Good Blog Post

I found this blog post recently, and would like to share it with everyone else.

Great stuff.

Knee Deep in the Hoopla

Everyone, to some degree, cares what other people think about them. Sure, there are those out there that have the “I am who I am, and all others be damned!” mentality, but even they must come to the stark realization one day that their success relies, to some degree, on the decisions of others. Sooner or later, everyone worries about their reputation.

So, what is it about this phenomenon of reputation?

Think about The effect which you have onto the world around you. Not just to your immediate family, close friends, and co-workers, but onto the circles of individuals belonging to more outlying portions of your friends and family. How about your acquaintances, lesser acquaintances, and people whom you don’t even really know, but with whom you still occasionally come into contact? The point is that we often have more impact on our own world, more than we realize. How often, however, do we take a moment to think about how we impact the lives around us, or if that impact is particularly positive or negative?

Think about the sum total of each of these groups, then think about the positive or negative impact which you have on them. Think about the degree of this impact: Just a bit good, just a bit bad, a whole lot good or a whole lot bad; or somewhere in between? In a psychological-economic sense and parlance of “Seven Habits of Highly Effective People” it is essentially the net imports and net exports of the emotional capital, both deposits and withdrawals, with other people.

Yes, people remember the impacts which you have on them. Some may let you know; some may not say a thing…but remember nonetheless. People tend to criticize when a need of theirs is not being met, but others will just let the ill will fester inside of them.

For the uninitiated, the concept of emotional deposits and withdrawals: Each time you interact with someone you will affect their emotions—if you do so positively, you make an “emotional deposit.” If you do so negatively, you make a withdrawal. Of course, you want to maximize the deposits which are made with each person in your life and minimize the chance that you will withdraw too much with a person. If you have enough emotional deposits with a person, you can certainly run a line of credit, so to speak. However…run a negative balance for too long and it becomes possible that you’re go into emotional default with a person and they’ll eventually write you off.

In an economic sense—a grander one—you must be aware of the aggregate of impacts which you have on other people. The net of the deposits and withdrawals which you make is ultimately the reputation which you have. In this sense, it is wise to be actively aware, monitor, and manage the impacts which you have with other people as to increase the value of your reputation and make you more famous than infamous.

Zen and the Art of Brain Maintenance

It seems, much of the time, that not more than a few hours, days, or (for the lucky ones amongst us) weeks can pass by without facing a difficult problem. While some people have developed methods for confronting such problems, scientists have decided to tackle the subject to determine the mechanics that take place behind such decisions.

Their hopes and definition of the issue at hand:

“’This insight is at the core of human intelligence … this is a key cognitive function that the human can boast to have,’ says Joydeep Bhattacharya, an assistant professor in Goldsmiths's psychology department. "We're interested [in finding out] whether—there is a sudden change that takes place or something that changes gradually [that] we're not consciously aware of," he says. The researchers believed they could pin down brain signals that would enable them to predict whether a person could solve a particular problem or not.”

The findings shed some light on human thought processes: Once at a mental impasses, subjects experienced strong gamma rhythms, patterns of brain wave activity which has previously been associated with selective attention, in the parietal cortex—think upper rear of the brain, responsible for integrating information obtained from sensory input. When offered clues in this particular increased gamma-rhythmic state, subjects were less likely to gain insight on getting past their impasses.

“If there’s excessive attention, it somehow creates mental fixation,” Dr. Bhattacharya notes: “Your brain is not in a receptive condition.”

When patients did not consciously monitor their thinking about a particular subject, they had their “eureka!” moments: The researchers likened it to an experience of emotional relief. Application of conscious information processing by the brain was associated with alpha waves—which have been previously associated with a relaxed and open mind. It has been shown that volunteers who were more apt to unwittingly solve problems exhibited more robust alpha rhythms as opposed to those who had to knowingly adjust their thinking to come up with the answer. In other words, the findings indicated that it is better to confront issues with an open mind rather than concentrating too much on them.

