Stirring the Stockpot and Digesting Gore
April 19th, 2008 | by Mitchell Allen |
Photo by azrainman
The Book
I skimmed The Assault on Reason, by former U.S. Vice-President Al Gore.
The introduction was disturbingly profound, given that he pinpointed my reasons for not voting [clarification: the 2004 election].
He basically states that democracy, as a form of government in the United States, has been derailed by the loss of two-way communication between the elected officials and the erstwhile well-informed citizenry.
He blames mass media, which pre-empted the printed word as the means by which citizens became informed.
Basically, Gore posits that the marketplace of ideas is moribund.
Short of screaming at the television, we have no voice in the unilateral bombardment of sound bites.
Little wonder, then, that Gore is co-founder of Current TV, an interactive television network.
The Chapter
Gore has a wonderful way of writing, using analogies and anecdotes to get his points across.
The common thread throughout the book is the pervasive hopelessness of one-way communication.
Why should we care who runs the government, if nobody listens to us, anyway?
The sad thing is that savvy politicians are able to exploit human behavioristic reaction to mass media messages.
Gore shared the following:
I vividly remember a turning point in that Senate campaign when my opponent, a fine public servant named Victor Ashe who has since become a close friend, was narrowing the lead I had in the polls. After a detailed review of all the polling information and careful testing of potential TV commercials, the anticipated response from my opponent’s campaign and the planned response to the response, my advisers made a recommendation and prediction that surprised me with its specificity: “If you run this ad at this many ‘points’ [a measure of the size of the advertising buy], and if Ashe responds as we anticipate, and then we purchase this many points to air our response to his response, the net result after three weeks will be an increase of 8.5% in your lead in the polls.”
I authorized the plan and was astonished when three weeks later my lead had increased by exactly 8.5%. Though pleased, of course, for my own campaign, I had a sense of foreboding for what this revealed about our democracy. Clearly, at least to some degree, the “consent of the governed” was becoming a commodity to be purchased by the highest bidder. To the extent that money and the clever use of electronic mass media could be used to manipulate the outcome of elections, the role of reason began to diminish.
The Verse
Manipulation. Exploitation. Devastation.
From genetics to politics, from the bedroom to the boardroom, imposing your will on another can get you in trouble.
Consider the financial world.
I believe that we may be about to witness murder in the marketplace of stocks.
Psychological investing, covered in a Popular Science Magazine article,
How to Psychoanalyze the Market, represents the evolution of technical analysis.
Imagine this: a hedge fund that uses linguistics to exploit mistakes in the pricing of stocks, currencies and commodities.
Richard Peterson, the guy who developed this software, actually went to medical school to learn “qualitative and emotional explanations for the way the market moves.”
A trained psychiatrist, Peterson uses the irrational impulses of investor behavior to make money.
Ironically, the basis for undertaking such an endeavor can be found in the work of Adam Smith, John Maynard Keynes and others.
In 1759, Smith, a behavioral economist, published The Theory of Moral Sentiments. He described the way in which humans influence each other’s behavior.
Keynes, considered the leading proponent of macroeconomics, in 1936 published General Theory of Employment, Interest and Money. Keynes expounds on what he called aggregated production to explain the cure for national economic depressions such as those of Britain in the 1920’s and America in the 1930’s.
The Point
By studying systems, it may be possible to learn how to manipulate them.
With the ability to harness the massive powers of computing and information gathering, technical analysis of the stock market is a foregone conclusion.
Psychoanalysis of the market, on the other hand, is nothing short of amazing.
Actually recognizing aggregate behavior is one thing.
Timing its effect on the marketplace requires an exquisite understanding of signals embedded in earnings reports and other daily writings.
Exploiting these predictions may lead to short-term profits.
However, it won’t be long before hucksters begin to reverse-engineer the process and start churning out bogus reports to be ingested and regurgitated by the analytical software.
