Wealth

In support of a constructive approach, we'll do some posts that deal with basic issues, and more.

Of course, the 'backbone' will be in the mix. Too, juxtaposition of this with the newbies.

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In other words, fun all around.

Remarks:

12/13/2011 -- McKinsey report shows that households hold over 40% of the world's wealth. Hence, the consumer as the major influence on the economy. Now, consider that the household wealth collection (using income in the U.S. as a proxy) is skewed to a very small bunch.

Modified: 12/13/2011

Doers and speculators

There are probably other ways to partition this thing, however we'll start with what the title says, as promised. You see, we're looking at what has gone down the past few decades such that we see larger accumulations of wealth in the hand of a smaller set than before. At the same time, the set of those without has grown substantially. So, we may start with one partition and move around to others as needed for the discussion.

What is a doer? Well, there was an earlier example of grain futures. The 'doer' class would cover a spectrum, from those providing seed, to the grower, to those who make use of the grain; even those who eat the grain would be in the class. Now, within the class there may be a way to measure the extent of membership (this extent may have some intrinsic value - that we will consider - yes, even in this day and age). The doer is trying to make his daily bread.

The speculator deals only with abstractions and the monetary associations thereof. We have to be careful here, as the doers will have their set of abstractions too. For instance, a grower (even as a doer, using acceptable levels of hedging) would deal with an abstract model related to decisions when trying to discern some choice in a 'futures' situation. Perhaps, there ought to be a different term used here; we'll consider that a research topic. But, the speculator has his daily bread; he's after the whole pie.

In the meantime, the use of 'abstraction' (probably in the extreme sense of 'abstract' nonsense - apologies to the category theorists) is apropos. The speculator has no intrinsic interest in the grain against which he or she may be gaming; this applies across the board as grain is only being used for example here; any other commodity would come into play.

And, the speculator would not have to be easily characterized by some prototypical notions, such as we see with the day trader. In general, it would be some 'big pocket' position; yet, what we have seen is that the 'gaming' allows privileges to the speculator that prevent in-the-large maximization across the whole. Oh, what the hell does that mean?

We'll look at that further next time; but, for now, let's just consider that the doers work with things that improve our lives through direct effort or through their efforts with others. What do the speculators bring except grief?

Remarks:

03/25/2013 -- The Atlantic had an article about King Abdullah II. Now, he is an example of a doer, from several angles. What I liked when I read it was that while being educated in Massachusetts, he bussed tables. What that means for those who don't know is clean up dirty dishes and such. When I, as a young man, was in the US Army, we had still had KP duty which included such types of things. Another task that ought to be tried once by everyone: cleaning the grease pit.

05/05/2011 -- Another round.

11/04/2010 -- Big Ben is still putting us at risk and trashing the savers.

01/22/2009 -- This topic is related to people matters which can get more attention now.

10/04/2008 -- One differentiating feature might be that speculators get bailed out. The doers get trampled.

Modified: 03/25/2013

Richer as smarter

We have asked the question the other way: if you're so smart, why aren't you rich?

Now, let's turn it around. Know of any idiots (to be defined) with a lot of money?

That the 'gab standard' (thanks, WSJ) has so much appeal and use, is indicative of a groupthink by those whose minds are mottled by too much money. There is a long list of things to discuss here.

But, poking fun at oops isn't of much use, as these are there, by necessity. Rather, we need to consider how smarts can go to more than just accumulation of more of itself (generally applied, as one could argue that even too much knowledge can be problematic, at times, analysis paralysis being one example).

One could argue that dumb rich won't be rich long, yet that type of statement would need to say what just might be 'dumb' (and, going with the gaming ontology would be problematic, as we've seen) as these types of discussions may, at some point, need to look at T-issues (one thing to consider is whether this is necessary, that is, following Kelly-Bootle, if we have Solomon why Occam?).

Of course, we need to look at 'rich' and possible variations thereof. It seems that most would run after money, even in it's abstracted form, given the chance. Are there other ways of being rich? Well, yes. One can be rich in 'smarts' that are not related to how much money you could get with it. Of course, these are not honed by 'best practice' methods.

You know, some of these may just dissipate when they are applied to any 'economic' theme. Which then brings up the use of 'idiot' earlier, how many ways are we idiots everyday? Again, one would want to set a framework for discussion, and perhaps demonstration, that does not necessitate big 'T' and its related issues.

Remarks:

07/03/2014 -- The Magna Charta is a wonderful example for us to apply to provider (king)/user (baron) issues.

06/12/2014 -- One way to look at this: cognitive elitism.