For a moment, let’s explore the larger network that the implications of these findings fit into. Research has shown that sleeping on a difficult issue is conducive to helping solve that issue, for instance. Just like any other muscle, the brain can be configured to have perspective to solve problems from a general sense, it can be trained to solve a specific set of problems, or it can be manipulated in the moment to work on a problem. My classic approach to solving a problem is that I prefer to take the tactful, graceful approach first; if that fails, then I will be apt to use a brute force approach. This particular philosophy fits in with the above, as grace employs techniques which are more concise, sophisticated, and even “Zen-like” in a sense, as opposed to the brute force approach where instead of coaxing a situation to become more to your satisfaction, you utilize more forceful techniques to control the situation to your satisfaction.

The solution for tough problems is simple, then: Either brute force your way through the toughness of the issue at hand…or use the smarter approach and walk away from the situation for a while. The alternative is to “train your brain” to have the perspective that is conducive to resolving these sorts of issues more quickly—by conditioning it to be more of a generalist than being focused on a specific manner of thinking.

Ethanol: Update

--Update---

You should make sure you've read the post before this one regarding Ethanol; then read this one.

Now...recall the portion where I mentioned ingenuity and innovativeness as part of the way to counter the un-economical nature of ethanol? I forgot to mention that the same ingenuity and innovativeness could also be applied to the ethanol problem.

Like what this company is doing: They claim to be able to make ethanol from most any biological material using a bacteria-based method for $1 per gallon. Apply economies of scale, an experience curve, and you have some potentially cheap biofuel!

The Un-Promise of Ethanol

I’m not usually one to write about topics that are very much political in this forum mostly out of respect for everyone’s political views, the polarizing nature that such views can be, and the fact that I could care less about a person’s political views: They are of a personal nature, and it is as simple as that. That being said, I’m going to breach what is mainly an energy topic in this post, and what is only a political topic by extension of it being an election year.

I saw a commercial today in which someone said “I don’t want to drill my fuel, I want to grow it:” Conventional wisdom that flows nicely and strikes an emotional note with many people sympathetic to the so-dubbed energy crisis.

Senator Dianne Feinstein, senior Democrat Senator from California, describes the promise of Ethanol: It is “a perfect, win-win solution for both the nation's farm economy and its energy needs. According to the National Corn Growers Association, ethanol production could make 1.4 billion bushels of corn "disappear" in 2004 ... enough to replace more than 2 billion gallons of gasoline and provide a much-needed market for farmers stricken with chronically low corn prices.” People feel the pinch of gasoline prices at the fuel pumps, eliciting an emotional reaction; furthermore people will tend to feel the plight of the depressed corn farmer—heck, I grew up on a farm and understand how economics work in agriculture.

However, I am an economist. From this perspective a dispassionate view of the situation must be done in order to properly assess the situation. What does the science say? What about the data?

David Pimentel has some insight on the situation. As an ecology professor at Cornell University, his research indicates that it takes the equivalent of just about 1 1/3 gallons of gasoline to produce enough ethanol to replace 1 gallon of fuel that goes into anything from your SUV to hybrid. In larger quantities, according to an article he authored in the science journal Natural Resources Research, it takes the equivalent of 271 gallons of gasoline to grow 2.47 acres of corn: Tractor fuel and the manufacture of nitrogen fertilizers are the biggest culprits here. The National Corn Growers Association, reporting on a study done by the U.S. Department of Agriculture, agrees: “In June 2004, the U.S. Department of Agriculture updated its 2002 analysis of the issue and determined that the net energy balance of ethanol production is 1.67 to 1. (For every 100 BTUs of energy used to make ethanol, 167 BTUs of ethanol is produced.) In 2002, USDA had concluded that the ratio was 1.35 to 1.”

Then, there’s the whole thing with the corn as part of the food supply situation: “The U.S. ethanol sector will need 2.6 billion bushels per year by 2010—1.2 billion bushels more than it consumed in 2005. That’s a lot of corn, and how the market adapts to this increased demand is likely to be one of the major developments of the early 21st century in U.S. agriculture. The most recent USDA Baseline Projections suggest that much of the additional corn needed for ethanol production will be diverted from exports.” MSNBC goes on to elaborate on the demand factors in the formula: “Demand has risen so sharply, the amount of corn in storage is expected to drop to half of last year's levels, the department said. Farmers should harvest 10.55 billion bushels of corn, a 5 percent drop from last year.”

