American Political DTs and BSs

Posted Apr 22, 2016 at 10:08. Revised Jan 29, 2017 at 21:37.

DT is a particularly interesting phenomenon in the context of the last 120 years of American political history. This history seems to involve a mythology that is only partially borne out in fact, and is bolstered by progressively muddying the distinction between fact and opinion. There seems to be a growing propensity for people to have ever greater difficulty distinguishing the difference between what they believe in, what they think they want, and what they really want.

The most basic attribute of politics is that politics is theater and story telling, pure and simple. It is no coincidence that most elected politicians are lawyers, and specifically trial lawyers. A successful trial lawyer’s presentation to a jury is theater and stories in their highest form, as is a politician’s presentation to the electorate. How lawyers (and politicians) stretch the truth is explained further in the post Insulting Vladimir Putin.

The most prominent presidents of the last 120 years all have had excellent acting skills. Teddy Roosevelt, FDR, Ronald Reagan, and Bill Clinton come to mind as being at the top of the heap in the world of political theater. In this world most people cannot keep the difference between fact and opinion straight. Whether a person likes any of these four presidents, or their policies, is a separate issue from whether they had good acting skills.

In the lead-up to the 1980 election many regarded Ronald Reagan as a nut case that stood no chance of winning a national election. He won because many voters instinctively felt that there was something right about Reagan and that things were horribly amiss in the country.

A similar situation has occurred for Donald Trump. The Animals In The Barnyard (the voters) exhibited the same nervousness that often precedes an earthquake. The animals in the political barnyard are not very articulate about what upsets them, but their instincts and concerns are deep and real.

In this environment DT – whether you like him or not – had what it took to go all the way to the White House. He will probably be more competent than his detractors would have us believe, and not as successful as his supporters expect. The same could have been said for BS, although his naiveté and shallow thinking were worrisome.

Now you can honestly say Nobody told me.

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Retrieved Jun 25, 2018 at 03:42.
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Too Small To Succeed

Posted Apr 20, 2016 at 10:21. Revised Feb 4, 2017 at 13:13.

It seems that the current political environment has brought politicians out of the woodwork, promising to break up financial institutions that are “Too Big to Fail.” The argument for ensuring that no bank or insurance company is “too big to fail” is sublimely simple. All financial institutions should be small enough so that when an individual institution fails the failure will not need a public funds bailout. Small failures would not infect or damage other institutions. This view ignores a financial disaster that hits everyone at once, which sometimes happens.

One can hardly argue against the intent behind keeping institutions small. Unfortunately, financial companies are more complex than they look, and there is much more to running a financial organization than one might think. For at least 200 years bankers have understood that financial dealings can sometimes go sour despite all efforts to handle them carefully and responsibly. They have also been quite aware that if enough things go wrong at the same time, those unfortunate events can sink a financial organization.

Interestingly, most people in Canada are probably more worried about a bank’s being too small to succeed, for reasons discussed later. Five big banks essentially make up the Canadian banking system. For instance, if the Royal Bank of Canada and the Bank of Montreal were to fail at the same time, a national financial crisis would ensue immediately. So why aren’t Canadians in a state of panic over this? There is an answer, but later.

From the beginning, a prudent banker was careful about lending money because if his bank failed, he went down with it. Good banking practice avoids lending too much money to any one customer and lends only to customers who can repay the loan. Unfortunately, there will always be unexpected circumstances that make a customer unable to repay his loan. A prudently run bank can handle such a loss without being pushed under because a single bad loan will be only a small part of all the institution’s assets.

Prudent bankers have also understood that a competitor’s failure is nothing to gloat over because the failure of a bank hurts the wider community. The bad loan will directly and indirectly hurt other banks as well. Because of this, banks long ago took the first step toward a complexity trap by agreeing that they would make funds available to their competitors when one of them needed a temporary bailout. Such arrangements make a town’s banks collectively stronger and safer.

Unfortunately, such arrangements make things worse when a community-wide disaster leaves many creditworthy customers unable to pay back their loans. For instance, in a farming community crop failures could make many responsible farmers unable to repay their loans. Such events would stress all the town’s banks and make each bank unable to help out the other banks. Guarantees among local banks are not adequate to handle a community-wide catastrophe.

The next step to spread the risk would include larger city banks in the mutual support arrangements, which is reasonable in most circumstances. Historically the smaller banks often deposited some reserves in a bigger city bank as an extra preparation for a rainy day. These reserve funds would be available when lady luck might leave many in the smaller towns broke. Sometimes the way to make a complex problem more reliable is to add to its complexity.

