Dave Friedman's Soul of Wit

On Stupidity

The Wall St. Journal on HP and Congress:

Are there any bigger lessons here about "corporate governance"? Not really. The fad of dividing the roles of CEO and chairman may sometimes make sense, but at H-P that division of responsibility led to dysfunction. Ms. Dunn seems to have meddled too much in corporate operations by supervising a leak probe run from the H-P counsel's office. That's one danger of dividing the two jobs. But like any collection of human beings, the knowledge and judgment of the individuals on a board matter far more than its structure.

Mr. Hurd and the entire H-P board also seem to have ignored a law of modern public relations, which is to get all the bad news out early, take responsibility, and move on. Instead, the board knew as early as June that the probe involved "pretexting," or misrepresentation, to obtain Mr. Keyworth's phone records, yet it failed to stop it. Mr. Hurd has finally acknowledged he should have paid more attention to the details of the probe, but he was also too slow to accept that Ms. Dunn had to leave as chairman. He's fortunate H-P's stock has performed so well, or some investors would be using this episode to call for his head as well.

As for Congress, we understand the impulse to grab some camera time by beating up on H-P witnesses. But even otherwise shrewd Members of Congress have been known to do stupid things from time to time. The last thing the country needs is a new Bureau for the Prevention of Bad Business Judgment, which is at bottom what the H-P saga is all about.

Though the Journal is undeniably correct here, good luck in getting Congress to take as nuanced an interpretation of the events as this. Politicians, as always, are out for blood, and no group of people is more easily demonized than businesspeople, never mind the fact that the size of our government is a direct function of the size of our private industry; government could not be government without the wealth created by business. Governments that print money in the absence of any economic underpinning experience hyperinflation; witness Germans buying loaves of bread for quadrillions of deutshce marks in the years after World War I.

And yet, HP et al will be demonized by government.

Explain to me how this makes any kind of sense?

Possibilities

There's a possibility I will become wealthier than Bill Gates.

There's also a possibility that I will live to 120.

There's also a possibility that I will one day score a hole in one in golf.

There's a possibility I will be struck by lightning.

It is safe to say, however, that there exists no possibility that Scott Dyleski will become a productive adult. See, he was convicted of bludgeoning to death his neighbor, in an apparent act of premeditated murder. His lawyer's understanding of probability suggests remedial math is neeced:

His lawyer pleaded with the judge to give the teen "the slimmest opportunity" of a chance at parole after he serves 25 years in prison for the brutal murder of Vitale, his 52-year-old neighbor.

"Scott Dyleski made a terrible mistake," public defender Ellen Leonida said. "There is always the possibility that he can mature into a responsible, productive citizen."

In a proper world, of course, this monster would have been sentenced to death, not life in prison, but we live not in a proper world but in the world in which our legislatures and judges have seen fit to warehouse murderers, not execute them.

Alas, it is folly to argue, even if it is one's duty to do, that one's client is redeemable. Such is the mockery of life and murder that our criminal "justice" system engages in daily.

It is also worth noting, of course, that 25 years till parole is, essentially, the same sentence about to be imposed on Jeffrey Skilling of Enron fame; to assert that fraud and murder are essentially the same, which is what sentences of equal length implicitly do, is to mock perspective.

Middlebrow and Urbanity

Civic leaders of various large cities claim that Wal-Mart is too middlebrow and therefore has no place in cities:

Wal-Mart is used to opposition, but these antagonists are tougher and better organized than earlier breeds. In the Northeast and America's big urban centers, they've augmented a traditional anti-Wal-Mart message with something more potent: an appeal to urban cultural values. Here, Wal-Mart is a metaphor for the worst of middlebrow America.

After missing out in Boston, the company lost a two-year fight to open in Leominster, in central Massachusetts. Some of the same antagonists are now organizing to block Wal-Mart in adjacent Lancaster.

Officials in Miami prevented Wal-Mart from locating a store amid a 55-acre midtown redevelopment project, on the grounds that its sprawling, suburban aesthetics and low-end appeal didn't conform to the city's architectural and social vision for the project.

"I feel bad for Wal-Mart, but that's their image," says Johnny Winton, the former Miami commissioner who helped plan the project.

