That Mind Virus Wants to Suck the Attention Out of Your Brain But Has to Call Itself a Meme Before You'll Let it Do That

If I remember correctly, when Richard Dawkins coined the term "meme" he was not thinking about Facebook. Dawkins was trying to find a way to describe the cultural equivalent of a gene as a way to talk about practices that become a part of a culture. He thought it might add a little formality to the notion of social evolution as companion to species evolution, the mutation of memes changing peoples and cultures in the same way that the mutation of genes changes species. Practices that spread, like democracy and blue jeans, are memes. It's a great idea, and meme itself has become an incredibly pervasive meme. It's also radically mutated to look a bit like a virus.

Now, every bright shiny object on the Internet has become a meme. Or at least it gets called that. Of course a video of the world's smallest monkey eating elbow macaroni does capture consciousness, just like the Bill of Rights or the idea that we ought to drive on the right side of the road. But it doesn't actually inform behavior, doing less to inform who we are than distract us from that. Instead, it's just a distraction, a way to transform consciousness  into page views (which, in turn, can be transformed into advertising revenues). 

Consciousness is under assault. It's odd. Never before has humanity been more free to live as they wish and yet never before has the world offered so many alluring enticements from one's own thoughts, making it difficult for the individual to define novel ways to live. From movies and TV shows to books, art, museums, and lectures, the world offers thousands of options for structuring our consciousness for us, even outside of work. Worse, many of these same memes can become viruses, not so much structuring consciousness as distracting it. 

But I digress. To be distracted is to be human in this Information Age. We all do it. But the notion that we're being distracted by something as sexy as a meme is a form of self-delusion. These aren't memes: they're badly mutated versions of Dawkins' original meme, something more akin to a mind virus than gene. 

[This blogger will leave you to determine if the preceding rant was a public service announcement, something akin to a meme, or was itself a mind virus, the blogging equivalent of a onomatopoeia.]

A Tempest in a Tea Party - the IRS Scandal

People have been fired. Mike Huckabee predicts that Obama won't complete his second term. At a minimum, Bloomberg Businessweek predicts, Obama's hope for gun legilsation, immigration reform, and a health overall are to be jettisoned. This IRS scandal is a big deal.

So what, exactly, is the big deal? The IRS targeted tea party like groups but not progressive groups. They were searching for folks who had formed groups around the notion of patriotism, tax relief, and anti-government sentiments. This much seems true and for that people have been fired. 

So then, what nefarious things did they do once they'd targeted these groups? They requested information. Specifically, they asked the following questions:

These questions were deemed "unnecessary." 

That's right. These groups had to answer questions they didn't have to. They weren't shut down. They weren't fined. Their members weren't subject to wire-tapping. Their leaders weren't imprisoned or targeted by drones. Nobody was water boarded. They were asked to provide information.

That's the big scandal. 

We live in time when we're about to hit a big inflection point. Going one way, we could enter a time of prosperity that past generations could not even imagine. Going another way, we could enter a time of unfolding disasters. And in the face of that, the government with the most influence of any group in the world is focusing on an issue that is - depending on the angle from which you observe it - either inane or irrelevant. 

We don't really have to worry about what future generations will think of us, though. With judgment about real vs. trivial issues this faulty, we're likely to cause our own extinction before those future generations can show up to judge us. That will shut them up.

Scandals, Policy, and Fast & Slow Thinking (About that IRS Scandal)

Daniel Kahneman begins his book Thinking Fast and Slow with a picture and an equation.

In an instant, 90% of people know that this girl is mad. 

By contrast, 90% of people take at least a few seconds to calculate the answer to this equation.

37 X 4.

Some things we can do so quickly and effortlessly that we don't even think that we're thinking. Other tasks make us very aware that we're thinking.

The media - and by extension the political dialogue - is defined by the fact that we can instantly judge scandals but it takes time and effort to judge policy. (Not that we always resort to actual judgment for policy; once we know whether a particular proposal is considered liberal or conservative, we can judge it as quickly as we can this little girl's mood.)

