Sunday, July 24, 2016

The blind leading the blind

“[T]his runway was built when aircraft were just 50 tons heavy and landing at 80 mph, now it’s more like 300 tons and 150 mph. With construction science of the ’40’s it won’t last long against the science of the 21st century.

“That same runway was closed less than two years ago . . . [T]hey must make sure repair work uses top quality asphalt and workmanship . . . “[I]f Clark is to be an effective diversion airport, it should be provided with enough facilities to handle the volume similar to what it got last Monday . . . [I]t seems we are coming to the point that we have to quickly develop Clark as an alternative airport regardless of plans to develop a new NAIA at Sangley which will take time. This means, we have to fast track the construction of a much larger Clark terminal.

“That ANC interview of young French tourists says it all. They said they enjoyed their stay in the country only to be marred by the mess at NAIA which leaves bad memories of the Philippines for them.” [Lessons from NAIA’s Monday mess, Boo Chanco, DEMAND AND SUPPLY, The Philippine Star, 22nd Jul 2016]

NAIA can’t deal with modern-day aviation traffic? How bad is that compared to the Republican convention? In both cases do we have the blind leading the blind? “[T]his week’s Republican convention has had the charged air of a Roman colosseum, a fraught and strange affair driven by gladiatorial cries, bear-pit politics and calls for retribution against enemies near and far.

“[T]he polarizing billionaire who has swept aside the Republican Party’s once-powerful Washington leadership, forged a powerful new political brand around anger and denunciation, and has now become the party’s nominee for the highest office of the land — and the most powerful job in the world.

“The storied party of Abraham Lincoln, founded on a mandate of containing the spread of slavery, is now headed by a candidate who has divided the country, and the Republicans, like none other in decades . . . Behind the facade of unity, though, frayed edges have become painfully exposed. Mr. Trump’s steamroller success has caused many party grandees, including the two former Presidents Bush, to stay away.

“What all agree on, though, is that Mr. Trump’s stunning victory is rooted in his ability to tap directly into American discontent. Jason R. Anavitarte, a delegate from Georgia . . . said Mr. Trump had ‘turned anger and frustration into a product’ that would be salable this fall.

‘There’s many people who haven’t bounced back from the crash in 2008,’ he said of America’s real estate and economic crisis. ‘They feel disconnected from mainstream politics. He lets all of that anger that people have built up just come out of his mouth’.” [Behind a Facade of G.O.P. Unity, Frayed Edges Painfully Exposed, Declan Walsh, Abroad in America, The New York Times, 21st Jul 2016]

“Andrew Lo [Professor of Finance, MIT Sloan School of Management; Director, MIT Laboratory of Financial Engineering] believed that the crisis was about more than economic forces. In his mind, a human element was at play, most notably the emotions of greed and fear of the unknown.

“During extended periods of prosperity, market participants become complacent about the risk of loss . . . In fact, there is mounting evidence from cognitive neuroscientists that financial gain affects the same ‘pleasure centers’ of the brain that are activated by certain narcotics. This suggests that prolonged periods of economic growth and prosperity can induce a collective sense of euphoria and complacency among investors that is not unlike the drug-induced stupor of a cocaine addict. The seeds of this crisis were created during a lengthy period of prosperity. During this period we became much more risk tolerant.

“In other words, ‘we’ became greedy. As Lo put it, this greed was spurred on by ‘the profit motive, the intoxicating and anesthetic effects of success.’

“When everything began to collapse, our greed then turned into fear. What we feared, Lo argued, was the unknown—in this case, who and what we owed, what our assets were worth, and how bad things really were.” [The Global Financial Crisis of 2008: The Role of Greed, Fear, and Oligarchs, Cate Reavis, MIT Sloan Management, 16th Mar 2012]

It’s been 8 years since the crash of 2008. Where is America and the West, if not the world, today? “After years of rapid internal growth, the world’s biggest hedge fund appears to be slowing down. The $154 billion hedge fund, Bridgewater Associates, run by the billionaire Ray Dalio, is known for hiring hundreds of people every year. Yet it is now telling recruitment firms to cancel interviews with prospective employees . . .

