- Former Goldman Sachs employee Greg Smith has been getting a lot of press today for an impassioned letter of resignation that levels some serious criticisms against his former company. There's plenty to speculate about regarding Goldman Sachs misdeeds in and around the recent crisis, though I'm not claiming anything here... in any case, I think Greg Smith's barrage is at best a ploy for sympathetic attention, on the heels of the Occupy stuff.
Eric Falkenstein wrote an excellent reply. Here are just a few of the highlights:
"People serve others in modern society in very nonintuitive ways. In small tribes we are pretty aware of who is part of the team and who is a loafer, and how our stuff gets there. In modern society, by contrast, we have things as simple as pencils that we simply could not make even if we knew how to make it. We all rely on a vast number of things we have no way of making ourselves, from our iPad to our breakfast, and it isn't possible for everyone to go back to being a hunter-gatherer even if we wanted to, our productivity would be insufficient to feed everyone...
...a paper in Science--Markets, Religion, Community Size and the Evolution of Fairness and Punishment--by Joe Henrich et al, who administer fairness experiments across 15 diverse populationsand found that more commercial societies tended to be fairer. That is, people are nicer the more commercial they are, because being nice is good business. It took McDonald's to get Muscovites to smile.
The world is not filled with people like your mom and dad who showered you with love and resources merely for being you. It is filled with people totally indifferent to you except in so far as you can help them. If that makes you sad you really haven't thought about it, because a society of that much love would be really oppressive--even just one mom can be smothering, imagine thousands of her.
...Being a good businessman is like being a good scientist. The most important thing is having the correct foresight to see the long-run, as in the long run the truth or value will win out. Having empathy for the customer or a respect for the truth in science is helpful in achieving those ends because you are better able to correct yourself before becoming too tied to bad causes via sunk costs and golden handcuffs. Day-to-day a simple focus on profits cuts through a lot of confused thinking about vague concepts like 'serving our customers', a subject that has produced its share of tiresome essays. Alternatively, nonprofits do this all the time if you really enjoy that kind of focus, or you can go off Jerry Maguire-like and start your own thing if really inspired, many people do."
- Here is a funny letter to the editor from Don Boudreaux about the price of gasoline. He writes:
"Asked by your “pump patrol” reporter about rising gasoline prices, a motorist at a gasoline station noted that “My tank is actually way more than half full now. I’m topping it off because I’m sure the price will be even higher this weekend.” When your reporter then asked her “What do you think explains these rising prices?” she replied “Speculators.” Your reporter followed up with “Do you think they should be stopped?” The motorist responded immediately: “Of course! They’re criminal.”This is exactly the kind of economic hypocrisy that is systemic among average Americans. In most industries, Americans trust experts, but for some reason people see unlimited license to criticize the economic analysis of professional economists; and most folks are willing to rationalize conspiracy-theory type explanations for why big, bad institutions are imposing intrinsically unfair world conditions on "the little guy." This confused person purchasing gas is a classic example. By trying to base gas purchases on personal speculation, she contributes to the factors raising that very gas price.
Speculating that the price of gasoline will rise, this motorist took action today – buying gasoline that she otherwise wouldn’t have bought today – that puts upward pressure on the price of gasoline today.
Had your reporter pointed out that this motorist herself is speculating in gasoline, I wonder if this motorist would have persisted in regarding speculation as being criminal. I wonder, too, how she would react if government – heeding her advice to stop speculation – were to forcibly prevent motorists from topping off their tanks."
- Here is an excellent opinion piece by Jennifer Granholm about the ridiculous extent to which female medical privacy rights are being taken away by a nearly all-male legislature. This should be so much more of a spotlight public issue than it is.
Wednesday, March 14, 2012
Links for 03-14-2012
Happy Pi Day... Here are some articles of interest, with quotations and commentary.