The Chinese Connection

Posted Sep 18, 2016 at 22:27. Revised Aug 14, 2019 at 08:17.

Chinese and Americans have spent the last 150 years or more trying to understand each other and have managed to achieve some success at it. This venture was not easy because the cultural gulf between traditional Chinese and Western cultures is so wide that the possibility of much understanding looked remote indeed. Each side tended to perceive the other as ignorant and barbaric animals not worth dealing with, but those misconceptions became the starting point for a complexity cycle that is still unfolding today.

In the nineteenth century, some Americans began to look at China more positively than did the European colonial powers. The early Chinese immigrant communities in places like San Francisco had ways of doing things that began to make sense once Americans took the time to notice what the Chinese were doing and understand why they were doing it. San Franciscans, in particular, soon developed a love affair with Chinese cooking.

The Chinese, being good businessmen, quickly saw this love affair as an opportunity. Soon many Chinese restaurants were in business to serve their customers’ newly acquired tastes. The new foods caught on so completely with many people that they could not wait to eat any and all new food that the city’s Chinese restaurants might offer.

According to legend, this desire for exotic new Chinese cuisine was satisfied by one restaurant owner in a clever and creative way. He announced to his customers that a ship had just arrived from China and was carrying a recipe for the newest and most exotic Chinese food of all, and he committed to preparing and serving this new delicacy starting on the following day.

The new food, which the restaurant owner named “chop suey,” was an instant success. Its name certainly sounded very Chinese, and the magic recipe for preparing it was quite simple. The restaurant owner simply took the previous day’s leftovers and served them attractively.

The only thing Chinese about chop suey was that a Chinese-American restaurant served it. No one questioned its Chinese origin, though, because the name sounded Chinese. People soon found out that chop suey was an American invention, but they did not mind being tricked. They regarded the restaurant owner as pretty creative and were able to chuckle over being tricked in such a harmless and creative way. Unlike those Westerners who looked down on everything Chinese, the patrons of these restaurants were gaining some understanding and respect for a people and a culture that most Westerners were dismissing.

The funniest thing of all is that chop suey is a common food in America to this day, and millions of Americans still believe that everybody in China eats chop suey. The enterprising restaurant owner would no doubt be very surprised by the widespread consequences of his little trick.

In a somewhat similar manner, an important Chinese food crop was unknown in America until it was brought to America from China. This crop, often with genetic modifications, now grows in America and is probably America’s most valuable single food crop. Few Americans connect this crop with China, but they are happy to believe that chop suey is a staple food in China.

The plant from China that is now America's most valuable food crop.Extensive fields of this Chinese crop now grow to a height of four feet (120 cm.) under good growing conditions, yet most Americans have no idea what this crop is, even when they see it. Here is a picture of the Chinese crop, growing in Ohio just before it ripened for harvest. Can you recognize and name this valuable food crop? Today, more of it is grown in the United States than in China!

About 140 years ago many people at the First Church in Oberlin, Ohio, had become aware of the extreme poverty in rural China and felt that Chinese peasants could benefit from gaining awareness of Western knowledge and religion. A more serious Chinese-American interaction came out of this awakening awareness. The birth of this interaction happened just one mile from the field now containing the pictured Chinese mystery crop.

image of the Shansi scrollA few of these concerned Ohioans and their families went to China’s Shanxi Province to set up a small church and school. The Clapp family, who were among those who had gone to Shanxi, returned to America on leave after spending several years in China. When the Clapps left for home, their students presented a scroll to them that thanked them for their work.

A year later the Clapps returned to Shanxi to continue their teaching. In 1900 everyone from Oberlin who was in Shanxi, including the Clapps, was killed in the Boxer Rebellion. Back in America the friends and families of those killed were determined to continue working to better the circumstances of Chinese peasants. They did not call for retribution against China.

In the years following the Boxer Rebellion a memorial to the missionary/teachers killed in the Rebellion was constructed in Oberlin, and an organization called the Shansi Association was formed to raise funds for sending teachers back to Shanxi. (In earlier times Shanxi was commonly spelled in English as Shansi.) In the first part of China’s Communist period the Shansi Association teachers were ordered out of China, which caused the organization to send its people to places like India and Japan instead. Today, Shansi teachers are once again in China at Beijing Normal University and Shanxi Agricultural University. The Shansi organization has remained involved in teaching in other Asian countries even though its people are again welcome in China.

The Shanxi scroll survived because the Clapps had left the scroll in America when they returned to China. More than 40 years later a member of the Clapp family found the scroll and recognized that it was important. It was presented to the First Church in Oberlin, where it remains on display today. An English translation of the scroll is on the First Church wall beside the scroll.

China today is a far different place from the China that gave birth to this scroll. Nevertheless, that earlier world is part of the continuity of Chinese history. It is noteworthy that this perhaps controversial piece of Chinese and American interaction survived Chairman Mao’s Cultural Revolution because it was on the opposite side of the world from China. Complexities sometimes play out in unexpected ways.

Now you can honestly say Nobody told me.

Copyright © 2016-2019 Charles E. Dial. All rights reserved.
Posted Sep 18, 2016 at 22:27. Revised Aug 14, 2019 at 08:17. –> Retrieved Aug 25, 2019 at 00:56.
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Why Banks Hire Idiots

Posted Aug 15, 2016 at 11:11. Revised Aug 14, 2019 at 08:17.

Banks and financial institutions don’t always hire idiots because their human resources people occasionally make a mistake and hire someone competent. Indeed, sometimes Human Resources (which normally is neither human nor a resource) lets competent people slip through is the system’s salvation. Once hired, these Human Resources accidents quickly find each other and become the connivers who will run the organization in the future.

Employee Requirements.