The federal government has nearly 3 million civilian employees. When they do something wrong, the question is whether it actually stems from policy or - even better for the media - conspiracy. If they were just acting on their own - mavericks in the system - it may qualify as a scandal but it is no indictment of the White House. (Unless, of course, you have mavericks in the White House like McCain and Palin who would, presumably, encourage maverick behavior.) 

Abu Ghraib and My Lai were atrocious but don't seem to have been the result of either White House conspiracy or policy; neither Bush nor LBJ were ever indicted in these awful acts and it would be unfair to judge them by those events.

By contrast, it really is fair to judge LBJ and Bush by the wars (occupations?) of Vietnam and Iraq. Those are the result of policy, choices that emanated from the White House. It's harder to judge whether those were good decisions. My Lai and Abu Ghraib? We can all confidently criticize those as wrong.

Conspiracies never make as much difference as policies. Abu Ghraib and My Lai did not kill as many people or cost as much money as the Iraq and Vietnam wars, did not have as much impact on the region. 

Yet policy is boring. It requires slow thinking, the same plodding thought that solves equations. Scandals, on the other hand, are exciting. It lets us rely on fast thinking, letting us judge them almost instantly. They make us feel smart because they are easy to think about. 

Scandals rarely matter. Policy almost always does. And yet savvy media and politicians will continue to feed us scandals and largely ignore policy. Not because that's a smart thing to do when it comes to running a country. Instead, they do it because it makes us - and them - feel smart.

Arbitrary? Yes. Random? Not So Much. Or Why The Economy Will Get Better Than You Think

The random walk hypothesis is simple. Today's stock prices predict what we know today. Tomorrow we will discover new information and that information is as likely to be bad as good - it is random - so future changes in stock prices are random. Put simply, we can't predict the future.

I think that events are more connected than that, more likely to form a part of larger patterns. And because of that, news tends to come in the form of clusters, bad news bringing more bad news and good news bringing more good news.

Let's take a look at today's news.

Today the non-partisan Congressional Budget Office (CBO) made a huge revision to the near-term deficit projections. By 2015, they are predicting a deficit that is only 2.1% of GDP, an incredible drop from the 10.1% of 2009 in the wake of the Great Recession and comfortably below the 3.1% it has averaged during the last 40 years.
The Dow has closed at new highs in 10 of the last 23 trading days.
Inflation last month was negative.
Unemployment is steadily falling.
Car sales are up about 8% from one year ago.
Home prices in southern California are up 23% in the last year and home prices in the Bay Area are up 17% in just the last month, dramatic examples of similar - if less dramatic - changes around the country.

It is hard to argue that these events are unconnected. Most obviously, an improving economy will make the deficit smaller. But it would be hard to argue that any of the above events are unrelated. A better stock market gives people more confidence to buy things and gives companies more confidence to hire people; as more people get hired, they buy more things; as companies sell more, they hire more people. Effect becomes cause and pretty soon we don't so much see individual dominoes falling as patterns: news about home sales or hiring is slowly displaced by more general reports: the economy is strong. Better news means even more better news.

And that more general pattern is driven by the emergence of simple consensus more than folks care to admit.

Economics is a bit like fashion: it gets defined as much by agreement as "real" issues.

It seems as though communities around the US have begun to build agreement that the economy is good and it is again time to buy homes and stocks and to hire people. That will make it so for months - probably years - to come. That may seem arbitrary but it is not random.

Judge Incarcerates 4,000 Children (Some as Young as 10) for Profit and Is Fined Less Than His Profit

US judge receives 28-year jail term for his role in kids-for-cash kickbacks

Mark Ciavarella Jnr ordered to pay $1.2m in restitution after he was found to be a 'figurehead' in the conspiracy

This poor excuse for a human being, Judge Mark Ciavarella, was putting kids as young as 10 years old into prison. Not for the crimes they'd committed but instead for kickbacks from the for-profit prison system into which the kids were sent.  Hard to imagine a more vile piece of humanity than Ciavarella. The Pennsylvania Supreme Court overturned 4,000 of his convictions. 4,000. I guess it's easier to do such things when you've already sold your soul.

