Pour yourself some fresh dark brew, and settle in for our long form weekend train reads:
• Baghdad, Arizona: Where Iraqi Pilots Learn to Fight ISIS (Popular Mechanics)
• What proportion of a CEOs success is down to luck? (Pieria)
• Costco has one secret that makes it ‘Amazon-proof’ (Business Insider)
• The Long Haul: One Year of Solitude on America’s Highways (Esquire) see also Blues on Wheels: A writer becomes a carrier for the United States Postal Service out of a long-held love for the mail. What she discovers are screams, threats, lies, labor violations, and dog attacks. (Morning News)
• There will be blood: Every year, roughly 40,000 people die in Minnesota. For some, it’s weeks or months before anyone finds them. Meet the crew who comes in to clean up the mess. (MinnPost)
• What if historians started taking the ‘what if’ seriously? (Aeon)
• Inside The Sad, Strange Family Feud That Helped Sink Rand Paul (Buzzfeed)
• The Ties That Bind Jihadists: Scholars explore the culture of radical Islam (Chronicle of Higher Education) see also Americans Attracted to ISIS Find an ‘Echo Chamber’ on Social Media (NYT)
• Pharma’s Bad Boy Exec Martin Shkreli Paid $2 Million for Wu-Tang Clan’s New Record (Bloomberg)
• How Star Wars Conquered the Galaxy: The economic power of the greatest movie franchise ever. (Reason)
Be sure to check out our Masters in Business interview today with Jazz guitarist and singer John Pizzarelli.
Less Than Half Of Adults Now Middle Class
Source: NPR
re: “WHAT PROPORTION OF A CEO’S SUCCESS IS DOWN TO LUCK?” Michael Mauboussin wrote a very good book on the subject (I think you recommended it and I took your advice, thank you.) Plus there’s a lot more research to review and sound logical analysis on the subject of success, random walks, misreading luck for skill (and vice versa) and new meta studies testing the economic value of good management (not just CEOs skills but the entire team).
There is a lot of tooth-gnashing among economists about why productivity is not higher. “Blues on Wheels” should explain much of the problem. It is clear that management systems in the country have not kept up with the advances in technology and, as a result, many workers are not positioned to be more productive overall without destroying their health and family life.
There is also a lot of blather about the necessity to return to the gold standard and the “Good ?Old Days” that it produced. In reality, the peak of the gold standard from the end of the Civil War to 1933 was just a series of rolling booms and busts that finally climaxed in the Great Depression. That period was also the transition from most people working on family farms or in small family businesses to working for multi0national conglomerates where employees were simply cogs in the machine and had no rights.
Is it really the current American Dream to return to those “Good Old Days” from about 1870 to 1933? Is the solution really to put the Great American Middle Class on a diet so that the wealth and income profile can achieve a svelte hourglass bikini body with the top 10% holding most of the wealth and much of the rest of the country is simply poor serfs and peasants? The middle class flourished as it grew from the 1930s into the 1970s as protections were put into place under both Democratic and Republican Administrations for Social Security, Medicare, civil rights, workers rights and safety, financial stability, and environmental protection.
Good Policy Is the Goal. Compromise Should Not Be.
“Liberals” …and “conservatives” are the labels DC insiders typically use to categorize people on one or the other of …false extremes …But the idea that these are two equivalently absurd “sides,” and that the best course of action is thus to compromise by meeting in the “middle,” is unfortunately a major impediment to good policymaking. It is harmful primarily because it fails to capture how certain views and proposals are more ethical and evidence-based than others. …
Elevating “bipartisanism,” “compromise,” and “realism” as goals might help a group come to a consensus wherein each “side” gets some things it wants. It does not often result in good policy platforms, however …. If we want final products that are truly ethical and evidence-based, we need to reject compromise for compromise’s sake and start recognizing that some viewpoints and proposals are more legitimate than others.
NB: Good points but it ain’t gonna happen because the overton window has shifted far to the right in the US and data are now cherry-picked to confirm tribal truisms rather than mark beliefs to market; e.g., analysis is rarely scientific, relying instead on legalistic modes with narrow or select evidence claimed as dispositive in debate. In that environment policy outcomes are strictly a matter of political influence.
The Decline of the Middle Class
https://www.washingtonpost.com/politics/charting-trumps-rise-in-the-decline-of-the-middle-class/2015/12/12/0f5df1d8-a037-11e5-8728-1af6af208198_story.html
OK but they leave out the massive issue of time. The time it takes to handle all the free market stuff (computers could do some of it you just parameterize off a “trusted” source, but you still have to find who you trust.)
it’s like negotiating with the three ambulances who come to pick you up after you’re hit by a bus to see which long term rehab deal fits your lifestyle best. The system is not tenable if you’re busy working to make ends meet. The free market choices swallow you up
Why Everyone Hates Cable Companies
http://www.businessinsider.com/comcast-ceo-brian-roberts-interview-2015-12
In the old days you changed the channel.
Nowadays my TV is 90% channels I don’t want, never will want, and have to scroll through. YOUR ADVERTISING.
When I call you make me listen to the next pay per view pitch for some moronic boxing match. YOUR ADVERTISING.
When I watch a show I spend my time, the shows rhythms are designed around YOUR ADVERTISING.
You flash YOUR ADVERTISING for me to click.