Now, there is some truth here: Wal Mart is middlebrow, decidedly and avowedly so. They pursue middlebrow with a passion. And, it is true that, in cities such as Boston, Miami, and New York, there is a relatively large population of people too wealthy* to shop at Wal Mart.

But so what? Why does it follow from any of this that (1) the poorer residents of the city would not benefit from having access to a cheap retailer, (2) that Wal Mart should not make its presence known, and, if concerns about its middlebrow-ness turn out to be true, lose money from its operations in the city?

The notion that there is a "correct" retailer and an "incorrect" retailer for a city is nothing less than class snobbery, of the very worst sort, because, this type of class distinction directly affects the pocketbooks of those least able to afford it.

There certainly is something to be said for the wanton nature of Wal Mart's stores. They are poorly laid out, hard to navigate, attract low income people, sell crappy products, have annoying, cloying ads, and otherwise do not appeal to me or most of my demographic. But so what? I have the option of not shopping there; why can't low income people have the option of shopping there?

*Of course one can't be too wealthy to shop at Wal Mart; this is an attempt at wry irony. Don't read too deeply into it.

In Other News, 2 + 2 = 4...

Sentence read today while reviewing CFA materials:

Rigidities in a national economy can prevent it from quickly joining growth in a world business cycle.

Say Italy? Or Japan? Or Mexico? Or Brazil? Or Russia? Or France?

Eureka, Or, How to Circumvent Calculus??

How the hell does the following make any kind of sense:

In mathematics, formulae form a crucial end result of many calculations. For example the problem of determining the volume of a sphere is one that requires a sigificant amount of integral calculus to solve.

Archimedes displaced water long before Newton and Liebniz invented calculus*.

*It should be noted that this blog post was written by someone who took precisely no math in college. And yet, your humble blogger seems more numerate than most?

My comment on Wikipedia's discussion page:

The reference to needing integral calculus to determine the volume of a sphere doesn't make sense, in light of Archimedes. While it makes sense to argue that integral calculus is needed to derive a formula with which to determine the volume of a sphere without dunking the sphere in water, one can nonetheless dunk a smaller sphere in water, measure the volume of water displaced, and proportionately calculate the volume of a larger sphere. So, calculus is not needed to determine the volume of any sphere. Its use is limited to creating a general formula with which to calculate a sphere's volume.

Yet more info: the density of the sphere in question doesn't matter, though density affects bouyancy. A sphere with a one-inch radius has the same volume, 4.1 cubic inches, whether it weighs one pound or one ton, though the one ton sphere is much more dense.

Posse Comitatus

Historically literate Americans will find something alarming in this headline:

Gov.: New Orleans crime calls for military presence

This, of course, would violate the Posse Comitatus Act, which, among other things, prohibits troops under Federal control from fighting crime on American soil, unless a special provision is made by Congress for such.

National Guard troops who are under the authority of a Governor, however, can be an adjunct to the civilian police force.

Logic

Take The Mantra:

The only thing I ask of the religious is that they consider the depths to which religion has sunk man.

Nothing in that mantra can logically be construed to mean that no non-religious man has sunk man; the statement makes a claim only about the religious. It says nothing about the non-religious.

Why is it, then, that when I quote The Mantra on other people's blogs, I invariably receive a response "yeah well, Hitler wasn't religious and look what he did." Well, yeah Hitler wasn't religious and look what he did.

The Mantra is stated as it is for a very simple reason: it would be demonstrably fallacious for The Mantra to be "the only people capable of sinking man to great depths are the religious." See Hitler, and what he did, above.

UPDATE: The comments are raging on this point of logic, at the comments linked to above. I think the bluntness of the mantra induces people into a sort of emotional stupor.

Nice in Theory, But...

One of the interesting things about theories is that, while they often sound nice, putting theory to practice seems elusive.

