Gongol.com Archives: April 2022

Brian Gongol


April 2022
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April 1, 2022

Business and Finance Use your leisure

America has built quite the cult of retirement: From The Villages (a planned retirement community in Florida with 138,000 residents) to robust public-sector pension plans that almost always offer the allure of earlier retirement than in the private sector, we focus mightily on treating ages 62 to 67 as a finish line at which everyone ought to be single-mindedly focused upon running through the tape before coming to a complete stop. ■ Considering the vast number of adjustments that went into accommodating the broad, instantaneous switch to working from home as a pandemic precaution starting in March 2020, it is surprising we haven't seen more energy and creativity invested in finding ways for people to remain plugged into work after reaching retirement age. ■ The retirement age is artificial, after all. Certainly there are many occupations in which people are entitled to a physical rest after decades of labor. And there are lots of people who find considerable fulfillment in non-employment activities, like volunteering or caring for grandchildren. ■ But we also find many examples of people who had much to do and contribute well after their mid-60s. Mike Krzyzewski has taken until age 75 to retire from coaching college basketball. Norman Borlaug continued working on the Green Revolution into his 90s. Benjamin Franklin was 70 when he signed the Declaration of Independence and 81 when he signed the Constitution. ■ Nobody ought to be indentured to their work, but it's a mistake to underestimate how many contributions people can still make well after many of their peers decide to take up golfing as a full-time pursuit. As Franklin himself put it, "It is not leisure that is not used." ■ For all the concern expressed about children's exposure to television, adults 65 and older watch an average of more than 7 hours of television per day. That number has risen a lot in recent years. And that's not the only boom in screen time for retirees, who are significant social-media consumers, too. ■ It might be worthwhile for society at large -- not just the retirement-age cohort -- to put some creative energy to use in deploying some of the time available to willing people in productive ways outside of the almost-nonstop consumption of entertainment. Finding fulfillment in useful activities -- being needed by one's community -- is an important aspect to psychological wellness. ■ If we found the resources and creativity needed to get people around extraordinary barriers to normal work because a pandemic forced us to do it, why shouldn't we put some similar resources to work figuring out how to better connect people to purposeful things they could do in new and meaningful ways even after they've earned the right to walk away? It's not the path for everybody, but it's hard to imagine we aren't leaving a lot of talent and pride on the table just because we haven't done much innovation in the new world of work.


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April 4, 2022

News No way out

Underestimating your rivals can be a terrible mistake, but so can be overestimating them. Turning an ordinary-sized opponent into a 10-foot-tall giant is a recipe for inaction and paralysis. And as Dwight Eisenhower put it, "Initiative, confidence, and boldness are among the most admirable traits of the good combat leader." ■ One of the great myths that has emerged in the modern age is the belief that China acts according to some mysterious but comprehensive 100-year plan for world domination. It is entirely possible that there exists some form of long-term strategic plan that guides the Politburo, but evidence of any such plan's usefulness are not forthcoming. ■ Just look, for example, at the country's incapacity to properly assess its demographics. Until 2016, China was effectively under a strict limit of one child per family. Then that limit was doubled, permitting up to two children per family. And then in 2021, it was raised to three. ■ Notwithstanding the obvious affront to human dignity that any such limits represent (and indeed such limits are odious), the ineptitude of the planning involved is plainly evident: Facing the ballooning (and potentially ruinous) costs of an aging population, the ruling powers tried tripling the birth limit in just six years. As the phrase is occasionally used in computer programming and project management, "The bearing of a child takes nine months, no matter how many women are assigned". ■ Nor can a country turn around its demographic decline by tripling the number of "permissible" children in less than a decade. Either they really aren't thinking 100 years ahead, or the Politburo lacks the most rudimentary skills of arithmetic. ■ On immediate crises, their feted plans fare no better: Consider the case of the Covid-19 lockdowns in Shanghai and elsewhere. As BBC correspondent Stephen McDonell points out, "Jilin Province has been locked down for weeks. [Tens] of millions of people here are restricted to their homes today." Jilin is a province of 24 million people. Shanghai has 24 to 26 million people in a single city, the largest in the world. For perspective, the entire state of Florida has just shy of 22 million residents. ■ The Chinese government's zero-Covid policy indicates that they didn't fully assess the likelihood that the pandemic would be around to stay, and that command-and-control remains their only strategy. But even when people aren't especially ideological, they usually do have feelings about the most practical aspects of government effectiveness. You may not care about the Supreme Court or international treaty obligations, but you probably do care about potholes on your street -- or being locked up and barked at by a dystopian robotic dog. The measures are extraordinary even for an authoritarian state, and they simply must be having grassroots consequences. ■ Lee Kuan Yew, the long-time leader of Singapore, looked to the long-term plans of his giant neighbor and warned that "One thing is for sure: the present system will not remain unchanged for the next 50 years. To achieve the modernization of China, her Communist leaders are prepared to try all and every method, except for democracy with one person and one vote in a multi-party system." Lee himself had both an affection for long-term plans and autocratic tendencies. But his advice here is valuable: The system itself cannot be preserved in its present form indefinitely, much less for 100 years or more. ■ Plans -- especially long-term strategic plans -- will always have a place, not so much for the steps they lay out as for the thought process they impose. No plan survives first contact with the enemy, but likewise there is no substitute for the process of looking forward and considering where chance will intersect with objectives. Clearly, some parties are getting more credit for their plans than they deserve -- which is all the more reason for the rest of the world to look ahead to the future we want for the whole of humanity and commit to confidently taking steps to get there.


