Posted by Marc Hodak on January 8, 2008 under Economics | 
“I’m optimistic, as I’ve seen this economy, you know, go through periods of uncertainty,” the president said. “I like the fundamentals, they look strong, but there are new signals that should cause concern. And one of the signals is the fact that the housing market is soft.”
This was President Bush, who appears to be talking about the economy quite a bit recently. Here’s the proper way of interpreting this statement:
I’m optimistic, as I’ve seen this economy, you know, go through periods of uncertainty.
This means nothing. A President is basically paid to be optimistic. Hillary is not optimistic, but that’s just because she’s not president. Then, there’s the fact that the economy is inherently uncertain, almost by definition. Why mention or write about “periods of uncertainty” when one would never hear about “periods of economic certainty?” Also, nice touch for the author to include the “you know.” Why did she do that? Most writers don’t include their subject’s “ums” “ahs” and “you knows,” but AP writers often do that with Bush. It makes him look like a high school kid pretending to talk about economics rather than a Harvard MBA. Bush certainly says “you know,” like many speakers, but why include that in an article about the economy, unless that’s not really what the writer is writing about?
I like the fundamentals, they look strong, but there are new signals that should cause concern.
Here is Bush repeating what he said in the first sentence, except in Wallstreetese. This phrase is not aimed at people who speak that language so much as the people who hear other people speak that language. It makes “I’m optimistic, but there’s uncertainty” sound more financial or scientific or whatever Bush thinks might comfort the typical AP reader.
And one of the signals is the fact that the housing market is soft.
At best, another subjective statement without content; at worst, a confusion of cause and effect. There are any number of reasons that the housing market is soft, none of which necessarily provide a “signal” about the economy as a whole. In fact, it’s not even clear that housing prices coming down from extraordinary peaks is a bad thing for anyone not speculating on housing prices.
Personally, I don’t think I could do it. I don’t think I could come up with creative ways to say nothing, day after day, like your typical politician can, especially when talking about the economy. This is a kind of art form. A dark, improvident, cynical art.
Posted by Marc Hodak on under Patterns without intention |
That’s what happened this evening to the farm we were at a couple weeks ago. The Marshfield home of my mother-in-law, Rose, was struck by a tornado. Thank goodness, she got away without a scratch, having spent the ordeal in her basement, emerging to a group of emergency workers checking out her badly damaged home. All of her other buildings and yard trees are gone.
Marshfield has endured tornadoes before, but it’s still a shock when it strikes your own home. Somehow, her brother’s farm across the road survived intact, so she has a convenient place to stay until she can survey the damage tomorrow morning. Her nephews and nieces, my wife’s grown cousins, will be there ready to help at daybreak. My wife will be out there soon enough.
Everyone who knows Rose is confident that she will be just fine, despite the destruction. This lady grew up in hard times. She has carefully maintained her health, finances, and relationships in precisely the way that would enable one to weather such a storm. For example, she had just completed an addition to the back of her house when we were there over Christmas. Now, if it were me, I would have gotten around to calling my insurance agent to update my homeowner’s policy by, oh…September. Rose had already gotten hers updated last week. That brand new addition is, as they say, gone with the wind, but what’s a poor claim adjuster to do? Check her phone records for any calls to Zeus?
Yea, she’s gonna be fine.
Posted by Marc Hodak on January 1, 2008 under Invisible trade-offs |
I saw this in the WSJ:
Kremlin officials argue that Russian voters are still too tainted by decades of communist rule to be relied on to make responsible choices in the voting booth. “We’re a very leftist country that’s not the least bit concerned with obeying the law,” said one.
At the meeting with foreign analysts in September, Mr. Putin said Russia would need “strong presidential power” for years to come. Parliamentary democracy — of the type tried in the early 1990s — would be “very dangerous” for Russia, he said, for at least another decade.
And it reminded me of this:
The heretical thought that rarely surfaces is that weakening democracy in favor of markets could be a good thing. No matter what you believe about how well markets work in absolute terms, if democracy starts to look worse, markets start to look better by comparison.
Here is another, practical take on democracy.