Heck, it’s even making the price of the tacos I love so dearly to increase.

What are the essentials of the ethanol-as-a-biofuel situation? Ninety five percent of ethanol is produced from corn, and 11 percent of the U.S. corn crop went into ethanol production in 2004. With these numbers in hand, the U.S. Congress passed into law the Energy Policy Act of 2005; Section 1501 of which mandates 7.5 billion gallons of ethanol in use by 2012. As of August 2007 there were 124 ethanol plants around the country with 7 being expanded and 76 more being constructed: As a whole, somewhere in the range of 200 to 300 have been proposed.

The General Accounting Office of the U.S. Government, a body that deals almost entirely in numbers, has been quoted as saying that “ethanol's potential for substituting for petroleum is so small that it is unlikely to significantly affect overall energy security."

Now that we’ve defined the problem, what about the solution?

Human ingenuity, especially in the capacity for which the United States has been known, knows no bounds. If one is to take the two fundamental areas of scientific research of basic and applied, the former applies to research for the sake of research and “basic” or fundamental knowledge in the sciences; the latter is the sort such that the end result is a product or technology. With that, I believe strong basic research of a nation translates into a strong national defense—and I don’t believe that there is any political debate in this premise.

The best solution to this problem, then, is a joint approach whereas the markets and government work together towards the same goal of a economical form of energy which is either renewable or easily enough produced, and integrated into the current circumstances of our economy. Although not impossible, we live in an economy fueled by oil—making all that more difficult for this to happen. However, if part of economics is the risk-reward quotient, data firmly suggests that with the right motivation, impetus, and resources the reward hiding behind the risk could someday be a reality.

The Myth of the “Google Generation”

Perhaps you’ve heard the news: Younger generations born or raised during the last several years, the co-called “Internet Age,” are the most web-literate. They have an ease and familiarity with the technology of computing and the Internet which often dwarves those of older generations. They can find information readily out on the World Wide Web, process it readily, and use it effectively.

Right?

A recent study by the “CIBER” research team over at the University College of London claims that these assertions become more incorrect the further one reads into the above paragraph.

“Research-behaviour traits that are commonly associated with younger users – impatience in search and navigation, and zero tolerance for any delay in satisfying their information needs – are now becoming the norm for all age-groups, from younger pupils and undergraduates through to professors.”

What do they intend to do about it? Dr. Malcom Read, Executive Secretary of the British Joint Information Systems Committee, says:

“These findings add to our growing understanding of subjects that should concern all who work in further and higher education – the changing needs of our students and researchers and how libraries can meet their needs. We hope that this report will encourage debate around these important questions. We hope it will also serve to remind us all that students and researchers will continue to need the appropriate skills and training to help navigate an increasingly diverse and complex information landscape.”

I’ll be curious to see what comes from the forthcoming debate.

Evolution: Not Random

Evolution is not random.

"The findings of an international team of biologists demonstrate that evolution is not a random process, but rather occurs through the natural selection of successful traits...The findings, which constitute a significant milestone in establishing and reaffirming the mechanism of Darwin’s theory, will help in understanding how evolution works in all living creatures"

The Culture-Productivity Factor

I am currently studying for my Bachelors degree in Finance. In the course of my studies, particularly a leadership and professionalism course, a question was asked on a pre-assessment regarding what cultural diversity did to a workplace. The answer, of course, was not that it produced a richer cultural environment; rather that it increased productivity because different cultures have different ways of approaching and solving problems.

In fact, a recent study corroborates this information. The study shows that culture dictates the wiring of the brain, so to speak:

“Neuroscientists Trey Hedden and John Gabrieli of MIT's McGovern Institute for Brain Research asked Americans and East Asians to solve basic shape puzzles while in a functional magnetic resonance imaging (fMRI) scanner.”

It’s a fascinating study; and, in fact: "There's a hint that six months in a culture already changes you," he said, referring to psychological, rather than neurological, research. "It suggests that there's a lot of flexibility."