12/03/2013 -- Born smart or rich: The Atlantic. If the former, it depends upon how far down the hole one's life begins. Standing on the shoulders of giants does help which is what richness may (but, not necessarily) bring. ... Case in point. Take the English aristocracy. If you look at the history some big name families, you'll see a later start. Many times, a guy marries up and starts a dynasty (din-asty, as the brits say). On the other hand, many families died out. Take Charlemagne, all descendants now are via daughters. That is, there is no male line that come down through the years. Whole series of books look at expired lines. ... Back to the present. Of course, getting help is needed (despite the protestations of some supposed self-starters - Ayn loved writing about these - who forget their infantile dependencies, and those who coddled them - in some cases, trampling their families under their feet). Cooperation is part of sustainability. Despite that, though, richness has side-effects that are not easily overcome (even if you give it all away a la Bill and Warren - that does not counter negative karma accumulated over the years of abusive practices). So, for me, I would pick smart (too many examples of idiots with money - need I elaborate?).

09/19/2013 -- To some, evidently, grabbing oodles of money, without due consideration of ramifications to others or to the common weal, is the smartest thing; but, we do know that virtue is smart, to boot. Even the secularists are trying hard to show how their worldview can lead to right living (as in, they do not need God to have a conscience). And, what virtue might be prime important to this discussion? Prudence (see Remarks, this day).

06/03/2013 -- Supposed smarties, with big pockets, are making computational hells for us all due to several factors that we'll address.

05/03/2012 -- We'll start a 'meme' discussion, Either / Or.

10/13/2011 -- It is our economy.

03/22/2011 -- It's spring, and the garble uses gambling metaphors.

03/15/2011 -- The M & Ms are apropos.

03/13/2011 -- The machine can help us realize our smarts.

11/21/2010 -- Three years ago, it was said: Computational foci raise miraculous need. Still applies.

10/11/2009 -- Forbes has an article about the traits of those who made it rich. That one of these deals with technical talent (or the inverse of innumeracy) is correct, yet those who grab oodles of bucks, at the same time, have people working for them who are more talented. So, the question remains, is rich smart?

09/02/2009 -- I had not looked at Fooled by Randomness until today. The book contains a chapter with a title something like this, "if you're so rich, why aren't you smart?" We've mentioned one of Taleb's work before.

08/10/2009 -- As promised, FEDaerated is here.

06/18/2009 -- A fresh look will be needed.

04/27/2009 -- We need to look at near-zero.

03/25/2009 -- Rhetoric can be fun, but we have to get into these issues with depth and technicalities.

01/18/2009 - We even need to look at why we need finance.

12/18/2008 -- Example loss by the rich.

11/20/2008 -- Boon and bust, the way of fairy dust.

11/12/2008 -- Well, things feel apart fairly quickly, starting in September of 2008. By N0vember, there was general spooking. Starting in September, movements toward nationalization sped so fast that it was easy to forget that a Republican administration was still in the White House. Talk about rewarding hubris and moral hazardness!!!!

10/23/2008 -- How do we control the influence of the fairy dust provided by the quants?

10/04/2008 -- Those who are smarter ran to the government (and we the taxpayers) for a bailout.

07/31/2008 -- It's not enough to rant and spout off. So, let's start something constructive by looking at money and what it is.

Modified: 07/03/2014

Wealth and truth

Retirement issues are getting more press with the aging boomers coming to the related milestones. In many cases, the articles are of practical use as a growing set of people will need to manage their affairs in the fall of their lives. Generally, retirement has not been given much attention; why else would there have been the raids on savings and funds that we've seen which essentially depleted hope for many?

And, financial gaming is finally getting some attention, especially in its impact on those approaching retirement.

Sometimes, the articles relate to a very small set. Today, Barron's article "How much of a nest egg do you need to join the true elite?" asked the question of what is needed to be rich (the general agreement is around the $25 million mark) and looked at three groups who can be considered rich ($25M+, $50M+, and $500M+). Naturally, the cardinality of these sets, presumably of the US population, is comparatively small (129K, 49K, and 1.4K, respectively).

One could think about types of studies that such facts might lead to, such as asking how 'elite' in this sense compares to other types of eliteness or looking at what particular game provided the spigot or similar analysis. Questions arise about what emaciated economic carcasses line the playground after having fed into the wealth stream.

So, value and related concepts will continue to be of importance to discussions about truth.

Remarks:

11/12/2008 --

Well, things feel apart fairly quickly, starting in September of 2008. By N0vember, there was general spooking. Starting in September, movements toward nationalization sped so fast that it was easy to forget that a Republican administration was still in the White House. Talk about rewarding hubris and moral hazardness!!!!