There are reasons why idiots are indispensable in a financial environment, but these reasons are not clear to the uninformed average person. Most people think the tellers and loan officers whom they see in a bank branch are the bank. These people are only a tiny part of an organization having thousands of people working behind the scene in operations centers. Such a complex organization requires rigidly structured interdepartmental communication, which in turn creates an impressive Complexity Trap. Idiots who never think and never ask intelligent questions are best suited to blindly ignoring complexities that might overpower more perceptive people.

A paramount need in banking is to reduce the chance that employees will steal money from the bank. Hiring idiots is the first line of defense since idiots are usually not astute enough to defraud a bank. The next defense is requiring that two people constantly watch each other and check each other’s work when doing tasks involving large amounts of money. In these cases, people must communicate only with their supervisors and not get friendly with their co-workers. Friendship among peers can lead to cooperation, which is the foundation of collusion and fraud.

The Job Requirements.

At the customer contact level, crazy things happen because most customers are irrational and paranoid on the topic of money. The organization’s public contact people must be capable of thinking only in reactive ways since the craziness of what the next customer might ask for is unpredictable and cannot be prepared for in advance. Their job requirements are not unlike those for the job of orderly in a mental hospital. Thinking ahead and planning are pointless in such an environment, so nutty people or idiots are the perfect employees for such positions.

The employee training needed to deal with customers is deceptively simple, so hiring idiots is often quite enough. Quickly learning and understanding how to handle ninety percent of the transactions a bank teller encounters requires no unusual talent. Unfortunately, the other ten percent of the job involves recognizing and correctly handling tricky transactions that are disasters when handled wrong. Gaining the experience needed to recognize and handle the unusual transactions can take thirty years rather than three days.

Hiring idiots gets the people needed to handle the ninety percent of all transactions that are simple. The other ten percent are not worth worrying about because the extensive use of decision-making committees guarantees that any blame will be diluted and dispersed to everyone on the committee. Committees exist for this purpose. Manning them with idiots helps lower staff costs because low-cost idiots can mess things up just as effectively as can more highly paid people.

Employee Presentation.

The use of idiots in financial institutions in no way implies that just any idiot will do. The image which an employee presents is critical to gaining customer trust and respect, so the idiot must have the first mandatory prerequisite of any successful con artist – a sincere and honest face. Presenting an idiot to customers as being competent and trustworthy is theater, and only requires basic acting skills. A bath, a shave, and an $800.00 suit will fully supply this needed image of competence. This formula applies to both bankers and bankerettes because banking is a sexually indiscriminate world wherein all idiots are equal, and all receive essentially equal and minuscule pay for equal work.

The remaining idiot presentation stage props consist of a fine mahogany desk, a plush carpet, and high-quality drapes for the office windows. These expenses along with the $800.00 suit save a financial institution an enormous amount in staff costs. How? It’s easy. A neurotic and insecure idiot wants to look important and will work for a much lower salary than a competent idiot, and the resulting payroll savings will quickly pay for the stage props’ high costs. The last accoutrement for our image adorned employee is to give him/her an impressive and much-valued job title instead of a decent salary.

Financial Committee Requirements.

There is one last warning for committee decision-making. The group must always make the decision for which it will be least criticized should things go wrong later. Never make a good decision that could subject you to criticism if it were to go wrong. Never think outside of the box since that risks making a good decision instead of a safe decision.

Financial committees must always focus focused on avoiding risk, especially when making loan decisions. Risk is just uncertainty of outcome. Lending money to a temporarily unemployed worker cannot be allowed because he may or may not be able to pay the funds back. i.e. the uncertain outcome makes the loan risky. On the other hand, loaning money to a scam artist with perfect financial paperwork is perfectly fine because there is no risk from uncertainty of outcome. Everyone knows with complete certainty that the loan will never be repaid. The committee cannot be criticized for making a loan involving no risk – that is, one having complete certainty of outcome.

Computerizing The Complexity Trap.

The Organizational Complexity Trap created by computerizing large financial organizations is mind-boggling. Computerization is necessary to deal efficiently with the huge quantities of information involved, but computerization also requires that those implementing and maintaining the computer systems communicate primarily with their project peers instead of with their supervisors. The people working on different facets of a project cannot be successful unless each person makes sure his piece fits together properly with the project’s other pieces. Any managerial move that blocks communication between computer project workers is a formula for disaster. Lateral communication is far more important than is vertical communication.

Successful computer project bosses must set down the goals for the group, listen to the concerns of the project’s workers, and function as the tiebreaker when the workers can’t agree on how to proceed. Sitting back and listening is the polar opposite management model from the jackboot Nazi management model required to keep up good financial control in the rest of the organization. The resulting complexity tangle between the two opposing management models disrupts the organization’s entire sociology and creates a cobra-mongoose relationship between the IT department and everyone else. The over-specialization needed to handle the organization’s ever more narrowly focused tasks only further expands the gulf between the two pieces of the organization.

The Conclusion.

You now have the basic knowledge needed to navigate modern financial Complexity Traps. Just don’t lose sight of the fact that all complexity traps will implode at some point. Make sure you are alert enough and agile enough to jump clear before it happens.

Now you can honestly say Nobody told me.

Copyright © 2016-2019 Charles E. Dial. All rights reserved.
Posted Aug 15, 2016 at 11:11. Revised Aug 14, 2019 at 08:17. –> Retrieved Aug 25, 2019 at 00:56.
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Intelligence and Stupidity

Posted Jul 26, 2016 at 11:11. Revised Aug 14, 2019 at 08:17.

International intelligence gathering and spying are pretty boring activities most of the time. They are boring because most intelligence gathering consists of desk work and analyzing readily available information. Just because certain information is readily available does not mean that it can be ignored when seeking top-secret information about what another government is doing or plans to do.

The recent massive leak of sensitive information in which former Secretary of State Hillary Clinton compromised tens of thousands of potentially sensitive documents by handling them extremely carelessly is a case in point. An uninformed observer might dismiss her carelessness because most of the mishandled information appears to be unimportant.