His sentence was not harsh enough. A 28 year sentence to a 61 year old man might be enough, but a million dollar fine for a million dollar profit is not. For other judges and for-profit prisons, this could just be seen as a cost of doing business, and not even a high enough cost to stop such practices.

The reason it is not enough is because the odds of getting any sort of fine are so low.

The odds that Ciavarella would be caught were less than 100%. There was maybe a 20% chance, say. The odds that the DA would decide to prosecute were less than 100% - perhaps about 50%? And finally, the odds that he'd be found guilty were less than 100% - again, maybe 70%? (And yes, I'm making up these numbers; the only thing that I know for sure is that the odds of his making it to each stage are less than 100% and by 10's of percent.) So by these calculations, the odds that Judge Ciavarella would be caught, prosecuted, and found guilty were about 7% (20% X 50% X 70%). 

So if you are another judge who is amoral enough to look at the incarceration of the young as a for-profit venture, you could easily make the following calculation. "I could make a million dollars by giving out the maximum sentence to these kids. Money I'd get in kick backs for the cost of their incarceration. Money paid by taxpayers to the for-profit prison company." Then you'd have to ask about possible costs. By the above calculations, the probable cost of this venture would be about $70,000 (7% of the million). Now you can make your own calculations about probabilities but no matter how you do it, you'll find that a fine equal to the reward for criminal behavior is inadequate. It would only make sense if the odds of being caught, prosecuted, and found guilty were 100%. They're not. 

I'd suggest that the judge's fine should have been at least $15 million, not merely $1.2 million. And who could make up the difference? The for-profit prisons. 

Have You Noticed What's Missing?

After the Mona Lisa was stolen in 1911, the lines to see the space where it had once hung were longer than the lines had previously been to actually see the painting.

Of course any reputable country music artist could tell you that absence is a great way to be noticed. Curiously, and rather fittingly, Kafka was among the folks who cut short a vacation to rush to the Louvre to see this blank piece of wall upon which the Mona Lisa had once rested.

Should ever happen again, I think that it would be all the more reason to have a museum of forgeries. (Such a museum would provide an identical art experience to the real art and yet acquisition costs would be much lower, no?) I'll have a blank wall in my museum of forgeries with a sign that says, "It's not here either."

So, I've discontinued my experiment to determine whether the lines to see - or rather, the hits on the blog - were greater with missing posts. 

Sorry for that Commercial Interruption

Before you leap to the conclusion that this blog has been abandoned, I would like to point out that I've been busy. In the last five weeks I've been in four states (not counting this one) in three different time zones (trips of 2 to 5 nights), been able to visit a new major league ballpark and the rock and roll hall of fame, driven through a snow storm, looked after my elderly father, and started work with two new clients. 

Stay tuned. The opinions will continue.

More Evidence for Optimism About 2013 - Car Sales

Reported in the Atlantic's new Quartz, it is not just stocks and homes that Americans are again buying.

US auto sales in March hit their highest level since 2007, showing American consumers are indeed in a mood to go shopping.... luxury Cadillac brand was up by almost 50% compared to the same period last year.The sales numbers show the US auto industry is in a sustainable recovery.  The news is even better for luxury brands, which posted stronger gains than their mass market counterparts. BMW, Audi, and Lexus all reported double-digit percentage growth in sales.

As mentioned previously in this blog, economists were oddly cautious in their forecast for 2013. I think they should have been optimistic instead. This, it seems to me, is further proof that GDP will grow by more than 3% in 2013. (That optimistic prediction is explained here, The Wealth Effect Will Boost 2013 GDP.) 

In Which a Mere Blogger Questions Warren Buffet's Investing Philosophy

Value-investing was developed during the Great Depression. Since then, the percentage of households holding stocks has at least tripled, radically increasing demand for stocks. Because of that, it is too hard to find under-priced stocks to ever systemically apply value-investing. It might be akin to a high school kid holding out for a Sports Illustrated swimsuit model for a prom date. If he can do it, great. But if he wants to go to prom, he might want to lower his standards. So it is for folks who want to retire.

There. That's the gist of my argument. You can click on to another of the web's nearly 15 billion pages or you can read further.