07/31/2008 --

It's not enough to rant and spout off. So, let's start something constructive by looking at money and what it is.

Modified: 11/12/2008

Wealth as value

An earlier post mentioned the old saw about how 'smart' needs to be rich to prove itself. Well, 'is that so?' is a retort alluding to various topics related to truth that we'll have to address, eventually.

A recent weekend article in the Wall Street Journal describe the work of the rich man's Moore (as in Michael and, namely Jamie Johnson). Johnson uses 'aristocrat' to describe a growing class of the 'silver-spooned' which one could argue is the result of a meritocracy (assuming no malfeasance or barely legal gaming) rewarding aptitude and attitude yet one keeps going back to those who claim 'divine right' and more.

Johnson's work looks not only at inter-generational wealth but at the growing gap between the upper 1% (actually, it's a much smaller number) and the rest; these issues are very much part of discussions about sustainability.

One can argue that aptitude has value due to its potential to fruit; some attitudes have value (many don't); yet, somehow we need to grapple with the notion of things-in-themselves where even intrinsics might come into play.

Remarks:

10/13/2011 -- It is our economy.

01/18/2009 - We even need to look at why we need finance.

08/01/2008 -- Actually, we have the perfect domain for discussing this issue which covers a gamut in its roles and is of phenomenal importance, namely money and what it can represent, as well as how it ought to do its representation. Especially is this so in that the modern financial realm has been engineered to the max with outcomes that are obviously apparent in their undesirability.

06/12/2008 -- It's interesting to turn this around.

Modified: 10/13/2011

Capitalism and truth

Who screwed up this wonderful concept of Adam's? Well, it'll be part of the discussion. Why? There is a truth-engineering way to sustain an economy that is going to be necessary for 'savers' who are those who, for various reasons, cannot continue the game.

Today, the Feb threw money in the 'morally hazardous' game again, with lame arguments. The Dow had been unsettled (like choppy waters all day) but took a leap at the news. Who was behind this rise? Those who believed that the economy would be better. Ah, so many questions?

Well, after reaching a peak, in short order, there was a fall. Now, the only explanation of who was selling off cannot point back to those originally bought into the climb. Most probably, that class was still buying.

No, there was profit taking from another class or two (or more).

You see, this scenario dreamt about by Adam Smith has descended into a computationally based mayhem which has lost its mathematical, political, and spiritual basis and upon which there cannot be a sustained economy. The corpses of the system litter the landscape.

There has to be brought back to fore the ideals of the American dream (with globally appropriate extensions, of course), that allows mature management of money. The gamesters need to be relegated to a sand box, albeit of very large scope.

Remarks:

11/04/2010 -- Big Ben is still putting us at risk and trashing the savers.

08/18/2009 -- As promised, FEDaerated is here.

07/31/2009 -- Let's see, 5,000 got over $1M for services rendered. Well, that's probably a sign of being a best-and-brightest, at least to certain eyes; it's called rolling-in-the-dough.

Now, this can be used to illustrate how the game it to fill the pockets of a small set to an exorbitant amount. Does the game need to be that way? Hell no. We'll look at that some more.

06/20/2009 -- Yes, rent can go to labor (new look at capitalism), and finance can have a higher calling.

01/26/09 -- One question is will anything be learned. Some of the bail out money went to Merrill Lynch who was taken over by Bank of America and who paid out $4B (yes, billion) in bonuses. We need to re-look at finance and its use, in depth.

09/30/08 -- Well, things do get curiouser through time. Now, a major bailout is underway, but the bases of the problem are ignored.

05/31/08 -- More types of gaming problems become more evident every day. The trouble is that the economy runs on; we experiment on the fly. Does the Fed learn?

02/01/08 -- The players, now, are not like the 1930s, Ben. Though the human element may be playing a large factor (as it will continue to), there is a growing presence of 'virtual' (we ought to get a better characterizing word) via computation that essentially enabled the silliness that has evolved since the 70s (of last century). The analysis here is not being Luddite driven; rather, economics needs to step up to its roles related to quasi-empirical; gaming theory, notwithstanding everyone's debt to Nash, is not the basis for the future (..., more on this in time, ...).

There used to be a concept called 'saver' that was touted as important. If those types exist (and they do), there ought to be some long-term return that could be defined, preserved, and managed (for argument, let's just use 4%).

Later, there was the concept called 'spender' who was the new basis for the economy. Of course, they got rewarded with huge anti-returns (18% and up). From whence came the means to manage the accumulated 'spending' for this class? Essentially debt, many times with little chance that the 'spender' could repay (indentured servant, indeed).