An intelligence analyst knows that the bulk of the information collected is of little or no apparent value. It is only after assembling the many pieces into a picture of what is going on do some of the insignificant items become important. J.D. Nobody is appalled that so many people dismiss this process as being of little consequence, thereby showing an appalling ignorance of the importance of trivia to intelligence gathering. In more than a few cases this ignorance rises to the level of just plain stupidity if the ignorant person keeps refusing to accept the seriousness of the situation once the process is explained to him/her. Let’s now walk through an example of how inconsequential intelligence is processed and might hold the clue to obtaining much more important information.

The Secretary of State sends an email to her daughter via insecure channels saying that they will get together for breakfast the following day. Getting together for breakfast is hardly a world-changing event. The following morning the Secretary sends her daughter an email saying that she must make an emergency trip to London and cancels the breakfast appointment.

A foreign intelligence agency intercepts these two emails and discerns that this emergency trip is almost certainly due to a developing monetary crisis in England. This breakfast cancellation reinforces information from other sources that a monetary crisis may be about to happen. This new information makes it clear that the foreign power can safely take market positions that will generate billions in profit at the cost of everyone else once the crisis blows out into the open. The breakfast cancellation has provided the key to turning the suspect crisis information into actionable information. Every piece of trivium potentially has important intelligence. Trivia can also be critically important to generating disinformation to trick an opponent.

There have been two recent instances in the U.S. where the failure to secure email communications adequately has made much valuable information readily available to hostile foreign powers. The first instance is the private email server used by Hillary Clinton when she was Secretary of State. The second instance is the failure of the Democratic National Committee (DNC) to secure its embarrassing email communications adequately. Hackers broke into much DNC email correspondence and posted it on the Internet, with the clear intent of disrupting the American political process.

This disruption has succeeded quite well, for it predictably has generated much furious discussion over who stole the information, what the motives were, and how to react to the manipulations and betrayals revealed in the emails. Unfortunately, the reaction to this has been a trial lawyer like reaction that argues endlessly over who is innocent or guilty.

Assigning blame has become a perfect storm in this situation because many persons have handled the embarrassing emails. The players in the game have thereby dispersed the culpability among many persons, allowing everyone to point a finger at someone else. Assigning blame is central in a court of law but has little relevance to dealing effectively with the dirty tricks of the espionage and disinformation worlds.

Worse yet is the time-proven principle of not informing the top-level affected person of the mess and dirty tricks that are underfoot. Intentionally not knowing what is going on lets the boss claim complete ignorance of the dirt should it be exposed later. Until then the boss can publicly bask in premeditated ignorance of what is happening. Should the subordinates’ treachery be exposed the reaction by the boss will be one of well-scripted horror, and a few subordinates will be scapegoated for their “rogue” behavior. The operatives playing the dirty tricks are hired into their jobs because they clearly understand that playing dirty tricks is part of their job description, even when they are given explicit orders to the contrary.

Subordinates understand that they must take the blame should their shenanigans turn sour. They act expecting that any needed legal and financial help will clandestinely come out of the woodwork to mitigate complications resulting from following their phantom marching orders.

In the Complexity Trap world of intelligence and espionage, the trial lawyer’s escape via the route of premeditated ignorance does not work. Premeditated ignorance becomes stupidity once people perceive the top dog as stupid and incompetent because the proper questions were not asked. Trial lawyers are glib problem obfuscators, not the analytical problem solvers required for information analysis.

Turning intelligence and information processing into an exercise in trial lawyering is an exercise in stupidity because results matter far more than does the blame for compromising information. Understanding this difference is critical to winning the currently underway Third World War. The Third World War is a war of cyber intelligence and psychological terror. Trial lawyers are ill-equipped to lead in this war because losing a court decision is not remotely as serious as losing a cyber guerrilla war based on terrorism.

Now you can honestly say Nobody told me.

Copyright © 2016-2019 Charles E. Dial. All rights reserved.
Posted Jul 26, 2016 at 11:11. Revised Aug 14, 2019 at 08:17. –> Retrieved Aug 25, 2019 at 00:56.
Transcript News Feed: https://ct.complexitytrap.org/feed/

Trump – The Student of FDR?

Posted Jul 17, 2016 at 10:03. Revised Aug 14, 2019 at 08:17.

History is bunk, right? After all, if that were not the case modern, enlightened, up-to-date educators would not have all but eliminated it from curricula. People familiar with the last seventy years of history might spot a Complexity Trap cycle covering the period from Franklin Delano Roosevelt (FDR) to Donald Trump. Ashes to ashes. J.D. Nobody didn’t know that Donald Trump would become President when this was written, but that is not the point. Beneath the surface, Trump, Roosevelt, and even Abraham Lincoln have some surprising similarities that their respective enthusiasts do not see. J.D. Nobody, however, clearly sees similarities between Trump and FDR.

Years ago J.D. Nobody had an acquaintance who was a deep thinker and scholar of history who understood that history is not bunk. He had an interesting theory: The U.S. has experienced three great crises since its founding, happening about 70 years apart. In his view, each crisis in America’s evolution involved different issues, but each was serious enough to put the country’s very survival in jeopardy.

Several characteristics have been common to all the crisis periods, with oversimplification being a primary one. Each crisis cycle has involved varying degrees of religious ferment in the years preceding its end. Most people underestimate both the complexities and the subtleties of the moment and wake up only when they are finally overwhelmed.

Each crisis has been marked by at least two political factions with strong, growing, deep convictions about whether or how to approach the perceived need for controversial change. The biggest faction is strong enough to block the next largest faction, but not strong enough to win the day. The political parties become more fragmented as the crisis comes to a head, and after the crisis, many voters “go over to the other side.” New political alignments and parties form, albeit some with the same name.

