The Family Business

In July 2004 my father passed away from pancreatic cancer. Soon after, many of his friends gathered at our home. Many expressed their condolences. One family friend then asked, directly, “When are you coming home to take over your father’s business?” I had graduated from law school just six months earlier, and had no experience or real qualifications to run my father’s venture capital firm – other than being the boss’ son.
I saw a lot of this growing up in Asia, but especially attending the private overseas American schools alongside many family “scions”. Kids who returned home from college during Christmas break, and would attend their family businesses board meetings – being groomed to take over the family businesses. Old management at the businesses all knew and accepted this.
When I told my mom what uncle/auntie so-and-so had said (all family friends are “uncles” and “aunties”) and how unqualified I would be, my mom said, in a very matter of fact manner, “Lin Han-dong will teach you.” That was my dad’s right hand man. Ostensibly, an industry veteran who worked years for my dad who would, as custom, step aside for and mentor the boss’ son when time came.
Nepotism was part of the social fabric – not so much frowned upon, than envied. My non-American School friends would comment, “it’s great to have a business to just walk into.” You didn’t have to deal with the job insecurities. They thought I would be crazy if I didn’t do it.
I had many friends who took over the family businesses. Some didn’t seek it. They felt their life choices were already made for them. From the outside, they were envied business socialites. But some privately chaffed at the notion that others from the outside would have died for, but ultimately followed in their fathers’ footsteps to keep the business within the family. They had to work their asses off. It wasn’t that things were just given to them, even though the opportunity was (similar to defenses of “White Male privilege” – I worked for everything I earned). In others, a more dangerous mentality set in.
The more dangerous mindset that comes with growing up with the shadow of a family business is one characterized foremost by entitlement, but also that the rules that apply to everyone else don’t apply to you.
You don’t stand in line. There is a line for the ordinary worker, and there is the express line for the Boss’ son. Ordinary salary employee pay taxes. The families have their armies of accountants. (In the past few years, when my mom calls, she has occasional news of of which “uncle” got caught up in tax/fraud issues and might be looking at jail time.)
This is a world I knew.
My friend says I appear to be “brooding” a lot lately. It’s probably true that I brood when I see the children of a President-elect sitting in on meetings with foreign heads of state; that I brood when a President-elect brushes aside conflict-of-interest issues as not applicable to him; that I brood when the public appears indifferent to open documentation of self-dealing (Trump Foundation IRS filings) – and appears more interested in Hamilton tweets.
I never thought that I would leave a world I was born into, only to find the highest office – an office ostensibly for *public service- in the one I chose, this close to capture by people I have not met but know well. 
***
Just two dudes about to treat the Office of the Presidency like a Family Business?
The rest of America are freiers.
http://www.haaretz.com/world-news/u-s-election-2016/.premium-1.755140?v=E9F6A891CB2B51E50F4CC52D9CF075E3
“It’s shocking to hear boastful and haughty words like: ‘Laws are meant to be circumvented.’ How many times have we heard people who’ve returned from trips abroad, who make fun of the citizens of the countries they visited, because they act like nerds: They stand in line, they make sure to pay.”

http://www.haaretz.com/thou-shalt-not-be-a-freier-1.211247

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Currents

I would be very careful, too, about confusing chauvinism with patriotism. #Patriotism celebrates free speech, particularly free speech that you disagree with. Because in America, its not the speech we cherish, its the underlying Freedom. #Chauvinism demands loyalty and attempts to silence dissent (it could say, just trust me; I alone can fix it.)
#History is not an irrelevant artifact. It is a continuous river with currents (some dangerous) – parts that exist in the past but, nevetheless, continue to direct future:
History … is how you “really see what direction you are going and without understanding what direction you are going, it’s really hard to correct course in order to make change in the future.” – Dan Freidenburg
http://mashable.com/2015/04/29/google-dan-fredinburg-tribute/#q4nOZG5omkqT
“It doesn’t give me all the answers, but it lights what is often a dark path ahead… [a] understanding of history means that we face NOTHING new under the sun….As commanders and staff officers, we are coaches and sentries for our units…. And how can you be a sentinel and not have your unit caught flat-footed if you don’t know what the warning signs are…
– General James Mattis
http://www.businessinsider.com/viral-james-mattis-email-reading-marines-2013-5 
///
“One of the things that I’ve learned to appreciate more as President is you are essentially a relay swimmer in a river full of rapids, and that river is history,” he later told me. “You don’t start with a clean slate, and the things you start may not come to full fruition on your timetable. But you can move things forward. And sometimes the things that start small may turn out to be fairly significant.
“I think we are born into this world and inherit all the grudges and rivalries and hatreds and sins of the past,” he said. “But we also inherit the beauty and the joy and goodness of our forebears. And we’re on this planet a pretty short time, so that we cannot remake the world entirely during this little stretch that we have.” The long view again. “But I think our decisions matter,” he went on. “And I think America was very lucky that Abraham Lincoln was President when he was President. If he hadn’t been, the course of history would be very different. But I also think that, despite being the greatest President, in my mind, in our history, it took another hundred and fifty years before African-Americans had anything approaching formal equality, much less real equality. I think that doesn’t diminish Lincoln’s achievements, but it acknowledges that at the end of the day we’re part of a long-running story. We just try to get our paragraph right.”
///
O me! O life!… of the questions of these recurring; Of the endless trains of the faithless–of cities fill’d with the foolish; Of myself forever reproaching myself, (for who more foolish than I, and who more faithless?) Of eyes that vainly crave the light–of the objects mean–of the struggle ever renew’d; Of the poor results of all–of the plodding and sordid crowds I see around me; Of the empty and useless years of the rest–with the rest me intertwined;
The question, O me! so sad, recurring–What good amid these, O me, O life?

 

Answer.

 

That you are here–that life exists, and identity; That the powerful play goes on, and you will contribute a verse.
– Walt Whitman. LEAVES OF GRASS. 1900

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The Fox and the Hedgehog

I care more about how people think and approach problems, than the conclusions they ultimately reach.