How could this be? Does it not sound stupid to the reasonable mind?

Well, you see, there is the 'player' who has always been there defining the game, raking in the dough, and keeping things muddy enough for unbounded gains.

Starting in the 1980s, there have come about better ways to support this gaming-scheme of the 'player' with computation creating an environment compared to which the web's supposedly wild-west, dangerous reputation pales.

New York's Street is the new Las Vegas (oh, is there still the purported mob affiliation?).

For some reason, the Fed seems to be on the side of the 'player' and not the 'spender.' Actually, the 'spender' has been loaded with so much debt that its inter-generational effects are going to be more problematic than we allow.

You see, it probably could be guaranteed that the 'saver' and the 'spender' share several attributes. For one, both dealt with real things concerning what we might eat, wear, or use.

Is it probably as likely that the 'player' set includes many (the majority?) who do not know where their feet are? Is this an economic model about which to be proud?

The true capitalist would be turning over in his grave about now.

Modified: 11/04/2010

Our daily bread

All sorts of thoughts and discussion could occur under this topic. For one, in light of the season, one could think about 'daily bread' as a gift. That is, even if one works, the 'bread' that one earns to buy one's bread depends upon, in part, the largess of the one for whom one works. Do not managers always tell workers that their job is a gift (subject to withdrawal and outsourcing, we need to acknowledge that we have a 'gift economy' as far as jobs are concerned - with fingers still being ground to the bone, to boot, though)? Of course, we all know the babe and others, who may be incapacitated, cannot work.

For a bit, let's use 'bread' for that which flows in the economy that has several purposes; one of these uses is obtaining that which nourishes the body; also, we're using 'bread' for the thing that cannot buy you love (apologies to J,P,R,G - not necessarily in that order).

Therefore, the gift of bread is not an uncommon occurrence. We ought not even consider too much that those with too much bread might be problematic from several viewpoints (these are large T issues). This would lead to thinking about the relative amounts of bread that different folks may have.

For instance, the daily bread of some (a very few) is in the 100,000s (perhaps, even in the millions). Others may have cents (in the US currency sense - see IMF rating for Liberia) daily. Others are without - if not zero bread, approaching that.

The largest set has some dollars (10s and 100s) in their daily bread; we'll look at those ranges.

First, though, some words about motivation. In other areas, focus is on an OEM program that has an unbounded set of interesting issues. Guess what? Many of those involve bread, from all sorts of angles. Too (or second, if we were counting), bread has become a measure and goal in itself (see earlier post on If you're so smart, why aren't you rich?). As well (...), people who are past their prime need some set of bread whose cardinality depends upon a number of factors (see The Number book, etc.); yet, for many their set was pilfered in many cases; or, if still intact, the set is of uncertain value (many senses here).

Taking that last example, thinking of 'daily bread' is far better for thinking of retirement bread-needs than some extrapolation on current earnings. Why? Well, it maps well to expenditures which is a better basis for starting the proper analysis (and, we're not talking zero-based budgeting so much - rather, that gradients at this level have a whole lot of meaning). Of course, then one could categorize bread (in better ways than we've seen).

You see, those with too much bread usually do not have sufficient respect for it for several reasons (which we can go into eventually); if they do, they are the exception; having a good feel for all the issues involved is not an abstraction thing required for handling large oodles (not googles); rather, it has to do with the function of bread as it maps to what-the-bread-buys is for (see post on 7'oops7 in regard to the abstract and the function in terms of how we need to deal with complications and difficulties - relating to number one, above).

These types of posts may lead to another blog; for now, an engineering economist part of the mind will be ruminating about some strange characteristics about the world, many of which have come out of the woodwork in the past 30 years.

You see, with an emphasis on youth, where does the sense of arms-around-time come from? It cannot, despite the amount of brilliance (which we see grows by time - see IQ and PIQ).

Guess what? Any supplier just starting is like a youth in many cases; yet, we can probably clone out (in a sense like horticultural grafting) pieces of an organization where they are not starting from ground zero (perhaps, that is how the Wichita outgrowth from Boeing ought to be characterized).

Finally, we've developed a culture of youth, as if the young minds who are coming out of their academic experience or who are being let loose to fly freely due to a seemingly better intuitive grasp of things virtual and computational or who are just starting their efforts without the baggages that can accumulate through time are the key; in some types of realms this is called green field.

Well, let's look at it this way, as discussion of the phenomena behind that youth thrust will be important, nature revitalizes every spring; is that necessarily a new generation for all types in nature? Of course not.

