evil?

Norwegians are hurting badly from this heinous crime and asking how one of their own could commit such an act. Some would like to see the whole episode go away and also deny Brievik the publicity and attention he seeks. From the lack of headlines of late on the BBC and other respectable news agencies it would seem that some clearly understand the essential role of the media to his carefully calculated plan. Hats off to media leaders who recognize this and have taken appropriate action. But what about those who are still trying to gain more information and understand why this happened?

Outside of the religious world people often scoff at whether the imprecise, black-and-white concept of 'evil' is useful. But what other word comes close to giving this its proper name?

Leave it to the shrinks to classify and rationalize empathy-devoid personality types. For the rest of us 'normal' people the word evil will suffice.

Video: Ray Kurzweil on Bill Mahrer

Real Time With Bill Maher: Overtime - Episode... by HBO

Video: WikiSecrets -- Frontline's Profile of WikiLeaks, Julian Assange and Bradley Manning

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Watch the full episode. See more FRONTLINE.

New Blood Test Tells You How Long You'll Live

The test costs under $1K. Story here.

Outrage of the Week: FCC Commissioner Meredith Attwell Baker Cashes-In

Shameful

Federal Communications commissioner Meredith Attwell Baker, who just four months ago voted in favor of the hugely controversial merger between Comcast and NBC, announced this week that she planned to join the lobbying office of Comcast.

From the Washington Post:

Baker stood out among the FCC’s five commissioners for criticizing the merger review process for taking too long. She said the agency attached too many conditions to the deal. Among them, she opposed holding Comcast accountable to Internet access rules and the sharing of content with new online distributors such as Netflix and YouTube. She said those Internet television platforms were too new and that the market for online video was competitive and still forming. 

The deal was approved in January by the FCC and Justice Department, forming a media behemoth that controls a bevy of television and movie assets along with the largest number of U.S. home Internet and cable subscriptions.

Also of note, Meredith Attwell Baker is a Republican who was appointed to the F.C.C. by President Obama two years ago. On the endemic problem of regulatory capture, here's The Future of Capitalism:

In a better world, this would be a hot political issue for a politician to seize on. But because it's such a bipartisan problem — both Republicans and Democrats cash out through the revolving door — it doesn't get much attention. It's a part of why government gets bigger, though, because for the politicians and regulators the incentives are there to make more complex rules and laws that they can then earn money helping companies to either comply with or get around.

Meredith Attwell Baker is just the latest example of the pervasive 'go into government to cash-in' culture which has poisoned public service in the U.S. Baker's shameful move is nothing new, but she does earn extra outrage kudos for brazenly waiting a scant four months before making such a blatant ethical affront.

Some may wonder whether it's right to cast shame on Attwell Baker? I'm not a legal expert, but I suspect she's not violating any laws or rules. Instead one could argue that she is simply behaving in accordance with the system's incentive structure.

The big problem with taking this view is that regulatory capture is a very difficult problem to address, but one that creates huge costs. Most of the people who are best served to work in the regulatory arena naturally come, and can most easily find later employment in, the industries they regulate. Until a systemic solution is devised accountability has to be maintained at the individual level, and that means shaming the shameful.

As the regulatory revolving door leading in-and-out of industry keeps going around, and around, and around, and as fiscal deficits keep piling higher, can there be any doubt that we're simply biding our time until the next big crisis?

'Adult Supervision' at Facebook?

But who is supervising Facebook's 'adults'?

Remarkable timing award of the week.

News of Facebook's secret smear campaign leaks the day after BusinessWeek publishes a rosy cover story on Sheryl Sandberg, which prominently quotes the Facebook COO as providing "adult supervision" at the social network.

However, Sandberg no doubt authorised and perhaps even concocted Facebook's idiotic PR caper.

In the competition over who people should trust with their very personal data, score a checkmark in Google's column and yet another minus against Zuckerberg and Co.

Video: Transcendent Man Movie Trailer (Featuring Ray Kurzweil)

Video: Atlas Shrugged Movie Trailer Disappoints

My first reaction: it has the look and feel of a Left Behind type film in terms of production quality (not good). And please don't ask how I know what a Left Behind movie looks like.

