- Only four presidents have lacked a Christian denominational affiliation, the most recent one in the 1880s. There have been 0 non-religious presidents; one of the 535 members of the current Congress; and about a dozen of all 7,383 state legislators.
- From 1967 through 2011, California was governed by former movie actors more than a third of the time, and one of them became president.
- Prevent auction (e.g. eBay) sniping, if a bid is made within the last minute, add another minute to the auction. To prevent slow-bid tactics (e.g. frustrating bidders into leaving by not letting an auction end), last-minute bid increases sharply (e.g. instead of $1 increments, $1/2/4/8 and so-on).
What Everyone Gets Wrong About ‘Soul Mates’
“People think a soul mate is your perfect fit, and that’s what everyone wants, but a true soul mate is a mirror, the person who shows you everything that’s holding you back, the person who brings you to your own attention so you can change your life. A true soul mate is probably the most important person you will ever meet, because they tear down your walls and smack you awake.
You think it’s all roses and happiness. A soul mate is somebody who changes you. And then, sometimes, they have to leave because the intensity of the relationship is so much that you can’t actually have stability.
Your partner is something else, that’s your friend. My husband is my best friend. He’s not the mirror that holds up my flaws. He’s just the guy who’s like, ‘I think you’re terrific’.
Whatever they fired up in you, you might have needed fired up, and then you might need them to go, so that you can go on your journey.”
How America Lost Its Mind
You are entitled to your own opinion, but you are not entitled to your own facts.”— Daniel Patrick Moynihan
We risk being the first people in history to have been able to make their illusions so vivid, so persuasive, so ‘realistic’ that they can live in them.”— Daniel J. Boorstin, The Image: A Guide to Pseudo-Events in America (1961)
“Well, anybody who knows me knows that I’m no fan of dictionaries or reference books. They’re elitist. Constantly telling us what is or isn’t true. Or what did or didn’t happen. Who’s Britannica to tell me the Panama Canal was finished in 1914? If I wanna say it happened in 1941, that’s my right. I don’t trust books — they’re all fact, no heart … Face it, folks, we are a divided nation … divided between those who think with their head and those who know with their heart … Because that’s where the truth comes from, ladies and gentlemen — the gut.” — Colbert Report (2005)
- The national lurch toward fantasy. The American experiment, the original embodiment of the great Enlightenment idea of intellectual freedom, whereby every individual is welcome to believe anything she wishes, has metastasized out of control. America has mutated into Fantasyland.
- Americans believe more in the supernatural and miraculous: two-thirds believe in telepathy and ghosts; and angels and demons on Earth; over half believe a specific God and heaven exists; a third believe in creationism, global warming in a hoax, the government has suppressed cancer cures, aliens have visited; a quarter believe in witches, that vaccines cause autism, and Trump won the 2016 popular vote; 15% believe that TV signals contain mind-control technology, and in 9/11 conspiracies. Much of this was before Trump.
- The reason? American can believe anything they want; and their beliefs are equal or superior to anyone else’s; experts be damned.
- American character contains a mixture of Puritan (steadiness, hard work, frugality, sobriety) and gambler (wild, fast, loose, excitable, tall tales) values. America was created by true believers and passionate dreamers, and by hucksters and their suckers, by a people uniquely susceptible to fantasy (Salem witch hunts, P.T. Barnum, Hollywood, Scientology, Walk Disney).
- Mix epic individualism with extreme religion; mix show business with everything else; let all that ferment for a few centuries; then run it through the anything-goes ’60s counterculture and the internet age. The result is the America we inhabit today, with reality and fantasy weirdly and dangerously blurred and commingled.
- The irrational has become respectable and often unstoppable. Denying facts and having an uncertain grip on reality, has overwhelmed our other exceptional national traits and turned us into a less developed country.
- In 1987, the right revoked the federal Fairness Doctrine — enacted to keep radio and TV shows from being ideologically one-sided (the internet would have achieved this in time). In 1988, Rush Limbaugh launched a national right-wing radio show and took off; in 1992 a syndicated TV show. In 1996, created Fox News offering viewers an unending and immersive propaganda experience of a kind that had never existed in the US before. Previously mass media had come to serve an important democratic function: presenting Americans with a single shared set of facts.
