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Sol Sanders | Follow the money No. 81 | The Great American Heresy
Latest from Uncle Sol. A version of this column is scheduled for publication in The Washington Times, Monday, August 28, 2011. -- Chris
Follow the money No. 81 -- The Great American Heresy
Sol Sanders solsanders@cox.net
More than a hundred years ago, the brilliant philosopher and father of modern psychology, William James, warned his American compatriots against “scientism”. James saw an increasing tendency to extend the then budding scientific method of controlled experiments in the physical sciences into intractable social and political problems. He warned it would not work, perhaps as much based on his psychological understanding as his philosophical logic, that is, as the old saying goes, people will be people.
Not too many listened to James then -- or since. The old logical fault has taken on new vast proportions since the invention of the computer and the incredible ability to accumulate virtually limitless numbers as well as “soft” information. Now the digital revolution has given us the capacity for virtually unlimited mathematical calculations. Listen to that fountain of politically correct wisdom, National People’s Radio, almost any morning or afternoon, and you will hear another long dissertation on some social or political issue, usually foisted on us by the tenuratti, backed up by voluminous, if often irrelevant, statistics.
Nowhere has the disease taken root more than in the business schools, pickled there by management experts, often practitioners of what has been termed “the dismal science” but more accurately, the pseudoscience. A few years ago, I was flattered to be asked to “lecture” a class at the prestigious University of Virginia business school. A professor had somehow learned I had written a popular [not so popular as I would have wished] biography of Soichiro Honda, the Japanese investor and industrialist.
I sat in on the tailend of the professor’s presentation of Honda as “a case study”. I was worried the gentleman might fall off the edge of his lecture platform when, spelling out Honda’s success, writing an algebraic [?] formula across the blackboard, he began to run out of space. Luckily, he left the room after introducing me. I picked up the monologue, telling my young audience I would possibly be going off on a different tangent since I had written an anecdotal book. There were, I must say, a few knowing smirks, indicating I had underestimated the students if not the professors, in their search for networks of future acquaintanceship in these courses rather than “learning” in the classical sense.
I had had considerable exposure to the company and, luckily, despite corporate antagonism toward my project, through a shinseki [a “relative”, the nakahodo, the “in- between-person” who had arranged the marriage of Honda’s eldest son], direct exchanges with Honda, himself. I found Honda a mechanical genius, but no businessman. The evidence was how repeatedly the company had almost bankrupted when he went chasing sometimes valuable, sometimes moonbeam, inventions. [Honda, for example, was virtually the only automobile company to attempt its own automatic gear transmission, later to be abandoned.]
At a certain point in time, as the lawyers say, MITI [Ministry of International Trade and Industry], the all powerful Japanese bureaucracy then overseeing Japan, Inc., intervened. It anointed a production line genius from the wartime Hayakawa aircraft to take over Honda’s “business side”. The rest, as they say, is history. The gentleman in question was an eccentric; e.g., a devoted Wagner fan he annually took a troop of young men to the Bayreuth Festival. But sitting through several drunken evenings in his little gazebo in a palatial house garden hidden away in Tokyo’s Akasakimits’kei neighborhood, I learned many Honda “proprietary” secrets. [I have been amused to see him quoted extensively in more recent books on Honda; he died shortly after our meetings. But then Ouija boards are a common utility in the book writing profession.]
All this was recalled when The Financial Times recently warned of new problems despite all the huffing and puffing over Dodd-Frank , the latest attempted reform of Wall Street by two legislators too associated with political corruption. The FT said “xxx the vast $6,000 billion over-the-counter derivatives market risks being undermined by potential ‘data caps’. xxx” Hmmm. A good, old and close friend, despite being an economics professor but luckily not in a business school, tells me: “"xxx These models tend to ‘work’ until there is some kind of structural shift. xxx" English? These models tend to work until they don't work.” Hmmm.
Dr. James, here we go: 2007-08 here we come [again]!
sws-08-26-11
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There are some interesting points in time therein article but I don’t know if I see all of them heart to middle . There is some validity but I will take hold judgement until I look into it further. Good article , thanks and we want more! Added to FeedBurner also.
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More drivel from Sol Sanders.