Spreading the risks inherent in a smaller town financial world to larger cities does make things safer – as long as nothing big hits all the regional financial institutions as well. So the logical next protection step is to spread the risk even further by including all the nation’s financial institutions in a network of guarantees. Again, this works as long as no big, adverse event hits all financial organizations at the same time.

Believing that a financial institution that is “too big to fail” increases the risk of system-wide failure is absurd. Catastrophic system-wide risk comes from the risk of a catastrophic system-wide disaster. In such a situation all financial institutions are hit hard, regardless of their size. That risk of collapse exists regardless of the scale of the institutions and comes from the basic system of guarantees wherein institutions look to other institutions for safety. Only the strong, whether big or small, will survive. When the situation is bad enough all connected dominoes will fall, and a few big ones are much easier to support than a sea of little ones. Smallness is a liability when dealing with a systemic failure. So what can one do to prevent this failure?

The answer is the one that the Federal Reserve Bank, the United States’ “bank of last resort,” used in 2008. At that time, the Fed instantly manufactured enough money to shore up the existing guarantees among the major financial institutions. “Printing money” to back up the guarantees was a terrifying task because nobody, not even insiders, had any way of knowing exactly how extensive the complex tangle of guarantees might be or the amount of money needed to arrest the chaos. The Fed saved the day because it was able to put overwhelming monetary pressure on a few key pressure points. In a world where all financial institutions are “too small to succeed,” the institutions become an army of cats that is impossible to herd.

Most of our Canadian friends understand the importance of having key intervention pressure points ready if needed. Canada’s cornerstone financial institutions are all “too big to fail.” Many Canadians clearly see that trying to sort out the complex guarantees among thousands of falling little dominoes and doing it in an environment where billions can and do move in milliseconds is absurd. Keeping thousands of little dominoes standing makes any system too small to succeed because swift and comprehensive interventions are not possible. When key institutions are “too big to fail,” central bankers have the key pressure points needed to intervene decisively and immediately. Being able to act immediately in support of critical inter-institution financial guarantees is the only way to win a financial war. Anyone who thinks that today’s international electronic banking is not a current, continuing, and vicious financial blood sport among people and nations needs to wake up.

Yes, most Canadian policymakers get it. They see that the risk from falling dominoes is the problem and that you can hold up a few big dominoes far more easily than you can support thousands of little ones. The system of inter-institution guarantees will keep thousands of little dominoes standing when a few big dominoes are kept standing. They also seem to understand the need for dealing with facts and logic when looking at a financial system, whereas Bernie Simpleton – in the name of helping the “little guy” – approaches the problem guided only by a complexity-free and uncalibrated moral compass.

Facts and logic are what one uses to calibrate a moral compass, but don’t waste your time trying to tell that to Bernie Simpleton. Financial Simpletons live in a cause-and-effect world in which uninformed morality sees everything as violating some moral precept and not interconnecting with anything else in substantive ways. It is a world in which everything is somebody else’s fault. Bernie would no doubt tell you that he loves Canadians – just not those Canadians who think the web of life is at all complex.

Canadians seem to get it from another angle as well. In some ways, Prime Minister Justin Trudeau is cut from the same cloth as Bernie Simpleton, but with an important difference: Trudeau has a brain in his head. Bernie Simpleton wants to raise corporate income taxes sharply even though those taxes are already the highest in the First World. He thinks this will bring jobs back to the U.S. and fund his welfare plans. No matter that current taxes already have driven an obscene amount of money and jobs out of the U.S. to more welcoming places. Trudeau has used his head enough to see that Canada will be better off by lowering Canadian taxes enough to import any American businesses and jobs that U.S. Simpletons might drive away. Any such match between Bernie Simpleton and Justin Trudeau is a guaranteed win for Canada.

In a Simpleton’s world, little guys can only be hurt by big guys. Simpletons see people as living in hierarchies where the people on the bottom are at the mercy of those at the top. In this world, there is no bidirectional interdependence, just top-down exploitation. It is no surprise that navigating this Simpleton’s world requires an uncalibrated moral compass.

Now you can honestly say Nobody told me.

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Retrieved Jun 25, 2018 at 03:42.
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Myers-Briggs Meets Politics

Posted Apr 3, 2016 at 19:13. Revised Jan 29, 2017 at 21:59.

Joe Nobody cannot help but notice the intuitive connections between some concepts from Jungian psychology and various personalities in the 2016 American presidential contest – Donald Trump and Bernie Sanders. The Myers-Briggs® psychological inventory (test) and its underlying Jungian concepts reveal much about commonalities between these two personalities that each would not doubt hotly deny. Looking at these personalities through Jungian and traditional Chinese eyes reveals some things that American eyes miss.

American eyes typically view conflicting situations as having “either or” choices having simple, conflicting cause and effect relationships. The traditional Chinese and Jungian view sees such situations as being the result of two opposite forces that are bound together, normally work together, and only sometimes come into conflict with each other.