- The internet may have broken America’s dynamic balance between rational thinking and magical thinking for good, allowing crazy ideas and falsehoods to spread faster and mobilize — outpacing reason. Search engine results tend to reinforce the falsehoods. Before the web it wasn’t easy to be exposed (or find) falsehoods.
- It’s ok to disagree about political issues, but people should agree on the essential contours of reality.
- Starting in the 1990s, America’s unhinged right became much larger and more influential than its unhinged left. There is no real left-wing equivalent of Sean Hannity, let alone Alex Jones. Moreover, the far right now has unprecedented political power; it controls much of the U.S. government.
- The GOP is now quite explicitly Christian. Until about 1980, the Christian right was not a phrase in American politics. Now it’s the American coalition of white Christians (led, weirdly, by one of the least religious presidents ever). Economic insecurity correlates with greater religiosity, and among white Americans, greater religiosity correlates with voting Republican. For Republican politicians and their rich-getting-richer donors, that’s a virtuous circle, not a vicious one. Religious people are more prone to fantasy.
- Republicans let business do whatever it wants; don’t spoil poor people with government handouts; let individuals have gun arsenals but not abortions or recreational drugs or marriage with whomever they wish; and don’t mention atheism.
- Libertarianism is an ideology whose most widely read and influential texts are explicitly fiction (Ayn Rand).
- Republicans have purposefully torn down the validating institutions, convincing voters that the media cannot be trusted; they have gotten them used to ignoring inconvenient facts; and abolished standards of discourse. The party’s ideological center of gravity swerved way to the right; the party’s fantastical fringe became its middle. Reasonable Republicanism was replaced by absolutism: no new taxes, virtually no regulation, abolish the EPA and the IRS and the Federal Reserve.
- In 2008, three-quarters of the major GOP presidential candidates said they believed in evolution, but in 2012 it was down to a third, and then in 2016, just one did (while adding “it does not need to be in the curriculum”).
“Trump doesn’t like experts, because they interfere with his right as an American to believe or pretend that fictions are facts.”
- Trump is a grifter driven by resentment of the establishment. He doesn’t like experts, because they interfere with his right as an American to believe or pretend that fictions are facts, to feel the truth.
- Trump’s various enterprises would have seemed a ludicrous, embarrassing, incoherent jumble for a businessman, let alone a serious candidate for president. What connects an Islamic-mausoleum-themed casino to a short-lived, shoddy professional football league to an autobiography he didn’t write to buildings he didn’t build to a mail-order meat business to beauty pageants to an airline that lasted three years to a sham “university” to a fragrance called Success to a vodka and a board game named after himself to a reality-TV show about pretending to fire people? His reality was a reality show before that genre or term existed.
- Trump’s campaign logic was a new kind, blending exciting tales with a showmanship that transcends ideology. Trump’s brilliance was calling that out in the most impolitic ways possible, deriding his straight-arrow competitors as fakers and losers and liars — because that bullshit-calling was uniquely candid and authentic in the age of fake.
- “I will give you everything,” Trump actually promised during the campaign. Yes: “Every dream you’ve ever dreamed for your country” will come true. “Forget the press,” he advised supporters — just “read the internet.”
- After Trump won the election, he began referring to all unflattering or inconvenient journalism as “fake news.” When his approval rating began declining, Trump simply refused to believe it. Factual truth is just one option.
- The idea that progress has some kind of unstoppable momentum, as if powered by a Newtonian law, was always a very American belief. However, it’s really an article of faith. It reflects our blithe conviction that America’s visions of freedom and democracy and justice and prosperity must prevail in the end.
- Has America permanently tipped into irreversible decline, heading deeper into Fantasyland; whether it’s only America’s destiny, exceptional as ever, to unravel in this way; early adopters, the canaries in the global mine, to be improved on by other countries?
- Make America Reality-based Again (MARA)
- Pilgrimage center for hundreds and thousands of youth interested in some sense of transcendence, breakthrough consciousness, LSD, the sexual revolution, encounter, being sensitive, finding your body, and yoga.