Changes coming out of each crisis period have resulted in at least some Constitutional change in governance. These changes happen either by formal Constitutional amendment or via “amendment by abandonment.” The abandonment route either simply ignores the Constitution’s requirements or uses as much glib lawyering as necessary to reinterpret the Constitution for the convenience of the moment.

Unfortunately, facts and logic become progressively less relevant as the crisis deepens. Both 85 years ago and today, most people have not recognized that the President has limited power to influence most events. Nevertheless, political theatrics have been central to fanning the perception that important political personalities have almost complete power over all events in the world and therefore must get the credit or blame for whatever happens.

The winner in a crisis period Presidential election is a controversial candidate who probably would not have been electable in immediately prior elections. His election victory is largely attributable to his having a dynamic, new personality and being able to seize the changed tone of the times and run with it. Most people perceive him as genuine, honest, and being concerned about them, whether or not he has those qualities. Once in office, the new President is hated by many, partly because of the need to expand presidential power to deal with the problems and partly because he must make decisions that will be widely hated.

“Crisis Zero”: The Revolutionary Period

Depending on how one counts, the U.S. has experienced four crises if one assumes that a crisis begins a cycle rather than ends it. The period between the publication of the Declaration of Independence in 1776 and the inauguration of George Washington as President in 1789 is Crisis Zero by this reckoning. By J.D. Nobody’s friend’s reckoning, the lead-up to Crisis One started after George Washington was inaugurated and ended with the outbreak of the Civil War in 1861.

Growing, but often unrecognized, relationship complexities and subtleties between England and the Colonies made the “crisis zero” period the first complexity trap in the nation’s history. The escape from the trap into a new era was long and not easy. The outcome of the Revolutionary War was far from certain, and the thirteen-year period under the Articles of Confederation was unstable.

Crisis One: The Constitutional Crisis

After breaking free of the Revolutionary period’s complexity trap, the nation embarked on a period of growth and prosperity fueled by having new territories to populate and by building the first transportation infrastructure. Replacing cowpaths with canals and railroads, growing the nation, and complementing slow mail communications with telegraphy ended in the constitutional complexity trap crisis. This crisis came to a head about 70 years after George Washington’s inauguration.

The Constitutional crisis was over the degree to which the states could govern themselves and whether states had the right to secede from the Union. Slavery was the third issue, and could not be addressed at the federal level because the Constitution reserved the needed authority to the individual states. These three issues resulted in the Civil War once passions on both sides finally reached the boiling point. The Crisis One troubles were highly visible and clearly seen by just about everyone.

Not until after Lincoln’s March 4, 1861 inauguration did this growing complexity trap become a full constitutional crisis. Just about everyone in the country was demonizing someone. Reason was almost completely missing from the scene. Lincoln was an exception to the lack of reason because he had a perspective tempered by being a Northerner, but had married into a Southern family.

When the war started most people thought the troubles would be resolved quickly because the other side would turn tail and run once confronted on the battlefield. The war’s opening battle – the First Battle of Bull Run, also called the Battle of First Manassas – occurred on July 21, 1861. The fierce fighting and many casualties sobered both armies, and only then did they realize that the war was going to be much longer and bloodier than either side had anticipated.

Many Washington, D.C. residents were so sure the rebellion would not last long that they came to the battlefield with picnics to see the rebels’ defeat. Instead, when the battle was over the picnickers were fleeing for their lives. Similarly, most people caught up in the next two crises were initially prone to minimizing the situation.

Initially, Lincoln’s thinking was that upholding the Constitution and keeping the nation together were more important than the slavery issue. Toward the war’s end, Lincoln changed his mind and made ending slavery his top priority. Deep wounds remained on both sides long after the war ended.

As in the later crises, the adversaries on each side were partly right. The Tenth Amendment to the Constitution denies all power to the federal government that the Constitution does not explicitly grant to the federal government. The Constitution makes it abundantly clear that the South was essentially correct on the states’ rights issue, while the North was right on the slavery issue. Ending slavery required a Constitutional amendment to give the federal government the expanded power needed.

The de facto Constitutional changes coming from Crisis One advanced the erosion of the Tenth Amendment’s original intent. This slow but relentless shift of power to the federal government caused both the people and the states to look progressively more to the federal government for solutions to problems.

Curiously, Britain’s recent vote to withdraw from the European Union is a modern “states’ rights” issue. In its way, history is repeating itself.

In the U.S., the political party alignments changed by Crisis One lasted for 70 to 100 years and reflected the growing trend toward more central power and a changed electorate. The new Republican Party became both the party of blacks who were able to vote and an advocate for more central power and business interests. The new Democratic Party became the party of farmers, laborers, and Southern whites. These somewhat illogical alignments slowly restructured themselves along more logical lines as a result of the 1965-1980 Civil Rights reforms.

Crisis Two: The Financial Crisis

Crisis Two, by the reckoning of J.D. Nobody‘s friend, was the financial crisis of the Great Depression. The Crisis Two complexity trap ended a 64 year period of growth and prosperity that was fueled by new territories to populate, industrialization, improved communication, and transportation innovations. In the course of one lifetime, the nation had become a nation of 48 states, a rapidly growing world industrial and financial power connected by rail, radio, telegraph, and telephone communications, and home to a growing urban, immigrant population. Television and aviation existed, but neither was ready for general use. World War One had transformed the country from a debtor nation into a creditor nation.

The 1920s were the culmination of the prosperity that came from all those developments. These new complexities set the stage for massive sociological, economic, and political change and launched the second crisis – almost 70 years after the first one. The world was far more complex sociologically than it had been 70 years earlier.

Herbert Hoover was the man in the White House when the roof fell in. Herbert Hoover, who preceded FDR as President, was widely perceived as responsible for the 1929 stock market crash and the serious depression that developed during Hoover’s term in office. By the end of his term, Hoover became soundly reviled by most of the public, similar to what President Barack Obama has experienced.

