Debt implies a strong statement about the future, and a high degree of reliance on forecasts. … debt is dangerous if you are overconfident about the future and are Black Swan-blind – which we all tend to be.

Read it here.

In the discreet white-collar realm, men and women are interchangeable, doing the same, mind-based work. Physicality is suppressed; voices are lowered and gestures curtailed in sanitized office space. Men must neuter themselves, while ambitious women postpone procreation. Androgyny is bewitching in art, but in real life it can lead to stagnation and boredom, which no pill can cure.

Let that sink in for a minute and then see what you think of this:

The sexes, which used to occupy intriguingly separate worlds, are suffering from over-familiarity, a curse of the mundane. There’s no mystery left.

Mystery… It almost seems like a nasty word in this day and age. Like mystery is a shameful failure instead of the main fixture of our human condition. Read more: Op-Ed Contributor – No Sex Please, We’re Middle Class – NYTimes.com.

Life’s a struggle. It’s the people who get us through.

@Bob Lefsetz

Only after the last tree has been cut down… Only after the last river has been poisoned… Only after the last fish has been caught, only then will you find that money cannot be eaten.

@CNN iReport Blog

Youth is a time of selfishness and immaturity, when the world revolves around you, and you think that’s the way it should be. But as you grow older, you realize that there is more to life than an endless party, more to life than even living for fun—that happiness too vigorously pursued doesn’t lead to happiness at all.

@Marriage Facts and Trivia: Men, Women and Surveys – Newsweek

Once you buy the argument that some segment of the citizenry should lose their rights, just because they are envied or resented, you are putting your own rights in jeopardy — quite aside from undermining any moral basis for respecting anybody’s rights. You are opening the floodgates to arbitrary power. And once you open the floodgates, you can’t tell the water where to go.

@Thomas Sowell

This same story plays out over and over — only the nouns change.

@Jonah Lehrer | Breaking Things Down to Particles Blinds Scientists to Big Picture

Three changes, which took place in the past hundred years, produced the system that is now producing M.B.A.s. They were the conversion of jobs into “professions,” the scientific measurement of intelligence, and the use of government power to “channel” people toward certain occupations.

Here are the major and minor axioms.

1. Risk
   • Worry is not a sickness but a sign of health. If you are not worried, you are not risking enough.
   • Always play for meaningful stakes.
   • Resist the allure of diversification.
2. Greed
   • Always take your profit too soon.
   • Decide in advance what gain you want from a venture, and when you get it, get out.
3. Hope
   • When the ship starts to sink, don’t pray. Jump.
   • Accept small losses cheerfully as a fact of life.
4. Forecasts
   • Human behavior cannot be predicted.
5. Patterns
   • Chaos is not dangerous until it begins to look orderly.
   • Beware the Historian’s Trap.
   • Beware the Chartist’s Illusion.
   • Beware the Correlation and Causality Delusions.
   • Beware the Gambler’s Fallacy.
6. Mobility
   • Avoid putting down roots. They impede motion.
   • Do not become trapped in a souring venture because of sentiments like loyalty and nostalgia.
   • Never hesitate to abandon a venture if something more attractive comes into view.
7. Intuition
   • A hunch can be trusted if it can be explained.
   • Never confuse a hunch with a hope.
8. Religion and the Occult
   • It is unlikely that God’s plan for the universe includes making you rich.
   • If astrology worked, all astrologers would be rich.
   • A superstition need not be exorcised. It can be enjoyed, provided it is kept in its place.
9. Optimism and Pessimism
   • Optimism means expecting the best, but confidence means knowing how to handle the worst. Never make a move if you are merely optimistic.
10. Consensus
    • Disregard the majority opinion as it is probably wrong.
    • Never follow speculative fads. Often, the best time to buy something is when nobody else wants it.
11. Stubbornness
    • If it doesn’t pay off the first time, forget it.
    • Never try to save a bad investment by “averaging down.”
12. Planning
    • Long-range plans engender the dangerous belief that the future is under control. It is important never to take your own or other people’s long-range plans seriously.
    • Shun long-term investments.

When I read these, the first thing I think of is Nassim Nicholas Taleb. Although these axioms were written about speculation, most are applicable to much broader aspects of life.