 

##SHOW YOUR WORK

 

Getting the right answer by luck doesn’t count, because it means you didn’t learn shit.

Reasonable people disagree on a range of issues, because we come from different places and have different perspectives. Anais Nin famously observed that “we don’t see things as they are; we see things as we are.” Miguel Cervantes’ Don Quixote proclaimed to a barber “that which appears to you a barber’s basin, appears to me Mambrino’s helmet .” (https://en.wikipedia.org/wiki/Mambrino) In day-to-day colloquisms: “To a hammer, every answer is a nail.”

So much of today’s politically-tinged narratives center on a political left-right dichotomy, that appears to be splitting further and further apart, and people hew to partisan identities the way they might defend their family or tribe. That is to say, sometimes irrationally, and very much personally.

A typical attack, for example, against the Dallas Morning News or Arizona Republic, both of which endorsed a Democrat this past presidential election (a first in half-a-century for the Dallas Morning News, and a first, period, for the Arizona Republic) was that oh, so the Dallas Morning News is now full of *libtards, or that the Arizona Republic is now just a Hillary shrill. Cancel your subscriptions! Cognitive dissonance, argh! And, for a good number of liberals post-election, conservatives supporting Donald Trump are reduced to a racist monolith. Complexity is rejected by both sides.  (http://www.businessinsider.com/jon-stewart-reacts-election-results-critiques-liberals-2016-11)

These people see nails, barber basins, and projections of themselves.  (Hint on social media interactions with them: responding to their Facebook comments is pointless)

In college, maybe, *maybe, a professor once said to you, the answer on an exam matters, but it also matters how you arrived at your answer. You were told, “Show your work.”In other words, getting the right answer by luck doesn’t count, because that means you didn’t learn shit.

To conservatives, irrational thinking, consistent with conservative ideology, shouldn’t be worth shit. To liberals, irrational thinking consistent with liberal ideology, shouldn’t be worth shit.

The quality of thinking and approach to problem-solving matters.

In fact, the quality of thinking may be the only thing that matters, once we accept that in a large and diverse democracy, we are bound to encounter many differences. We should be willing to accept those differences that arise from thoughtful consideration and reject those arising from snap judgement, and for not showing the work.

 

 

### THE FOX AND THE HEDGEHOG

 

 

There is a line among the fragments of the Greek poet Archilochus which says: ‘The fox knows many things, but the hedgehog knows one big thing.’ … taken figuratively, the words can be made to yield a sense in which they mark one of the deepest differences which divide writers and thinkers, and, it may be, human beings in general. For there exists a great chasm between those, on one side, who relate everything to a single central vision, one system, less or more coherent or articulate, in terms of which they understand, think and feel – a single, universal, organising principle in terms of which alone all that they are and say has significance – and, on the other side, those who pursue many ends, often unrelated and even contradictory, connected, if at all, only in some de facto way, for some psychological or physiological cause, related to no moral or aesthetic principle.

 

These last lead lives, perform acts and entertain ideas that are centrifugal rather than centripetal; their thought is scattered or diffused, moving on many levels, seizing upon the essence of a vast variety of experiences and objects for what they are in themselves, without, consciously or unconsciously, seeking to fit them into, or exclude them from, any one unchanging, all-embracing, sometimes self-contradictory and incomplete, at times fanatical, unitary inner vision.

 

The first kind of intellectual and artistic personality belongs to the hedgehogs, the second to the foxes; and without insisting on a rigid classification, we may, without too much fear of contradiction, say that, in this sense, Dante belongs to the first category, Shakespeare to the second; Plato, Lucretius, Pascal, Hegel, Dostoevsky, Nietzsche, Ibsen, Proust are, in varying degrees, hedgehogs; Herodotus, Aristotle, Montaigne, Erasmus, Molière, Goethe, Pushkin, Balzac, Joyce are foxes.

 

Of course, like all over-simple classifications of this type, the dichotomy becomes, if pressed, artificial, scholastic and ultimately absurd. But if it is not an aid to serious criticism, neither should it be rejected as being merely superficial or frivolous: like all distinctions which embody any degree of truth, it offers a point of view from which to look and compare, a starting-point for genuine investigation.

Isaiah Berlin, THE HEDGEHOG AND THE FOX, 1953.

 

http://press.princeton.edu/chapters/s9981.pdf

(A broader argument could also be made that senior leadership levels – e.g. CEO, where an organization defines its values and its vision, and where strategic thinking matters more than operational brilliance (COO/Executive Officers) – should be occupied by Foxes and not Hedgehogs, in an “increasingly complex and demanding world” with events and developments occurring at “remarkable speed.”)

 

 

Update to original list

Nate Silver, “THE SIGNAL AND THE NOISE: Why so Many Predictions Fail – but Some Don’t“, 2015


 

Fox – Hedgehog:

  • Tyrion Lannister – Cersei Lannister
  • James Mattis – Michael Flynn/McGeorge Bundy
  • Nassim Nicholas Taleb / Jeff Bezos – Howard Sosin
  • Osama bin Laden -Abu Musab Al-Zarqawi
  • Abraham Lincoln / James Madison –  I have a good brain
  • XO Ron Hunter – CO Frank Ramsey (Crimson Tide)
  • Phillip Jennings – Elizabeth Jennings (The Americans)
  • Jean Valjean – Javert (Les Miserables)
  • Prince (the Artist formerly known as) –
  • “Moderates” – Ideologues/Extremists
  • Strategic thinkers – Operational tinkerers

 

 

Notes:


1  Simon Johnson,  “The Queen urges Britain to calm down”, THE TELEGRAPH, July 2, 2016

The monarch used her address at the opening of the fifth session of the Scottish Parliament to recommend to the UK’s political class that they allow “room for quiet thinking and contemplation” before they decide their next move.