The Myers-Briggs approach to understanding different people provides a way for describing different personalities. It does not label personalities judgmentally, but descriptively, in the way that a color can describe a car. There is nothing right or wrong or superior or inferior in the Myers-Briggs personality descriptions just as there is nothing inherently good or bad about a yellow vs. green car. In both cases, these are only descriptions, not judgments. Of course, an individual may like certain personality attributes more than others, but that is a separate matter from declaring a particular personality to be inherently good or bad.

To be continued.

Now you can honestly say Nobody told me.

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Retrieved Jun 25, 2018 at 03:42.
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Other Complexity Traps

Posted Apr 3, 2016 at 14:48. Revised Jan 29, 2017 at 22:58.

Joe Nobody has discovered that the name Complexity Trap has been used in academic articles about vaguely similar concepts to those this blog discusses. Joe Nobody was unaware of this usage until recently, but has looked into the thoughts put forth by those authoring articles about the Other Complexity Trap. They are addressing similar problems to those addressed by The Complexity Trap, but are addressing them primarily from a military and foreign policy perspective. Rather, The Complexity Trap blog addresses complexity issues from a sociological and political perspective. The two perspectives do overlap.

Curiously, the other complexity trap was not discovered by Joe Nobody when searching for and registering the domain name for this blog. A scholarly presentation by Sebastian Gorka, Michael J. Gallagher, and Joshua A. Geltzer at http://www.iwp.edu/news_publications/detail/the-complexity-trap presents another view of complexity traps. Their ideas parallel those of Joe Nobody, but by virtue of those authors being Somebodies, none of their readers can say Nobody told me.

It is important to keep a historical perspective on complexity because there probably have been many times in history when people faced as much complexity as we face today. A key difference is that in earlier times there was not as much technology to generate problems, or in turn to generate as much help in solving them. It is unclear whether a complexity trap or a series of complexity trap cycles will ultimately devolve into chaos. Devolution into chaos will happen when people no longer see any hope for moving forward.

Short of falling into despair, it is vitally important to strategically plan and prioritize all the available resources. By definition, not all aspects of a complex situation can be addressed, due to the complexity itself. Nevertheless, any thought out strategy is better than nothing at all.

Now you can honestly say Nobody told me.

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Retrieved Jun 25, 2018 at 03:42.
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America’s New Indian Wars

Posted Apr 2, 2016 at 17:08. Revised Jan 29, 2017 at 21:34.

In America’s 19th century Indian Wars a major issue was the conflict between tribal lifestyles and the more structured lifestyles of Europe. Groups such as the Iroquois had an agrarian existence, building the permanent buildings and settlements needed for farming. Groups such as the Plains Indians had a nomadic lifestyle because they followed the big game they hunted.

Ironically, the 19th-century settlers who fought to displace the Plains tribes are having the tables turned on them in the range wars of the 21st century. History is repeating itself – in incidents such as the recent Malheur National Wildlife Refuge occupation in eastern Oregon.

It is unlikely that the people engaged in the recent occupation saw many parallels between their situation today and that of the 19th-century Plains Indians. In both instances a key issue is access to the land and the right to graze and/or hunt animals on it. Then and now many people have felt a deep need to be one with the land and the spiritual sustenance coming from their connection to the land.

Joe Nobody followed the Malheur National Wildlife Refuge standoff’s TV news, which gave only shallow coverage to the issues involved. Joe Nobody was particularly haunted by an interview with occupier Robert Finicum, who appeared to be a harmless but tough man of honor who would stand up for issues he deeply believed in. Nestled in a sleeping bag with a rifle at his side, he explained to a somewhat befuddled reporter that he would never point his rifle at a person unless that person was shooting at him first. Joe Nobody had the eerie premonition that before the standoff was over Finicum would be killed.

The premonition came true when the occupation ended and Finicum was the only man killed. Finicum had drawn his gun on an officer, who reacted as best he could in the circumstances. In another account Nevada Assemblyman John Moore accused the Oregon state police and federal agents of murdering group member Robert “LaVoy” Finicum while Finicum was trying to surrender.

One doubts that Finicum’s intent was actually hostile, but may have been to force the officer confronting him to shoot to kill. Finicum was perhaps making a heroic last stand for what he held most dear and may have been committing suicide for his cause via a method that would not burden his survivors with the lingering pain from a suicide in the family. His life dreams were shattered, and he appeared to have derailed in a collision with modern life’s complexities. His death ended a tragic personal complexity trap from which there was no escape.

Now you can honestly say Nobody told me.

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Retrieved Jun 25, 2018 at 03:42.
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