Dan Erwin

Failing Your Way to Success

Walter Russell Mead, an astute historian and commentator on American history and current events, recently wrote an article on our American history of failing our way to success. His first paragraph is a fun mind game.

As Americans struggle to make sense of a series of uncomfortable economic changes and disturbing political developments, a worrying picture emerges of ineffective politicians, frequent scandals, racial backsliding, polarized and irresponsible news media, populists spouting quack economic remedies, growing suspicion of elites and experts, frightening outbreaks of violence, major job losses, high-profile terrorist attacks, anti-immigrant agitations, declining social mobility, etc. etc. etc.

Sound familiar? Really? Actually, it’s a description of the American Democracy in the years between 1865 and 1900.

Mead then reverts to our world. He’s aware that it will a very long time before it becomes clear what a fully mature information economy might look like. He points out that if people and the 1860s and 1870s had been told that only two percent of the population would earn a living on the farm in the twentieth century, they could never imagine what jobs the displaced farmers could find. The full consequences of the knowledge economy and the information age will only come into view on a very slow time table. The implication, however, is that getting caught in the grip of profound pessimism and giving up on government, business and the nation is highly unrealistic.

But he draws some interesting conclusions about...

Deciding Whether to Buy a Book. . . .

Or, why I bought Yascha Mounk’s The People vs Democracy.

If you have only so much time to read and you’re watching your pennies, how do you decide whether to buy a new book outside your area of expertise? One way to go at that is to check out who’s reviewing the book. You may not know all the reviewers, but you can probably flag bias pretty quickly if you read a few of the online reviews. Next you have to ask yourself what you think about the bias. And then, decide. I bought Mounk’s book on the above basis!

Mounk’s recent book The People vs. Democracy has been reviewed or commented about positively in the Wall Street Journal, the New York Times, The Economist, Washington Post, The Atlantic and the New Yorker. That says “buy me.” I had read his earlier book with much admiration, and this was another fascinating study to buy and digest.

Mounk points out that democracy—not just in the US—is going through its worst crisis since..

Bret Stephens and the Paranoid Style

I graduated from college in 1959, a few years before Richard Hofstadter's essay on The Paranoid Style in American Politics came out in Harper's. As an associate in a Pasadena (California) church, the conspiracy theories of the John Birch Society were driving me nuts. One of the promulgators of conspiracy, a retired naval officer and member of the "society" was teaching in adult classes. The senior minister, a nice guy, but utterly gutless, let it go on and on. I was a history major, so I was familiar with American conspiracy theories. I was amazed how many in that well-educated, upper-middle-class church were believers in the process.

Shortly after I left that position, Hofstadter's essay came out in Harper's magazine. I have viewed it as a touchstone ever since. Still I never thought the essay would be as valuable today as it was then. Yet here's Bret Stephens, a "never Trump Republican" using the valued essay again. What's especially helpful...

Is Job Security Really All About “Who You Know”?

A little exercise in critical thinking.

Recently, I received an email from LinkedIn with the familiar heading regarding job security, “it’s not what you know, it’s who you know.” Let’s suppose you have no history with this kind of statement. How would you assess its truthfulness? For that matter, how do you test the truthfulness of any claim, whether email, text, tv or conversation?

 The either/or format of the LinkedIn claim is a common persuasive technique, often called the black or white fallacy because readers are asked to decide between two positions. Many business people recognize decision biases like anchoring, over-confidence and vivid anecdote, but few yet recognize the common fallacies of decision-making such as the false dichotomy, name-calling and card-stacking.  From the get-go, the ability to recognize a dichotomy like the LinkedIn claim is a kind of “sensitivity training” and a cue that the solution being offered is probably wrong.

Vantage point

LinkedIn has over 500 million users and, I assume, is the largest and most prominent professional network, suggesting that their pronouncements come with a lot of clout. So, it’s important to ask whether their claim, like those of other major institutions, is actually true.  Critical thinkers assume that when you construct an entire argument on one cause, you face the temptation to leave out anything that complicates that notion. It’s inevitable, therefore, that LinkedIn minimizes job performance, skips over issues of economic or organizational stability, ignores the job destructive digital technology—and avoids mentioning any other potential issues...

Gloria Steinem's New Category for Gory, Blood-and-Guts, Terrorism Filled, Male Movies

 

Maybe it's just the fact that we're both the same age--82 years--that causes Steinem and me to get a real bang out of creating new terminology and laughing at ourselves. She really did me one better a short time ago, revealing her ability to create new linguistic categories. I burst out laughing three or four times the same day, just thinking about her obscene category label.

Steinem was on a plane from New York to Seattle when a long delay on the tarmac prompted the airline to offer a free movie. When the flight attendant read the choices out loud, the man across the aisle from her said, "I don't watch chick flicks!" She knew the language as well as I...

A Better Understanding of the Trump Presidency

Inevitably, as we face the losses of Republicans and Democrats to Trump, we're trying to make sense of the situation. Making sense of Trump is relatively easy: very little in the toolkit which makes for a great deal of unpredictability. This presidency is unique in that it's the only successful response of American populism. Historically, populists have failed to elect a president.

For years, however, both Republicans and Democrats have failed or were unable to understand how to deal with the social and political discontent of many Americans. In spite of years of denial, it's...

So 80% of Adults Think They Can Spot Fake News??

Nahhhh! That makes no sense. In those very few areas where I’ve done a lot of homework and some listening to conversations about the news, it’s very clear that very, very few (say 20%?) can spot fake news (enough adverbial uses of “very?”). The newscasters and opinion writers can’t or don’t, and neither can John Q Public.