Alluding to the political economic turmoil that has enveloped the country since the vote to Leave the European Union, she said that Britons “live and work in an increasingly complex and demanding world” with events and developments occurring at “remarkable speed”.

The Queen admitted that the ability to “stay calm and collected” in such circumstances can be “hard” but argued that a major hallmark of leadership is the ability to take a step back. She argued this would allow for a “deeper consideration of how challenges and opportunities can be best addressed.”

 

http://www.telegraph.co.uk/news/2016/07/02/the-queen-urges-britain-to-calm-down-and-allow-time-for-quiet-th/amp/

 

 

2.  Mark Chussil, “Slow Deciders Make Better Strategists,” HARVARD BUSINESS REVIEW, July 8, 2016

There are many ways to split people into two groups. Young and old. Rich and poor. Us and them. The 98% who can do arithmetic and the 3% who cannot. Those who split people into two groups and those who don’t.

Then there’s the people who make good competitive-strategy decisions, and those who don’t.… the essential lesson for competitive-strategy decision-makers is not so fast, in both senses of the phrase: take your time and don’t be so sure. That’s the mindset used by the new VP and the I-don’t-knows.

The willingness to apply that mindset is what separates the good decision-makers from the bad.

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3.  George R. R. Martin, “A Song of Fire and Ice,” GAME OF THRONES

“She does not lack for wits, but she has no judgment, and no *patience.”

 

 

4. Will Hutton, “We need a social media with heart that gives us time to think,” THE GUARDIAN, February 7, 2016

System 2 thinking is slower and more deliberative. You marshal evidence, you exercise judgment, you discuss with others and you try to arrive at conclusions that will hold up. It is time-consuming, intellectual and hard. It would obviously be better if more decisions were subject to System 2 treatment, but in the hurly-burly of life it is just not possible.

We fall back on System 1, with all its inherent cognitive biases, to get through the day. We are over-optimistic, over-emotional, too readily influenced by the way a recent event has framed our thinking, too anxious to avert risk rather than seize opportunity for no other reason than this is where fast, intuitive System 1 thinking takes us. We simply have to rely on the intuitive to manage all the impulses hitting us.

… Social media is changing the rules. Paradoxically, it is teaching us that we need more time to think – and space in which to be serious.

 

 

https://www.theguardian.com/commentisfree/2016/feb/07/social-media-heart-tim-berners-lee

 

See, also What You See is All There Is (WYSIATI) – 0:40:
“If I told you a foreign leader was intelligent and strong, and if I asked you at this point if she isa good leader, you have an answer. She is a good leader. But now you know the third world could be corrupt. I haven’t told you anything about her character. You were not waiting….”

 

CfDavid Z. Hambrick & Alexander P Burgoyne, “The Difference Between Rationality and Intelligence,” THE NEW YORK TIMES, September 16, 2016:

It all started in the early 1970s, when the psychologists Daniel Kahneman and Amos Tversky conducted an influential series of experiments showing that all of us, even highly intelligent people, are prone to irrationality. Across a wide range of scenarios, the experiments revealed, people tend to make decisions based on intuition rather than reason.

In one study, Professors Kahneman and Tversky had people read the following personality sketch for a woman named Linda: “Linda is 31 years old, single, outspoken and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and also participated in antinuclear demonstrations.” Then they asked the subjects which was more probable: (A) Linda is a bank teller or (B) Linda is a bank teller and is active in the feminist movement. Eighty-five percent of the subjects chose B, even though logically speaking, A is more probable. (All feminist bank tellers are bank tellers, though some bank tellers may not be feminists.)

In the Linda problem, we fall prey to the conjunction fallacy — the belief that the co-occurrence of two events is more likely than the occurrence of one of the events. In other cases, we ignore information about the prevalence of events when judging their likelihood. We fail to consider alternative explanations. We evaluate evidence in a manner consistent with our prior beliefs. And so on. Humans, it seems, are fundamentally irrational.

http://www.nytimes.com/2016/09/18/opinion/sunday/the-difference-between-rationality-and-intelligence.html?

David Dunning, “We are all confident idiots”, PACIFIC STANDARD, October 27, 2014

The American author and aphorist William Feather once wrote that being educated means “being able to differentiate between what you know and what you don’t.” As it turns out, this simple ideal is extremely hard to achieve. Although what we know is often perceptible to us, even the broad outlines of what we don’t know are all too often completely invisible. To a great degree, we fail to recognize the frequency and scope of our ignorance.

https://psmag.com/we-are-all-confident-idiots-56a60eb7febc#.k3k6cmexx

 
5.   Malcolm Gladwell, “DAVID AND GOLIATH: Underdogs, Misfits, and the Art of Battling Giants”, 2013

“… your ability to understand when something is more complex than it appears – to move past impulsive answers to deeper analytic judgments.”

1604585_10102316245761774_959855894_n

 

 


6.  James Mattis, US Naval Academy lecture, January 30, 2012

“I spent 30 years getting ready for that decision that took 30 seconds.”

https://www.youtube.com/watch?v=xIYkAAdAe8I

 
6.  David Halberstam, THE BEST AND THE BRIGHTEST, 1993

“… there was something lacking: his thinking and performance were too functional and operational, he was not considering the proper long-range perspective, instead he was too much the problem solver, the man who did not want to wait, who believed in action. He always had a single pragmatic answer to a single question, and he was wary of philosophies, almost too wary … But pragmatic thinking is a also short-range thinking…. A government is collapsing. How do we prop it up? Something is happening; therefore we must move. Thus, in 1965 Bundy was for getting the country into the Dominican mess, because something had to be done, and then very good at extricating us when he realized that extrication had become the problem, though as he and the men around him would learn, not all countries were as easy to get out of as the Dominican Republic.”