Well, we know that bread is not sufficient, but it can be a starting point for building a model with better functional support for what needs to be done than what we've seen the past few decades.

No mention of bread and what it buys would be complete without a nod to Maslow.

Remarks:

11/21/2010 -- Three years ago, it was said: Computational foci raise miraculous need. Still applies.

11/04/2010 -- Big Ben is still putting us at risk and trashing the savers.

08/10/2009 -- As promised, FEDaerated is here.

06/17/2009 -- A fresh look will be needed.

01/19/2009 - We need to remember that people matter more than finance.

11/20/2008 -- Boon and bust, the way of fairy dust.

11/12/2008 -- Well, things feel apart fairly quickly, starting in September of 2008. By N0vember, there was general spooking. Starting in September, movements toward nationalization sped so fast that it was easy to forget that a Republican administration was still in the White House. Talk about rewarding hubris and moral hazardness!!!!

08/01/2008 -- It's not enough to rant and spout off. So, let's start something constructive by looking at money and what it is.

06/01/08 -- Humans like to play with their bread, we know. Yet, maturity is accompanied with an appreciation for the values of hedging (see Minsky). At some point, we get to more speculative thinking, yet that too ought to have some constraints which we have seen evolve into risk management schemes. The question then comes up, how do we keep out the froth (that is, the inevitable Ponzi-ness)?

Well, folks, the WSJ had an op-ed on 5/30/08 dealing with the Feds actions this past spring in which they opened up the discount window to investment banks among other things.

In other words, we the taxpayers are being allowed the tremendous opportunity of putting our bread behind what might essentially be junk. You see, 'leverage' is no longer suspect. No, leverage yourself to the hilt; expect that Ben and crew will bail you out. Oh, if only this were so for the rest of us!

So, speculation's access to our bread ought to be seriously constrained. Ponzi-ness? Well, perhaps only some minor percentage that is considered gaming and entertainment would be allowed.

So, we'll have to look at intrinsics and more.

01/18/08 -- Reinventing the wheel seems to be a continually present phenomenon in the work world despite several issues. For instance, each reinventing sets back to zero the 'truth' clock. Science does not allow proof via an infinite collection (that is, no large set of successes guarantees continuance thereof), yet that is no argument to throw out what is working in order to try something new whose value has to be proven through time.

Modified: 11/21/2010

Market as measure

Some have argued that the market is useful as an indicator, or measure; the amount of focus and reliance put upon the market varies widely; many types of decisions are founded upon market value; evaluation of decisions, concerns about status, and other management assessments somehow relate to the market.

Yet, we have to ask how this all relates to truth (little 't'). As well, the extent of the market has never been across the total of the human population; the forces at play in the market lead toward fixed points for which we can assign clever terms, many of which are not flattering. So, we'll not venture there, at this time.

Adam Smith's work has to be taken in context of the times that he lived; the world has changed phenomenally since his time. The rise of globalization and internationalization, as characterized by the web, for one, has some thinking that the market, in its idealized goal, is better served. Is that true? You see, the same fixed point (for nuances here, consider an interpretation as might be characterized in dynamical systems) phenomena are still problematic.

Perhaps, they are more so. Aspects of this problem relate to funds (hedge or otherwise), 'quant' efforts, and even political influence.

One thing that will be discussed further is how a true democratization might work better than the market. Of course, some may argue that what is defined here is really how the market ought to be. That's not an issue.

Who says that the market has evolved to what it ought to be? The issue is that at each stage of its evolution, some learn how to optimize their take (usually in an unbalanced manner).

Is all this anything other than a zero-sum game at the moment? This we'll look at in depth.

Remarks:

01/20/2013 -- Change link for bet2give.

08/04/2012  -- Over five years, we had a lot of side trips. We'll try to focus more. BTW, Rumsfeld has recently had his say.

10/11/2009 -- Discussion has gone over to FED-aerated. Note the 10/11/2009 Remarks about the Business Week article on India's progress' inhibitors. 'Near zero' recognizes that some always suffer more than others, especially in win-win situations, as the whole notion of characterization minimizes visceral reactions by diminishing the real in favor of the abstracted (ah, the modern world, you say?).

01/27/2009 -- Now a new day and way to consider these matters.

mm/dd/07 (earlier note) -- Market in the above sense is too constrained (gaming the world for profit by the few is not sufficient to knowledge as is needed for the many in future generations though it may be necessary) and does not consider the Collective Intelligence community in areas such as the bet2give example. We can look at these examples in terms of the need for a collective nose and how such might work. Of course, there are little and big 't' (truth or Truth) issues, and we must consider things and tribes, to boot.

