Saturday, April 19, 2014

Not enough to win, others must lose(?)

UPDATE: Jeremy tweeted me that this is not true. He said he was quoting a New Yorker cartoon (which does exist, and does pre-date his speech, here), and saying he disapproved of that mind-set.  I accept him at his word, and can only assume the newspaper article I linked to was written by someone who mis-quoted him (wouldn't be the first time that happened).

Jeremy Frommer, Wall Street Exec, went to visit University at Albany, his alma mater, and told the audience: "It's not just enough to fly in first class; I have to know that my friends are flying in coach,"[1]

This "I can only win if you lose" attitude is sick and destructive. It is the worst kind of "scarcity thinking"--something most (all?) faith traditions would condemn.

It's not just a question of morality, though. From a purely secular perspective, business leaders who take this view are likely to depart from their fiduciary duty--namely, to act in the best interests of their employer and shareholders. That will often mean striving to come in "first", but it is not always the case. If coming in second, or third, or whatever provides the greatest shareholder value, that is exactly what the executive should strive for, ego be damned. Unlike sports or elections, business does not always confer the absolute clarity of an undisputed victor. Position and success can produce different rankings. When executives reduce business to a personal contest, bad things are prone to happen.

A counter-example to illustrate the point...Apple, Inc, currently one of the most profitable companies in history, has never measured its success by "winning" market share or unit sales. They measure it by profitability. Competitors are welcome to the sales Apple can't make while maintaining it's margins, at whatever profit they provide. So even though they sell only 25% of smartphones, they make more money than the rest of the industry, put together.

Vinyl Love: Agency Bias and Audio Elitism

There has been a fun debate going amongst the Accidental Tech Podcast crowd regarding the merits and science of vinyl LPs audio quality versus CDs. I won't rehash that here, but the summary seems to be:
  • Science strongly supports digital as a vastly more accurate means of capturing and transmitting recorded sound. (In fact, after reading the Marc Edwards analysis, I found myself marveling that vinyl does (did) work as well as it did.)

  • Probably the most common underlying reason people profess to find vinyl superior is the "tea ceremony" aspect. I.e., all the loving handling and ritual involved in accessing and preparing a vinyl LP for listening is an inseparable aspect of the overall experience. In many cases, the vinyl lover may not be fully aware of their reasons for finding vinyl superior, in which case it also takes on some strong overtones of placebo effect: they expect vinyl to sound superior; and since the vinyl experience involves close, purposeful listening, it is easy for the listener to convince themselves that the sound is better.

  • Another possibility raised, is that the distortions created by analog mastering and vinyl reproduction are a feature, not a bug.
I agree with the above, primarily the first one, but I suggest two other reasons may explain some cases of vinyl preference.
  • First, there is a variant of "agency bias". Agency bias is the belief that things don't "just happen"--there is always an active agent. E.g., it wasn't luck that caused me to miss my connection and avoid a fatal plane crash--there was some active force (fate, God) that was the agent of my good fortune.

    The mental phenomenon I have in mind is the idea that there has to be a payoff for effort. It's the same reason many people insist on overpaying for high octane gasoline, when it has no benefit for their vehicle. Or want to buy $40, gold-tipped cables that don't deliver a digital signal any differently than generic $3 cables. Vinyl takes effort to get a good result. CDs don't. This just seems wrong, if you are prone to "effort bias". Anything that easy can't be very good.
  • The other factor is audio elitism. With vinyl, you could easily tell who cared about their audio and who didn't. Just randomly examine one record from someone's collection, or watch them prep an LP for listening. Doing it right requires careful storage of the albums, loving removal from the sleeve, taking care to only hold the sides, and then the Discwasher ritual of cleaning the record. Every. Single. Time. Anyone who didn't care about their music would be marked by beat-up records, and punished with crackly sound. With the advent of CD, any slob can have the same excellent sounds as the audiophile.

Sunday, April 06, 2014

Epilogue to the Movie/Musical "Once" (Spoiler Alert)

Spoiler alert...stop reading if you don't want to know the ending to Once.

We saw the movie in 2008 and just saw the musical at the Orpheum. We loved them both. Terriffic music. I really liked the non-storybook ending. However, if we continue to play out the characters' lives, I think the storybook ending might come to pass. Here is my reasoning...

The relationship between Guy and his NYC expat girlfriend is clearly too tempestuous to last. I think he goes to NYC, gets back together with her, but they only last 18 months, 2 years tops.

As far as Girl's relationship goes--any husband who can't get along with such an all-around delight as her is bound to be worthless. Maybe he just can't adjust to life in a new country, I don't know. But no way are they going to stay reconciled.

So, within 2 years, Guy and Girl are both free to take up with each other. Whether that happens is not a sure thing. If he finds stardom, all bets are off. Likewise, if he stays in NYC, it's probably going nowhere. But there is a significant probability he is headed back to Dublin in 2 years, tail between he legs. And if that happens, the next step is obvious.

Saturday, April 05, 2014

Klein on PPACA (Obamacare)

Klein is right on about some big things:
  • Obamacare is here to stay, and Republicans would be well-advised--politically as well ethically--to focus on improving it, not continuing to pretend they can end it.
  • Doing so would give them an opportunity to pursue a favorite issue, the need for malpractice reform (maybe they could take some real chances, make that their own Obamacare moment, and actually do some lasting good).
  • The fact that each state has so much leeway in how to implement it is crazy and needs to be fixed.
But off-base on some important details, inherent in the nature of health insurance:
  • There should be a broader variety of options (lower premiums, higher cost-sharing)
  • Likewise a broader variety of coverages ("if a family believes it receives all the mental-health counseling it needs through its church", it should be required to pay for that coverage).
The problem here is self-selection. Should young people be able to opt-out of coverage for heart disease? Fit people out of diabetes? Down this path lies expensive complexity that ultimately adds no efficiency to the system.

Likewise the idea of more options for cost-structure. I already am in the camp that believes the options that exist are problematic. If I expect to be a low-utilizer, then I will go for the cheapest coverage (bronze). Even if I guess wrong, and get diagnosed with an expensive chronic disease, in a guaranteed-issue environment (aka, Community-Underwriting), I only have to wait the remainder of the year, for the next open enrollment, to sign up for a much more generous plan.

So the point is that self-selection will make having too many options actuarially un-viable. Better to make the most of the situation by keeping it stick-simple, and thereby reducing administrative costs.