- Embraced the radical notion that mental illness was a label imposed on visionaries and the primary tools of coercion and control. That insanity was just an alternative way of perceiving reality. Within the psychiatric profession itself this idea had two influential proponents, who each published unorthodox manifestos at the beginning of the decade — R. D. Laing (The Divided Self) and Thomas Szasz (The Myth of Mental Illness). The idea was also behind One Flew Over the Cuckoo’s Nest.
- Essentially everything that became known as New Age was invented, developed, or popularized at Esalen.
- “A mother church of a new American religion for people who think they don’t like churches or religions but who still want to believe in the supernatural. The institute wholly reinvented psychology, medicine, and philosophy, driven by a suspicion of science and reason and an embrace of magical thinking. It was a headquarters for a new religion of no religion, and for “science” containing next to no science. The idea was to be radically tolerant of therapeutic approaches and understandings of reality. Invisible energies, past lives, astral projection, whatever — the more exotic and wondrous and unfalsifiable, the better.”
What is Money?
“There are two ways to enslave a country. One is by the sword. The other is by debt.” — John Adams (1826)
- America is blessed with limitless natural resources, giant oceans protecting us on the left and right, and friendly neighbors to the north and south. We’ve got a military that any other country would trade for theirs, a political class constrained by an ingenious system of checks and balances, and a built-in, self-correcting mechanism of free elections. Almost 250 years later, it’s easy to forget how uniquely successful the American experiment has been.
- In 1933, FDR misled the public into “temporarily” turning in their gold for patriotic reasons to support the nation’s credit. Nine months later he confiscated the gold and devalued the dollar 59%, which would have been impossible without the government’s physical possession of all the nation’s gold at that time. Possessing gold was punishable with ten years in prison or a $10,000 (over $500,000 today) fine!
- In 1973, following the “Nixon shock” and the Smithsonian Agreement the US dollar was officially devalued — changing the price of gold from $35/oz to $42.23/oz. Congress set the American dollar completely afloat with nothing to back it up but the declaration of the government that it was “legal tender” — or fiat currency. The G-10 pegged their currencies to the US.
- A year later the “most significant monetary achievement” smashed apart on the rocks of economic reality. Instead of gold the US dollar crashed spiking the value of gold to $125/oz — a level unthinkable
to “every expert” and Congressmen. The G-10 began to quietly abandon the Agreement. In the last 50 years the dollar had depreciated versus gold ~8%/year. Paper is paper.
- Money is, and has always been, technology for making our wealth today available for consumption tomorrow. There is no sharp distinction between what is money and what is not. Throughout history, various monies have always existed — simultaneously — along a continuum of soundness, subject to competitive monetary network effects.
- Money is unique among all the goods we seek because we value money not for its own sake, but rather solely for its prospective exchange utility. Humans will choose the money they believe best stores the sum of their labor (i.e. time). Money is title to human time. People sacrifice their time for money, which enables them to trade for commensurate sacrifices from others.
“Any central bank can control the supply of their money. They can’t make their people value it.”
- When the Fed doles out billions, or trillions, of USGPM (US Guaranteed Paper Money), it has the immediate effect of helping the favored few who first receive it, directly or indirectly, plus all pre-existing financial asset owners, at the expense of everyone else.
- Prices matter. Price signals made by billions of humans rippling through the system.
- Modern central banking is the cause of severe economic busts, not the cure. By manipulating the market with ever more abundant and ever cheaper money, small corrective market downturns are delayed and accumulated.
- Unfortunately gold is hard to transport. Though fiat’s periodic, human-nature-induced hyperinflations make it a huge step backward in terms of salability (i.e. value) across time, it was a substantial leap forward in terms of salability across space.
- Free money has consequences. Because it is not free. No matter how well-intentioned, runaway global money printing, and the resulting financial repression, is society’s largest global challenge.
- The first store of value in history for which its supply is entirely unaffected by increased demand. From this perspective, Bitcoin is better at being gold than gold (which can be mined more aggressively on Earth, harvested from asteroids, etc.).