Second reaction: setting it in the modern world is a questionable call. It's easy to criticize Atlas Shrugged today, but it's important to remember the context and historical period in which it was written. Aesthetically, there's not enough art deco in this trailer, and it should be in black and white, preferably filmed in a Sky Captain and the World of Tomorrow grain. 

Also for such a long-winded story to have any chance of holding the attention of a general audience it probably needs A-Listers. While I'm not a huge fan of Angelina Jolie, perhaps she could pull off Dagny; maybe Antonio Banderas could play Francisco, etc.

Atlas Shrugged and its characters in particular captured my imagination when I was younger, but as I blogged previously Rand's ideas are (for starters) inconsistent.

Last word on the film adaptation of Atlas Shrugged goes to Tiger Beatdown:

I myself am greatly looking forward to the movie. Because the whole point of it – superior people make superior products and earn superior money because they're superior! – is going to be really complemented by the spectacle of this broke-assed movie made with former WB stars for like five cents.

2045: The Year Science Makes Humans Immortal?

Ray Kurzweil

For my money it just doesn't get any more bleeding edge than the 'Singularity'.

A good read published in Time yesterday on this topic, and radical life-extension, featuring inventor and futurist Ray Kurzweil, Cambridge Professor Aubrey de Grey, investor Peter Thiel, and others at the forefront of this (for lack of a better term) movement.

From the article:

The more you read about the Singularity, the more you start to see it peeking out at you, coyly, from unexpected directions. Five years ago we didn't have 600 million humans carrying out their social lives over a single electronic network. Now we have Facebook. Five years ago you didn't see people double-checking what they were saying and where they were going, even as they were saying it and going there, using handheld network-enabled digital prosthetics. Now we have iPhones. Is it an unimaginable step to take the iPhones out of our hands and put them into our skulls? 

Already 30,000 patients with Parkinson's disease have neural implants. Google is experimenting with computers that can drive cars. There are more than 2,000 robots fighting in Afghanistan alongside the human troops. This month a game show will once again figure in the history of artificial intelligence, but this time the computer will be the guest: an IBM super-computer nicknamed Watson will compete on Jeopardy! Watson runs on 90 servers and takes up an entire room, and in a practice match in January it finished ahead of two former champions, Ken Jennings and Brad Rutter. It got every question it answered right, but much more important, it didn't need help understanding the questions (or, strictly speaking, the answers), which were phrased in plain English.

The idea of the Singularity first hit me like a lightning bolt a little over a decade ago when I read Sun Microsystem co-founder Bill Joy's alarming Wired article titled Why the Future Doesn't Need Us. I've been fascinated and trying to wrap my mind around the many potential implications of exponential technological development and living indefinitely ever since.

The Antithesis of Idle Chitchat

If you're looking for a way to spice up your next dinner party or bar conversation then I encourage you to trot out the idea of science making immortality a reality within your lifetime.

As noted by Kurzweil, people can more easily accept the idea of superhuman HAL-like computer artificial intelligence in the foreseeable future than banishing death. Based on limited anecdotal observations women in particular seem to have an almost viscerally negative, knee-jerk response when first confronted with the notion that the necessary technological advances could arrive in their lifetime.

In fact I have yet to encounter a single woman that responds positively at first blush to the idea of living forever. Perhaps the only thing this reveals is a homogeneity amongst my circle of female friends and acquaintances. But it has led me to wonder whether there is something fundamental to radical life extension which makes it more appealing to men?

Personally, I don't think so. Rather I think this is a case of a big, hard to fathom idea traumatically upending the perceived natural order of life's apple cart. Once you get passed initial concerns over things like quality of life (living long but as a gimp or vegetable) or what this means for romance (and concepts like soul mates) then some women soften up their initial distaste for life extension.

I for one love the idea of extending life indefinitely! There is so much I would love to learn, see, and do; to one day catch a sunrise on planet Mars and then climb Olympus Mons, a mountain almost three times as tall as Everest!

So far as I can imagine there is simply nothing else which would more profoundly alter life as we know it than the Singularity and radical life extension. However, their prospect raises tectonic moral, philosophical, socioeconomic, and security implications. Joy's concerns, which are shared by Kurzweil, must be addressed.

Below is a video of a 17-year old Kurzweil during his 1965 television appearance on I've Got a Secret, and here is a link to his most recent television interview on Charlie Rose where he describes the Singularity.