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April 5, 2022

Agriculture Putting enough on their plates

In most cases, the kinds of social safety-net interventions that do the most good are the ones that maximize the freedom that individuals have to make their own choices. For instance: While it isn't the only answer, one step that could do considerable good for ensuring access to affordable shelter is for local authorities to stay out of the micromanagement of housing. Zoning reforms that stay out of the way of multifamily construction would do a lot of good for making shelter more affordable in many places. ■ Similarly, when trying to lift people out of poverty, direct cash payments and simple transfers like the Earned Income Tax Credit support personal freedom and allow the recipients to concentrate on those priorities that matter most to them. In general: the simpler, the better. In approving of the principle of a negative income tax (like the EITC), Milton Friedman argued, "The heart of the liberal philosophy is a belief in the dignity of the individual, in his freedom to make the most of his capacities and opportunities according to his own lights, subject only to the proviso that he not interfere with the freedom of other individuals to do the same." ■ Perhaps the (partial) exception that best supports the rule comes from a real-world experiment which is soon to expire: The significant expansion of free school meal programs, funded by the US Department of Agriculture. As a means of responding to the closure of schools and the consequential disappearance of congregate meal settings (kids can't eat in the school lunch room if schools are closed), the changes first implemented in 2020 allowed schools to revise and expand their meal programs. ■ The exception is only partial, of course: Relaxing some of the restrictions on things like meal delivery and portioning actually deregulated the program from the Federal level and gave local administrators more freedom to act as they saw most prudent. On the other hand, funding food specifically, and for the specific population of school-aged children, is the part that runs contrary to targeting the safety net to the people most in need and doing so with cash or the closest things to it. ■ But if there is one population a society should be willing to serve most generously, it is children -- as they neither made the choice to be born, nor have much if any control over their material circumstances. And nutrition in particular is, aside from water and shelter, as basic a physiological need as they come. ■ Obviously, universally free school meals aren't targeted by incomes, meaning many children from families that can afford healthy food will receive benefits for which they are not "in need", in the conventional sense. But making meal programs universal simplifies bureaucratic oversight and maximizes access by taking away both the paperwork burdens for parents and the stigma that can be associated with receiving free or reduced-price lunches. ■ Kids are influenced by social pressures, and eliminating the payment process removes barriers to getting food into the bellies of kids who might go hungry. Moreover, getting children fed through school nutrition programs ensures that food cannot be withheld from them by malicious or negligent parents -- while also alleviating some of the difficulty that some parents may have in finding and preparing an adequately nutritious diet at home. Food deserts remain a thorny problem, and accountable programs for child nutrition can help overcome some of the gaps in food access that kids might otherwise experience. ■ Seen as a tool for reducing regulatory and social obstacles to child welfare, in much the same way that direct cash transfers to adults help reduce the "high price of being poor", universal free-meal programs in schools deserve to be assessed as a well-targeted, well-justified exception to an otherwise maximally laissez-faire social safety net.


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April 6, 2022

News Hyperbole is going to kill us all

The temptation to resort to hyperbolic language is strong in the contemporary political climate. We are awash in breathless warnings of climate catastrophe and democracy on the brink, and threats of a stock market crash and World War 3. None of this is made better by the presence of candidates and even elected officials who resort to repugnant claims about others because they have so little to offer of their own. ■ But the temptation to engage in that rhetorical escalation has to be resisted, or else hyperbole is going to kill us all. ■ And that includes the language from the highest of offices. Just because one President resorted to more than 30,000 lies in four years doesn't mean things are made better by his successor resorting to overstatement, even of matters more grounded in fact. ■ Words matter. Even today, Americans still cherish the plain language of Abraham Lincoln and the directness of the Declaration of Independence, because words used carefully can shape thoughts and decisions for generations to come. ■ In attempting to make a case for health-care coverage, the President has pronounced, "In America, health care should be a right -- not a privilege." No sane or reasonable person could quibble with a close variation on that argument: That health care is a universal need. Everyone knows that. But to call something a "right" is different. ■ Americans subscribe to a belief that life, liberty, and the pursuit of happiness are fundamental rights. That's why there is almost universal consensus in America that Russia is wrong to invade Ukraine, and that America is right to impose consequences against the aggressor for committing and continuing the invasion. We may struggle to delineate between war crimes and genocide, but we know that the crimes committed by Russian troops against civilians in Bucha and elsewhere are fundamentally, inescapably wrong and utterly without defense or excuse. Fundamental human rights are incontestable. ■ Fundamental human rights, though, are virtually always those things which one person cannot rightly be denied by the powerful: The right to speak one's mind, the right to go about life unmolested by authorities, the right simply to live without fear of summary execution. These are things that do not respond to the laws of supply and demand. ■ Health care, like other fundamental needs (including food, clothing, shelter, and safe drinking water), is unfortunately still subject to those laws of resource limitations. It does not make it easier to provide those things simply by declaring them "rights". Calling them what they are -- universal needs -- acknowledges at that they are things nobody can do without, but reserves the language of "rights" for those things that everyone possesses by right of birth as a human being. There is no supply curve on your claim to the pursuit of happiness, but there are costs that apply to those things we consume. ■ It may seem pedantic to call out the difference between rights and needs, but the distinction is important, and so is the application of care in the use of the language. If we speak of universal needs, then we are obligated to have the more difficult discussions about who pays, how much they pay, who ensures an adequate supply, and how we must intervene to fix the gaps. Calling something a "right" isn't a magic incantation that makes the good or service appear out of thin air. A person cannot be arbitrarily deprived of their right to vote -- but in some places, there simply aren't any doctors, and no amount of calling access to one a "right" will produce an MD on the spot. ■ More deeply, though, it matters that we use the language carefully and hold others accountable to do the same, even when we agree with the things they want. Lots of things -- including the temptations of social media -- encourage people to resort to overheated rhetoric and linguistic overextensions. Too many of those, compounded upon one another, deprives us of the ability to have real discussions about matters in the public interest. Hyperbole isn't really going to kill us all, but it does choke out the debates a democratic society needs to have.


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April 7, 2022

News Who are you?

It is a shame that the coming-of-age film is a genre so overstuffed with navel-gazing targeted at adults. A seemingly infinite number of minor variations on the same general themes of youthful shenanigans, social awkwardness, and romantic fumbling fill the vaults without many original ideas ever coming forth. Even when they take novel turns (as in "Boyhood", which was filmed with the same cast over a dozen years), the audience is rarely told how youthful choices result in adult outcomes -- and when they do, it's rarely for more than laughs (as in the freeze-frame epilogues in "Animal House"). ■ Instead of trying to make adults feel good about how they weren't the only ones left dazed and confused by adolescence, our culture would be much better off communicating to young people that youth is merely the start of a lifelong process of self-discovery. ■ Well into adulthood, most people are still uncertain how to answer the deepest questions of self-identity. It's why the quarter-life crisis and the mid-life crisis are equally predictable sources of uncomfortable laughs of recognition. ■ But too many times, the neat resolutions required by cinema and novels communicate the idea that at some point or another, one finds all of the answers. Nothing could be further from the truth, of course -- but nobody tells you that when you're 13 or 14 years old. ■ It would do an enormous amount of good if youthful guidance could communicate to young people how to undertake the process of deciding who they want to be. The value is not in telling them the answers -- everyone is entitled by right of birth to follow that path for themselves. Human dignity demands it. ■ But it also demands that we don't isolate an education to just a few aspects of life. Figuring out a prospective occupational path with a career aptitude quiz and probing one's sexual self-identity are useful aspects of growing up, but they're hardly the whole thing. Much more needs to be explored, too: Forming an ethical framework, shaping a moral identity, and discovering one's tolerance for external motivation and intrinsic goal-setting matter, too. ■ So do quandaries like finding hobbies and other non-remunerative interests that balance work demands, and questions about what one does to pay the civic rent. We often touch briefly on these things -- for instance, rewarding community-service hours with cords at graduation -- but other than implicitly suggesting that volunteerism is a path to applause, civilization depends in part upon people figuring out why their contributions matter, and which ones they're best suited to give. ■ Some of this could be projected by delivering them interesting and introspective biographies and autobiographies, but rarely do those stories tell the most important part: How people came to their decisions. Lots of biographies and autobiographies present their important moments as faits accomplis, due to over-simplified causes like hard work or divine intervention. ■ The decision-making process is the hard part to figure out in life, and nobody gets it completely right. But we could do a better job of communicating some of the trial-and-error involved so as to reduce some of that error for future generations. Plenty of juvenile pratfalls will still happen, and they will always demand their places in film and literature. But it would do a world of good to make those stories looking backwards from adulthood into ones that young adults on their own quests for self-discovery would find more attractive as navigational aids for the times ahead.