An ominous foreshadowing has already darkened the financial landscape:
Pump-and-dump
An investment scheme, sometimes illegal, in which false recommendations are made concerning a stock’s future performance in order to drive share prices up. Investors making the false recommendations intend to sell their shares when the share price reaches a higher level
- from investorwords.com
12 Responses to “Stirring the Stockpot and Digesting Gore”
By Pinhole on Apr 19, 2008 | Reply
I’ve never understood economics…I’m not sure anyone does, if they’re honest about it, but I will definitely be checking out Gore’s book. Thanks for the pointer.
By Jessica Sellers on Apr 24, 2008 | Reply
As a political science major, I had a class devoted to public opinion and campaigning. It’s amazing how you can take a smallish sample of people and get a pretty good idea what the whole group thinks. All thanks to applied statistical formulas.
That said, opinion polls can’t tell you how to think…unless you don’t…Sometimes the questions can be pretty loaded though and so whenever I see a poll I always like to know what the actual questions were and what options a person has for answers. Otherwise you might have a campaign ad masquerading as an opinion poll. Yikes!
That said, I believe it is really hard to manipulate a wise and educated person. One who knows what he believe with a deep, deep “why.”
How are your ideas serving you and where did they come from?
By Mitchell Allen on Apr 25, 2008 | Reply
Poli-Sci, eh? I’d like to see you take on the ladies on “The View”.
Hmmm, interesting take on polls. My wife, Toni, always says something similar about those food industry studies: the first thing we have to watch out for is, “who sponsored this study?”
As for your questions, I am the sum of my cogitations
Sometimes, I wonder where these ideas come from.
I think that I have always had access to the creative spark, which allows me to not only write stories in one massive brain dump, but also to create board games and develop computer software.
As for this post, I think the idea came from turning that spark inward and finding connections to seemingly unrelated bits of mental backwash.
What we commonly refer to as divine inspiration or serendipity, I think of as the law of attraction.
Simply stated, I get joy from sharing parables, creating analogies and presenting old ideas in new garments. The more I do these activities, the more they seem to manifest.
You should have seen the old WritingUp blog site! I had dozens of these ideas sprinkled through comments as well as my own posts.
I just realized I answered both questions!
Cheers,
Mitch
By Jessica Sellers on Apr 25, 2008 | Reply
Wow, I haven’t watched “The View” in a long time! I think the last time I watched, I agreed most with Whoopee Goldberg because she was encouraging people to take responsibility for their own actions and not just pan it off on someone else. I think it’s a fun show but I hardly ever ever watch TV anymore.
I get my kicks hanging out with my baby girl and making sweet designs on the computer! I’m lucky if anything else gets done at home! LOL!
Even so, I think it’s really really important to analyze where thoughts come from, and by that I mean the underlying assumptions that a person has about the world. Are they based on circumstance or principles? And then see whether or not those ideas are producing good “fruit” in your life.
I think it is cool how you connect seemingly totally unrelated ideas with such ease. That must be one of your talents!
By Mitchell Allen on Apr 25, 2008 | Reply
Well, as Pinhole pointed out earlier, economics is not easily understood. I don’t pretend to understand it, but I am totally fascinated with the subject.
The key word in your last comment, Jessica, is seemingly. In truth, the underlying framework for my mental processes is the idea that EVERYTHING is related to EVERYTHING.
One of the most compelling visuals I’ve ever seen was in the first Men In Black movie.
As the movie ended, the camera zoomed out from the ground level, slowly but predictably reaching Earth orbit. As the planet shrinks into the distance, the perspective suddenly changes and Earth becomes a marble in the hand of an alien.
The alien carelessly flicks the Gaian orb onto the sand of an alien landscape.
If you remember the movie, assuming you saw it, there was entire galaxy on a cat’s collar (“Orion’s belt” ha-ha).
While this cliché appears all over Hollywood, the idea of our being just a minor part of some larger system intrigues me.
During high school biology, I used to imagine that we were under a microscope. “Somebody” was watching us dissect frogs!
Anyway, to use another movie, Revenge of the Nerds,
Betty asked Lewis how come he was so good …(wink wink).
To paraphrase Lewis, I think about systems all the time. I dream about them – confusing vignettes that don’t help me solve anything, yet. I read what experts are saying about their perspective regarding systems.