Another issue to address might be attempts at obfuscation via abstraction, to wit the collection, labeling, slicing, and marketing of financial instruments that cannot be valued except by 'model' (or is it myth only?) - the sub-prime issue is extremely indicative of the problem. The cloud, supposedly made more palatable via the computational basis (read, the mathematical and related panache), then allows those in the know to exploit and fill their pockets. Do not the financial giants trample the simple little dreams of those who actually bring the 'value' to the table? All this because we've made progress with our control of the virtual via computation where only a few understand what is going on; granted a limited view of reality may have been enhanced thereby (we cannot go back but need to engineer computational truth), yet something is awry and stinks.

Modified: 01/20/2013

Measuring progress

Earlier posts, in this and and another context, mentioned the difficulties found with earned-value analysis and management in a project. Essentially, some time line, that itself is a collapsed tree/graph, serves as a basis for a whole bunch of stuff that maps to the time line.

That is, we're talking an abstracted collection which overlays the activity landscape (itself an abstraction) plus provides descriptive information (some of it measurable) about the thing-in-itself that is the purpose for the project.

Model is a good word to use though there are many nuances to consider. Typically, for earned-value we need to track task progress (activity) and product completeness.

Even simple situations can be problematic depending upon several factors. An example is that it is a lot easier looking backward than forward. Yet, we've learned how to look forward in some cases, though we can try to push our extrapolation prowess too far. Also, as the cardinality of the task and product component sets rise, so to do the issues of benchmark and performance.

There are common themes that can be used for this discussion, such as those confounding some financial situations. That is, how does one mark, that is, evaluate for comparative analysis and for supporting decisions (necessary correction)? We've mentioned model; this capability is both boon and bane to the problem (and actually, the motivation for this blog). For some of the more recent financial instruments, this is not an easy task (marking to model).

Myth. That's a large subject dealing with mindsets and other phenomena that need some discussion.

Market. Unlike finance with its limited ontology and its dependence upon the dismal science, in engineering, we can actually build something and then test it. Success may very well revolve around techniques that quickly bring something to fruition which is then improved via an evolutionary scheme. This technique has found some use in software, its development driven by the requirements of the web.

Large products would need an entirely new variation on that theme. But, the notion that something must be seen in action is strongly inherent. A computer simulation versus prototype is still an open issue due to things like quasi-empiricism (will be looked at further).

Remarks:

03/28/2009 -- Mark to myth can be attributed to Buffet. Many claim that mark-to-market has exacerbated the current crunch (see WSJ Letters to the Editor - "Honest Accounting with Reasonable Write-Downs" Robert D. Arnott -- 3/27/2009). As said, the issues of this problem are not dissimilar from the earned-value problem of engineering. We'll revisit this issue shortly.

01/23/2009 -- Expect more effort in firming up the earned-value (and related) discussions.

06/12/2008 -- It's nice that engineering and finance have these parallels, thanks to economics being common between them, allowing more discussions of oops.

01/18/2008 -- See threads Finance as game and Wealth as measure.

Modified: 03/28/2009

If you're so smart, ...

Context: See Tru'eng anew, focus going forward, mathematics.

--

Have you ever heard, "If you're so smart, why aren't you rich?" (We can turn that around, to boot.)

Well, this was a common refrain in the 60s (and is even so now) when massive accumulations of wealth were only held by a few. Since that time, the set of wealth holders has grown quite large, yet it remains, with the proper perspective (what would be the threshold, etc.?), percentage-wise much smaller than the rest of us.

This retort generally was in response to statements alluding to philosophical superiority (since the posts, for now, are dealing with the 'little t' truth, let's exclude spiritual or moral arguments - yet the Fed jokes about moral hazards - it would be funny it this were not so serious -- also, see 3/30/08 remark about capitalism not honoring intellectuals). In many cases, the viewpoint being mocked was idealistic and may have even considered that determination of intrinsic value could be truthfully based.

In the sense of history, some economic and social analysis can start with that 60s era. Expansions occurred along many fronts, since then, that are too numerous for this forum. Just the advances in mathematics and science have been tremendous, and this enabled computation which then helped establish schemes for determining value.

The thing called the 'market' became to have a very large importance in the minds of many. For instance, in finance, 'marked to' market may be preferred to 'marked to' model which trumps 'marked to' wish (not in some views, see 6/1/08 Remark).