I, Economist

The Greeks used the words oikos for house and nomos for law which would eventually be combined to reflect philosophies which would evolve from the writings in the Muqaddimah, written by the Arab historian Ibn Khaldun in 1377. Mercantilists and physiocrats would eventually arise in Europe, becoming known as economists, studying the separate discipline of economics with the publishing of Adam Smith’s quintessential work The Wealth of Nations in 1776. A discipline falling within the purview of the larger study of business, it is formally considered a social science studying production, distribution, and consumption of goods.

When I was previously in school for one of my business degrees I categorized the three business sub-disciplines of accounting, finance, and economics into what I dubbed “Matthew’s Levels of Money” such that each of the fields dealt with money at different levels: Accounting deals with the simple “accounting” of funds inasmuch as making sure what money is where; economics deals with the greater movements of such things through groups of businesses, industries, markets, national economies, and larger systems. Finance deals with money flowing in intermediate systems, between the scales which accounting and economics covers. Lastly, I posed that there were areas in which accounting merged with finance and where finance and economics merged as fields of study.

While finance and accounting are all well and good, economics, at least to me, is the physics of the business world. Physics is the study of the relationship between matter and energy, one of the fundamental sciences on which everything else in the universe can be understood and is built upon. Economics is a business and social field of study which can shed immense amounts of light onto many things, not just those that involve money, distribution, or production.

For instance, when observing behaviors of others, the economist understands that people are apt to do one of two things: Seek pleasure and avoid pain. Put another way, one needs to find the incentive in the actions of individuals or groups thereof to understand their stated or unstated intentions. People speed in their cars along their route between points A and B because there is a perceived incentive that they would rather be at point B rather than either of the other alternatives. People cheat on their taxes because there is the perceived incentive that they will not have to pay as much money to the Internal Revenue Service or that they will get more money in tax refunds. They may be honest because that makes them feel good, or they may tell lies because they feel that there is an incentive in being perceived a different way than what reality would otherwise dictate: People chasing the incentive is a powerful tool.

A concept in economics which is closely related to a person’s incentive to do something is one that is old as the science itself: Utility. It is essentially defined as the degree of usefulness which a person assesses to a situation, product, or anything involving choice; classical economics dictates that each person should be maximizing utility in any situation involving choice. While practicality is often what textbooks teach in regards to how utility is measured, this can vary based on culture or any one of a multitude of other factors. For instance, companies have a tendency to use Canada as a test market, as opposed to the United States, because Canadians tend to attach more practicality to their measure of utility and Americans tend to attach more status or prestige to their perceived utility in a decision, such as one to purchase a product. Put another way, Canadians will buy the test pizza at a fast food chain restaurant because they find it convenient or tasty. Americans will purchase the pizza because it is the cool thing to do that week.

Economics is a versatile science which allows the practitioner to look at the details of a given situation or the big picture. From the intelligent interactions between agents to the dynamics of national economies, economists rely on data and an understanding of the geometry of a given situation. Calculated, the economist is an effective decision maker that can sort through and process large amounts of information and think effectively on their feet.

In the art of corporate warfare, the economist is an able participant and a lethal combatant. Even in the hands of any other member of the business team, a firm understanding of economics will make one’s effectiveness that much more potent.

Monkey Mondays: Mouse of Keyboard Monkey

The mouse which the kid of Keyboard Monkey would use.

See it here.

“To every action there is always opposed an equal reaction.”
—Sir Isaac Newton

Times change; everyone knows this. Change is that great constant that coincides with the passage of time. I used to work in a call center for the wireless phone industry: Starting as a vanilla agent in the receivables management department, I became one of the fastest employees to move into the “resolutions” department where the duty du jour was to assist agents in doing their jobs and assist customers in escalated situations. Just as any high technology industry, the wireless industry changes quickly. If something didn’t change (at least) on a weekly basis, something was wrong…and the next change would often be much bigger than the changes that would have normally occurred over the course of the last week or more that had not had change.

The easily-learned, but difficult to adapt to principle is that things change. Each day, all around us, we see things changing. However…what is the propensity for people to change along with the changing times?

There are conventional wisdoms abound here. Conventional wisdoms, as anyone whom as read here any time in the recent or distant past, understands that this sort of wisdom is often nothing more than convenient. The short answer is that people can change, but it can be difficult for them to do so.