- Moves much faster across space than fiat for certain (e.g. international 3–5 day) transactions, but slower for others (e.g. buying gum at the local store). Credit card payments are generally settled 2–3 days later, with each bank taking credit risk (i.e. debt) along the way; with disputes being rare. Bitcoin safely settles about every hour and, as a bearer instrument, credit risk is not a concept (neither are disputes and refunds).
- Inflation-proof through a dynamic mining difficulty adjustment that ensures blocks are always mined every 10 minutes on average
- Consumes more energy (equivalent to around 8–10 million people), but maybe the cost of better technology? Cars consume more energy than horses, electric lights than candles, computers than typewriters, etc. [ed: unlike those there is no upper limit, mining arms race between nation states]
- Mining is the only profitable use of energy in human history that does not need to be located near human settlement to operate [ed: data centers?]
- Lacks the possibility of antitrust enforcement, confiscation, or shutdown. Ever. No matter how big and no matter how valuable it gets. [ed: still subject to the IRS, forcing citizens to pay taxes or break the law]
- Only need believe one thing; that USGPM will depreciate relative to Bitcoin over an investment time period
- For blockchain to be best store of time, it needs to offer protections from theft
- Blockchain are susceptible to forking (i.e. dilution, confusion)
- Susceptible to pump and dump activity from whales — asymmetrical distribution (similar to stocks). Expected to become more distributed over time?
- Proof of Work is better (if validated)
- Requires global connectivity to succeed (e.g. what if basic internet structure is attacked?)
Suck It, Wall Street
“They are like looters after a hurricane.” — Andrew Cuomo
Allowing “speculators and hedge funds” to “turn our markets into a casino.” — John McCain
- 2008 GFC bank bail-out (12 of 13 on the brink of failure), caused by hedge funds betting them down as the economy circled the drain. The SEC imposed a ban on shorting via emergency overnight grants of commercial bank licenses to companies that weren’t commercial banks in order to get the lifesaving Fed credit lines that came with it. Rescued, given a forever pass to keep feeding at the neck of society while claiming, falsely, to be not-failures and not-welfare recipients.
- r/wallstreetbets better up GameStop in defiance of Wall Street, causing enormous losses (Melvin Capital lost $3 billion!). The entire tale, in a nutshell, goes like this. One group of gamblers announced, “Fuck you!” Another group announced back: “No, fuck YOU!” That’s it. Or, as one market analyst put it to me this morning, “A bunch of guys made a bet, got killed, then doubled and tripled down and got killed even more.”
- Overreaction from establishment at the threat of disruption by the masses. Just like in 2008, Robinhood restricted purchases of select stock, and calls for an SEC investigation. “It’s going to be hard for the SEC to find blatant manipulation, [but they] owe it to look.” Leaving aside that the Redditors were doing exactly what billion-dollar hedge funds do every day — colluding to move a stock for fun and profit — the notion that this should be the subject of a federal investigation is preposterous.
- America’s banks just had maybe their best year ever, raking in $125 billion in underwriting fees at a time when the rest of the country is dealing with record unemployment, thanks entirely to massive Federal Reserve intervention that turned a crash into a boom.
- Goldman, Sachs posted revenues of $44.56 billion in 2020, its best year since 2009. Back then, the shortcut back to gigantic bonuses was underwriting fees for financial companies raising money to purge themselves of TARP debt. This time it’s underwriting fees for bond issues and IPOs.
- It’s no accident that income inequality dramatically accelerated after the last bailouts, and that the only people to see net gains in wealth since 2008 have been the richest 20% of Americans, a pattern almost certain to continue.
- Finance companies suck out hundreds of billions in fees, encourage lunatic risk-taking in every direction, rampages of private equity takeovers, and kept a vast stable of functionally dead “zombie companies” alive on cheap credit — which make up roughly 30% of all corporations in America, racking up over a trillion dollars in new debt since the pandemic alone.