“Over the last two years, the University of California’s Board of Regents, the endowment for the state university system in California, has withdrawn the $550 million it had invested with Bridgewater.” [Bridgewater, World’s Biggest Hedge Fund, Is Said to Be Slowing Hiring, Alexandra Stevenson and Matthew Goldstein, The New York Times, 17th Jul 2016]

Are we seeing ominous signs of trouble again? “The health of America's public corporations and financial markets — and public trust in both — is critical to economic growth and a better financial future for American workers, retirees and investors.

“Millions of American families depend on these companies for work — our 5,000 public companies account for a third of the nation's private sector jobs. And these same families and millions more also rely on public companies to help improve their financial future . . . Our future depends on these companies being managed effectively for long-term prosperity, which is why the governance of American companies is so important to every American.

“We represent some of America's largest corporations, as well as investment managers, that, as fiduciaries, represent millions of individual savers and pension beneficiaries.

“This diverse group certainly holds varied opinions on corporate governance. But we share the view that constructive dialogue requires finding common ground — a starting point to foster the economic growth that benefits shareholders, employees and the economy as a whole. To that end, we have worked to find commonsense principles. We offer these principles, which can be found, in the hope that they will promote further conversation on corporate governance. These principles include the following, among others:

“Truly independent corporate boards are vital to effective governance, so no board should be beholden to the CEO or management.

“Diverse boards make better decisions, so every board should have members with complementary and diverse skills, backgrounds and experiences. It's also important to balance wisdom and judgment that accompany experience and tenure with the need for fresh thinking and perspectives of new board members;

“Our financial markets have become too obsessed with quarterly earnings forecasts. Companies should not feel obligated to provide earnings guidance . . .

“These recommendations are not meant to be absolute . . . But we do hope our effort will be the beginning of a continuing dialogue that will benefit millions of Americans by promoting trust in our nation's public companies.” [Commonsense Corporate Governance Principles, 21st Jul 2016]

If man can mess things up, it follows that he can fix things too? “It is assumed that your experience of your own consciousness clinches the assertion that you ‘know your own mind’ in a way that no one else can. This is a mistake.

“Ever since Plato, philosophers have, without much argument, shared common sense’s confidence about the nature of its own thoughts. They have argued that we can secure certainty about at least some very important conclusions, not through empirical inquiry, but by introspection: the existence, immateriality (and maybe immortality) of the soul, the awareness of our own free will, meaning and moral value.

“Yet research in cognitive and behavioral sciences increasingly undermines that confidence . . . In fact, controlled experiments in cognitive science, neuroimaging and social psychology have repeatedly shown how wrong we can be about our real motivations, the justification of firmly held beliefs and the accuracy of our sensory equipment.” [Why You Don’t Know Your Own Mind, Alex Rosenberg, The Stone, The New York Times, 18th Jul 2016]

“A new map based on brain scan data collected by the Human Connectome Project. The data revealed 180 new regions.

“The brain looks like a featureless expanse of folds and bulges, but it’s actually carved up into invisible territories. Each is specialized: Some groups of neurons become active when we recognize faces, others when we read, others when we raise our hands.

“While an important advance, the new atlas is hardly the final word on the brain’s workings. It may take decades for scientists to figure out what each region is doing, and more will be discovered in coming decades.” [Updated Brain Map Identifies Nearly 100 New Regions, Carl Zimmer, Matter, The New York Times, 20th Jul 2016]

Indeed, an ominous sign that the party – if not the nation – that is proud of its exceptionalism could fall into the trap of the blind leading the blind. Like we all can – including us Pinoys where rank is omnipotent given our hierarchical system and structure? And why Filipinos are under its mercy.

“Why independence, if the slaves of today will be the tyrants of tomorrow? And that they will be such is not to be doubted, for he who submits to tyranny loves it.” [We are ruled by Rizal’s ‘tyrants of tomorrow,’ Editorial, The Manila Times, 29th Dec 2015]

“As a major component for the education and reorientation of our people, mainstream media – their reporters, writers, photographers, columnists and editors – have an obligation to this country . . .” [Era of documented irrelevance: Mainstream media, critics and protesters, Homobono A. Adaza, The Manila Times, 25th Nov 2015]

“Development [is informed by a people’s] worldview, cognitive capacity, values, moral development, self-identity, spirituality, and leadership . . .” [Frederic Laloux, Reinventing organizations, Nelson Parker, 2014]

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