The longer answer: Sir Isaac Newton, the guy that once proverbially had an apple fall onto his head, then determined that for every action there is an opposite and equal reaction and developed a brand new system of math to describe the phenomena that he had discovered in the universe. Among his definition of the brave new universe that was coming to know the world was the concept of inertia. This principle of classical mechanics dictates that an object at rest will stay at rest and, likewise, an object in motion will tend to stay in motion. People don’t change because they are often held back by inertia such that they have behaviors which hold them back. While I can’t cite the research, I recall hearing once that after a couple weeks of “staying home, holed up in the house,” doing little to nothing productive, a person’s brain chemistry changes fundamentally, such that they are more apt to continue in that mode of living: I’ve witnessed this around me over the years and experienced it myself once, during a down period. I have often asked myself about the madness in the minds of these people.

It seriously requires a person to force themselves to get off of their behind and go out and do something.

An interesting corollary to this: How does one deal with the constant of change?

Most of the time people are resistant to change. Going back to my days in the call center business I learned one critical thing: The people that resist change often get left behind. The people whom grasp onto the change, ride the wave, and become a part of the change, “change agents” and “change warriors,” often find themselves benefiting from the change rather than becoming a casualty of it. However, I have a caveat coupled with a case study: Be careful not to become a casualty of the change

Quote: Extraordinary People

“One machine can do the work of fifty ordinary men. No machine can do the work of one extraordinary man.”
—Elbert Hubbard, The Roycroft Dictionary and Book of Epigrams, 1923

To commemorate the last address Bill Gates will give at the Consumer Electronics Show as the Chairman of Microsoft, a quote from one of the biggest visionaries of our time:

“If GM had kept up with technology like the computer industry has, we would all be driving $25 cars that got 1000 MPG.”
—Bill Gates, Chief Software Architect and Chairman, Microsoft

Quote: They Can't Get Away Now!

“All right, they're on our left, they're on our right, they're in front of us, they're behind us... they can't get away this time.”
—Lieutenant General Lewis "Chesty" Burwell Puller, U.S. Marine Corps

Quote: Judgment and Experience

"Good judgment comes from experience and experience comes from bad judgment."
—Unknown

Monkey Mondays: Happy New Year Monkey!

The Knowledge Paradox

“When everybody knows that something is so, it means that nobody knows nothin’.”
—Andrew S. Grove, Co-founder of Intel

In other words, “it becomes nearly impossible to look beyond what you know and think outside the box you’ve built around yourself.” It is a paradox such that as our collective knowledge increases, such does our expertise, our creativity and innovative ability will tend to plateau or decrease. It is the classic “thinking inside a box,” and the walls thicken with our experience over time.

An essay appearing in the 1989 Journal of Political Economy called this the “curse of knowledge.” Experts in their respective disciplines learn through their daily activities the jargon of their subjects and perform their routine tasks in the ways in which they have always been done. While it is efficient and possesses a concept of utility, it can stifle innovation by taking the path much-taken.

People see the world how they want to see it, since the world revolves around each individual person, through the filters with which they perceive the rest of the world. I’ve written about this before in a few posts. This is why this curse is so pervasive: It can be difficult for people to imagine what the world is like outside their own universe and their own paradigm. As an aside, this is why it can be so difficult to find really, really good trainers and teachers.

Imagine your remote control at home: Anything from your television or stereo remote control to your $1000 remote control. It probably has many more buttons than a reasonable person would need, but they all exist on that remote control because an engineer somewhere in the research, development, or production process determined a use for that button; as described by Chip Heath in a book him and his brother Dan co-wrote in their book Made to Stick: Why Some Ideas Survive and Others Die. Mr. Heath says of this: “People who design products are experts cursed by their knowledge, and they can’t imagine what it’s like to be as ignorant as the rest of us.”

How can a person fix this?

Cynthia Barton Rabe proposes bringing in a team of outsiders, “zero-gravity thinkers” in order to add creativity and innovation to the development mix in her book Innovation Killer: How What We Know Limits What We Can Imagine — and What Smart Companies Are Doing About It. “I would ask my very, very basic questions,” making mention of the initial frustration, however transient it may be, with this approach, “it always turned out that we could come up with some terrific ideas.” She finishes her wisdom with: “Look for people with renaissance-thinker tendencies, who’ve done work in a related area but not in your specific field…Make it possible for someone who doesn’t report directly to that area to come in and say the emperor has no clothes.”