This is especially so when you are dealing with the troubling tendency of poor kids being consigned to life long poverty due to factors beyond their control. A Constrained Vision notes that some research suggests environment, not genes, augurs academic performance for the impoverished. Here's the research quoted:

Among families of lower socioeconomic status, variation in IQ is far more environmental than genetic in origin, whereas the converse holds in families of higher socioeconomic status. That is, an impoverished child's background and experiences can so heavily influence his or her degree of achievement that his genetic makeup is nearly irrelevant in predicting his academic success. Optimistically, such a powerful role for experience suggests that intervention may be particularly successful among disadvantaged children.

I commented:

Well, that sounds nice in theory, and makes some kind of sense, but how do you inculcate such an environment?

Take kids from impoverished families and warehouse them with educated people who can speak well?

As always, a nice theory, but what is its practical application?

To quote Rod Tidwell, "show me the money."

Bad Writing

There is nothing more important in the world than writing well about Donatella Versace. And yet, Wikipedia throws this garbage at us:

Also, in many other films, including the recent hit, The Devil Wears Prada, the mention of "Donatella" is used sporadically.

How about the more fluid:

Donatella's name is mentioned sporadically in other movies, such as the recent hit The Devil Wears Prada, which gives some indication of her influence on pop culture.

Now, as to why I'm wasting my time reading a Wikipedia entry on Donatella? Well, that's for me to know and you to find out.

Stupid PR Move

Idiot lawyers strike again.

OfficeMax is apparently suing because some families of Americans executed by Castro's regime are themselves suing to recoup funds frozen by American authorities as redresse for their relatives' murder:

The U.S. Foreign Claims Settlement Commission, an arm of the Justice Department, has certified nearly 6,000 U.S. claims for property seized by Cuba. Claimants hope that after the reign of Fidel Castro ends they can recover their homes, factories, beachfront land and sugar plantations believed to be valued at $6.7 billion today. To settle some claims, they also expect to gain access to more than $268 million in Cuban assets -- largely held in U.S. banks -- that were frozen under the Kennedy administration's Cuban embargo.

Most citizens and businesses will likely have to wait years to recoup any losses. In the mid-1990s, a coalition of U.S. companies, including OfficeMax's future parent, put pressure on the Clinton administration to settle its members' numerous claims with Cuba -- with no luck.

But thanks to special antiterrorism laws passed in 1996 and 2002, a few families have been able to leapfrog to the head of the line. The legislation helped permit relatives of Messrs. Anderson and Ray to seek, and ultimately win, wrongful-death judgments in Florida state courts, with a federal judge in January clearing the way to tap into the frozen Cuban funds.

OfficeMax wasn't pleased with the news. In March, the company filed court papers in New York U.S. District Court, Southern District, seeking to block the Ray and Anderson relatives from collecting.

Robert Muse, a Washington, D.C., lawyer who represents Cuban Electric and OfficeMax, says the dead men's families shouldn't be given first dibs on the accounts. "I'm not trying to be provocative," Mr. Muse says. "That money was sequestered for the purpose of paying [restitution] claims."

Now, Muse may not be trying to be "provocative," but he sure is being rather stupid in not considering the venomous hatred most Americans have for Castro, and, therefore, the natural sympathy other Americans have to those whose lives have been affected by Castro. The smart thing to do--again, not necessarily the thing that protects OfficeMax's legal interests--is to leave well enough alone and let these families seek their redress.

The idiocy of lawyers continues apace.

A Good Man

The Agitator has a great post about a 9/11 victim named John Perry, a NYPD officer filling out his retirement papers when the first plane struck:

Perry was at a police station near ground zero filling his retirement papers when he first heard news that a plane had hit one of the Trade Center towers. He immediately asked for his badge back, ran into an old captain on his way to the towers, and the two of them began assisting in evaucating the building. One report I read indicated he was the only off-duty officer killed on September 11. Perry was apparently assisting a woman who had fainted when the south tower collapsed. That's the last time he was seen alive.

There's a scholarship set up in Perry's name that seems particularly appropriate. The money goes to promising students affected by the insidious provision added to the 1998 Higher Education Act by drug war champion Rep. Mark Souder. Souder's amendment forbids federal aid to any student convicted of a drug offense. It's a policy that seems to fly in the face everything Perry stood for -- it inhibits the pursuit of knowledge and education, it's an unforgiving and draconian punishment for victimless crimes, and it's aimed squarely at kids who are attempting to move on from past mistakes. It's also a private, civil society solution to a stupid government policy.