- In other words, it was all well and good for investment banks and executives of phoney-baloney companies to gorge themselves on funhouse profits on a funhouse economy, but when amateurs decided to funnel just a bit of this clown show into their own pockets, finance pros wailed like the grave of Adam Smith had been danced upon.
- Unlike betting on a stock to go up (i.e. betting “long”), where you can only lose as much as you invest, the losses in shorting can be infinite. This adds a potential extra layer of Schadenfreude to the plight of the happy hedge fund pirate who might have borrowed gazillions of GameStop shares from so-called prime brokers (Goldman, Sachs and JP Morgan Chase, etc.) who don’t always really procure those original borrowed shares, and often give out more “locates” than they should — putting more shares in circulation than actually exist (GameStop at 138%). GameStop is exposing this systematic plundering of firms using phantom shares and locates, by groups of actors who now have the gall to complain that they’re the victims of a “get rich quick” scheme.
- Short-sellers can be instrumental in rooting out corruption and waste in whole sectors like the subprime industry, or in single companies like Enron. Many hedge funds invest on behalf of entities like pension funds, though maybe they shouldn’t, given their high cost and relatively mediocre performance.
- The rank selectivity of this makes any moral argument against the GameStop revolt moot. There’s no legitimate cause here, just an assertion of exclusive rights to plunder, which will doubtless be exercised now in the form of bans, investigations, and increased barriers to market entry. Probably also, in the political spirit of our times, there will some form of speech crackdown on platforms like Reddit, to protect us from the mob.
- An updated and superior version of Occupy Wall Street. It’s likely not any evil manipulation scheme, but ordinary people acting — out of self-interest, but also out of sheer enthusiasm for one of the best reasons to do just about anything, because you can — on a few simple, powerful observations.
- They’ve seen first that our markets are basically fake, set up to artificially accelerate the wealth divide, and not in their favor. Secondly they see that the stock market, like the ballot box, remains one of the only places where sheer numbers still matter more than capital or connections. And they’re piling on, and it’s delicious, not so much because they’re right, but because the people running for cover are so wrong, and still can’t admit it. Buy the ticket, take the ride.
Looting the Pension Funds
- The GFC was an epidemic of fraud and thievery in the financial-services industry triggered the collapse of our economy. The resultant loss of tax revenue plunged states everywhere into spiraling fiscal crises, and local governments suffered huge losses in their retirement portfolios ($2.6 trillion in state pension money under management in America).
- In 1974, Congress passed the Employee Retirement Income Security Act (ERISA) to protect the retirement money of workers with pension plans by forcing employers to provide information about where pension money is being invested, giving employees the right to sue for breaches of fiduciary duty, and imposing managers make sensible investments and seek to minimize loss — but in a major loophole it didn’t cover public pensions.
- Politicians quickly learned to take liberties. One common tactic involved illegally borrowing cash from public retirement funds to finance other budget needs. It’s the governmental equivalent of stealing from your kids’ college fund. States that engage in this activity may also be committing securities fraud if they haven’t made this clear to ratings agencies, then go out and borrow money from investors by issuing bonds. States caught were issued no monetary fines or other severe penalties, reinforcing the practice.
- Another is failing to make the necessary Annual Required Contributions (Massachusetts made just 27%, New Jersey 33%, Kentucky 50%, Illinois 68%). The Kentucky Employee Retirement System (KERS) is only 27% funded! Post-crash, cash-strapped states had been paying out that much less of their mandatory ARC payments.
- But for all of this, a strong stock market during the 1990s and 2000s left state pension funds in decent shape prior to 2008. But then the crash came, and suddenly states everywhere were in a real, no-joke fiscal crisis. Tax revenues went in the crapper.
- The supposed impending collapse of Social Security, which actually should be running a surplus of trillions of dollars, is now repeated as a simple truth. But it wouldn’t be “collapsing” at all had not three decades of presidents continually burgled the cash to pay for tax cuts, wars and God knows what else.
- Most pension-reform proposals required that states must chase higher returns by seeking out “alternative investments.” In the 1990s, Ohio put $50 million into coins and “other collectibles” — including Beanie Babies. “Coingate” simply had the effect of states simply holding back the information by investing in hedge funds that require investments not be disclosed to the public for fear of “competitive disadvantage” — this makes it illegal for workers to find out where their own money has been invested!