 

Cf.  Chris McGreal, “America’s former CIA chief: ‘If we don’t handle China well, it will be catastrophic’”, THE GUARDIAN, 9 March 2016

“The only person to head both the CIA and the National Security Agency (NSA) now wonders if the US’s preoccupation with terrorism he helped shape since 9/11 has caused the country’s intelligence services to take their eye off more serious threats down the road. “The danger is we become so focused on the urgent that we don’t pay enough attention to the really important,” he says.

The urgent, says Hayden, is a terrorist trying to get a bomb on a plane. He understands the political imperative of throwing huge resources into preventing the next 9/11. But he says, carefully, that a terrorist attack “is not an existential threat to the United States”. What keeps him awake at night is what the CIA isn’t paying enough attention to.

“I call it states that are ambitious, fragile and nuclear. I put Iran and North Korea and Pakistan and even the Russians in there. Now if that heads south, that’s much worse,” he says in the corner of a hotel breakfast room in New York amid the clatter of plates. “Now if you run the timeline out to the 10-year point, it’s China. I’m not saying China’s an enemy of the United States of America. I’m just simply saying that if we do not handle the emergence of the People’s Republic well, it will be catastrophic for the world.”

Hayden frankly concedes that all of this became much clearer to him after he was effectively sacked when Barack Obama took office in 2009. Inside the CIA’s headquarters in Virginia, the mentality was summed up by a sign that read: “Today’s date is September 12, 2001.” “Where we find ourselves now is a product of us viewing ourselves as having been in combat for 15 years,” Hayden says. “We need to guard against the consequences of that.”

https://www.theguardian.com/us-news/2016/mar/09/america-cia-nsa-chief-general-michael-hayden-china-catastrophic-for-world?

 

 

6.  Nassim Nicholas Taleb, “ANTIFRAGILE: Things That Gain from Disorder”, 2012 

“We need to learn to think in second steps, chains of consequences, and side effects.”

See, also, “Former commander of US Central Command Cautions against U.S. military involvement in Syria without an endgame” July 21, 2013

“We have no moral obligation to do the impossible and harm our children’s future because we think we just have to do something. there’s a way to do it, but it’s a commitment, not a donation. If americans take ownership of this, this is going to be a full-throated, very, very serious war.” (Emphasis added)

http://security.blogs.cnn.com/2013/07/21/former-commander-of-us-central-command-cautions-against-u-s-military-involvement-in-syria-without-an-endgame/

 

Cf.  NO CIALIS FOR OLD MEN, October 20, 2009 https://www.facebook.com/notes/jason-l/no-cialis-for-old-men/10154730089426111

The world is getting increasingly complex. So much so, it seems we are unable to predict and manage things such as our financial systems, national economy, or international affairs, with a comfortable degree of certainty.


AIG Financial Products complex derivative trades that took advantage of AIG’s triple-A credit ratings were based on financial models developed by then- thirty-something boy geniuses. And yet, the spectacular rise and equally precipitous collapse of AIG Financial Products, along with AIG itself, is well documented.(http://www.washingtonpost.com/wp-dyn/content/article/2008/12/28/AR2008122801916.html)
We plan for the future based on things we know at the time but, in some instances, the outcomes are eventually determined by those things we did not know.


Howard Sosin, Randy Rackson, and Barry Goldman were brilliant, no doubt. Perhaps that made it even more difficult for outsiders to challenge their models, or for them to acknowledge, themselves, the limitations of their own brilliance and possibility that there were still things they did not know.
In the realm of foreign policy, and in warning against the hubris of self-assuredness, Richard Holbrook (known for welcoming differing opinions) once observed that “the smartest person in the room isn’t always right.”


The complexity of issues of our time is oftentimes simply beyond any one person’s grasp – or within human understanding, period – and we should never deceive ourselves into thinking we know all that there is to know

 

and, Robert O’Harrow Jr and Brady Dennis, “The Beautiful Machine,” THE WASHINGTON POST, December 29, 2008 http://www.washingtonpost.com/wp-dyn/content/article/2008/12/28/AR2008122801916.html

 

 

7.  Steve Coll, “GHOST WARS: The Secret History of the CIA, Afghanistan, and Bin Laden, from the Soviet Invasion to September 10, 2001”,  2004

“Pillar saw terrorism fundamentally as ‘a challenge to be managed, not solved’…. He objected to the metaphor of waging ‘war’ against terrorism because ‘it is a war that cannot be won’… Striving for zero terrorist attacks would be as unhealthy for American foreign policy as pushing for zero unemployment would be for the economy. In a broad sense, Pillar’s outlook accorded with Clinton’s: Terrorism was an inevitable feature of global change.”

 

 

8.  David Ignatius, “Osama bin Laden, a lion in winter,” THE WASHINGTON POST, March 18, 2012

… the al-Qaeda leader turns immediately to a bitter reflection on mistakes made by his followers — especially their killing of Muslims in Iraq and elsewhere. The result, he said, “would lead us to winning several battles while losing the war at the end.” Bin Laden ruminated on the “extremely great damage” caused by these overzealous jihadists. Not only is the organization’s reputation being damaged, he noted, but “tens of thousands are being arrested” in Egypt and Saudi Arabia. The brooding bin Laden advised his followers to back off on these self-defeating attacks in Muslim nations….

https://www.washingtonpost.com/opinions/osama-bin-laden-a-lion-in-winter/2012/03/18/gIQADmAKLS_story.html

See, also, Joby Warrick, “BLACK FLAGS: The Rise of Isis“, 2016

9. Yochi, Dreazen, “Michael Flynn, Trump’s national security adviser, loves Russia as much as his boss does,” VOX, November 21, 2016

“… Flynn, who did multiple tours in Iraq and Afghanistan, has also adopted some of Trump’s core foreign policy positions, including the president-elect’s beliefs that ISIS poses the biggest threat to the US and that the military needs to take a far more aggressive approach to fighting the group.

That’s starkly different from the viewpoints of the serving generals Flynn will now help to oversee, who generally support the Obama administration’s current strategy of bombing ISIS from the air while arming and training local forces battling on the ground. They also think Russia, not ISIS, is the biggest threat to the US.