Though not the same thing, we know, based on hundreds of studies, that people can spot a liar 54 percent of the time — a ratio that is perilously close to pure chance. Spotting lies from people suggests that

Trump Was Predicted 18 Years Ago

If you've read the shock and surprise of the past two weeks, you'd be certain no one could have predicted the Trump and populist win. But you'd be wrong. Some commentators were alert to the electoral change. Both before and after the election, a passage from Richard Rorty's 1998 book, Achieving Our Country, circulated on the web.

Here's what he had to say:

Trump, Populism and the Election

If you voted Trump, don’t expect too much. If you voted Clinton, the world is not at an end. 

Candidly, I was 80% shocked and surprised, and about 20% merely reflective. What created these stats for me was last week’s blog, What’s the noise really all about?--a blog that defined populism and that has now become predictive of Trump’s success. Populists believe in their own virtue—and that they are being mistreated by a small circle of elites. Added to that belief is the view that “if we work together, we can overthrow those elites.”  That just happened in our election. What’s unique is that Trump’s win is the first time populism has elected a president--even though populist ideas have impacted voting throughout American history.

American history of populism
This morning I rechecked the history of populism and gained a number of fascinating insights...

Soft on White Collar Crime?

One of my regularly frustrating experiences is listening to legislators and ordinary people talking about what CEOs and senior executives should know about employees are doing five levels below them. That’s nearly impossible in big companies, unless like Wells Fargo’s CEO, John Stumpf it’s a widespread behavior that’s been going on for years. So I’m always watching for examples of business reality for my readers—reality, that is, that reflects my years of experience with top companies and my own philosophical orientation. All the better if that reality is supported by trustworthy research. A recent issue Economist dealt with a superb example of business reality: that lock-‘em-up mentality for white collar crime.

But first, let’s be candid about business magazines and newspapers. All of my antennae are out when I’m reading the Wall Street Journal and nearly all the American business magazines. More than anything else, before I look seriously on any article I’m watching to make certain the writer or the magazine takes a responsible attitude toward the community. My read of too many American business magazines is that they are too capitalist or too individualist and very little oriented to the greater good of the country. That’s not only a political issue, but also a moral issue.

The one obvious exception to that cautionary rule is the Brit magazine, The Economist, what some call rather snobbish in its appeal. But it regularly critiques itself, takes a stance toward the greater good, reflects wisely on business strategy and never fails to challenge conventional wisdom. It’s an expensive magazine, but brilliantly, often hilariously, written. The Economist has the largest business circulation in the world, except for the Wall Street Journal. That’s not necessarily good company since the Journal seems to have gone on a downward slide ever since the Murdochs took over. I get some sense, however, that Murdoch’s sons may be a bit more communitarian and responsible. But we’ll see. (FYI: I’m neither correspondent nor salesperson for The Economist)

Why this tangent and all this explanation? It’s not just that too few business people pick up an intelligent piece of news. Though I’m clearly a capitalist, I agree fully with David Brooks, that intriguing conservative, who has stated on numerous occasions that we need to be more communitarian and less individualistic, more moralistic and less utilitarian, more emotional and less cognitive. More emotional and less cognitive applies directly to techie algorithms. They have their uses, but they’re extremely biased. As Cathy O’Neil has wisely written, they are Weapons of Math Destruction: they increase inequality and threaten democracy.  

Are we soft on white collar crime?
The Economist’s Schumpeter points out that both right-wing populists and left-wing progressives think that society is too soft on white collar-crime. That’s the conventional perspective, but how accurate is it? Two new books, one by Harvard’s Eugene Soltes and the other by Duke’s Samuel Buell, who was the lead prosecutor in the Enron case, provide the research and evidence demonstrating that we are now tougher on white-collar crime.

We’re punishing white-collar criminals more severely because of two bills: Sarbanes-Oxley (2002) and the Dodd-Frank (2010). Other countries are moving in the same direction, including states as diverse as South Korea, Oman and Spain.

Although I appreciate Senator Elizabeth Warren’s highly productive rhetorical indictment of the Wells-Fargo Company and CEO, as Schumpeter points out, even prosecutorial zeal does not always result in convictions. Prosecutors face very difficult trade-offs and that includes protecting the rights of unpopular bankers.

This piece of reality is very significant and goes against the grain. Those mortgages that brought down several finance institutions were perfectly legal. The people doing the buying were probably just as much in the dark as the people doing the selling. And furthermore, most corporate crime is not individual, but the result of collective action.

Right vs. wrong
Populists like to think there is a bright line between right and wrong. Step over the line and you should go to jail. That’s naïve. Here’s what was initially surprising to me, but I quickly realized very accurate: “a great deal of wealth-creation takes place between what is legal and what is questionable.” (Remember the old truism? Ask for forgiveness, not permission! Having gone through numerous IRS audits, myself, and suffering only one small fine, that’s a great recommendation.)

Want some public examples? Bill Gates was hauled before the authorities for using Harvard’s computers without permission. Steve Jobs was involved in backdating stock-options to increase their value. Technology firms typically work with outdated legal regulations. Uber and Airbnb are regularly engaged in legal battles with regulators.

Fact of the matter—and this is something never to forget—new business typically tests the rules. That can result in updating the rules. Significantly for all of us, new businesses pushing the envelope often end up offering services that people want and that advance the common good.

So don’t be too quick to criminalize white collar behavior.