Posted by Marc Hodak on December 30, 2007 under Executive compensation |
I took Larry Ribstein to lunch a couple weeks ago as a meager thank you for his guest lecture in my “Scandal” class this Fall. Eating with Larry, one expects to partake of his keen insights on corporate law, business, and the media. The bonus of this particular lunch was Larry’s hearty recommendation of oPtion$ by Fake Steve Jobs (aka, Daniel Lyons of Forbes).
Despite being an FSJ fan since before Thanksgiving, I didn’t think I’d have time to add another book to my Christmas list. I decided to chalk it up to “research” on my own options idea I would be developing during my iLess break on the farm.
My wife, wrapping last-minute presents in the kitchen and hearing me laughing from the living room, was wondering what could be so funny about modeling a complex financial product. I disclosed the nature of my preliminary ‘research’, and tried to read a passage to her.
Friends, I simply couldn’t get it out coherently. I ended up needing a paper bag to catch my breath from laughing so hard. No spoilers, here, but the passages with Apple’s Chairman, who hilariously hates Jobs, and FSJ’s run-in with the attorneys investigating him as well as the one hopelessly trying to defend him are priceless. Various celebrities get skewered in cameo appearances, any one of which is worth the price of the book.
Having sampled the FSJ site over several weeks, I was initially concerned that oPtion$ would read like a collection of blog entries forced into a book just to cash in on the site’s popularity. Folks, it didn’t read that way at all. Each funny chapter hewed to a story line that was faithfully maintained to nearly the very end. At that point, some hints of character development emerge, only to be gratefully suppressed in a suitably goofy denouement.
When I was done with it, I thought, “God, I wish I could write like that.”
Posted by Marc Hodak on December 29, 2007 under Collectivist instinct |
Spain has banned spanking. Spain, of course, is not the first political jurisdiction to suggest that maybe Daddy doesn’t know best.
Now, I have often joked about not beating my kids enough–almost always with my kids in hearing distance–but I personally never saw a reason to actually strike them. I remember being struck by my own dad many times (probably more than he actually did), and not with fond memories, and resisted creating those same memories for my kids. But I would not have surrendered my right to do so. I certainly wouldn’t have handed power to the state to develop the bureaucratic machinery necessary to distinguish, say, a pat on a youngster’s butt, or aggressive handling of a child in need of reminding who is in charge, versus illegal “striking.”
It takes a certain mindset to presume that the government can effectively make these distinctions. One such genius is Sally Lieber. As is typical of the kind of blindly liberal buttinsky that regularly gets elected in California, she proposed a bill to ban spanking, i.e., expanding government’s reach into the family room, without actually having raised any children herself.
“Responsible parents have to give up the privilege to physically discipline their children for the sake of protecting children that aren’t being hit once in a blue moon or in a light way.”
I think the same line of reasoning should apply to severely curtailing state power on account of those who would exercise it irresponsibly.
Posted by Marc Hodak on December 26, 2007 under Executive compensation |
I came across this survey showing that most employees, including senior executives, consider CEOs “overpaid.” Nevermind this survey’s schlock statistical methods; the question that immediately came to mind for me was whether the question itself made any epistemological sense. Consider this definition:
Overpaid: Any person receiving a wage in civilized society.
Consider the perspective of people making far less than American employees. To someone struggling in the third world, anyone living an American middle class lifestyle by doing, say, electronic filing from their cushioned chair might be considered overpaid. We can’t ask our dead great-grandparents who tried to pull survival from the ground what they would think, but is it far-fetched to consider that they might regard their progeny pushing paper in cubicles, or Big Macs out of a drive-thru windows, as “overpaid?”
Yet innumerable articles continue to be based on the premise that CEOs are “overpaid.” Sure, one might argue that certain individuals are “overpaid” based on how they get their pay, e.g., cheating or stealing. But that’s not what this question is asking, nor is it the premise behind so much jaw-boning about the subject of CEO pay. No, this survey was simply pulling a subjective response from an uninformed audience, and the press was simply reflecting this response back to them in the guise of informing them. This study’s authors and the media, then, become a critically passive route by which useless information gets processed–kind of like intestines that push along the crap with the nutrients, failing to sort them for the nourishment of the body.