First, from The Zurich Axioms:

Minor Axiom XIV – Never follow speculative fads. Often, the best time to buy something is when nobody else wants it.

Then from Warren Buffet:

Be fearful when others are greedy. Be greedy when others are fearful.

Finally, from David Swensen (Open Yale Courses) who considers the idea after looking at historical data:

I was looking at some of the contemporary literature, the popular literature, and there was an article in the Saturday Evening Post that basically said, you shouldn’t call stocks securities–that was a ridiculous thing to call them; they should be called insecurities because they were so risky. Of course, this attitude came at exactly the wrong time. If you put a dollar into small stocks in June of 1932, by the end of 2006, you would have had 159,000 times your money. Just at the point of maximum opportunity people were at the point of maximum bearishness about the equity markets.

The final moment of success is often no more thrilling than the relief of taking off a heavy backpack at the end of a long hike. If you went on the hike only to feel that pleasure, you are a fool.

A static perfection is a bad ideal for humanity, and attempts to impose an artificial order on the world only succeed in creating greater disorder.

Read the rest of the interview @Mises Economics Blog.

First, go read Stop Slouching! Good posture boosts self-esteem and then come back. I’ll wait. It’s just one paragraph.

If we boil the article down to an outline we get:

1. Your mother told you to sit up straight instead of slouching because “good posture helps you look confident and make a good impression”.
2. College age students were given a task that involved rating their confidence in themselves as job candidates. Those students were told to either “sit up straight with their chests out” or slouch while performing the task.
3. While performing the task, those with better posture rated themselves as more confident than those that slouched.

We are left with the conclusion:

Once again, Mom was right.

The key points appear to be:

• There is some kind of physical/psychological mechanism that accounts for the effect.
• A study shows that this mechanism exists.
• Mom intuitively knows of this mechanism.

But let’s look at it another way:

1. Your mother told you to sit up straight instead of slouching because “good posture helps you look confident and make a good impression”. At a very impressionable age, your mother told you how you should feel when doing a particular thing and then gave her approval when you did it. Approval is important to a child and receiving the approval made you feel good. So you associated sitting up with confidence and this behavoir was reinforced by the good feelings.
2. College age students were given a task that involved rating their confidence in themselves as job candidates. Those students were told to either “sit up straight with their chests out” or slouch while performing the task.
3. Those with better posture rated themselves more confident than those that slouched. Study participants felt better and rated themselves with higher confidence during the task than those that were slouching because they had been conditioned from an early age to associate good posture with confidence, reinforced by approval/good feelings.

The conclusion we are now left with is: Mom must’ve been correct. Mom’s conditioning is the Energizer Bunny, still going strong all these years later.

Did the study validate what mom knows or did it actually show that she did a good job conditioning you?

Readiness to answer all questions is the infallible sign of stupidity.

Saul Bellow, via Marginalia, no.116 « The New Psalmanazar

Tom Hodgkinson from The School of Life writes about evils of usury. But I’m not buying many of his arguments.

Partially because his post doesn’t seem to actually address the idea of a loaner charging an “unlawful rate of interest” to a borrower and partially because in the end, his arguments don’t actually have much to do with either usury or even the collecting of interest on money borrowed.

I.

Both on an individual and a national scale, debt imprisons. … the UK has been borrowing like crazy since 1694, when the Bank of England was invented. This means that we are locked into high taxation to pay for 300 years of wars and other costly and generally disastrous state enterprises.

Debt could imprison with or without interest charged on money borrowed.  Usury didn’t cause a country to make the decisions that would plunge it into debt any more than it caused your neighbor to buy a big screen TV and a BMW he couldn’t afford to pay for.

II.

Aristotle, who had also written against usury, provided the classical view. For Aristotle money, unlike, say, an apple tree, was infertile, and could not produce more of itself.

Aristotle appears to be wrong have a very one dimensional view of money (my emphasis in bold):

The most hated sort, and with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural object of it. For money was intended to be used in exchange, but not to increase at interest. And this term interest, which means the birth of money from money, is applied to the breeding of money because the offspring resembles the parent. Wherefore of an modes of getting wealth this is the most unnatural.

But isn’t the lending of money itself an exchange of value though? You’re giving me the use of something you have that I don’t. Is it wrong for Home Depot to charge rental for a garden tiller? Why does all this change the moment the thing that’s being lent is money?