The spectacular 1929 stock market crash extended only from September 1929 to November 1929 and was attributable more to corrective market forces than to either any presidential actions or to the deteriorating economy. A major bull market followed the 1929 crash and continued until June 1930. Only then did the big, nearly three-year-long stock market trip to the bottom begin. This second stock market collapse was primarily a reflection of the failing economy and not the cause of the failure.

In Crisis Two, things fell apart to a far greater degree than just about anyone had thought possible. Financial difficulties fed on themselves as many solid loans and financial arrangements went bad along with the shaky ones. No doubt existed about the seriousness of the situation because the troubles were plainly visible, and everyone could see them everywhere. The economic disintegration had caused massive damage to the nation’s ability to produce food, clothing, and shelter. For many citizens, survival was now an issue.

The law required the Federal Reserve to protect the dollar by maintaining strong bank reserves, so the Fed had to raise interest rates to comply with the law. This tightening helped strangle the limping economy and made it impossible for many people and businesses to pay back bank loans. These bad loans then caused many banks to fail, making it progressively more difficult for the economy to work.

No economic group had wanted the troubles or benefitted from them, but there were plenty of simpletons with naively incomplete answers about how to fix things and whom to blame. The big difference between then and now is that today’s difficulties are not as overtly obvious as were those in the 1930s, but today many more simpletons are probably endowed with “the” answer. Complexity traps breed a backlash of simpletons.

The growing social, economic, and financial complexities after World War I eventually collapsed into chaotic simplicity and national despair. The situation provided the perfect setup for scapegoating those in positions of responsibility and blaming them for a colossal mess which they had only partly created. People love simple explanations for problems. Notice any similarities to today?

The 1932 election chose Franklin Delano Roosevelt as the next President in an atmosphere of much vitriol. The political tone of the times was not about to listen to the sitting President, even when his ideas made sense. Notice any similarities to today?

An opportunistic Congress had blocked Hoover’s ideas until FDR could get the credit for addressing the problems of the times. Notice any similarities to today? Indeed, Hoover had tried to carry out various of the ideas FDR implemented once he was in office.

The Hoover Presidency started at a time when civility and respect for both the presidency and the person of the president were normal but ended on a very different note. The nearly complete breakdown of political civility and growing political venom made the transition from Hoover to Roosevelt quite nasty and needlessly worsened the economic damage to the country. Notice any similarities to today?

During the transition period, Hoover repeatedly asked Roosevelt what he (Hoover) could do in his last days as President to smooth the transition into the Roosevelt Presidency and keep the crisis from becoming even worse. Roosevelt was not statesman enough to accept Hoover’s offer because he would not risk allowing a political “enemy” to be involved in part of the solution – even for the good of the country. More cooperation doubtless would have helped make the four-month transition between the presidents less damaging, but FDR saw increasing the damage to the country as a low price to pay to maximize the damage to a political opponent.

On Roosevelt’s inauguration day this situation rose to a crescendo of boorish indecency toward the departing President. Once the new President was sworn in, Hoover was forced to walk, alone, to the train station. No simple act of courtesy such as driving the former President to the train station or thanking him for giving his best efforts under often impossible circumstances occurred. Doing so would have risked both elevating the former President above demon level and reduced the “politically necessary” rancor the nation was feeling toward the “enemies” of the new administration. Notice any similarities to today?

Many people agreed with the actions taken by FDR to deal with the crisis, but many others were violently opposed, thinking the changes were a great mistake. The actions taken in the 1930s resulted in an intensely hot discussion between those who believed that FDR was saving the nation and those who believed that he was destroying it – a discussion that continues to this day.

Only one other instance of a catastrophic financial crisis has unfolded during the transition from a Republican President to a Democratic President. In the 2008 transition, George W. Bush and Barack Obama coordinated and cooperated effectively and with some gentility and civility. That situation was at high risk of becoming a financial Armageddon that would engulf the entire world, but fortunately, a few big men acted quickly and decisively to prevent disaster. The Presidential staffs focused on dealing with the problem at hand, not on vilifying their counterparts or maximizing their personal glory.

Both Trump and FDR have understood well that politics is theater and that their acting skills must be good enough to keep supporters from seeing through their performances. Conversely, it is equally important that their detractors see through the dishonesty and phoniness of those on the other side. This theater, in turn, feeds a self-reinforcing anger among the supporters and detractors, anger that further increases supporters’ motivation.

Building a power base via mutual vilification keeps the supporters as motivated as possible. This strategy works best when your supporters significantly, but not overwhelmingly, outnumber your detractors. You want your opponents to be strong enough to make a lot of threatening noise, but not strong enough to win. Although Lincoln did not extensively use vilification, it worked in 1862 and 1932, and it still works today.

The truth probably is that FDR saved the country from an even bigger disaster, but he also did some long-term damage in the process. The proud independence and self-reliance that most Americans had during the Depression lessened in the following decades and progressively more borrowing decreased the financial independence of most consumers.

This trend probably occurred because the growing complexity of post-Depression life gave people fewer simple, clear choices and less control over the growing complexities that they faced. Their slowly eroding self-reliance and decreasing ability to control their destiny and cope with growing complexity has forced people to look increasingly to the government for solutions to problems. This trend has not turned the land of the free and the home of the brave into the land of the freeloaders and the home of the bravado, but the trend is in that direction.

Crisis Three: The Cultural Crisis

The third great crisis, by the reckoning of J.D. Nobody‘s friend, arrived about 70 years after the previous crisis. J.D. Nobody‘s friend viewed this cultural crisis as probably the most serious of the crises to date because it goes to the heart of everything that the nation is. Everyone alive at the time of the first two crises could plainly see the troubles everywhere, whereas a cultural crisis is much more intangible and invisible. People know that something is very wrong but cannot clearly articulate what it is.

The more we reflect on the times in which we live, the more we notice the similarities between today and the times at the bottom of the Great Depression in 1932–1933. Both situations have involved colossal political upheavals having many similar crisis attributes. Emotions often transcend logic when such crises deepen.