But, as recent events show, and again, we could say, since bubbles seems to be as ubiquitous as mankind has baser instincts, the market can become a ploy for those who are smarter to toy with the rest. It wasn't meant to be that way.

Slogan: 'marked to' the market needs truth engineering to improve handling of value issues.

A similar issue can be applied to advanced analytics (CAE, etc.) where the blurring of the line between reality and the model can push us toward losing sight of the former and setting too much reliance on the latter (see Unreasonable effectiveness).

Who is smarter? Those who fly high with abstractions or those who can trudge through gory details. You see, in finance, people chasing after the lure of easy money may fall into the former trap; yet, those pockets that do get lined (as, the success set is the smaller) need to rely on the reality built and maintained by those doing the trudging. So, too, in the product world, the reality is more associated with engineers and other doers rather than with other views (finance, mainly) that we hear from so much.

Remarks.

01/05/2015 -- Renewal, see Context line.

06/12/2014 -- One way to look at this: cognitive elitism.

12/03/2013 -- Born smart or rich: The Atlantic. If the former, it depends upon how far down the hole one's life begins. Standing on the shoulders of giants does help which is what richness may (but, not necessarily) bring. ... Case in point. Take the English aristocracy. If you look at the history some big name families, you'll see a later start. Many times, a guy marries up and starts a dynasty (din-asty, as the brits say). On the other hand, many families died out. Take Charlemagne, all descendants now are via daughters. That is, there is no male line that come down through the years. Whole series of books look at expired lines. ... Back to the present. Of course, getting help is needed (despite the protestations of some supposed self-starters - Ayn loved writing about these - who forget their infantile dependencies, and those who coddled them - in some cases, trampling their families under their feet). Cooperation is part of sustainability. Despite that, though, richness has side-effects that are not easily overcome (even if you give it all away a la Bill and Warren - that does not counter negative karma accumulated over the years of abusive practices). So, for me, I would pick smart (too many examples of idiots with money - need I elaborate?).

09/19/2013 -- To some, evidently, grabbing oodles of money, without due consideration of ramifications to others or to the common weal, is the smartest thing; but, we do know that virtue is smart, to boot. Even the secularists are trying hard to show how their worldview can lead to right living (as in, they do not need God to have a conscience). And, what virtue might be prime important to this discussion? Prudence (see Remarks, this day).

09/18/2013 -- Pop, fizz, ... Ben had to show largess because of idiots who ran the economy to the ground (rogues all around). Ben is going. What do we have to look forward to? Businessweek has a review issue (of the past five years). Several articles are especially interesting. Too, phrasing shines: spin dross into gold (in relation to mortgage bonds). Perhaps, we'll get back to some of the more pertinent ones, at some point. If we do, it would be to bring forward what has been said here, from the beginning. To wit? Tranche and trash (WSJ has a good take on that). Securitization? This article brings on weeping (one example of the misuse of mathematics and computing that has been harped about). Adoption, and improved understanding, of lazy evaluation let loose the powers that resulted in the wild web and its little children, namely social media and more. To grasp the problem, we have to go back to computing that is in some type of responsible area. Avionics comes to mind. If what is couched as software in looser domains (financial engineering? -- looser?, yes bailouts are the norm despite all of the protestations of the ruling elite; or the whole cadre of the poorer folk can just suck it up when there are problems in order to relieve the fat cats' loss) were to used in flight controls, would we not have planes falling out of the sky? We'll get back to the simple issues that seem to not be seen by the elites chasing after the bucks that Ben has been throwing out of his helicopter.

06/03/2013 -- Supposed smarties, with big pockets, are making computational hells for us all due to several factors that we'll address.

05/02/2013 -- This has been a popular post (most popular), of late. Perhaps, it's the growing awareness of the ever-increasing gap twixt the haves and those without. The post ought to be re-done using insights gained over the past six years. It seems like a life-time ago. Well, the theme of the blog needs to look at lessons from the past (such as, we not learning Anselm's message). Too, money does not solve existential problems. Never has. And, one does not need a pot load to figure that out.

03/25/2013 -- The Atlantic had an article about King Abdullah II. Now, he is an example of a doer, from several angles. What I liked when I read it was that while being educated in Massachusetts, he bussed tables. What that means for those who don't know is clean up dirty dishes and such. When I, as a young man, was in the US Army, we had still had KP duty which included such types of things. Another task that ought to be tried once by everyone: cleaning the grease pit. There is no one so smart that they wouldn't learn something from the experience of the grease pit.