During his July 9 confirmation hearing to be the next chairman of the Joint Chiefs of Staff, Marine Corps Gen. Joseph Dunford Jr. said, “Russia presents the greatest threat to our national security” and “could pose an existential threat to the United States.” ISIS was fourth on his list, behind China and North Korea.

ISIS was even lower down the list of Dunford’s deputy, Air Force Gen. Paul Selva, who told lawmakers at the time that he “would put the threats to this nation in the following order: Russia, China, Iran, North Korea, and all of the organizations that have grown around ideology that was articulated by al-Qaeda.”

“Right now, [the Islamic State] does not present a clear and present threat to our homeland and to our nation,” Selva said, adding that Russia’s powerful armed forces could become an “existential threat to this country.”

Given his newfound power, Flynn could help Trump brush aside those concerns in favor of doubling down on what the military’s top brass see as the wrong war and cozying up to the country many military leaders see as our greatest threat.

http://www.vox.com/2016/11/17/13673280/mike-flynn-trump-new-national-security-adviser-russia-isis-obama-clinton-turkey?0p19G=c

 

10. Strategic patience v tactical bias for action – March 26, 2016

“What do you want you want us to do? Sit around and do nothing?!” – Battalion Operations Officer, Helmand Province, Afghanistan, 2010

https://wordpress.com/post/youhatemosquitoestoo.com/68

 

 
11. Larry Summers, “Trump’s Carrier deal an ad hoc capitalism”, December 2 2016

 

“I have always thought of American capitalism as dominantly rule and law based. Courts enforce contracts and property rights in ways that are largely independent of just who it is who is before them. Taxes are calculable on the basis of an arithmetic algorithm. Companies and governments buy from the cheapest bidder. Regulation follows previously promulgated rules. In the economic arena, the state’s monopoly on the use of force is used to enforce contract and property rights and to enforce previously promulgated laws.

Even though we know of instances of corruption, abuse of power, favoritism and selective enforcement, we take this rules-based system for granted. But looking around the world today or back through American history, this model is hardly a norm. Many market economies operate what might be called ad hoc or deals-based capitalism: Economic actors assume that they have to protect their property and do their own contract enforcement. Tax collectors use discretion in assessing taxes. Companies and governments buy from their friends rather than seek low cost bids. Regulators abuse their power. The state’s monopoly on the use of force is used to enrich and satisfy the desires of those who control the apparatus of the state.
This is the world of New York City under Tammany Hall, of Suharto’s Indonesia, and of Putin’s Russia.

Reliance on rules and law has enormous advantages. It greatly increases predictability and reduces uncertainty. It reduces expenditures on both guarding property and seeking to appropriate property. It promotes freedom because most of the people most of the time do not take political positions with a view to gaining commercial advantage. The advantages of the rule of law are so great that I would claim that there is no country more than 2/3 as rich as the United States that does not have a strong tradition of the rule of law based capitalism. And I know of no country where the people are free where the rule of law does not largely govern market interactions.

It seems to me what we have just witnessed is an act of ad hoc deal capitalism and worse yet its celebration as a model. As with the air traffic controllers only a negligible sliver of the economy is involved but there is huge symbolic value. A #principle is being established: it is good for the President to try to figure out what people want and lean on companies to give it to them. Predictability and #procedure are less important than getting the right #result at the right time. Like Hong Kong as the mainland increasingly imposes its will, we may have taken a first step towards a kind of reverse transition from rule of law capitalism to ad hoc deal-based capitalism.

The commentary on the President-elect’s actions has emphasized its novelty, has emphasized the difficulties of scaling, and in the case of Bernie Sanders has argued that the actions taken were insufficiently forceful because some workers will still be relocated to Mexico. All of this misses the point.

Presidents have enormous latent power and it is the custom of restraint in its use that is one of the important differences between us and banana republics. If its ad hoc use is licensed, the possibilities are endless. Most companies will prefer the good to the bad will of the US President and his leadership team. Should that reality be levered to get them to locate where the President wants, to make contributions to the President’s re-election campaign , to hire people the President wants to see hired, to do the kinds of research the President wants carried out, or to lend money to those that the President wants to see assisted?
Some of the worst abuses of power are not those that leaders inflict on their people. They are the acts that the people demand from their leaders. I fear in a way that is more fundamental than a bad tax policy or tariff we have started down the road of changing the operating assumptions of our capitalism.

I hope I am wrong but I expect that as a consequence we are going to be not only poorer but less free.

http://larrysummers.com/2016/12/02/trumps-carrier-deal-ad-hoc-deal-capitalism/

 

 

12.  Intelligence is a different creature than rationality, open-mindedness, and self-awareness.

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13. David Remnick, “One and Off the Road with Barack Obama,” THE NEW YORKER, January 2014

“I have strengths and I have weaknesses, like every President, like every person,” Obama said. “I do think one of my strengths is temperament. I am comfortable with complexity, and I think I’m pretty good at keeping my moral compass while recognizing that I am a product of original sin. And every morning and every night I’m taking measure of my actions against the options and possibilities available to me, understanding that there are going to be mistakes that I make and my team makes and that America makes; understanding that there are going to be limits to the good we can do and the bad that we can prevent, and that there’s going to be tragedy out there and, by occupying this office, I am part of that tragedy occasionally, but that if I am doing my very best and basing my decisions on the core values and ideals that I was brought up with and that I think are pretty consistent with those of most Americans, that at the end of the day things will be better rather than worse.”

“I think we are born into this world and inherit all the grudges and rivalries and hatreds and sins of the past,” he said. “But we also inherit the beauty and the joy and goodness of our forebears. And we’re on this planet a pretty short time, so that we cannot remake the world entirely during this little stretch that we have.” The long view again. “But I think our decisions matter,” he went on. “And I think America was very lucky that Abraham Lincoln was President when he was President. If he hadn’t been, the course of history would be very different. But I also think that, despite being the greatest President, in my mind, in our history, it took another hundred and fifty years before African-Americans had anything approaching formal equality, much less real equality. I think that doesn’t diminish Lincoln’s achievements, but it acknowledges that at the end of the day we’re part of a long-running story. We just try to get our paragraph right.”