In the first and third crises, many people threatened to leave the country if Abraham Lincoln or Donald Trump, respectively, were elected. Lincoln was thoroughly hated by much of the country for the duration of his presidency. Only after his death did Lincoln become a national hero.

Even though the party labels are reversed today, it is interesting that Donald Trump has learned presidential theater well from perhaps his best mentor – Franklin Delano Roosevelt. Both Trump and Roosevelt are renegade agents of change who are totally hated by “the establishment.” Both are men of great wealth who have put themselves forward as populists. Their most enthusiastic supporters are the people who hate wealth and privilege the most. Trump has gained their support by speaking to them in locker-room English rather than country club English and by dressing accordingly.

Roosevelt, like Trump, was notorious for glib double-talk that his supporters loved. FDR’s relentless vilification of bankers and industrialists played extremely well in Peoria but did little to build the bridges that could have helped heal the nation. In a sense, Roosevelt was a lifetime ahead of his time politically, with the difference being that he focused his double-talk on largely innocent bankers and industrialists, while Trump has focused his double-talk on Mexicans and Muslims.

Counterproductive slander is counterproductive slander, but it is a major ingredient in a crisis election. In pursuing the Presidency both Trump and Roosevelt have allowed the pursuit of political gain to demean both the office and the path to it.

One can only guess what psychological forces might have turned Trump and Roosevelt into emotional pieces of work obsessed with completely destroying their adversaries. Some of this would have been influenced by the homes in which they grew up. Trump hardly grew up in a gentle, teddy-bear atmosphere; FDR’s mother, Sarah Delano, was an overwhelming force in the lives of those around her, dominating FDR’s entire life until nearly the end of his second term as President.

In today’s history-exempt world almost nothing interconnects over time with anything else, and everything is somebody else’s fault. Nevertheless, the lives of FDR and Trump interconnect in that both came to the forefront in rapidly changing times with the recognition that the previous ways of doing things were on their way out. Theatrics and maverick behavior are the primary ways in which FDR and Trump have led their electorate away from the familiar and got the public to regard the newly evolving world as normal.

Of course, Trump is much cruder than FDR ever was, but we are living in much cruder times. Today the world is in an international cultural crisis, whereas FDR faced only a national financial crisis. After allowing for the differences between the times in which these two men have lived, their similarities stand out more strongly than do their differences. As long as people see history as bunk, people won’t connect many of these dots.

In short, both FDR and Trump are very wealthy men from the Establishment who have deep support from the common people. Both have been able to speak the language of the average person at times when that skill has mattered and to successfully appeal to those endowed with gullible ignorance.

History also says that, like FDR, if Trump is elected he will have his periods of political cheapness, such as 1933–1939, and periods of effective leadership, such as 1939–1945. Could today’s sins of Donald Trump be long-delayed and exaggerated blowback from the sins of FDR, and even from earlier leaders – a perverse payback, with compounded interest?

Now you can honestly say Nobody told me.

Copyright © 2016-2019 Charles E. Dial. All rights reserved.
Posted Jul 17, 2016 at 10:03. Revised Aug 14, 2019 at 08:17. –> Retrieved Aug 25, 2019 at 00:56.
Transcript News Feed: https://ct.complexitytrap.org/feed/

Too Small To Succeed

Posted Apr 20, 2016 at 10:21. Revised Aug 14, 2019 at 08:17.

It seems that the current political environment has brought politicians out of the woodwork, promising to break up financial institutions that are “Too Big to Fail.” The argument for ensuring that no bank or insurance company is “too big to fail” is sublimely simple. All financial institutions should be small enough so that when an individual institution fails the failure will not need a public funds bailout. Small failures would not infect or damage other institutions. This view ignores a financial disaster that hits everyone at once, which sometimes happens.

One can hardly argue against the intent behind keeping institutions small. Unfortunately, financial companies are more complex than they look, and there is much more to running a financial organization than one might think. For at least 200 years bankers have understood that financial dealings can sometimes go sour despite all efforts to handle them carefully and responsibly. They have also been quite aware that if enough things go wrong at the same time, those unfortunate events can sink a financial organization.

Interestingly, most people in Canada are probably more worried about a bank’s being too small to succeed, for reasons discussed later. Five big banks essentially make up the Canadian banking system. For instance, if the Royal Bank of Canada and the Bank of Montreal were to fail at the same time, a national financial crisis would ensue immediately. So why aren’t Canadians in a state of panic over this? There is an answer, but later.

From the beginning, a prudent banker was careful about lending money because if his bank failed, he went down with it. Good banking practice avoids lending too much money to any one customer and lends only to customers who can repay the loan. Unfortunately, there will always be unexpected circumstances that make a customer unable to repay his loan. A prudently run bank can handle such a loss without being pushed under because a single bad loan will be only a small part of all the institution’s assets.

Prudent bankers have also understood that a competitor’s failure is nothing to gloat over because the failure of a bank hurts the wider community. The bad loan will directly and indirectly hurt other banks as well. Because of this, banks long ago took the first step toward a complexity trap by agreeing that they would make funds available to their competitors when one of them needed a temporary bailout. Such arrangements make a town’s banks collectively stronger and safer.

Unfortunately, such arrangements make things worse when a community-wide disaster leaves many creditworthy customers unable to pay back their loans. For instance, in a farming community crop failures could make many responsible farmers unable to repay their loans. Such events would stress all the town’s banks and make each bank unable to help out the other banks. Guarantees among local banks are not adequate to handle a community-wide catastrophe.

The next step to spread the risk would include larger city banks in the mutual support arrangements, which is reasonable in most circumstances. Historically the smaller banks often deposited some reserves in a bigger city bank as an extra preparation for a rainy day. These reserve funds would be available when lady luck might leave many in the smaller towns broke. Sometimes the way to make a complex problem more reliable is to add to its complexity.