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April 8, 2022

News How much is it worth to you?

People of goodwill and moral conscience in the United States ought to ask a basic but important question: How much is it worth to us to see a peaceful and just resolution to the invasion of Ukraine? ■ Wars are not without costs, and this one is no different. The State Department says that the US has provided $1.7 billion in "security assistance" (defensive arms and equipment) since the invasion began in February. That's a lot of money -- but not on a per-capita basis. Spread across a population of 332 million, it's just $5.11 per American. ■ We should forever be on guard against overspending on weapons and war. Dwight Eisenhower counseled that "Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children." ■ But Eisenhower didn't shirk from the burden of making the world peaceful. He fought tyranny as Supreme Allied Commander in Europe in World War II, and he went toe-to-toe with it in its Communist form while serving as President. ■ A GoFundMe page led by Mila Kunis has raised almost $36 million for humanitarian relief for Ukrainians. Vastly more will of course be necessary for relief purposes, but it's a good sign that so many people are voluntarily willing to contribute to the effort. Many other charities are raising worthy support, too. ■ But as a mental exercise, we ought to be willing to consider how much it would be worth to subsidize a Ukrainian defensive victory against a barbaric invader. A price will have to be paid, and we are reminded daily of the need for war materiel, and that tab could continue running for a long time -- depending, in part, on whether enough resources are committed now. ■ The more decisive and prompt the defensive victory now, the greater the deterrent against pointless wars in the future. Is a just peace worth more than $5.11 per American? More than $10.22? More than $100? Surely the number is higher than the price of a hamburger. And it must be worth more than a few. ■ Before we become weary of the cost, or congratulate ourselves too much on the $1.7 billion already dispensed, we need to be sure we understand that Ukraine is purchasing in blood, toil, tears and sweat an outcome -- hopefully, a just peace -- that will affect us all.


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April 12, 2022

Computers and the Internet We won't sell your data, but we might sell the company

The emptiest of promises in all of the digital world remains "We will never sell your data". It's certainly a necessary statement -- far too many websites and vendors are willing to sell the data of individual users without their prior permission, and the resulting privacy violations begin with spam and escalate to much worse. ■ But the simple promise not to sell user data is profoundly incomplete, because it affords no meaningful protections if the service, site, or parent company is sold. Consider the vast one-time popularity of MySpace. It not only catalogued the social relationships of millions of users, it also was the first mass-market site to have the capacity to collect actionable intelligence on users and their habits, feelings, and preferences. ■ The test anyone who ever used MySpace needs to ask themselves is this: Who owns MySpace now? It isn't the ubiquitous "Tom", to be sure. ■ Since 2005, MySpace has been through the hands of News Corporation, Justin Timberlake, Meredith, and a NASDAQ-listed advertising company -- though none of those exchanges really looked like "selling user data" in the conventional sense. ■ What makes MySpace such a cautionary tale is not whether anyone retains an account there today. But literally billions of people are active, cumulatively, on Facebook, Twitter, Snapchat, TikTok, and other sites. ■ Facebook is almost wickedly transparent about how it regards personal data: "Specifically, when you share, post, or upload content that is covered by intellectual property rights on or in connection with our Products, you grant us a non-exclusive, transferable, sub-licensable, royalty-free, and worldwide license to host, use, distribute, modify, run, copy, publicly perform or display, translate, and create derivative works of your content" (it's right there in the terms of use). ■ Note a couple of things about those terms: "Royalty-free" tells us implicitly that user content and data have value. If they didn't, royalty rights would never enter the discussion. And "transferable" and "sub-licensable" make it evident that Facebook thinks others might value user content, too. ■ Facebook's unintentional honesty about what it "owns", both from and about users, is a reminder that anytime we spill information into social networks (or indeed any digital platform), we are creating digital footprints that seem ephemeral but in fact have durable value. MySpace's copy of your "Top 8" friends from 15 years ago might not be worth much -- but then again, China's government has been out to mine every byte of data it can steal about unwitting Americans, so maybe it's not worthless after all. ■ And therein lies the rub: The drama was high at Twitter as Elon Musk bought more than 9% of the company, then touted his plans to join the board, then reversed course. ■ Musk's headline grab showed that ownership is the central matter. That demands more caution than has been widely shown up until now, whether among the estimated 80 million Americans using TikTok, a platform owned by a Chinese company that could easily be bent to the will of an authoritarian government, or among the two billion daily active Facebook users whose sole guarantee of prudential behavior is however Mark Zuckerberg decides to behave with his majority control over the voting shares in the company. Wherever we leave those digital footprints, someone has an incentive to go tracking.


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April 13, 2022

Business and Finance On your most professional behavior

A very good question -- "How do we identify and create professional business executives?" -- recurs chronically because we abuse the word "professional". ■ A "professional", correctly stated, is a person who obtains legal coverage to keep other people out of their trade. In exchange, they promise to conduct themselves according to binding professional standards. ■ An essential part of the "professional" trade-off is that the professional surrenders the right to extract maximum profits from their clients. It's an acknowledgment of an insurmountable knowledge problem on the part of the client. ■ A "professional" doctor, for instance, surrenders the right to upcharge a patient for tests or treatments they don't need. In exchange, the patient (through the government) protects the doctor from competition. With a profession comes not just the assurance of good (though not extravagant) compensation, but also social esteem. ■ The meaning of "professional" starts to break down by little erosions -- celebrity doctors profiting off weight-loss fads, dentists hocking snake-oil tooth whiteners, and accountants pivoting to more-lucrative business consultancy. ■ Any old set of dopes sharing a common craft or trade can form a guild to keep others out, and they can peddle their influence to protect themselves from competition. (This, of course, is the source of the gag behind Gob Bluth being purged from his own "Alliance of Magicians" in "Arrested Development".) Without binding standards that serve to protect unwitting customers from being manipulated, what we call "professions" are often just guilds dressed up in fancier titles. ■ The more we chip away at the fundamental meaning of the word "professional", the more we lose touch with an important distinction. After all, does a "professional" athlete swear to uphold a self-sacrificial code of conduct like the Hippocratic Oath? Hardly. Sports leagues often enforce tougher codes of conduct for fans than for owners and players (see, for instance, how Atlanta's baseball team continues to profit from the indefensible Tomahawk Chop). ■ All of this is a shame, because America (and the world) really could use higher standards for "professional" business conduct. But that would require the managerial professionals to sacrifice some material self-interest in exchange for professional status. ■ As a symptom of the principal/agent problem, the absence of any widely-used codes for business conduct is a problem. This problem is on display tenfold when you look at how some agents abuse the trust of their clients. ■ The absence of binding professional codes in business is why Warren Buffett's words to the staff of Salomon Brothers stood out: "Lose money for the firm, and I will be understanding; lose a shred of reputation for the firm, and I will be ruthless." ■ Jack Bogle also sounded like a moralist in contrast with the vacuum of professional business standards when he wrote, "I am arguing that our business principles have been diluted [...] There are some things that one just doesn't do". Bogle willingly gave up what could have been enormous riches because he thought bringing thrifty, low-cost index funds to the public was a matter of doing the right thing. He voluntarily held himself to an extremely high professional standard because he believed that was the right thing for a capitalist to do. ■ Perhaps we would be better off if business owners (particularly the shareholders in publicly-traded firms) insisted that corporate suites were full of people sworn to uphold a professional code that would put owners' interests ahead of maximizing personal gain. ■ But given the routine use of lavish compensation models to keep board members fat, happy, and complacent with the will of the CEO, it seems unlikely we'll see the advent of a truly "professional" business class anytime soon without the ignition supplied by other reforms. Poodles in the boardroom are no substitute for sheepdogs. ■ That's a shame, because even Adam Smith saw that there was a moral dimension to well-functioning markets. Not everything that is legal is right, and not always is the right course (by ethical standards) the best way to make a buck. Correcting for those shortcomings would be good for capitalism.