- Hedge funds have good reason to want to keep their fees hidden: They’re insanely expensive. The typical fee structure for private hedge-fund management is a formula called “two and twenty,” meaning the hedge fund collects a two percent fee just for showing up, then gets 20 percent of any profits it earns with your money. Some hedge funds also charge a mysterious third fee, called “fund expenses,” that can run as high as half a percent. They also pass on their trading costs to their clients, a huge additional line item that can come to an extra percent or more and is seldom disclosed. There are even fees states pay for withdrawing from certain hedge funds. Many states have engaged middlemen called “placement agents” to hire hedge funds who are paid enormous sums from both states and financial firms just to “introduce.”
- Even though they can and sometimes do post incredible numbers in the short-term— spikes notwithstanding — over time, hedge funds basically suck. In 2008, Warren Buffett famously placed a million-dollar bet with the heads of a New York hedge fund called Protégé Partners that the S&P 500 index fund — a neutral bet on the entire stock market, in other words — would outperform a portfolio of five hedge funds hand-picked by the geniuses at Protégé; Buffet earned 8.69% compared to 0.13%! Investing in simple index funds cost between 0.1% and 0.5%.
- So when you invest your pension money in hedge funds, you might be paying a hundred times the cost or more, you might be underperforming the market, you may be supporting political movements against you, and you often have to pay what effectively is a bribe just for the privilege of hiring your crappy overpaid money manager in the first place. What’s not to like about that? Who could complain? A conflict of interest.
Where are all the Billionaires?
- Premise: In 1900 there were 4,000 millionaires. If they had only matched the market returns and then bequeathed the wealth to their children, we would have 120,000 billionaires today; instead we see around 400.
- Detracting factors include spending, taxes, fees and commissions, and ourselves! Cognitive biases make us poor investors. Active non-professional investors lost 6% per year compared with the passive stock market — the only free lunch in investing over the long-term.
- Ignores taxes and assumes all millionaires have at least $1M invested fully into US equities at all times, which is unrealistic (e.g. volatility when approaching retirement age)
- Index funds currently allocate capital based off of market capitalization (current stock price of company multiplied by the number of shares outstanding), so more investment will be allocated to Apple (overvalued) than Zoetis (undervalued) — even though the latter might be a more efficient investment
- If you could combine the passive, low cost, no-decision (and no opportunity to screw yourself over) virtues of index funds/passive investing and basic tenants of value or momentum investing to prevent overly expensive or overvalued purchases, you’d have the best of both worlds. Named Active Index Investing.
- Jeremy Siegel is an advisor to Wisdomtree for “fundamentally indexed” funds that allocate based on dividend yield instead of market cap. Victor Haghani works for Elm Partners who are attempting active investing.
- Practically, it’s not that simple to buy an index fund of the entire market
FCC Fairness Doctrine
- 1949 policy that required broadcasters (radio, television) to present issues in a manner that was honest, equitable, and balanced. Controversial matters of public interest needed to be discussed, and contrasting views needed to be presented.
- Repealed by Reagan in 1987, and considered by some to be a contributing factor for the rising level of party polarization in the US.
- The following year ABC signed Rush Limbaugh — then working at a little-known Sacramento station — to a nationwide syndication contract offered to stations for free. “From his earliest days on the air, Limbaugh trafficked in conspiracy theories, divisiveness, even viciousness.”
- Precursor to Fox News
Is It Time to Move the NBA 3-Point Line Back? The 3-Point Revolution.
- The 3-point shot was borrowed from the ABA and introduced to the NBA in the 1979–80 season by commissioner George Mikan
- The NBA is currently a perimeter-driven league. The line affects everything from offensive architecture and defensive priorities to playing time.
- Harder and harder to justify an extra 50 percent point reward for a shot that has become only marginally (36% versus 39% for 2-point jumpers) more difficult than any other jumper. No wonder the midrange game is dying: Why shoot a 40% 2-pointer when you can shoot a 37% 3-pointer?