Spreading the risks inherent in a smaller town financial world to larger cities does make things safer – as long as nothing big hits all the regional financial institutions as well. So the logical next protection step is to spread the risk even further by including all the nation’s financial institutions in a network of guarantees. Again, this works as long as no big, adverse event hits all financial organizations at the same time.

Believing that a financial institution that is “too big to fail” increases the risk of system-wide failure is absurd. Catastrophic system-wide risk comes from the risk of a catastrophic system-wide disaster. In such a situation all financial institutions are hit hard, regardless of their size. That risk of collapse exists regardless of the scale of the institutions and comes from the basic system of guarantees wherein institutions look to other institutions for safety. Only the strong, whether big or small, will survive. When the situation is bad enough all connected dominoes will fall, and a few big ones are much easier to support than a sea of little ones. Smallness is a liability when dealing with a systemic failure. So what can one do to prevent this failure?

The answer is the one that the Federal Reserve Bank, the United States’ “bank of last resort,” used in 2008. At that time, the Fed instantly manufactured enough money to shore up the existing guarantees among the major financial institutions. “Printing money” to back up the guarantees was a terrifying task because nobody, not even insiders, had any way of knowing exactly how extensive the complex tangle of guarantees might be or the amount of money needed to arrest the chaos. The Fed saved the day because it was able to put overwhelming monetary pressure on a few key pressure points. In a world where all financial institutions are “too small to succeed,” the institutions become an army of cats that is impossible to herd.

Most of our Canadian friends understand the importance of having key intervention pressure points ready if needed. Canada’s cornerstone financial institutions are all “too big to fail.” Many Canadians clearly see that trying to sort out the complex guarantees among thousands of falling little dominoes and doing it in an environment where billions can and do move in milliseconds is absurd. Keeping thousands of little dominoes standing makes any system too small to succeed because swift and comprehensive interventions are not possible. When key institutions are “too big to fail,” central bankers have the key pressure points needed to intervene decisively and immediately. Being able to act immediately in support of critical inter-institution financial guarantees is the only way to win a financial war. Anyone who thinks that today’s international electronic banking is not a current, continuing, and vicious financial blood sport among people and nations needs to wake up.

Yes, most Canadian policymakers get it. They see that the risk from falling dominoes is the problem and that you can hold up a few big dominoes far more easily than you can support thousands of little ones. The system of inter-institution guarantees will keep thousands of little dominoes standing when a few big dominoes are kept standing. They also seem to understand the need for dealing with facts and logic when looking at a financial system, whereas Bernie Simpleton – in the name of helping the “little guy” – approaches the problem guided only by a complexity-free and uncalibrated moral compass.

Facts and logic are what one uses to calibrate a moral compass, but don’t waste your time trying to tell that to Bernie Simpleton. Financial Simpletons live in a cause-and-effect world in which uninformed morality sees everything as violating some moral precept and not interconnecting with anything else in substantive ways. It is a world in which everything is somebody else’s fault. Bernie would no doubt tell you that he loves Canadians – just not those Canadians who think the web of life is at all complex.

Canadians seem to get it from another angle as well. In some ways, Prime Minister Justin Trudeau is cut from the same cloth as Bernie Simpleton, but with an important difference: Trudeau has a brain in his head. Bernie Simpleton wants to raise corporate income taxes sharply even though those taxes are already the highest in the First World. He thinks this will bring jobs back to the U.S. and fund his welfare plans. No matter that current taxes already have driven an obscene amount of money and jobs out of the U.S. to more welcoming places. Trudeau has used his head enough to see that Canada will be better off by lowering Canadian taxes enough to import any American businesses and jobs that U.S. Simpletons might drive away. Any such match between Bernie Simpleton and Justin Trudeau is a guaranteed win for Canada.

In a Simpleton’s world, little guys can only be hurt by big guys. Simpletons see people as living in hierarchies where the people on the bottom are at the mercy of those at the top. In this world, there is no bidirectional interdependence, just top-down exploitation. It is no surprise that navigating this Simpleton’s world requires an uncalibrated moral compass.

Now you can honestly say Nobody told me.

Copyright © 2016-2019 Charles E. Dial. All rights reserved.
Posted Apr 20, 2016 at 10:21. Revised Aug 14, 2019 at 08:17. –> Retrieved Aug 25, 2019 at 00:56.
Transcript News Feed: https://ct.complexitytrap.org/feed/

Myers-Briggs Meets Politics

Posted Apr 3, 2016 at 19:13. Revised Aug 14, 2019 at 08:17.

J.D. Nobody cannot help but notice the intuitive connections between some concepts from Jungian psychology and various personalities in the 2016 American presidential contest – Donald Trump and Bernie Sanders. The Myers-Briggs® psychological inventory (test) and its underlying Jungian concepts reveal much about commonalities between these two personalities that each would no doubt hotly deny. Looking at these personalities through Jungian and traditional Chinese eyes reveals some things that American eyes miss.

American eyes typically view conflicting situations as having “either-or” choices having simple, conflicting cause and effect relationships. The traditional Chinese and Jungian view sees such situations as being the result of two opposing forces that are bound together, normally work together, and only sometimes come into conflict with each other.

The Myers-Briggs approach to understanding different people provides a way for describing different personalities. It does not label personalities judgmentally, but descriptively, in the way that color can describe a car. There is nothing right or wrong or superior or inferior in the Myers-Briggs personality descriptions just as there is nothing inherently good or bad about a yellow vs. green car. In both cases, these are only descriptions, not judgments. Of course, an individual may like certain personality attributes more than others, but that is a separate matter from declaring a particular personality to be inherently good or bad.

To be continued.

Now you can honestly say Nobody told me.