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April 14, 2022

The United States of America It's going to cost us

In the book "1984", one of the recurring themes is the tale that "Oceania had always been at war with Eastasia" (or Eurasia, as served those who needed it to do so). By the use of that plot device, George Orwell was making a nod to the notion that if people were kept blind to history and ignorant of reality, they could be made to believe anything, even those things that were patently untrue. ■ It isn't just ignorance that can lead us into false belief; so can can wishing too much for a thing to be true. Looking from afar at the Kremlin's war of aggression against Ukraine, it is all too easy to let hope drive the imagination that a clear and binding peace treaty will be implemented sometime in the near future. How heartbreakingly unlikely that really is. ■ Russia has not "always been at war" with Ukraine, but even putting aside the historical violence it has committed against its smaller neighbor, Russia most certainly has been making war there for almost a decade. ■ It was for precisely the kind of defensive weaponry that America is now shipping to Ukraine in huge volumes that Volodymyr Zelenskyy was asking when then-President Donald Trump attempted to extort Ukraine for political help. What is happening now is just a hotter phase of a long-simmering conflict. ■ Indeed, the fact that the war on Ukraine has motivated both Finland and Sweden to set aside decades of neutrality or non-alignment and initiate the process of joining NATO should be warning enough that this is a problem that will be around for the long haul. The Kremlin's thundery reaction tells us it has no quiet ambitions. ■ Even if peace were to break out spontaneously tomorrow -- and it will not -- the trauma of the war alone will resound deafeningly for at least a generation to come. A country cannot lose thousands of lives (4,577, by the latest count) to a depraved and barbaric invader and then merely forgive or and forget. Nor, for that matter, will any amount of Russian state propaganda erase the anguish of thousands of Russian mothers who will never see their sons again. The blame lies squarely at Putin's feet. ■ For a generation to come, the Russian military will contain within its ranks vicious murderers who will, tragically, never be individually held to account for their crimes. The scars of war will remain on the Ukrainian land and people for many decades to come. And the 44-year-old president of Ukraine can be certain that no matter the diplomatic outcome of the war, Russian agents will be trying to poison him for the rest of his natural life. ■ All of this would be true if the war were to end 15 minutes from now. But it won't. Like a cancer that has already metastasized, this problem will persist for the long haul. And there won't be a clean bill of health at the end like we probably wish there would be. ■ We have to make peace with the uncomfortable reality that there will not be a satisfying peace anytime in the foreseeable future. Even if hostilities de-escalate, there will still be plenty of war ahead. ■ American public opinion isn't well-suited to unsatisfying conclusions. Americans want the signing of surrender documents on a battleship in Tokyo Bay. That isn't forthcoming. ■ The essence of leadership will consist of telling Americans that we're in this for the long haul -- and painting a picture of what that long haul will be. "The peaceful self-determination of all free peoples" isn't a concept that rolls gently off the tongue. But it's the one that has to be defended and promoted loudly. ■ In too many ways, we mistook the end of the Cold War to mean the end of great-power influence and self-serving international conflicts. A peaceful world with triumphantly advancing living standards is extremely desirable, but it isn't inevitable. Essential, but not inevitable. ■ It can only be sustained by a combination of un-self-conscious promotion (in culture and in political rhetoric) and the hard-nosed construction of the rules-based global order that makes a peaceful coexistence possible. ■ In the words of business author Jim Collins, people need to believe in a "big, hairy, audacious goal". The rhetoric must lead towards that goal -- peace, freedom, and prosperity for the entire world -- but it must built on an infrastructure that invests both in the maintenance of the peace and the promotion of the rules that keep the peace. ■ These are costs we will face aplenty not just now, but for many years to come. The sooner we bring credibility to the long road yet to travel, the tolls that must be paid along the way, and the worthiness of the destination, the better.


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April 15, 2022

Business and Finance It's better to be bored by markets

The high drama surrounding Elon Musk's attempt to take over Twitter has brought unusual popular attention to the business world. Ordinarily cordoned off as "business news" covered by "financial media", questions of valuations and ownership rarely intrude into the mainstream consciousness. Events involving certain high-flying, attention-hungry magnates pose an unusual exception. ■ It was about 12 years ago that Berkshire Hathaway laid out $26 billion in cash and stock to buy out the BNSF railroad. It was a huge deal -- Warren Buffett was basically betting a quarter of his own company on it. ■ Later this month, Berkshire will hold an annual meeting in Omaha, where shareholders will be reminded that the company brings in operating earnings of about that same volume as the entire BNSF purchase every year. (Last year's operating earnings were $27 billion.) ■ Berkshire recently announced the purchase of Alleghany, an insurance company, for $11 billion. It's safe to say the event went almost unnoticed outside of true hard-core financial news-watchers. It most certainly did not get proportional attention to Musk's Twitter-takeover offer, which is larger -- but only four times larger. ■ Even more enormous (and less renowned) than such Berkshire buyouts have been the company's share repurchases. Berkshire has repurchased more than $51 billion in shares since just 2019. If Warren Buffett had moved his company to buy out Twitter for that much, it would have made headlines. But consolidating ownership of itself by an even larger number barely raised anyone's attention at all. ■ Just for comparison, put the Alleghany purchase and the share repurchases together, and that would be a deal the size of buying the entire Ford Motor Co. (market capitalization: $62 billion). Boring? Only by nature of what the company does. In scale, it's quite exciting. ■ For as much as the crypto-bros and others want to sell you on their get-rich-quick schemes, they're just trying to get people hooked on emotions and speculation. It's morally unsound. Peter Thiel can rage against a "sociopathic grandpa from Omaha" for downplaying Bitcoin, but Thiel isn't really making a case for cryptocurrency on the merits. ■ Meanwhile, Berkshire continues growing, reinvesting in huge projects for renewable energy (to the tune of $37 billion at last count), and sending billions of dollars in corporate taxes to the US Treasury, while paying the salaries of more than 371,000 people. ■ People need to know the distinction between speculation and valuation. Valuation is a matter of determining what something is truly worth, no matter what its price tag. Speculation is a matter of grabbing something at one price (without regard to its intrinsic value) and looking eagerly to sell it for a higher price -- often as quickly as possible. Speculation can be fun for an adrenaline rush, but it's a trashy way to characterize a market economy. ■ Capitalism does great things when it's patient, thoughtful, and focused on the long term. Command economies cannot measure up! But the skill of market valuation (which is the cornerstone of how Buffett has built Berkshire) is wildly under-appreciated. We ought to try fixing that. Other activities may be better for capturing headlines, but patient, strategic attention to business-building is vastly better for a civilization.