02/09/2013 -- This year, we'll get more into t-issues. Plenty of people are looking at science/religion topics. Too, Dawkins was quoted as saying that the existence of God ought to be subject to a scientific test. This can be arranged, given the right framework. Perhaps, I'm too old to see it, but its day will come. And, with its advent, we would not have an explanation, necessarily. The benefit? Progress of a nature not seen due to the dampening related to not allowing the broader views. Mind you, science getting into religion may help root out all of those accumulated bits of dross which are so problematic (too many to name here, but I would attempt such an enumeration if there were interest).

05/03/2012 -- We'll start a 'meme' discussion, Either / Or.

10/13/2011 -- It is our economy.

05/09/2011 -- Doers, reconsidered.

03/15/2011 -- The M & Ms are apropos.

03/13/2011 -- The machine can help us realize our smarts, in part.

10/11/2009 -- Forbes has an article about the traits of those who made it rich. That one of these deals with technical talent (or the inverse of innumeracy) is correct, yet those who grab oodles of bucks, at the same time, have people working for them who are more talented. So, the question remains, is rich smart?

10/11/2009 -- Discussion has gone over to FED-aerated. Note the 10/11/2009 Remarks about the Business Week article on India's progress' inhibitors. 'Near zero' recognizes that some always suffer more than others, especially in win-win situations, as the whole notion of characterization minimizes visceral reactions by diminishing the real in favor of the abstracted (ah, the modern world, you say?).

08/26/2009 -- Looking at some of the arguments (see Remarks), it seems that a corollary is: if you're so smart, then why don't you accept underdetermination?

08/10/2009 -- As promised, FEDaerated is here.

06/27/2009 -- We can think about this in terms of money and class (as Orwell would have us do).

06/18/2009 -- A fresh look will be needed.

05/08/2009 -- This'll be look at from first principles.

01/27/2009 -- Now a new day and way to consider these matters.

10/21/2008 -- Yes, it's time to re-look at related themes, hopefully coherently.

09/25/2008 -- Things continue to unfold. We're now going to bail out (we meaning the taxpayers) the idiots to the tune of $1 trillion. Oh well. Do smarts lead to fraud? That we need to answer.

06/11/08 -- Seems that some think that marking to 'model' is preferred to marking to 'market' which, if we think about it, could be true. Of course, it's a matter of who wins and loses (it's always near zero-sum, folks, we can only argue how far is 'near' which is an abstractionistic outfall, which, in the terms of money, results from gab standard-ing [a long story, to be told]).

06/01/08 -- Naturally, this topic would cover a whole lot of material, and it's is large enough to keep our interests for awhile. Too, both 'smart' and 'rich' are right at the core of matters that need discussion; that is, these topics cannot be avoided. For instance, we need to look at 'rich' in terms of utility, perhaps, as well as what is needed to be so (monetary basis, etc.).

The sub-prime event has brought attention to several related topics. How does one 'mark' for evaluation is one. No less august person than a Forbes magazine editor thinks that we ought not be marking to market. His argument is that such action causes unnecessary unwinding. Yet. given that abstraction leads to problematics (by necessity), continuing to mark to model stands to just perpetuate a house-of-cards, does it not?

Well, discussions about evaluation, in various senses, can follow a nose metaphor.

03/30/08 -- As referenced in a Cato Institute report, philosopher Robert Nozick noted that capitalism does not hold intellectuals to be of much value. Of course, the report emphasizes the intellectual as being a 'wordsmith' yet one could look at this as similar to the science and engineering rift, assuming that we could identify such.

02/24/08 -- So much going on that topics related to this blog keep growing. A recent article in the WSJ pointed to works suggesting that there is a new aristocracy in the making, the main story being that accumulation of riches is the key factor. That those at the top of business regularly skim off, albeit legally, pocket fillers could hint that the taking is considered as 'divinely' given. What would a different model for motivation look like and could it be sustainable? Well, the answer is not as quickly forthcoming as many would believe; we'll be looking at this further.

01/12/08 -- Things are getting interested, both in the 7'oops7 and finance realms. Plus, analysis is progressing as it ought.

12/02/07 -- So, accumulation and greed seem to be the operative viewpoint, or ought we say operational strategy. Too, though, is the drive to play the game. From the experiences of some, it might be that this latter drive is the stronger. Hence, we ought to provide a means for gaming that allow rewards to those who play the system well, yet, at the same time, protects the innocent (or not so). One result of this growing use of layers of abstraction is that the distance from the 'real' increases.

This whole post might get a different flavor at some point. Tolstoy had the right idea: how much land does one man need? So, the post might ask instead, how much money is necessary? However, large T (Truth) issues start to lurk.

Modified: 01/05/2015