Your clicker is designed to get me see flashes of YOUR ADVERTISING.
Your cable guy comes by selling “better modems” off his truck that he pockets the money on. Your UI is something out of Radio Shack and you charge me a hundred bucks a month and you spend the profits to lobby against Net Neutrality. You fight anything pro-customer and your internet services goes down three or four ties a week.
Cable companies, you’re public trust is unrecoverable. You are text book monopolists. You make Volkswagen look like solicitous English butlers.
Cable watcher, you like GOP giving power to big business, look to your cable company first. before you vote.
Many countries are going to have to consider similar stipends as technology/automation/robotics juggernaut destroys more jobs that get created. But where will the stipend money come from? Tax the ever declining wage earners? Or perhaps tax the replacement robots/automation as workers? That’s an idea I haven’t heard anyone broach!
However, it you do tax the automation, then perhaps it would prove not economically worthwhile to automate humans out of jobs. Hmmm?
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Finland Plans to Give All Its Citizens $875 a Month, Should Other Countries Follow Suit?
December 8, 2015
By Sirin Kale
Finland is looking to scrap individual welfare benefits and replace them with a universal basic income available to all Finns, regardless of how much they earn.
Although the details haven’t been ironed out yet, a pilot scheme would see Finns receive a payout of 550 euros [$598] per month (while still receiving some other benefits). If the pilot is a success and the scheme is rolled out nationwide, Finns would receive 800 euros [$870] a month tax-free, replacing the range of other benefits they receive at present.
Here in the UK, a basic income was proposed by the Green Party in their 2015 General Election Manifesto, with the claim that it would save the UK £163 million [$244 million] annually in terms of welfare payouts.
…
http://www.vice.com/read/we-asked-an-expert-about-finlands-plan-to-give-every-citizen-800-euros-a-month-800
Here we go again, sigh. The resurfacing of the inane fear that there is a terrorist around every freaking corner, just waiting to get YOU. Boo!
Maybe news reports about terrorist attacks should be censored? Would anyone disagree that news organizations, with their ever “breaking news” reports, fan the flames of fear and insecurity in the general population?
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Survey | Nearly Half of Americans Worried That They or Their Family Will Be a Victim of Terrorism
[12.10.2015]
December 2015 PRRI/RNS Religion News Survey
Terrorism Tops Americans’ Concerns
Three-quarters (75%) of Americans say that terrorism is a critical issue in the country, while roughly one in five (21%) say it is one among many important issues and only four percent say it is not that important. Concerns about terrorism have increased substantially over the last few years. In 2011, slightly more than half (53%) of the public said the issue of terrorism was critical.
Americans also report being very concerned about mass shootings. Two-thirds (67%) of Americans say the issue of mass shootings is a critical issue in the U.S. today, while more than one in four (27%) say it is one among many important issues and four percent say that it is not that important an issue.
The public is somewhat less concerned about illegal immigration. Roughly four in ten (41%) Americans identify illegal immigration as a critical issue, while a similar number (37%) say it is one among many important issues. One in five (20%) report that illegal immigration is not that important. Notably, views about the importance of illegal immigration remain largely unchanged since 2011, when roughly four in ten (43%) Americans said illegal immigration was a critical issue.
There are notable partisan cleavages in views about the importance of these issues. Republicans are somewhat more likely than Democrats to say the issue of terrorism is of critical importance (84% vs. 70%, respectively), while Democrats are more likely than Republicans to prioritize the issue of mass shootings (74% vs. 60%, respectively). There is an even deeper partisan divide in views about the importance of illegal immigration: Republicans are more than twice as likely as Democrats to say illegal immigration is a critical issue for the country (63% vs. 30%, respectively). The views of independents roughly mirror those of the general public.
….
http://publicreligion.org/research/2015/12/survey-nearly-half-of-americans-worried-that-they-or-their-family-will-be-a-victim-of-terrorism/
The History of the Stock Market going back to 1871.
Take away is that if you held stocks for longer than 10 years, the odds of you doing well increase dramatically. If you hold for less than 5 years, you are very much subject to randomness that may leave you with a profit or you may not have a profit.
http://www.fool.com/investing/general/2015/12/10/the-history-of-the-stock-market.aspx?source=iaasitlnk0000003
“Hold stocks for less than five years and you’re at the mercy of lots of randomness. Stocks rise in about 70% of all years, but huge booms or huge busts are more common than returns of 0% to 10% a year, the historic “average” annual return people tout.
Hold for five years or more and your odds of success rise significantly. Eighty percent of five-year periods produced a positive result.
At ten years, the odds of success are solidly in your favor. Almost 90% of 10-year periods are positive, and the 10% with negative results are nearly all small losses, especially once dividends are factored in.
There’s no 20-year period where you’ve lost money in stocks, even after inflation.”
What is left unsaid in this article is the choice of stocks. For the information in this article to work you must have a well diversified low cost portfolio, one that can be had in say a low cost index mutual fund or ETF. If you buy just a few stocks and hold 10 years it would be very easy to loose your shirt. History says that if you are broadly diversified then the odds are in your favor.
Of course none of this historical stuff matters if the world comes to an end, or the temperatures continue to increase, or the Democrats take over. Choose you disaster. But on the other hand it won’t matter anyway.