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April 16, 2022

News When voting is like toothpaste

To keep a marriage happy, spouses ought to agree on their laundry detergent but keep their toothpastes separate. On certain matters (like how the bedsheets and towels are going to smell), unanimity and uniformity are essential. But it's perfectly tolerable -- in fact, preferable -- if everyone can remain responsible for cleaning up after themselves on those matters that matter almost entirely to themselves. What matters most is that one brushes their own teeth regularly; beyond that, whether you choose cool mint, bubble gum, or lemon and ginseng really isn't all that materially important to anyone else. ■ It ought not to escape notice that both France and Australia are in the midst of elections. France is about to conduct the second round of a presidential election based upon a runoff vote, while Australia's parliamentary elections are both ranked-choice and compulsory. ■ Nobody will deny that both electoral systems are democratic, in the sense that they depend upon the consent and expressed will of the people in order to cement their legitimacy. But the systems are deeply different from one another, and vastly different from comparable elections in the United States. ■ On the matter of seeking the consent of the governed and attempting to reflect the will of the majority, all three countries agree -- like spouses on laundry detergent. On the particulars of how they use ballots to sample and count the will of the people, they are like those same spouses choosing toothpastes. ■ Far too many of the arguments about democracy assume that there is a perfect system to be had. That's not just a bad assumption; it is fatally flawed. Making choices among even small numbers of people is an imperfect science. Doing so when millions of people are involved is absolutely guaranteed to leave large numbers of them utterly unsatisfied. The point is not that the popular will is perfectly expressed, but that it is sought -- preferably under transparent and predictable rules. ■ Rules can shape the outcomes of elections, whether intentionally or not. Ranked-choice voting produces different outcomes from first-past-the-post, but there are literally dozens of ways to parse votes, whether proportional or majoritarian in design. Most sensible people can agree on the need for universal suffrage -- but at what point should people become eligible to vote? There are those both on the left and on the right who argue that right should activate at birth. And then there are rules like representation quotas or reserved seats that can institutionally override majority views. ■ Complaining about systems like America's Electoral College is practically a national pastime. But so is complaining about the voting system in every other democracy. There is no perfect system, and fantasizing that one exists is a mistake bound to lead to chronic frustration. Much better it would be if imperfection were expected by all parties, factions, and individual voters, right from the start.


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April 18, 2022

News The center must hold

Benjamin Franklin wrote, "If you would not be forgotten as soon as you are dead and rotten, either write things worth reading, or do things worth writing." He did both, and it's noteworthy that we still have access to his words more than a quarter of a millennium after he wrote them. ■ Have no doubt about it: If he were living today, Benjamin Franklin would be an enthusiastic user of social media. He might not spend his time making TikTok videos, but he would certainly be involved in the rough-and-tumble of Twitter. Snappy assessments of the world would have been like catnip to his prodigious mind; indeed, most of his memorable aphorisms fit tidily within 280 characters. ■ But Franklin's opus would have been hollow without his autobiography. And his wit shines not because of cherry-picked quotes that would fit on a desk calendar, but because his observations, taken together, formed a worldview that is both readable and often quite salient today. He said many things to his contemporaries, but he wrote for the audience of history. ■ The National Council of Teachers of English has published a position statement on "Media Education in English Language Arts" with which Franklin might have taken issue. It contains some sensible reflections on the evolution of what it means to learn the English language -- like acknowledging that "The time is now to bring media education into the mainstream of ELA [English language arts] education". But it also contains some significant nonsense. ■ In particular, the position statement declares, "We no longer live in a print-dominant, text-only world", and thus concludes, "The time has come to decenter book reading and essay writing as the pinnacles of English language arts education." Nuts to that. ■ Of course it is important and worthwhile for students to know how to consume digital media thoughtfully, to express their own opinions and explain their discoveries in more than the printed format, and to be capable of assessing content sources critically. Those are all valuable skills that need to be developed as part of a holistic education in the language arts. ■ But if anyone seriously thinks that books and essays need to be "decentered", they need to rethink their worldview. The only way to take that "decentering" seriously is to believe that history is like an old tape recorder on an infinite Mobius loop, forever erasing itself before recording anew, only to erase itself all over again. Of course, that is not the case. ■ Human history is not only something that has been constructed over many generations, it also reflects an almost stunning consistency of human nature across time. The Soviets may have thought they could create a whole new human, but the rest of us ought to possess the humility to realize that we're not so special that everything is novel. History might not repeat, but it quite often rhymes. ■ The act of writing a book or even a careful essay requires a process of thinking that isn't equally required to record a Snapchat video. The process requires not only a respect for the immediate audience, but also a view toward permanence. That is why people of goodwill are still moved by Dr. Martin Luther King's Letter from Birmingham Jail. It is why understanding the Constitution still requires reading what Hamilton and Madison wrote in The Federalist Papers. It is why Christian churches still read the letters of the Apostles and why Maimonides remains influential more than 800 years after his death. ■ Great films have gone missing. Websites are often only archived by chance. Only a few early broadcasts were ever recorded, and only a fraction of what has ever aired has been saved digitally. But books and essays are intended to be permanent. ■ And while they shouldn't be the only materials that students study or create, there is no sound reason for "decentering" carefully-written words. History isn't the only reason; so is the present. The logic of composition imposes rigor on the writer, and practice is the only way to really become good at it. ■ Nobody is going to master a complex subject from "snack-length" video segments. We learn from those who take the time to form their ideas carefully. Multimedia tools are sometimes the most effective ways to project those ideas -- but even a great film requires a written script. Yes, students should "master the full range of literary competencies"...but the book will still be around a thousand years from now. Instagram will not.