One of the weirder things I do is to try making up a game that involves the system. These games don’t usually progress beyond lots of paper scribbling, but it’s a lot of fun.
Hmmm, maybe I’ll write a post about that.
Cheers,
Mitch
By Ethan on Apr 25, 2008 | Reply
Blogging might lessen the dominance of the sound byte over the written (although not printed in the traditional sense) word enough to possibly tilt the balance in favor of writing again, but the nature of the internet seems to guarantee that the feelings of voicelessness will continue of preferred media change. Being able to write something in response to anything and have it potentially be read feels great, but because everyone can do that it can often feel like shouting at your television with other people occasionally in the room with you and often those people weren’t invited. I’ve been coming up with new ideas and revisiting older ones on my general blog, and in some cases I think they could be real moneymakers in the right hands but it’s frustrating to not have any idea how to match ideas with people who can do things with them. You told me I had the spirit of writingup on my blog, but I would like to see the community spirit there – I tried starting uup another name game for the general blogosphere but nobody played yet. Maybe the spirit of writing up was fueled by naive idealism that will never be seen again among intelligent writers on the internet. Or maybe the problem is that honest success online without venture capital requires being a talented writer and at least as good at marketing and working full time at both jobs. Which is basically impossible.
By Mitchell Allen on Apr 25, 2008 | Reply
Hey, Ethan, I hear you. Score one against voicelessness!
There are so many dynamics to define what WritingUp was all about.
First and foremost, the Drupal software platform upon which it rested was designed with community interaction in mind. Since it was my first experience with blogging, it set the standard very high.
Next, there was the sheer marketing genius of John Jonas. While I’m sure he wasn’t the first person to incorporate revenue-sharing for Google AdSense, his timing was impeccable. Judging by the comments of hundreds of members (and the numerous tech support questions I fielded), this was a relatively recent development in the online money-making niche.
Third, the social networking aspect of the site was phenomenal. Because John worked diligently to keep out undesirables, we generally had a well-behaved group. Opinionated? Sometimes. Mis-informed? Maybe. But well-behaved.
Finally, there was the AdSense incentive which, for many of us, became irrelevant, as we discovered the true meaning of blogging.
Ironically, WritingUp and other successful community blogging sites are perfect examples of why you seldom find all four dynamics on a stand-alone blog: the power was distributed over three golden strands.
SEO
Content
Contributors
The third strand was the most powerful. WritingUp regularly had dozens of members logged in simultaneously. That kind of engagement fed the content, which fed the SEO. The self-contained ecosystem sucked in visitors and churned out members.
Contrast that with our lonely digital outposts. We literally hang on by a single thread: content.
While blogging software does a fair job of SEO, it doesn’t come close to the kind of promotion John did with WritingUp.
Of course, we are our only contributor! Comments, when we get them, are like sips of water out here in the sun-baked wasteland of words. We learned that comments beget comments and generally lead to links.
That works here, but on a much smaller scale.
After all is said and done, I have opted for a less cohesive version of the community. Perhaps you can try this on for size: a feed reader.
I use bloglines.com and subscribe to a variety of cool blogs. This is just like WritingUp in that you can see multiple topics at once.
The community aspect is disjointed. You have to take that extra step to click over to the blog, if you want to comment.
But, short of joining another community site, that’s about the best I can imagine myself doing.
There is a whole ‘nother topic: once you learn the devastation of losing a community, how the heck do you pick up the pieces and try again?
For me, there will never be anything like WritingUp.
So my bottom line echoes your bottom line: it is impossible to do all the stuff you need to do as a writer. Marketing alone is a full-time endeavor. So, without a budget to outsource the things you don’t have time to do, you’re basically doodling in the sand.
Heads Up! Yonder blows the sirocco.
Mitch
By Jessica Sellers on Apr 26, 2008 | Reply
My husband recently read a book called “Economics in One Lesson” by Henry Hazlitt. Aaron read some of it to me. It was really fascinating. Let me share an analogy with you and see what connections you come up with. It’s called the fallacy of the broken window….