 

http://www.newyorker.com/magazine/2014/01/27/going-the-distance-david-remnick

Cf. Ben S. Bernanke, Federal Reserve Board Speech, Baccalaureate Ceremony, Princeton University, June 2 2013

“Ultimately … cynicism is a poor substitute for critical thought and constructive action. Sure, interests and money and ideology all matter, as you learned in political science. But my experience is that most of our politicians and policymakers are trying to do the right thing, according to their own views and consciences, most of the time. If you think that the bad or indifferent results that too often come out of Washington are due to base motives and bad intentions, you are giving politicians and policymakers way too much credit for being effective. 

“Honest error in the face of complex and possibly intractable problems is a far more important source of bad results than are bad motives. For these reasons, the greatest forces in Washington are ideas, and people prepared to act on those ideas. Public service isn’t easy. But, in the end, if you are inclined in that direction, it is a worthy and challenging pursuit.

 “Will you keep learning and thinking hard and critically about the most important questions? Will you become an emotionally stronger person, more generous, more loving, more ethical? Will you involve yourself actively and constructively in the world? Many things will happen in your lives, pleasant and not so pleasant, but, paraphrasing a Woodrow Wilson School adage from the time I was here, “Wherever you go, there you are.” If you are not happy with yourself, even the loftiest achievements won’t bring you much satisfaction.

 

https://www.federalreserve.gov/newsevents/speech/bernanke20130602a.htm

 

14.  See, also,  “Because men are not angels: Why James Madison really matters,” THE ECONOMIST, April 26, 2014

http://www.economist.com/news/united-states/21601266-why-james-madison-really-matters-because-men-are-not-angels

15.  Crimson Tide (1995)


(270) What are you, a communist? You have a problem with us dropping nuclear bombs on Japan?

(271) Shut up, Dougherty.

(272) You think it was a mistake, Mr. Hunter? Sir?

(273) Using the bomb on Hiroshima and Nagasaki.

(274) Well, if I thought that, sir, I wouldn’t be here.

(275) Interesting way you put that. How’d I put it, sir?

(276) Very carefully.

(277) You do qualify your remarks.

(278) If somebody asked me if we should have bombed Japan…

(279) a simple “Yes, by all means, sir, drop that fucker. Twice.”

(280) I don’t mean to suggest that you’re indecisive, Mr. Hunter.

(281) Not at all.

(282) Just, um, complicated.

(283) Of course, that’s the way the Navy wants you.

(284) Me, they wanted simple.

(285) Well, you certainly fooled them, sir.

(286) Be careful there, Mr. Hunter.

(287) It’s all I got to rely on: Bein’ a simpleminded son of a bitch.

(288) Rickover gave me my command, a checklist…

(289) a target and a button to push.

(290) All I had to know is how to push it. They’d tell me when.

(291) They seem to want you to know why.

(292) I would hope they’d want us all to know why, sir.

(293) At the Naval War College, it was metallurgy and nuclear reactors, not 19th-century philosophy.

(294) “War is a continuation of politics by other means.”

(295) Von Clausewitz.

(296) I think, uh, sir, that what he was actually trying to say was a little more…

(297) Complicated?

(298) Y-Yes, the purpose of war is, is to serve a political end…

(299) but the true nature of war is to serve itself. I’m very impressed.

(300) In other words, the sailor most likely to win the war…

(301) is the one most willing to part company with the politicians…

(302) and ignore everything except the destruction of the enemy.

(303) Uh, you’d agree with that? Well…

(304) I’d agree that, uh…

(305) that’s what Clausewitz was trying to say.

(306) But you wouldn’t agree with it? No, sir, I do not.

(307) No, l-I just think that in the nuclear world…

(308) the true enemy can’t be destroyed.

(309) Attention on deck. Von Clausewitz will now tell us exactly who the real enemy is.

(310) Von?

(311) In my humble opinion…

(312) in the nuclear world, the true enemy is war itself.
http://movietranscript.blogspot.co.il/2015/12/1995-crimson-tide-english-transcripts.html?m=1
“Captain, I think you need time to think this over.”

https://www.youtube.com/watch?v=Q1sLU6HOxyI&feature=share

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Foundations

If you’re not feeling well, would you think that talking to someone who has watched all the seasons to ER is an okay substitute for seeing a doctor with a medical degree and residency completed? Yet when it comes to stuff like foreign relations or domestic politics, it sometimes seems like everyone – everyone – has an opinion after reading this or that news story on social media.
That’s probably the point during the 2007 Iraq surge when the IAs going to my unit were told, “You’re not allowed to have an opinion here until you’ve been here at least 90 days.”
Probably the point when an (Israeli) expert on the Israeli-Palestinian conflict here says “the problem with Israelis is that they talk without a #foundation of knowledge.”
I don’t think anyone really becomes “informed” by reading social media articles. Things like that don’t provide nuance and perspective. Reading long-form (investigative) journalism and histories (actual books) at least begins to set a proper “foundation”, that then provides appropriate context and perspective to whatever news item of the day pops up on our feeds. It’s more than just “knowing facts” – its also about having a certain sense of proportion and judgment to evaluate those facts to see how they might be relevant in a larger context. “Widen your lens” kind of stuff. Ideally, you’ve both studied something (med school) and lived it (residency), if you’re really going to be dispensing actual conclusions about something.
Otherwise, a hypothesis is just a hypothesis, and those are fun to toss around, too. But probably shouldn’t be taken *so seriously that people need to get mad and feel they have to post angry comments on each others’ Facebook pages.
Anyway, if you get sick, don’t be like “hey, you watch ER, can I ask you a medical question?”