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April 19, 2022

Business and Finance A disaster of choice

Back when computers were a novelty (rather than omnipresent in our lives), coffee cups and other tchotchkes were sometimes sold with the slogan "To err is human; to really foul things up requires a computer". A more relevant spin on that quotation today might be "To cause disruptions is the will of Mother Nature; to cause a real catastrophe requires a human". ■ The International Monetary Fund, noting that the global economy has been recovering from the shock of the Covid-19 pandemic, has issued its opinion that "Global economic prospects have been severely set back, largely because of Russia's invasion of Ukraine." Other than the handful of lunatics who embrace "degrowth" as the solution to the world's problems, most people properly appreciate that rising living standards resulting from broad-based economic growth are a human good. Effects like rapidly-declining child mortality rates are the dividends of growth. ■ Many aspects of the economic troubles we can all observe are consequences of a shocking pandemic. Some of the widespread price inflation can be traced to money-supply interventions that have been employed by central banks for the last 15 years to try to ease the pain of recessions. But nothing whatsoever excuses the completely unnecessary and deliberate assault initiated by the powers in the Kremlin -- most specifically, Vladimir Putin -- against Ukraine and, consequently, against the world's economy. ■ This is an unforgivable, totally unnecessary, and (almost singularly) man-made disaster. The world cannot excuse the malicious decisions made. And it must not forget the lesson that human choices have consequences.


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April 20, 2022

Broadcasting An eye on the prizes

Netflix has reported something both unexpected and unpleasant (for its prospects): A quarterly decline in subscribers. While it still claims more than 221 million subscribers worldwide (a figure that would make it the 7th largest country in the world, just ahead of Brazil), the idea of a shrinking subscriber base is enough to raise both internal and external alarm. ■ It's interesting to note that today's streaming services have many of the features of the classic Hollywood "studio system": They are capable of vertical integration, from producing their own original content (see, for example, Netflix Originals, Hulu Originals, and the entire Paramount and Disney catalogs) to distribution and delivery. ■ In important ways, the economics of owning a streaming service beat the vertical integration of the Hollywood studio system, because the customers not only pay for their own screens (saving the "studio" the enormous real estate and operational costs of owning theaters), they also pay subscription fees that are far more predictable than ticket revenues. ■ But while the old studio system was dismantled by the courts, the new streaming-based studio system is subject to blistering competition. Netflix has emerged as a serious contender for awards like the Oscars and Emmys (winning more in 2021 than any other network or service). ■ Yet Netflix's competitors are gunning for prestige and respect, too: Apple TV won seven Emmys in 2021 just for "Ted Lasso", and it won the 2022 Best Picture at the Oscars. Meanwhile, Amazon has gone off and spent $8.5 billion on MGM and its 4,000-movie library. ■ It seems likely that fierce competition -- even despite the advantages of vertical integration -- is going to keep modern incarnation of the studio system (a studio neo-system, perhaps) much more constrained than the Hollywood system of yore. It remains possible that new rounds of consolidation are yet to come, but it seems more likely that the future will end up resembling the fragmented landscape of cable and satellite television networks. ■ There's still a lot more of the game of musical chairs left to play, and it's unlikely that they'll all end up sharing one big sofa. If the awards-night successes of the various streaming platforms are any indication, those rivalries are going to be very good for the viewers.


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April 21, 2022

Agriculture Green fields eclipsing the brown

The average date of the last frost in most places in Iowa happens around the middle of April, though in some northern parts of the state, that average last frost happens sometime in early May. That date can feel impossibly late following a long-lingering winter (perhaps even moreso after more than one "false spring"), but it's the climatological reality. And it constrains choices like when to plant corn in the state -- a decision bounded on the other end by the date when it's too late to plant before risking losing the harvest to arrival of the next winter. ■ These constraints typically leave Iowa (and much of the rest of the Corn Belt) looking pretty barren for about half of the year. That vista has started to change, though, with the increasing adoption of cover crops -- plants seeded in the ground after the cash crops (usually corn and soybeans) have been harvested in the fall. Where cover crops are planted, it's become increasingly common to see green in the fields well outside the usual seasons. ■ The adoption of cover crops is the kind of easily-overlooked development that deserves both attention and applause. Plants like cereal rye (the most popular cover crop in Iowa) keep soil nutrients from leaching away when the snow melts, while helping to reduce soil erosion and build up helpful organic matter. Some even help to choke out weeds until the next year's cash crop can be planted. ■ In modern terms, it's still a new practice -- almost no cover crops were planted in Iowa a decade ago, and now they're planted on more than 2 million acres annually. ■ It's not just aesthetically pleasing; soil preservation is an important tool for reducing toxic runoff into the rivers and streams that not only eventually flow into the Gulf of Mexico, but that also serve as a major source of drinking water along the way. It's going to take a while to really establish the practice and to make sure that the right incentives are in place for all of the stakeholders involved (farmers, governments, consumers, and water-drinkers, just for starters), but it's a challenge well worth undertaking.


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April 22, 2022

News Reclamation and rehabilitation

Signs of decay are easy to spot once you set about looking for them: Dilapidated old barns in the countryside, abandoned buildings in the city, faded billboards by the side of the road. For too many people, though, every symptom of decay is escalated all the way up until it is taken as proof of terminal decline on a much larger scale. ■ It can be perfectly rational to let things fall into decay. An old farmstead that used to depend on a windmill to drive a water pump no longer has any use for that windmill once a rural water system service connection becomes available. Since rural water service is invariably safer and more reliable than a household well, it makes all the sense in the world to allow a windmill that has no further use to fall into decay. There are lots of other demands on time and resources that are more worthy of investment from our limited resources. ■ On the other hand, it isn't rational to allow important things to fall into disrepair. In fact, it is a duty to keep them from falling into decay. Voters and their elected representatives too often permit the essentials of civilization -- like infrastructure -- to decay, simply because there isn't enough immediate reward for doing the prudent thing. That's a shame upon all of us. ■ Somewhere in the middle of all this we uncover a special act: That of finding something that has fallen into decay and discovering a way to make it useful again. It's an honorable thing to do, and it's worthy of more of our applause. ■ Not everything is worth salvage or rehabilitation. It's an economic decision: If more value can be created than the cost of the inputs, then the rehabilitation creates value. If not, then it may be better to let the decay run its course (or to sweep away the debris entirely). But human ingenuity is a special thing, and we shouldn't just cheer for those who create things from scratch. A round of applause is also due for those who raise things to higher levels of value, especially after neglect.