Copyright © 2016-2019 Charles E. Dial. All rights reserved.
Posted Apr 3, 2016 at 19:13. Revised Aug 14, 2019 at 08:17. –> Retrieved Aug 25, 2019 at 00:56.
Transcript News Feed: https://ct.complexitytrap.org/feed/

The Animals In The Barnyard Are Nervous

Posted Feb 23, 2016 at 17:53. Revised Jul 8, 2019 at 07:13.

For many years, farmers in Central and South America noticed that occasionally their animals would become restless, and would sometimes attempt to smash their way out of their pens or corrals. Many farmers believed this behavior was because the animals knew a major earthquake was imminent.

Knowledgeable people thought this was just ignorance and superstition on the part of the farmers, but over time, there was a growing realization that the animals knew something. No one was able to explain with certainty how they were detecting impending earthquakes, but there is much evidence that they knew when an earthquake was coming.

The 2016 political situation in America is similar. Huge numbers of people (the animals) know that something is wrong and that trouble lies ahead, but they’re not sure what to do about it or whom to blame. The people in the Establishment, like the farmers in Central and South America, have a hard time believing that many in the ordinary rank and file (the animals) may know something that the elite do not know.

Politics has manifested itself in two extreme groups of people, a group of conservatives who want to throw the rascals out and replace them with people who respect traditional values, and a group of extreme progressives who want to throw the rascals out and then massively redistribute wealth.

Even though these factions regard each other as enemies, they have a great deal in common. Both want to tear up the current order and replace it with something much more to their liking. In each case the people involved in this advocacy are often ignorant and simple, having simple-minded solutions that would probably create more problems than they would solve.

Because of this, the Establishment has difficulty listening to inarticulate outsiders. Ironically, the Establishment itself is also ignorant and uninformed about what is going on in the world beneath its feet.

Much of what is happening is a result of the ever-growing complexity of society, technology, and current life. This complexity guarantees that people will be less and less informed about the things going on around them simply because there is too much for any one person to absorb. It also results in ever-increasing specialization because each ever-narrowing specialty becomes ever more complex.

The people who are the best able to master the world of complexity and keep it running become increasingly more valuable and the pay they can demand reflects this. Those who are less able to stay on top of keeping this complex system running become less valuable economically than those in the know. Neither a return to the traditional values of earlier years nor wealth redistribution can reverse this force.

The primary cause for extreme wealth inequality is ever-growing complexity and its associated need for specialization. Tax law changes rarely reduce tax law complexity. Since 1981, there have been many conservative and liberal income-tax reforms that promised to produce tax fairness and less extreme wealth distribution. The result of the reforms is that inequalities increase as complexity makes the insiders more valuable because they have the knowledge for dealing with the tax system. This increasing tax complexity promotes the self-interest of tax accountants and tax attorneys.

Tax law complexity and tax law revisions guarantee an ever-growing need for tax advice from tax accountants and tax attorneys. Any change to tax law, even simplifying it, generates new work for tax practitioners. More complexity allows tax practitioners to become ever bigger leeches on the economically productive segments of society. It is simple: more tax law complexity (and change) generates more wealth for tax specialists. The beauty in this scam is the people will demand tax revisions forever, thereby giving the legislators the perfect excuse: “We are only complying with what our electorate has requested – which is what our job requires!” (And we are laughing all the way to the bank in the process!).

If pro is the opposite of con,
then what is the opposite of progress?
Congress!

As complexity grows, it places an increasing drag on people’s lives. They then seek simplicity by seeking ever simpler explanations for things and oversimplifying the things they do. Ever-increasing complexity ultimately generates a complexity trap that ends each complexity sub-cycle. The result is the situation devolves into the chaos of a new simplicity, which can be far more perverse than the original simplicity was.

The biggest complexity cycle, consisting of the sum of all the smaller ones, similarly has an ultimate complexity trap. What the limits to complexity are, when they might happen, and how our complexity will simplify will correct itself is not known. We do know that nothing can grow exponentially forever.

All this is unfolding before our very eyes, and we don’t believe what we are seeing.

Now you can honestly say Nobody told me.

Copyright © 2016-2019 Charles E. Dial. All rights reserved.
Posted Feb 23, 2016 at 17:53. Revised Jul 8, 2019 at 07:13. –> Retrieved Aug 25, 2019 at 00:56.
Transcript News Feed: https://ct.complexitytrap.org/feed/

The Importance of Being Nobody

Posted Feb 22, 2016 at 18:28. Revised Jul 15, 2019 at 07:17.

Being J.D. Nobody makes me a most important person. Indeed, millions of people quote me every day when they find themselves in a mess. The great beauty in being able to say “Nobody told me” is that no one can ever question you about whether it is true or false. You win either way when you quote me or pretend to quote me because it will be unclear to your listener whether the word “nobody” is a proper noun or just a convenient collective noun. Moreover, this tool which I am providing to the world is perfect for keeping honest lawyers honest.

The power I grant to you to quote me is unlimited, and it provides you with a “get out of jail free card” for use in any situation in which you have screwed up or are unjustly accused of screwing up.

Use this power wisely, and use it in full compliance with the creed of America’s one true state religion, embodied in the beliefs of The National Utilitarian Church. That simple and profound creed embodies our unswerving belief in pragmatism and nothing else.

Panic-filled pragmatism is the typical result of twenty-first-century complexity. Also, the more complexities people find in the world around them the more likely they are to seek too much simplification. The mission of The Complexity Trap and ScholarZero Publishing is to give you the cover you need to be able to say “Nobody told me” when someone challenges you. This response will be especially true when I, J.D. Nobody, have in fact told you something you don’t want to admit to knowing.

Now you can honestly say Nobody told me.

Copyright © 2016-2019 Charles E. Dial. All rights reserved.
Posted Feb 22, 2016 at 18:28. Revised Jul 15, 2019 at 07:17. –> Retrieved Aug 25, 2019 at 00:56.
Transcript News Feed: https://ct.complexitytrap.org/feed/