If there is one thing more insidious than religion, it is the drug war.

September 11th

The only thing I ask of the religious, on this day that witnessed evil perpetrated by man in the name of religion, is that they consider the depths to which religion can sink man.

In Which I Am Divorced From Faith

The New York Times seems to imply that the Pope believes Muslims correct in rioting and killing in the name of defamation of their religion:

While the pope did not mention Islam specifically, his comments echoed previous statements about how Muslims cannot comprehend how the West has divorced itself from faith. His comment on the “mockery of the sacred” seemed too to refer to the controversy earlier this year in which many Muslims took offense to cartoons in a Danish newspaper depicting the Prophet Mohammad, which were defended in the West as an exercise in free speech.

On the one hand I doubt even the Pope could be so venal and stupid as to endorse wanton violence in the name of protecting one's religion (though I could be wrong on this count, and would not be surprised), and, on the other, there is no room to excuse the behavior of any religious person who reacts to satire and commentary with violence.

The only thing I ask of the religious is that they consider the depths to which religion has sunk man.

Comment on Comments

Apparently, I had 4 unapproved comments dating back to the middle of August, which I have now approved.

Apologies for the delay in approving comments; I don't know how they slipped under my radar. I will be more diligent in the future about comment approvals.

--The management

Innumeracy

Here's the situation. You're on a golf course. You tee up, swing the ball, and lo and behold, you get a hole in one.

It is therefore impossible for you to get a second hole in one in that round of golf, right? Because, the odds of getting one hole in one are so small, the odds of getting two holes in one must be infinitely small, that is, impossible.

But no. These are two separate events; the odds of getting the second hole in one are unaffected by getting the first hole in one. The odds of getting two holes in one in the same round of golf likely are very very small (but not impossible). But the odds of getting any one of those holes in one is the same, whether one previously scored a hole in one or not.

So why am I prattling on about math and a good walk spoiled?

Cause Althouse is blogging about some lady who won two jackpots in state lotteries. The title to her blog post is somewhat misleading: " The odds were 1 in 3,669,120,000,000". The odds of winning both lotteries very well may be 1 in 3.669*10^12, but the odds of winning the second lottery are unaffected by having won the first lottery.

UPDATE: Posner:

What would be socially and even economically useful would be to instruct high school students in the rudiments of statistical theory. That would help them learn to think straight about a range of public policy issues, as well as to avoid certain recurrent mistakes in everyday life. People are terrible at handling probabilities. For example, most people, including otherwise quite intelligent and well educated people, don't understand that randomness is not regular alternation--that a typical random pattern is 1000110110001, not 101010101010. And this mistake leads them, for example, to give undue weight to the recent performance of a mutual fund (e.g., 1101). But whether to teach statistical theory in high school is an issue of educational policy rather than a matter of raising the scores on math tests.

It would also be helpful to the United States, mainly from a public policy standpoint, if more of our people were scientifically literate; and it would help them to be so if they knew some math, because modern science is heavily mathematical. In my book Catastrophe: Risk and Return (2004), I examined the issue of scientific literacy briefly, pointing out that only a third of American adults (adults, not 15-year-olds) know what a molecule is, that 39 percent believe that astrology is scientific, that 46 percent deny that human beings evolved from earlier animal species, and that almost 50 percent do not know that it takes a year for the earth to revolve around the sun (many do not know that the earth revolves around the sun). These are amazing statistics, and yet, according to the materials I consulted, the scientific literacy of the U.S. population actually exceeds that of the European Union, Japan, and Canada.

Communism In America, Or, You Should Be Reading the Economist

It's true. In the land of the free and the home of the brave, communism is running amok, ruining the insurance industry:

Robert Muir-Wood, head of research at Risk Management Solutions, a firm that creates catastrophe models for use in the insurance industry, says that “if you ask climatologists how much of the extra activity is the result of climate change, the range of opinion is between 10% and 60%.”