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April 26, 2022

Business and Finance Costly playthings

The announcement that Elon Musk is poised to buy Twitter for $44 billion has lit the short fuse on some of the worst habits in American cultural debate. The New York Times is offering opinions under the headlines of "Elon Musk is a Problem Masquerading as a Solution", "Twitter Under Elon Musk Will Be a Scary Place", and "Musk's Twitter: Weed Memes. Editable Tweets. And the Return of Trump." Some have called it hyperventilation, and that may not be a bad characterization. ■ Meanwhile, largely because Musk has a history of libertine personal behavior on the site and is intentionally provoking debate with tweets like "The extreme antibody reaction from those who fear free speech says it all", the pending ownership change has become a cause for celebration among those who perceive that Twitter's policies and management have landed heavily on some of their favorite figures -- the former President certainly chief among them -- despite often inexcusable behavior by those figures. ■ No person of sound mind and decent character should stand opposed to the principle of freedom of speech. But principles often conflict with one another, and one of the most important indicators of good judgment is the ability to reconcile those conflicts thoughtfully. There is no pure freedom of speech, and even the Voltaire-adjacent promise to defend to the death another's right to say things with which one disagrees is itself limited. (It would be insane, for instance, to defend a mob leader's right to use "free speech" to coordinate a murder.) ■ It is especially unfortunate that a false dichotomy of "free speech or not" is taking shape around something as ultimately trivial as a social-media site. Twitter hasn't taken the full form of a public-good protocol, as co-founder Jack Dorsey says he wished. It's just a popular digital meeting space -- a very noisy virtual agora -- where people can engage, agree, disagree, or ignore one another entirely. ■ But if anyone fails to keep their experience of Twitter or any other site at arm's length, no matter who owns that site, then they're bound for disappointment. Turning any means of engaging with other human beings into an opportunity to cultivate an enemies list is neither psychologically healthy nor civically responsible. If it matters so much that it's worth pages and pages of debate in the nation's newspaper of record -- and stokes mutually-condescending takes and division from people overeager to prove they're on the right "team" -- then maybe it matters too much all around.


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April 27, 2022

News Where do you get your news?

While nobody seems to want to admit it, much of what shapes public debate is still generated by a handful of media outlets with high prestige and valuable institutional brand names. Memes, video rants, and viral tweets can instigate new conversations, but the bulk of what gets decided inside major institutions is still steered there by the editorial choices of a few publications. ■ This sort of cachet remains important because people doing high-stakes work (including government officials, business executives, and NGO leaders) have scarce free time and have to concentrate the use of that time thoughtfully. It is not irrational to assume that if you're Warren Buffett, then you can expect that a news diet consisting of the Wall Street Journal, the Financial Times, the New York Times, USA Today, and the Omaha World-Herald (or your comparable local paper) will probably cover most of the news you actually need to know in a day. If it doesn't meet the standards to merit coverage by at least one of those outlets, it's probably below the level of significance to demand immediate attention. ■ In recent years, the Washington Post has invested heavily in displacing USA Today for top-tier prominence in the same class with the New York Times, and it would be hard to argue it hasn't succeeded. Despite tough times for both, the Washington Post has nearly beaten USA Today for the third-place spot in national print circulation, and its website has much greater cachet. Its rise reflects a conscious decision to aspire to greater reach. ■ What's interesting about the landscape is that, at least among those outlets conventionally associated with heritage-status print publications, none are conspicuously both general-interest in nature and center-right in perspective. The Wall Street Journal, with its peculiar online paywall and financial focus, is big but not general-interest in nature. ■ It would seem evident that there exists a void in the market waiting to be filled. Not by fire-breathing right-wing populism or coverage obsessed with politics as blood sport, but with covering mainstream news in a mainstream way, but with editorial assumptions that would align with some of the same features that tend to make the United States basically a center-right country. ■ Imagine, for instance, an outlet with an editorial stance that is Madisonian in outlook -- firmly attached to the understanding that government must be limited in reach and constrained by rules, but also congenitally skeptical of concentrated power in all its forms. One reconciled to the imperfection of the world, and consequently well-adjusted regarding the necessity of tolerating compromises and accepting incremental progress as uncomfortable necessities. ■ Picture an outlet that would be cheerfully optimistic about spontaneous order, both in market relationships and social affairs -- protective of institutions and practices that have survived evolutionary pressures over time, but open-minded about finding better ideas and strongly attached to the perpetual quest for reforms in government and other centers of power. ■ It would be fascinating to see a center-right outlet, run by the principle that news organizations exist in order to interest the public in the public interest. There is quick money to be made in satisfying instinct-driven, emotional urges with tabloid-style coverage. ■ But the long-term well-being of the country (and its states and people) lies in having robust, thoughtful, even cerebral, debates about those matters we need to know about now and those we need to see coming down the road. It would be good for matters if at least some of that coverage and some of those ideas were initiated from a set of staunchly-held editorial principles that differed -- even if only gently -- from the prevailing viewpoints at the current leading institutions. That voice is missing in the USA, today.


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April 28, 2022

Computers and the Internet A real head-scratcher

In the span of just a handful of months, Wordle went from one family's novelty game to a sensation so big it was purchased by the New York Times for some price over $1 million. ■ The rules of the game are exceptionally simple: Guess a five-letter word in no more than six tries. The game tells you whether you got a letter right (in the right place), right (in the wrong place), or altogether wrong. As is so often the case, the art is in the constraints: The solution will be one of about 2,500 words, the number of allowable tries is generally sufficient but not excessive, and there is only one game released per day. ■ It's a simple puzzle that offers reasonably good prospects of a reward from a very modest investment of time. And there are certain network effects, too: The more people who play and compare their results, the greater the "stickiness" of the activity. And thus, people keep coming back for the reward of solving simple puzzles and sharing the feeling of success with others. ■ For all of the various ways in which people try to achieve some level of self-understanding through interest quizzes, aptitude tests, and self-help resources, we tend to under-value the identification of each individual's preferred problem-solving/puzzle-solving type. Human minds are well-adapted to solving puzzles and piecing together solutions from limited information; that's why we identify familiar objects in clouds and see a Man in the Moon. ■ But not everyone enjoys solving the same sorts of puzzles. Some people are attracted to crosswords, while others like to assemble jigsaw puzzles. Some find satisfaction from detangling knotted jewelry, and others like to paint by numbers. If we choose to define a "puzzle" as any kind of activity that requires creative mental engagement to find a solution, then we find that many people have high tolerances for puzzle-like activities and even careers (like engineering, auditing, and detective work). ■ The more we succeed at offloading many of our routine tasks to computers and various forms of automation, the more important it will become for individuals to uncover the kinds of puzzle-like problems (in the broadest sense of the word) that give them satisfaction. Computers can be excellent at relieving humans of decision-making under conditions where rules are easy to apply, which is why we're already able to let some cars drive themselves autonomously. ■ Until the elusive "general" form of artificial intelligence arrives -- if, indeed, it ever comes -- human beings will not only remain the best resources for solving open-ended, puzzle-like problems, but those problems will also become increasingly important to ensuring that people can find psychological satisfaction. ■ Even the most ordinary of humans are imbued with phenomenal mental capacity, as illustrated every night as billions of people experience vivid, complex, and long-lasting dreams -- the generation of which would be a challenging problem for digital computers. Putting that capacity to work in problem-solving activities is important not only to making general human progress, but to giving individuals the satisfaction of solving puzzles along the way. ■ Right alongside the ASVAB and the Myers-Briggs and the MAPP, we would do well to find a test to help individuals uncover which types of problems (that is, puzzles) they will find the most consistent satisfaction in trying to solve -- mechanical or mathematical, open-ended or closed, short-form or multi-decadal, cosmic or small enough to fit on a wrist. ■ The future is bound to become massively more complex than the reality we inhabit today, yet many of the routine decisions that occupy our time and thoughts now are likely to be offloaded to machinery of one sort or another, just as household tools like washing machines and microwaves have taken some domestic endeavors almost entirely off our minds altogether. More of those "dumb" decisions that tax our mental energy and deplete our decision-making capacities are destined to go away. That's good, because in the aggregate, they leave too many people with decision fatigue. ■ But some of the problems that are left over are bound to require matching problems with the right kinds of problem-solvers who will find deep satisfaction from untangling the metaphorical knots. It would serve civilization well to try to drill deeper into helping us sort ourselves accordingly.