###

“I spent 30 years getting ready for thst decision that took 30 seconds.”

https://youtu.be/xIYkAAdAe8I
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https://youtu.be/OZVYcpO6Mgk

https://youtu.be/nCgyUXYKCxo

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🇺🇸

America is great not because America has won wars against other nations, but because American government has institutions built to withstand domestic partisanship, norms and rules against nepotism, and checks against the tyranny of the masses (populism) – ie, we are a great organization.
All those may be sorely tested in the next few years.

###

A reality is that populists with zero governing experience and weak establishment support – compounded by insecurities (lack of clear mandate) that create an inclination to surround oneself with friends, family, and loyalists – can be a disaster.
“When Raggi was elected, it was seen as a breakthrough for the anti-establishment M5S, a Eurosceptic political party created by the satirist Beppe Grillo in 2009 that espouses direct democracy and transparency. The Cinque Stelle, as it is known in Italy, has become the country’s second most popular party thanks to a knack for tapping into Italians’ anger over the status quo. 
“Grillo, an admirer of Ukip’s Nigel Farage, routinely rails against everything, from corruption to establishment politicians’ cosy ties with big business.
The Raggi victory was significant because it was seen as a test of whether the M5S could move beyond its role as a protest party and actually govern.
So far, the verdict seems to be “no” and the political ruptures have fanned fears that a planned investment in the public transport system could be delayed because Raggi does not have a budget chief in place. Romans are also still awaiting a final verdict on whether Raggi will support Rome’s bid for the 2024 Olympics, which she said she opposed during the campaign. 
“They don’t even have anyone in charge of finance in Rome. Yet they want to be in charge of a country with €2.5tn (£2.1tn) in debt? There is a huge issue of credibility at stake,” said Wolfango Piccoli, the co-president of Teneo Intelligence in London.
Raggi’s problems started early on, when she decided to appoint officials who served under Gianni Alemanno…. When it emerged that her chief of staff would be earning about €200,000 (£170,000) – a figure far exceeding recommendations for the role – she was forced to sack the official, prompting several other high-profile resignations.
The most controversial decision has centred on her choice of person to clean up the city, Paola Muraro, who had previously been paid hundreds of thousands of euros as a consultant for the city’s rubbish collection agency. 
https://www.theguardian.com/world/2016/sep/20/rome-mayoral-crisis-could-hurt-five-stars-national-chances-italy-virginia-raggi?0p19G=c

###
https://youtu.be/2Z8XCWVaObw
Tywin: A house with great wealth and fertile lands asks you for your protection against another with a strong navy that could one day oppose you. How do you know which choice is wise and which isn’t? 
Tommen: [The boy looks through Tywin blankly without uttering a reply]
Tywin: You’ve any experience with treasuries and granaries, or shipyards and soldiers?
Tommen: No. [the Prince admits defeatedly] 
Tywin: No. Of course not. A wise king knows what he knows and what he doesn’t. You’re young. A wise young king listens to his counselors and heeds their advice until he comes of age. And the wisest kings continue to listen to them long afterwards. Your brother was not a wise king. 

http://www.historyofwesteros.com/forums/viewtopic.php?f=16&t=47

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We’ll See (The Zen Master and the Boy)

 

In other words, and from another Tom Hanks movie, “Life is like a box of chocolates. You never know what you’re gonna get” – just more indirectly so:

* You’re happy Biden stepped aside so Hillary can run unopposed. You’re irritated that Bernie came out of nowhere and has unexpected support. Hillary nevertheless clinched the nom! Now Trump is president-elect.

“We’ll see.”

 

###

 

The difference in the 2016 election came down to: who felt more deeply disenfranchised, or potentially disenfranchised, and how many of them were there.

Turns out it was working class rustbelt whites (Ohio, Michigan), who have seen a declining quality of life, compared to minorities of various orientations nationwide – who still face much discrimination, but have seen progress over the past decade, and maybe had the sense that all was a matter of time – who felt the existential heat.

The partisans were going to be partisans, and talk about Supreme Court justices and around all kinds of racist/misogynistic comments, or about public policy and around questions of judgment regarding careless email use. That stuff wasn’t what made a difference in the swing states.

Obama foresaw this years ago even as a second-term president. But Hillary’s 2016 team pushed back against Bill Clinton’s advice to reach out. The parallels are buried in there if you’ve been consistent in paying attention and not just relying on social media echo-chamber fluff pieces or Fox/MSNBC:

2014: “Obama’s advisers are convinced that if the Republicans don’t find a way to attract non-white voters, particularly Hispanics and Asians, they may lose the White House for two or three more election cycles. And yet Obama still makes every effort to maintain his careful, balancing tone, as if the unifying moment were still out there somewhere in the middle distance. “There were times in our history where Democrats didn’t seem to be paying enough attention to the concerns of middle-class folks or working-class folks, black or white,” he said. “And this was one of the great gifts of Bill Clinton to the Party—to say, you know what, it’s entirely legitimate for folks to be concerned about getting mugged, and you can’t just talk about police abuse. How about folks not feeling safe outside their homes? It’s all fine and good for you to want to do something about poverty, but if the only mechanism you have is raising taxes on folks who are already feeling strapped, then maybe you need to widen your lens a little bit. And I think that the Democratic Party is better for it. But that was a process.”