Posted by Marc Hodak on December 22, 2007 under Self-promotion |
I’m leaving for a farm in southern Missouri with no internet connection. For those of you not familiar with U.S. geography, that will place me squarely in the middle of…nowhere.
I usually take this week of peaceful isolation to develop an idea for the following year. Two years ago, I used the time to write up some research that became the basis for our highly regarded, compensation governance advisory work. Last Christmas, I developed a proposal to NYU for what would become my “History of Scandal” course. I’m still amazed that the department deans approved the course last spring, but having just finished its opening semester, I’d like to think they’re pretty happy they did.
The idea I’ve teed up for next week is quite novel, but I’ve gotten spoiled by my successes these last couple of years, so I’m getting bolder. (Hint: if you’re a public company CEO, your options will multiply as your excuses shrink.)
To the couple dozen of you who faithfully–or otherwise–follow these scribblings, I hope that this season is one of relaxation, hope, and good cheer with your loved ones.
Posted by Marc Hodak on under Collectivist instinct |
314. That’s the number of congresscritters who voted to ban the incandescent light bulb.
If you care about reasons why Congress would do such a thing, you can read this. If you think Congress is a bunch of dim bulbs, you can read this (gated). If you want to see why the intended effects are likely to be outweighed by the unintended effects, read this.
If you’re, like me, wondering where Congress gets off even being able to ban the light bulb, read this, and get back to me with an explanation that Washington or Madison might understand.
Posted by Marc Hodak on December 20, 2007 under Unintended consequences |
The Coast Guard gives a helpful update of their success this past year. They celebrate a record year for cocaine seizures “with 355,755 pounds seized, worth more than $4.7 billion.” They trumpet these high-profile achievements:
* In September, the Coast Guard and its partners interdicted a vessel loaded with 3,600 gallons of cocaine dissolved in diesel fuel, a technique used by smugglers to avoid detection. The liquid cocaine could be converted into 15,800 pounds of pure cocaine.
* In August, Coast Guard, Navy and Customs and Border Protection crews interdicted and boarded a self-propelled, semi-submersible vessel loaded with an estimated $352 million of cocaine.
* The Coast Guard made its largest maritime cocaine seizure when it intercepted the Panamanian vessel Gatun carrying more than 33,500 pounds of the narcotic — or approximately 20 tons — in March 2007.
Cmdr. Robert Watts, chief of Coast Guard drug and migrant interdiction, said, “The more we push them to adopt extreme measures, the more difficult we make it for them to succeed.” The drug warriors have been making these statements for over 30 years. So, what is the end result of all these achievements?
Read more of this article »
Posted by Marc Hodak on December 17, 2007 under Scandal |
Isn’t that what everybody wants?
No.
First of all “The Whole Story” is more boring than the story based on selected facts and biased interpretations. Any time a reader has a choice between a “whole story” and a “good story,” guess which one they’ll buy and which goes into the stack of unread manuscripts?
Second, “The Whole Story” is uneconomical to produce. Most stories are outlined based on facts that have already captured people’s interest (“good story” facts) before they are written up. Once the story is outlined, the story-writers job is to get the interviews and documentary support before a deadline. The worst thing that could happen under deadline pressure is uncovering information that undermines the impact of the story by providing nuance or inconsistent evidence. So, given their limited time and energy under a deadline, how much time will a writer spend chasing down the “other side” of the story, even if contrary evidence is left in their inbox? Especially if that evidence will be met with skepticism by the reader, anyway?
Third, “The Whole Story” is impossible to obtain. Even if a journalist had plenty of resources and time, and they were able to amass all the information into a plausible time line with all of the player’s motives candidly volunteered in a blizzard of interviews, it would not be the whole story. Every historical event or figure has an almost unlimited amount that can be written about them. A historian tracking a recent event, where all the players are still alive, will invariably miss witnesses who have no incentive to volunteer their version, which may offer a valuable perspective. A historian tracking a distant event or figure will invariably miss a welter of material that might have provided key insights. Every time we discover a cache of letters by the relative of some major historical figure, we end up with a new take on the past.
Of course, most people producing words and images for mass consumption aren’t even trying.