When in doubt, seek the perspective of others to forge your own wisdom in this often-chaotic world! However, in the end know that the decision is your own, and the responsibility of that decision is your own to bear, so weigh each perspective with the value with which it is truly worth!

The Not-So-Conventional Wisdom

Following World War II America went through a period in which the government, or the public sector, was growing poorer in relation to the private sector which was becoming wealthier. This is the outline offered by Harvard economist John Galbraith in his book The Affluent Society. It is also the origin of the term “conventional wisdom.”

We’ve all heard it: Conventional wisdom, rules of thumb, and urban legends. What is the problem with such “wisdom?” Not only is it “easy” wisdom but it also tends not to be true, just accepted by enough people in order for it to seem true. It acts as an obstacle to the truth, to new ideas, and is only fueled by the inertia of so many people believing in such bad information. This inertia is fueled by convenience, emotion, and assumption.

Common sense, on the other hand, is largely practical: Less of the abstract and more of the “collection of prejudices acquired by age eighteen,” according to Albert Einstein. In the same train of thought such practicality can have its limits when it comes to the progression of society: “Similarly, common sense has been invoked in opposition to many scientific and technological advancements. Such misuse of the notion of common sense is fallacious, being a form of the argumentum ad populum (appeal to the masses) fallacy.”

So, we return to our original premise: If so many people believe in it, it must be true, right? Logic dictates otherwise with a concept known as Argumentum ad populum. Translated from Latin it is “appeal to the people;” placed into a more concise context “if many believe so,” or “if many find it acceptable, then it is (acceptable or so).”

Alright, let’s test it.

It has been reported in the mainstream media that more than 1/3 of Americans believe there was a government conspiracy surrounding the attacks on the World Trade Center in New York City on September 11, 2001. As of 1 July 2007 the population was about 301 million individuals in the United States; 36 percent of 301 million people equals about 108.3 million people. More than 100 million people believe that the U.S. government was complicit—either actively or through negligence—in the horrible attacks of 9/11. Certainly more than 100 million people, statistically, can’t be wrong! Right?

I can’t help but look at the world from the perspective of an economist, believing in some bits of logic. Sociology teaches us that while the person might be intelligent, rational, and calculated, putting many of them together and their behaviors tend to move towards the irrational. Additionally, just because the many believe something…it doesn’t mean that it’s true.

How about looking at it this way: Have you ever voted in an election? Did the person whom you voted for win or lose? Doesn’t matter, because the majority of individuals voted for the person who got into the office; that means that he or she was good in their elected position by virtue of most people voting for them! Politicians are good by virtue of how many people voted for them…right? How about at any certain time when most people think that a particular company whose stock is a good place to invest? History and your favorite Internet finance site can tell you how this is a failed notion.

So, in the end the masses aren’t necessarily correct, conventional wisdom isn’t necessarily wisdom and tends to be more convenient than possessing any utility and your own experiences should be all that draws you towards a more thorough wisdom about the world.

A Look Back: The Science of 2007

Updated!

Science is arguably the single set of disciplines which propels the human race forward, drives culture, and increases our collective utility. The state of science can also be used to determine, via a snapshot, the state of the human condition; art and other elements of interdisciplinary studies flow from science. Just as this is so, I like to look back at the previous year’s scientific accomplishments.

Top 10 Scientific Breakthroughs, courtesy Wired News

Top 10 Science Breakthroughs of the Year, courtesy Science News

Top 25 Science Stories of 2007, courtesy Scientific American

Craziest Science Stories of 2007, courtesy Live Science

Top 100 Science Stories of 2007, courtesy Discover Magazine

Now We're Elite!

Now we're elite, or as is the popular vernacular amongst the die-hard Internet community: We're "leet."

The number "1337," as in one thousand three hundred and thirty seven, in "leet speak" dictates "eliteness."

Yeah, we're ending the year becoming "leet."

Keep on visiting and we'll see which mark we can hit next!