Here's some non- drivel from Tom Whipple:
Peak oil notes - August 25
by Tom Whipple
Developments this week
This week the oil markets have been dominated by the repercussions of the rapid insurgent advance into Tripoli on Sunday and hopes that a speech by the Federal Reserve Chairman later this week will signal a new round of stimulus for the economy. After a brief sell-off on Monday, sparked by hopes that oil would soon be flowing from Libya, prices climbed on Tuesday as the equity markets rose and the future of Libyan oil production became murkier. There was little change in oil prices on Wednesday with NY oil closing at $85.16 and Brent at $110.15 – about $7 a barrel below where it traded for most of July.
The weekly US stocks report brought another surprise decline of 2.2 million barrels in US commercial crude inventories. Increases in refined products, however, meant that the report had little impact on oil prices. The steady decline in US crude inventories, mainly from lower imports, continues to add support to the IEA’s thesis that global oil consumption is outrunning production at the expense of stockpiles.
Some analysts are noting that the fall in crude prices, particularly on the NY exchange – down about $15 a barrel since the end of July - is not being reflected in a concomitant fall in retail gasoline prices which have only fallen 12 cents a gallon. This is not seen as being sufficient to boost consumer spending in other sectors. The problem of course is that Brent crude is only down about $7 a barrel in the last month and fears of refiners that oil prices are going up again.
A recent analysis of Chinese demand by Platts concludes that its oil consumption in July rebounded to 6.9 percent over last year. Platts notes that the refinery maintenance season in China is over and that if normal seasonal patterns prevail China’s oil demand will be higher in the 4th quarter.
Restarting Libyan production
After a burst of optimism on Monday that Libyan oil exports would be returning soon, a number of analysts are having second thoughts about just how fast and how much oil production can be restored. The first issue is when the security situation will return to normal so that bands of renegade Gadhafi supporters are not running around blowing up pipelines.
A more important question is just which foreign oil companies will be allowed back and under what terms. As the uprising began last spring the Italians, Russians and Chinese were very reluctant to back away from supporting the Gadhafi government, while France, the UK, and the US took the lead in first saving the insurgency from Gadhafi’s overwhelming military power and then supporting the drive on Tripoli with air strikes. Whether this support and lack of same is turned into greater or lesser access to Libyan oil remains to be seen.
Some analysts believe that 300-600,000 b/d of Libya’s oil infrastructure has not been harmed and could be returned to production in a few months – provided there is security and a solid enough government. Other analysts are skeptical and believe that it may take years to work out the various political kinks and get production back to pre-insurgency levels.
TAKEAWAY: Stocks are up b/c Libyan oil is soon to hit the market and Bernanke will give speculators QE3 next week.
Ayn Rand explains the infiltration mysticism/witch doctor science politicized.
Her take a little more than midway through this interview....
http://www.c-spanvideo.org/program/170069-1
The Anthropogenic Global Warming fraud is a perfect example of "witch doctor" mystic science in action.
Thanks RC nice little piece.
G-R-U-N-T, +10^10
Thanks much for the priceless Ayn Rand link!
I have some grandchildren that will be interested as they go through young adult years.
And, speaking as a former USAF Meteorologist, you can safely assume that global warming is real. I don't think we can do much about it because, worldwide, people are go on doing what they have been doing. Mankind will just have to live with it.
"you can safely assume that global warming is real."
Assumption is the mother of all fuck ups ol'Chap, as the anthropogenic CO2 causing atmospheric temperature change fraud dictates.
and on the other side of the coin lies the idea that Nuclear science is a simple and safe method of power, warfare and medicine. The facts are quickly omitted for the sake of want versus developing for the need. It's exactly at that point the dollars start becoming the "science".
I get it. Complicated technical formulae give the appearance of logic, sense, and certainty just enough so that the crazy world of derivatives starts to make sense. As does the immense amount of paper gold. As does the enormous benefit level of Social Security. All are crazy insane bubbles. And, my personal fave, how Fractals prove, to anyone with eyes, that stock movements are not random Marlov processes but something else. And yet, the market operates as if Fractals were never discovered. Meh! What to do. Well the big bubble for today is the Euro. so here is my fix on that...
Southern Europe Financial Zone
1.Portugal, Greece, Spain, Italy and Ireland all leave the Eurozone at once, and default on their loans
2.They establish their own currencies, at once.
3.Each currency is backed by a basket of commodities and vouchers from that country. These commodities would represent the goods and services required by the elderly or poor population such as wheat, olive oil, dairy, wood, bricks, vouchers for routine dental and medical care, and energy. In this fashion, each new currency would actually be backed by commodities such that if there were a run on that currency, it would produce jobs and prosperity.