Humor and Good News The watchtower

Some doofus designed a home with a double-sided fireplace, one side of which is in the living room. The other is in the main bedroom. That's a little too much sharing.

Weather and Disasters When clouds take the form of waves

The atmosphere is a fluid, after all


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April 29, 2022

Business and Finance Bad math doesn't break the real economy

Measuring the size of the economy using gross domestic product (GDP) has always been an endeavor subject to judgment calls. While the GDP is intended to capture the total value of goods and services created by a country, it omits some values that are considered too hard to calculate -- like the equivalent value of all of the household labor devoted to things like cooking, shopping, and keeping up a home. Just because it's "non-market" work doesn't mean it's not valuable; in fact, it's probably worth trillions of dollars a year. ■ GDP is a necessary but insufficient tool for measuring the wellness of an economy. Like an individual's body weight or pulse, it's an essential part of the whole picture, but it has to be considered alongside a great deal else to start to form a holistic picture. With the preliminary data indicating that US GDP shrank in the first quarter of 2022, some people have already begun hyperventilating that "we are now halfway to a recession". ■ Strictly speaking, a recession is two or more consecutive quarters of negative real GDP growth. That doesn't really mean we are "halfway to a recession"; it only means that half of the conditions for a recession have been met. ■ An even more troubling misinterpretation of the facts is the claim that "A soaring trade deficit detracted from U.S. economic growth figures", in the words of the New York Times. The problem with that way of reading the figures is that imports are neutral to GDP. ■ GDP is only intended to measure what goods and services are generated domestically (again, it's gross "domestic" product). The equation used is "GDP = C+I+G+NX" -- consumption plus investment plus government spending plus net exports. ■ It's true that imports represent the negative half of "net exports" (exports minus imports). But all we're doing by subtracting those imports is removing their effects from what they added to C, I, and G. If you buy and eat a box of Belgian chocolates, it's added under "C" -- so we subtract it under "NX" so that we don't count the Belgian chocolates as American gross "domestic" product. ■ The subtraction has no effect whatsoever on what is generated domestically (at least, not in the sense that the New York Times headline would suggest). A "soaring" trade deficit is only harmful to GDP if it is a symptom that the economy is producing far fewer exports than it did before. If they do anything, imports often help the American economy to focus on those things it does best: Buying Taiwanese semiconductors, for example, helps the American automakers build more cars. Slowing down that pace of imports doesn't help the US economy; it hurts. ■ The only sense in which imports actually "deduct" from GDP is that it probably does serious damage to economists' brains when they repeatedly bang their heads against their desks over this misunderstanding of the data. For every other purpose, imports are neutral to the GDP.


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April 30, 2022

News The fear of history

Among the most widely-cited of Shakespearean lines is one from "Twelfth Night": "[S]ome are born great, some achieve greatness, and some have greatness thrust upon 'em". It's not actually true: Nobody is born great, at least not in the sense we use "great" to mean both noteworthy and admirable. Child prodigies burn out all the time, and truly great adults are -- without exception -- shaped by their experiences into what they become. ■ We are undoubtedly born with certain kinds of programming deep in our DNA. Attentive parents can detect personality traits in their newborns, and it wouldn't be outlandish to assume that everyone is born with predispositions among the big five personality traits. Yet those traits can (and often do) change over time, and experiences have effects on them. More significantly, every individual is born with at least some self-awareness, which can (and ought) to be used to refine who they turn out to be. ■ Perhaps the most important trait we can hope to find among those leaders who turn out to be "great" is an attunement to history. It is noteworthy, for instance, that in our own time, Ukrainian President Volodomyr Zelenskyy ably speaks of Pearl Harbor and 9/11 and analogizes weapons deals to the Lend-Lease Act. He is self-evidently aware of history and of the place in it that has been thrust upon him. ■ Only people who are actively aware of history in that kind of way can be trusted to behave in a way that reflects the fact that history is watching them. It may not be a sufficient condition (certainly some people think they're on the "right side" of history when they in fact are not), but it is an utterly necessary one. The people who think that history doesn't matter or who take none of the prospective judgment of later generations into perspective are the ones who ought never to be entrusted with power. ■ A high regard for, and perhaps even a healthy fear of, the judgment of history is a precondition for sound leadership at the highest levels. And that regard really cannot be instilled without a proper working knowledge of the past. Abraham Lincoln, perhaps the greatest of American Presidents, almost chronically referred to history for orientation (think "Four score and seven years ago"). If a civilization wants good leaders, perhaps the most important thing it can do is put the knowledge -- and a little bit of fear -- of history into all its people, just in case greatness is thrust upon 'em.

Business and Finance Welcome back to Omaha

The Berkshire Hathaway annual shareholder meeting returns to Omaha after two pandemic cancellations in a row. From the Omaha World-Herald: "For decades, thousands have flocked to Omaha for the annual Berkshire shareholders meeting, what Buffett often likes to call the Woodstock of Capitalism. Shareholder Brian Gongol from West Des Moines, Iowa, likened it more to a religious revival. Many of the tenets Buffett will talk about are well-known to shareholders, and they already believe strongly in them. 'But you just need to hear (them) about once a year (to know) you're not crazy,' Gongol said."

Weather and Disasters Extraordinary footage of a tornado

Drone footage in very high resolution of a tornado tearing a path through Andover, Kansas. Truly some of the most remarkable weather-related video yet seen. Using autonomous aircraft (like drones) to observe severe weather in real time is one of the best possible uses for such technology.

News Sage advice about history

Hal Brands: "History never provides exact answers. It provides strategic awareness and understanding within which hard choices can be made."


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