David Remnick, “On and Off the Road with Barack Obama”, The New Yorker, January 2014

///

“The Clinton campaign decided early on that these voters—Reagan Democrats driven rightward by the Democratic Party’s focus on identity politics—were expendable, and focused instead on recreating the progressive, multiethnic coalition that won the White House for Barack Obama in 2008 and 2012. It was also, ultimately, a mistake—and one that Bill Clinton himself reportedly saw coming. The former president, whose natural affinity for the white working class won him the presidency in 1992 and reelection in 1996, repeatedly pushed his wife’s campaign to do more outreach to economically distressed white communities by prioritizing her populist economic message, according to The New York Times. But her advisors refused, believing that Hillary would do better by appealing to minorities and college-educated suburban voters. (In one particularly painful anecdote, Bill reportedly tried to convince Hillary to attend a prominent St. Patrick’s Day fund-raising dinner at the University of Notre Dame, an event that Obama gladly attended. Her team told the event’s organizers that “white Catholics were not the audience she needed to spend time reaching out to.”) After Bill Clinton tangled with Black Lives Matter protesters at a campaign rally in April, the campaign began using the former president sparingly, worried that he might further alienate minority voters.

http://www.vanityfair.com/…/the-great-white-irony-of-cl…/amp?

///

Joe Biden wants to make sure Democrats don’t give up on Trump voters, 22 Oct 2016

“A year ago Friday he gave up his own presidential ambition, announcing that his son’s death had made a bid for the highest office emotionally impossible. Instead, after months of introspection, he is pouring his energy into a fight that he thinks will help Democrats this year but also continuing his effort to convince them not to give up on white working-class voters who were once the party’s core, and whose support has fueled the insurgent candidacy of GOP presidential nominee Donald Trump.

https://www.washingtonpost.com/politics/bidens-last-stand-convincing-democrats-not-to-give-up-on-the-white-working-class-voters-fueling-trump/2016/10/21/d4230d4a-7a94-11e6-ac8e-cf8e0dd91dc7_story.html

 

 

NOTES

“It occurred to him that his friends did not know much about America, about how deep the evangelical streak was.”

 

 

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###

 

My big boss made this distinction once- he said intelligence is actually fairly common, but judgment is much more rare. He then defined judgment as coming from an ability to step outside your own shoes and see a thing from different perspectives.

I get a lot of “Trump isn’t stupid.” I don’t think he is, either. I think he’s a smart guy – but that’s not the point. Very, very smart people have been making bad decisions for all eternity.

 

###

 

->  Peripheral Vision

How we were shocked at the election outcomes – digital echo chambers.

 

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Echo chambers -> Precise (affirming) but Inaccurate (wrong) predictions

 

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EPILOGUE

Why many “elites” did not see it coming, but Bubba, a redneck from Arkansas, and Barack, the child of a single mother, who “made it” to the elite but were not of it, were concerned by the loss of white working class support for Democrats.

January 21, 2012

AMERICA is coming apart. For most of our nation’s history, whatever the inequality in wealth between the richest and poorest citizens, we maintained a cultural equality known nowhere else in the world—for whites, anyway.

But there’s a problem: It’s not true anymore, and it has been progressively less true since the 1960s…

If you were an executive living in Belmont in 1960, income inequality would have separated you from the construction worker in Fishtown, but remarkably little cultural inequality. You lived a more expensive life, but not a much different life. Your kitchen was bigger, but you didn’t use it to prepare yogurt and muesli for breakfast. Your television screen was bigger, but you and the construction worker watched a lot of the same shows (you didn’t have much choice). Your house might have had a den that the construction worker’s lacked, but it had no StairMaster or lap pool, nor any gadget to monitor your percentage of body fat. You both drank Bud, Miller, Schlitz or Pabst, and the phrase “boutique beer” never crossed your lips. You probably both smoked. If you didn’t, you did not glare contemptuously at people who did.

When you went on vacation, you both probably took the family to the seashore or on a fishing trip, and neither involved hotels with five stars. If you had ever vacationed outside the U.S. (and you probably hadn’t), it was a one-time trip to Europe, where you saw eight cities in 14 days—not one of the two or three trips abroad you now take every year for business, conferences or eco-vacations in the cloud forests of Costa Rica.

Even the income inequality that separated you from the construction worker was likely to be new to your adulthood. The odds are good that your parents had been in the working class or middle class, that their income had not been much different from the construction worker’s, that they had lived in communities much like his, and that the texture of the construction worker’s life was recognizable to you from your own childhood.

Taken separately, the differences in lifestyle that now separate Belmont from Fishtown are not sinister, but those quirks of the upper-middle class that I mentioned—the yogurt and muesli and the rest—are part of a mosaic of distinctive practices that have developed in Belmont. These have to do with the food Belmonters eat, their drinking habits, the ages at which they marry and have children, the books they read (and their number), the television shows and movies they watch (and the hours spent on them), the humor they enjoy, the way they take care of their bodies, the way they decorate their homes, their leisure activities, their work environments and their child-raising practices. Together, they have engendered cultural separation.

It gets worse. A subset of Belmont consists of those who have risen to the top of American society. They run the country, meaning that they are responsible for the films and television shows you watch, the news you see and read, the fortunes of the nation’s corporations and financial institutions, and the jurisprudence, legislation and regulations produced by government. They are the new upper class, even more detached from the lives of the great majority of Americans than the people of Belmont—not just socially but spatially as well. The members of this elite have increasingly sorted themselves into hyper-wealthy and hyper-elite ZIP Codes that I call the SuperZIPs.

Why have these new lower and upper classes emerged? For explaining the formation of the new lower class, the easy explanations from the left don’t withstand scrutiny. It’s not that white working class males can no longer make a “family wage” that enables them to marry. The average male employed in a working-class occupation earned as much in 2010 as he did in 1960. It’s not that a bad job market led discouraged men to drop out of the labor force. Labor-force dropout increased just as fast during the boom years of the 1980s, 1990s and 2000s as it did during bad years….

Meanwhile, the formation of the new upper class has been driven by forces that are nobody’s fault and resist manipulation. The economic value of brains in the marketplace will continue to increase no matter what, and the most successful of each generation will tend to marry each other no matter what. As a result, the most successful Americans will continue to trend toward consolidation and isolation as a class…

The only thing that can make a difference is the recognition among Americans of all classes that a problem of cultural inequality exists and that something has to be done about it.

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http://online.wsj.com/article/SB10001424052970204301404577170733817181646.html

 

 

 

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