First the caveat. I'm no Warren Buffet. Thursday of last week, Buffet's net worth rose $557 million. Yeah. Half a billion. My total net worth is a rounding error in the amount his wealth fluctuates during a trip to the bathroom. Buffet recommends value-investing, so you would probably be wise to ignore my concerns and listen to him instead.

But you're still here. Good. That means you've got an open mind. So for you I'll elaborate.

Ben Graham and David Dodd developed their ideas about value investing in 1928 and then released a textbook defining it (Security Analysis) in 1934. In its simplest form, the idea is to find stocks that are under-priced and then buy those when investing. Buffet has since defined this as buying outstanding stocks at sensible prices. I'm not foolish enough to argue with this. While it's a great ideal, it's just not a practical idea. Not anymore.

Both the percentage of households owning stock and the percentage of wealth represented by this stock ownership have gone up dramatically since Graham and Dodd wrote their book. As demand has risen for stocks, it is harder to find under-priced stocks that meet their criteria. While you wait for cheap stocks, you could miss out on decades of decent gains.

In 1929, when the stock market crashed and triggered the Great Depression, only twenty-some percent of Americans owned stock.

Gallup reveals that about 54% to 67% of households now hold stock. This percentage probably under-reports the actual percentage since so many Americans are invested in the stock market through pension funds they're unaware hold stocks.

Further, the portion of household wealth has gone up. In 1984, only 9% of household wealth was in the form of stocks (either directly or through mutual funds or IRA accounts). By 2011, that had risen to 46%. (401(k) accounts did not take off until about 1984.) As a percentage of household wealth, stocks rose about 5X in a quarter century.

This demand for stocks has driven up their price. And it is only getting worse. It's a cliche (and possibly even accurate) to say that about 20 years ago 80% of retirees depended on fixed pensions whereas today it is 80% of retirees who depend on their own investments. Demand is high for stocks and that alone drives up prices.

So, if you can find a stock that sells for cheap, a stock that's a great investment, do it. But that's like saying buy a good house for less than market price. It's tough to do. If you want to retire, you'd probably do well to get your money out of your savings account and into the market. If you can find cheap stocks, great, but don't wait because that may never happen. Buffet may represent the last generation able to systemically find under-priced stocks. You and me? We may have to pay retail.

The Beginning of the Zombie Apocalypse

The zombie apocalypse began so subtly, so seductively even. Of course now, in retrospect, it seems so obvious.

Portman's Reversal on Gay Marriage - or, the failure of imagination in policy formulation

Ohio Republican Senator Rob Portman changed his mind about gay marriage once his son came to him to announce that he was gay and had been as long as he could remember. It seems to me illustrative of the GOP's general lack of imagination when it comes to policy. Aid for the poor and homeless? Can't imagine this ever happening to me, says the GOP, so let's not worry about it. Aid for AIDS victims? Can't imagine this ever happening to me, says the GOP, so let's no worry about it. Same-sex marriage? Can't imagine ever wanting to marry someone of the same sex, so let's not worry about that.

In my opinion, good policy is a product of a good imagination. Ultimately, being able to imagine that the situation in which others find themselves is one that you could find yourself.

Finding our Future in the Past - There is Brain Research to Support my Conviction (he says, a little defensively)

From the WSJ article "The New Power of Memory" by Shirley S. Wang,

"Memory allows for a kind of mental time travel, a way for us to picture not just the past but also a version of the future, according to a growing body of research.""The studies suggest that the purpose of memory is far more extensive than simply helping us store and recall information about what has already happened.""Brain-imaging studies have demonstrated that when people are asked to imagine the future as they recall past experiences, many of the same regions of the brain—the hippocampus and the medial prefrontal cortex—show increased activity. "

The person who only knows the now has no clue about what else could be. Knowing what else has been in the past immediately triggers the imagination for what else could be in the future. 

Memory of the past seems to be the first step towards mental time travel. Those who learn history have an easier time imagining the future. 

Or maybe, as a guy who wrote about patterns of change that played out over 700 years of history in order to predict the next 50 years, I am reading too much into a little brain research to support my notion that we can find the future in our past.