In summary, many people mistakenly believe that destruction is good for the economy. “War is our business, and business is good…” If someone breaks your window, you are probably going to buy a new one. Hence, the window guy gets more business. So actually it worked out for good, right?
Well in the large scheme of things destruction makes everyone a little less rich, even if one or two people gain. Sure, maybe it helped the window guy whom you paid to replace your broken window, but that was money you were going to use to buy a new ____. So instead of having a perfectly good window AND a new _____, you only have a new window. The money you would have given to the guy who makes the _____ had to go to the window guy instead.
Therefore destruction does NOT help the economy overall.
***By the way, I think the One Lesson learned from this book is that it is important to look at both the seen AND the unseen. Everyone sees the broken window and the new window, but what they don’t see is the new _____ that never came to pass.
Sorry to go on a tangent…feel free to tangentalize again!
By Mitchell Allen on Apr 27, 2008 | Reply
Hey, Jessica! Ever go to a cocktail party where folks talked about Britney Spears ALL Night?
Me neither. Conversations are supposed to ebb and flow.
Heck, this post has more comments than any previous articles, so I’m happy to take the plunge into whatever tributaries the main topics branch off into.
Since I don’t really understand economics, I can’t tackle that broken window analogy on the merits.
However, I can suggest further food for thought:
Hazlitt seems to have obscured the fallacy by using a polarized view. He seems to understand that readers will resonate with his reasoning if he made it about them. By equating the broken window from the perspective of reallocating funds, something to which we all can relate, he puts forth a compelling argument for destruction equals bad economy.
However, he neglects to follow the money. (If he did, could you add that bit to your response?)
The window guy gets x dollars for replacing the window. He and his wife breathe a sigh of relief, as he is now able to pay for the baby’s medicine.
Okay, that’s extreme but, if you don’t consider the concept of economics in terms of the greater good, then you only get half the picture.
Perhaps we should try to consider economics in terms of the law of attraction (LOA).
There is no scarcity in LOA. Tapping into abundance is a simple matter of attracting it.
In the limiting views of most economic theories, money is the oil which lubricates the machine of supply and demand.
With LOA, money becomes merely a cog which turns a bigger wheel of fortune.
Think about it. If you can have everything that you want, merely by thinking it into existence, what do you need money for? The answer is simple. Hear a good song lately? What key was it in? What was the tempo?
You probably don’t know, but your ears perceived pleasing tones that translated notes and measures, clef lines and bass lines into a recognizable tune.
Money is the collection of notes (pun intended? hmmm) that most people understand.
Cheers,
Mitch
By Jessica Sellers on May 1, 2008 | Reply
Sure Hazlit follows the money. And I LOVE the idea of looking at economics from a LOA perspective.
All things being equal, everyone is worse off because of the broken window because whereas there was once a nice window AND money to spend on something else, say, one’s own child’s medicine, now that the window is broken, one must choose to spend money fixing the window or buy medicine for one’s daughter, to follow the extreme. Of course if you are a producer you probably just go out and work harder to pay for both. But then that is activity that could have produced something else, perhaps a nice Sunday dinner for a sick relative.
Of course, each situation is different, but the point is that all things being equal, everyone looses a little bit with destruction.
I do have to agree with you though that it is great to view economics from a LOA perspective. Traditional economics assumes that Things have a certain intrinsic worth that cannot change. But truly nothing has intrinsic value in and of itself except for human beings. And people are beings with unlimited Godlike potential to create, so therefore the value that is able to be created by them is endless as well. Abundance mentality rather than scarcity mindset. There is “enough and to spare” for everyone in this world and universe. And if we did ever run out and there was a true need, I do believe more would be created/attracted. That is assuming we are following the laws of the universe and being good stewards over what we have already.
Notes…hahaha!
By Mitchell Allen on May 2, 2008 | Reply
Hey, Jessica, thanks for sticking around. The blog was down for a while, due to a plugin that didn’t seem to play nicely with anyone but me.
I take your point on the window. And in all of the confusion, no one ever commiserates for the shards.
Cheers,
Mitch