- Move the 3-point line back to 25 feet and possibly remove the corner 3?
- Over the last 20 years, NBA players have averaged 1.05 points per above-the-break 3 and 1.16 points per corner 3. In contrast, players have averaged just 0.79 points per 2-point attempt outside of the restricted area.
- At the end of the game the clock is turned off and the first team to reach a score target (e.g. 24 points more than the winning team when the clock is turned off) wins. Suggested by Nick Elam (Ball State University professor) in 2007 and used in the 2017 All-Star Game.
- Frequent examples of games where the final minutes of a game time can take 20 real time due to fouls, timeouts, time reviews and other video reviews
- Late-game deliberate fouling occurs in approximately 44% of NBA games and 58% of NCAA games, and results in a comeback victory roughly 1% of the time.
- Getting rid of the clock and playing to a target score eliminates deliberate fouls as the losing team isn’t under time pressure and can concentrate on defensive stops
- A defensive team down by 2 against an offensive team down by 3 can simply foul to stop a game-winner and get possession. To prevent this, a defensive non-shooting foul during the Elam Ending with the offensive team in the bonus results in one free throw and possession.
Should Soccer Penalties Be Moved Back?
- Penalty kicks are the most draconian and most influential penalties in any sport. This is compounded by a needlessly inflexible penal code, applied within an arbitrary box, that disables referees from exercising any sort of reasonable judgment. An incidental foul is punished the exact same as a blatant handball.
- The best place to score in the World Cup is at the penalty spot (81%) — compared to within five yards (50%) or open play (10%)
- The value of any penalty shot far exceeds that of almost any other “live play” scenario
- What if the spot were moved back? What if that number were 50 percent or 33 percent instead? How would moving the penalty spot back a few yards affect this situation? If players converted half their penalty shots, would fouls in the box go way up? What if there were two penalty spots, a farther one for incidental fouls, a closer one for flagrant fouls?
- Construction efficiency has declined over time
- A production system is any system where a set of inputs (e.g. materials, labor) are transformed, step by step, into a set of outputs (e.g. house)
- Production rate (throughput), work-in-progress (unfinished), cycle time (start to finish), utilization rate (idle), and queue length (waiting)
- The more variation and unpredictability in your production process, the worse it will perform
- If you can’t reduce variability, the only option is to buffer against it, either with extra material (as happened naturally in our above simulations), extra time, or extra capacity
- Construction has low throughput, high cycle time (months or years), high work-in-progress (materials and labour) — and is strife with variability (few repetitive tasks, context switching, relocating, finding tools, waiting on materials, lack of communication/coördination, order of tasks, weather)
- In a more streamlined production process, the step of figuring out what needs to be made is wisely separate from actually making it. But in construction, they’re deeply intertwined (architects, engineers and subcontractors with opinions on how to do things)— making things difficult to predict with any accuracy
Efficiency Is the Enemy
“You’re efficient when you do something with minimum waste. And you’re effective when you’re doing the right something.”
- Wasted time = slack = excess capacity allowing for quality responsiveness and flexibility. Google 20% time!
- Many organizations and/or people want to maximize efficiency (i.e. utilization). This view, however, fails to recognize that efficiency and effectiveness are not the same thing. In a world of manic efficiency, slack often comes across as laziness or a lack of initiative.
- Total efficiency is a myth
“Slack is the natural enemy of efficiency and efficiency is the natural enemy of slack. Slack represents operational capacity sacrificed in the interests of long-term health.”
- Slack allows people to be creative, respond to changes, learn, experiment, think ahead, gain perspective
- Too much slack is bad because resources get wasted and people get bored or lazy. But, on the whole, an absence of slack is a bigger problem.
- In general, you need more slack than you expect due to uneven tasks
- In certain short-term scenarios, less slack can be better (e.g. embrace constraints, get shit done)
- The irony is that we achieve far more in the long run when we have slack. We are more productive when we don’t try to be productive all the time. Another irony that one of the biggest slack-killers (besides email) is named Slack. Trying to eliminate slack causes work to expand; there’s never any free time because we always fill it.