Money can be combined with innovation/effort can create more value than the money itself possessed. Just like when the farmer plants seeds in the ground, waters them and hopes they get enough sunlight. His original capital combined with his effort created more value than the original capital possessed.

Money doesn’t exist in a vacuum any more than apple seeds do.

III.

Therefore usury sets up an imbalance: someone’s got to pay, and it is generally the poor.

I’m not sure I see this imbalance. Somebody only has to pay if they decide to borrow. It doesn’t matter if the borrower is rich or poor. And rich people borrow all the time (to start businesses, finance homes, etc). Hodgkinson tries to frame this all as the classic “rich people taking advantage of poor people” but I don’t see a compelling argument.

Let’s go back to the farmer analogy and walk through a thought experiment so I can show why.

Let’s say I’m a farmer and I want to plant something but I don’t have the particular seeds I need. But another farmer does have those seeds. He says he will give me 1000 seeds and at the end of the year I will give him back 1000 seeds and some of the crop I harvest as payment for the loan. This sounds fair enough, right?

Now lets  assume that the other farmer is much richer than I am. Is he taking advantage of me? Let’s assume he is actually much poorer than me. Is he still taking advantage of me? Am I taking advantage of him?

The fact that Hodgkinson is talking about money causes him (and others) to frame the argument as rich vs. poor. But it isn’t necessarily so.

IV.

And in a new scam, usury has been half-banned: the banks no longer pay out interest on our savings, but they still charge 12.9% when they lend to us! This is monstrously unjust…

If a bank offers you a loan at 12.9%, tells you it’s 12.9% and then proceeds to collect 12.9%, then it isn’t a scam. Why? Because they haven’t deceived you in any way. You knew exactly what you were getting into.

Hodgkinson then complains that the banks charge you when you borrow from them and then also complains that you can’t turn around and charge the bank when they borrow from you. He may have a point here in that this seems unfair, although it’s a bit hypocritical to call usury a monstrous practice and then feel slighted when you can’t turn around and do it to somebody else.

These arguments are not really specific to Hodgkinson. You see them and hear them from a lot of different people. But when you dig into them you don’t find much there to grab hold of.

When patients pretended to confide in me that they were suffering from low self-esteem, I used to reply that at least, then, they had got one thing right: they had valued themselves at their true worth.

The self-esteemist wants something for nothing, and, because in his heart he knows that what he wants is impossible, he is wretched and ascribes all the many failures of his life to it. Self-esteem is therefore first cousin to resentment.

@Theodore Dalrymple on Self-Esteem vs. Self-Respect — Features — In Character, A Journal of Everyday Virtues by the John Templeton Foundation

But how do these things get started? Maybe we should ask The Rambling Fool or The Last Psychiatrist.

…in the end, success in business comes from the willingness to grind it out. It’s not because of the brilliant idea. It’s because you are willing to work hard. That’s the key to my success.

@Corner Office – Guy Kawasaki – I Want 5 Sentences, Not ‘War and Peace’ – Question – NYTimes.com

The lone inventor/entrepreneur is a nice fantasy, but in practice it seldom works out that way. Brilliance is often incremental in nature, and, well, you’ve heard the saying. “If I have seen further, it is because I stand on the shoulders of giants.” Compare that to the Galt fallacy, where you’re born on third and think you hit a triple. Basing an entire political worldview off of it? That’s bordering on solipsism.

@Amazon.com: Barry Milliken’s review of The Spirit Level

if marriage is to blame, why did it take 20 years of it to figure it out?

See it @Atlantic Capture

Here is a little thought experiment though. Take any instances of anti-male humor in the media and replace the man with a woman. Theoretically, no women should object because the portrayals are harmless and the women just need to get a sense of humor. Right?

If such a reaction doesn’t sound likely, then maybe we need to start considering the way men are being portrayed.

If you are intelligent, you are at a clear advantage against people who are not intelligent. But if you are intelligent, and another person is not as intelligent, but the other person is willing to train harder than you, the other person will very quickly overtake you in ability.

@Your high IQ will kill your startup – Cube Of M

Intelligence isn’t fixed. Intelligence isn’t general. Intelligence is not a thing. Instead, intelligence is a dynamic, diffuse, and ongoing process.

@The Questions in All of Us – National – The Atlantic