4.Each country would have a tax rate very favorable to corporations, and a small free port, in the manner of Hong Kong.
5. Travel within the zone is passport required but unlimited tourist visa. Major limits on work permits and residence permits. Assimilation expected. Work permits mostly for folks who start businesses and create jobs.
6. Tax policy is set to reimburse zone corporations for currency transaction expenses within the zone. Even though there are five different currencies, it should be almost expense free to do business in the other zone currencies.
Grrr...science bad. Chicken entrails and raindance good!
bones, snowball, it's the chicken's bones you cast -- what, you've never been to new orleans?
human entrails are the only guts worth prognosticating over.
science good; scepticism bettah
“"xxx These models tend to ‘work’ until there is some kind of structural shift. xxx" English? These models tend to work until they don't work.”
As stated, economics is a social science. This means that when you develop a model that accurately explains human nature, it will become widespread. The moment it becomes widespread, everyone's coming to the same conclusions and acts accordingly. Therefore the model stops working.
If you know what people are going to do, and they know you know what they're going to do, they're going to act differently.
this guy needs to polish up on his story telling
You try to encapsulate part of a complex world in model. The model is based upon assumptions. The model is used to make decisions. Current reality deviates from the history that was used to build the model. The assumptions are violated. The decisions are wrong.
You just wrote the anit-LTCM business case.
Mr. Sanders,
it is important to point out that dostoevsky beat mr. james to the "scientism" thing. he explored the idea in his book, "The Possessed" (it's about these two young machiavalian schemers whose ambition and morality gets all coiled up in a brilliant political and psychological thrillah). in it he basically lays out the future: wherein the various offices and duties of the church are to be redistributed among the sundry professionals representing all those wonderful soft-sciences. he calls them the new priesthood; and properly warns us that they are the greatest threat to human potential and liberty since death stalked adam and eve down to the land of Nod.
even so, i'll be googlin you later on today -- good show.
but what the fuck does it matter, sol? who's gonna read fydor doestoevsky or william james?
actually, my cynicism is starting to thaw here at ZH...and the irony of these haters sayin that we're the cynics! no, we're here because we still cling to hope; if ever so desperately. The cynics are those who say there's not a better way. And on that score, i stand shoulder to shoulder with p henry and all the rest -- 'give me liberty or give me death'. i'm at the point that i truly mean it.
life is more; i demand more
fuck all you cowards and whores,
janus
Thanks Uncle Sol
instead of looking for an application on your IPHONE to figure out why the bridge is destroyed in front of you and what you should do about it, simply look up, realize your going over the cliff and hit the brakes.
Many people have lost the ability to reason becuase they rely on tech to solve their problems. Look at the head and shoulders on gold today (fabricated or not it is there) and act accordingly.
william james's work on hypnosis is amazing.
his psych work was groundbreaking and poignant -- he was more in tune with the humanity of humans than was freud.
and the rest of his family twernt bad neither
i'm just getting to the point i don't know what to say around here...i was just thinking along these lines, and in fact rereading some james mass psych stuff the other day -- that's just too damned bizarre. if it were like steinbeck or someone a little more widely read, i'd think...
it's almost as if some sort of mass consciousness is congealin about ZH; or maybe i just need to get some sleep
Too subtle for y'all.
The message is encapsulated in a metaphor. It is not one that hits your consciousness like a ton of bricks but must first working its way through your subconscious. Economics is not a hard science you can't so you're going to be disappointed if you expect computer calculations by quasi scientists to work forever.
The problem is that Hari Seldon has not been born yet, he will fix everything.
http://en.wikipedia.org/wiki/Hari_Seldon
... er ... Hari's Newtonian plan went askew.
And the Arisian's plans too.
But I think I see evidence of Eddorian influence in the area recently pelted by Ilene.
- Ned
Attempts to have policies based on facts, a rule of law, a Constitution to protect the governed are NOT the " Great American Heresy".
If anything the moral lapse comes from sponging off the rest of the world.
America’s Economic hegemony has become rather immoral
http://kingdomecon.wordpress.com/2011/08/25/americas-economic-hegemony-has-become-rather-immoral-why-is-this-so/Translation: too many people relying on technical analysis AND The shit is going to hit the fan, regardless of what the charts say.
Seems to be more like mental Sharting!
Uncle SOl needs his meds
red arrow DOWN, bitch
Uncle SOl needs his meds
Senile rambling?
red arrow DOWN, bitch!
I hate it when I don't understand the "message" of a post.
Errr..... what??