The insurance industry has a strong interest in these matters. In 2004 and 2005, the two most active hurricane years on record, weather-related losses amounted to $145 billion and $200 billion respectively. The big losses of the past two years have pushed reinsurance prices up. “When events occur, prices rise,” says Christian Mumenthaler, chief risk officer with Swiss Re. “Post-Katrina prices in this bit of the reinsurance business have doubled. Such events usually pay themselves back.”

If prices are rising, that should be a signal to people and businesses to avoid settling in risky areas. The economic centre of the hurricane business is Florida, which is both the most vulnerable part of America and the most valuable. In 2004 the total value of insured coastal property in Florida was $1.937 trillion, compared with $1.902 trillion in New York. Unfortunately, the signal is not getting through to homeowners in Florida, because the government is cushioning the blow. Insurance companies in America may not set their own prices. The rates they charge customers (and indeed the models on the basis of which they calculate their rates) are regulated by state governments. “Communism survives in three parts of the world,” says Mr Muir-Wood: “North Korea, Cuba and the American insurance market.”

Kill communism. Let nature destroy the Southeastern United States and induce people to move away from such areas. A dead Miami is a good Miami.

Sentimentalists and Naifs Take Cover

The fourth season of The Wire is about to start, and, for those of us hip enough to have HBO On Demand, the premier episode is available for your viewing exercise.

I say exercise, not pleasure, because watching the Wire is like reading good literature. (Interesting discussion here about narratively complex TV shows, such as The Wire and, natch, Battlestar Galactica, two very different shows that nevertheless share the same narrative complexity that demands a lot of its viewers.) It's a safe bet that the viewers of either show tend to be more intelligent than the population at large, much the same way that a person who reads novels for exercise (not pleasure!) is more intelligent than the population at large. (Logic test for my readers: This shouldn't be construed to mean that those who don't read novels aren't more intelligent than the population at large.)

But, as always, I digress. This season's The Wire promises to be a meditation on the failed promise of public education, especially as it relates to the inner city poor. Witness the sullen, shell-shocked teachers forced to sit in front of an old, clueless lady, who claims that the secret to educating black America is IALAC--I Am Lovable And Contemptible. (OK, I made the "C" up. I forget what it stands for.)

You get the idea: (1) The Wire is a brutal, gruesome show that displays life in a manner which defines verisimilitude; (2) public education, especially in the inner city, is a complete and utter failure; (3) the tragedy to be explored in the show is that, given the poverty of their educational environment, the school kids would do better to sell drugs on the street, and have an income thereby, than to idle away their years sitting in ineffectual government-funded schools.

As to point 3: Never mind that one of the risks attendant with selling drugs on the street is that you will be laid low by an errant (or inerrant) bullet; the street gives you an income where the classroom does not.

The Fall Of the Berlin Wall

Mankiw notes that some former Soviet Bloc countries are friendly to starting businesses.

Those countries in which it is easy to start a business, of course, tend to be wealthier and more democratic than those countries in which it is hard to start a business.

That this should surprise anyone only demonstrates the ignorance with which most people lead their lives.

Wealth

Jane Galt on the wealthy:

Contra the belief I have encountered among my commenters, most rich people did not inherit most of their wealth, and most of their income comes from wages rather than capital. Some of my interlocutors seem to be working off an income distribution model they clipped out of the 1928 Catholic Worker.

I would agree with her on how wealthy people get their income but not in the way she likely thinks one should agree with her. The point is that the vast majority of Americans are (1) wealthy and (2) get the majority of their income from wages, not capital. The very wealthy (who, I presume, Galt is alluding to when she refers to "wealthy") do get their incomes primarily from capital, but it is nonetheless true that the vast majority of Americans have incomes far in excess of the average person's income and, therefore, by any right, they are wealthy.

Thoughts similar to mine at Mankiw.

What Does It Mean When I Have Access Where Paris Hilton Doesn't?

So, I've been to Bungalow 8 before.

Paris Hilton couldn't get in.

What the hell is the world coming to?!

Personally, I was a fan of the late, lamented Lot 61, as opposed to Sacco's new creation. And I'm not even a nightlife person.

Australian English

Apparently, the Australians call toxicologists toxinologists.

Which makes some kind of sense. More so, at least, than the Brits' kerb affectation.