Wednesday, March 14, 2012

Why I'm Leaving Goldman Sachs

An employee writes an article in the New York Times on why they are leaving Goldman-Sachs: Why I Am Leaving Goldman Sachs

And here is Goldman Sachs's response: Goldman's Response

     I wonder how much of what he's saying is truth? It isn't surprising that Goldman Sachs disagrees. They most certainly are not going to come out and say, "Yep, he's right, we're all really nothing but a bunch of corrupt bastards..." :D I hope Goldman-Sachs can fix itself if this is the case. It actually brings up some interesting premises though: does GS have any obligation to really be about anything aside from making money? After all, that's the job of the company: to make money for the shareholders. They can do this by peddling junk or by truly seeking to serve the customer, but anything goes as long as it's legal.
     Personally, I think it's a combination of the two. Yes, the job of a business is to make money for the owners, but, businesses should seek to make money morally and ethically (as in, don't peddle junk on people under the guise of it being quality and don't seek to rip people off). Just because you can be unethical doesn't mean that you should be. Being ethical also can help in terms of public relations in the long run. It means that your firm will never enforce the stereotype that people in finance are all just greedy no-goods.
     And a big corporation such as Goldman-Sachs, in particular, should strive to be as moral and ethical as possible. Firms like this are key pillars of the global financial system. They are key pillars of the overall economic system. They are the stewards of capital, and how it is allocated. They should take this role seriously.
     There is often talk about businesses being "good corporate citizens." Some people say that this is nonsense, that the business should focus on making money for the owners, not on meeting some arbitrary definition of being a "good corporate citizen." For the most part, I agree with this. A business need not have to be involved in a bunch of partisan issues that are fashionable so as to be a 'good corporate citizen." What being a good corporate citizen to me means is a business that acts ethically, is moral, that doesn't try to rip people off, that doesn't abuse workers, and so forth. Such a business will not try to make anyone work in unsafe working conditions, and will not put harmful products into food or lead paint in the toys or anything like that, even if it could get away with it. Sadly, this is not how most businesses function, so we have to have regulations (and many of them use regulations to monopolize their industry).
     So for a firm like Goldman-Sachs to be a good corporate citizen, it doesn't need to get involved in issues such as global warming, or environmentalism, or other popular issues, but it should seek to be moral, ethical, not try to rip off people, and take seriously its role as a key pillar of the global economic system.
     It is sad that finance and financiers, one of the most important professions in the existence of humanity, have to have such a bad reputation. It is the lack of financial systems and financial institutions that are why so much of the world is poor, and why the world has been poor throughout so much of history. Finance, when populated by moral people, is to me one of the most noble professions in existence. The premier financial firms should make it a point to set the standard for ethics. But that's probably no more realistic than expecting businesspeople overall to do this!

One Other Point On Iran

One other point I had forgotten to mention that should also be kept in mind when considering a military strike on Iran is that there would be no land war with Iran. Retliation would be through terrorism or through rocket attacks. The United States in particular has major advantages when dealing with Iran in this sense.

Tiger Mom Philosophy on Education

     Some may remember the Tiger Mom, the Chinese woman who wrote the article for the Wall Street Journal that was an excerpt from her book. The article was titled "Why Chinese Mothers Are Superior." In it, she discusses the extreme level of discipline Chinese parents often put on their children to succeed academically, and that it is this, and not any special genetics, that results in Chinese children who come across as math prodigies, music prodigies, and so forth. Just plain old very strict discipline and hard work. She also details her disciplining of her own children, and even how a mini war broke out between her one daughter and she.
     Well the article resulted in the largest number of comments out of any WSJ article ever posted in the site's history. I found the article interesting because I think it points out another aspect of balance regarding education, this time in regards to how to educate your child. Some parents go to one extreme whereby they do not discipline their child/children at all. Whatever grades they get are the grades they get. Sometimes this works fine, as the child is self-driven and will study hard and work hard on their own. Other times though, it leads to a kid with no appreciation for learning or education or hard work or discipline, and who thus doesn't learn anything.
     However, then there is the opposite extreme, the parents who plan out their child's lives with practically military precision, who push the child very hard to excel in all subjects. The thing is, just as the lack of any discipline can result in a child who has no appreciation for learning or education, this extreme discipline method can result in the same over the long-term. You get a child who grows up where they never were able to enjoy learning at all. The only thing learning makes them think about is how they were pressured and horribly disciplined. It is where you can have a child that grows into an adult who has a hatred for classical music, simply because all they remember of classical music is being forced under strict discipline to practice it on an instrument. They never had an opportunity to enjoy it or life in general. This can end up resulting in a person who will revolt against learning for a long time even.
     I myself remember in elementary and high school hating music class and art class. I hated having these things forced on me. I didn't gain my love of art and music until I hit my twenties. The same can apply with other areas of learning I think as well. With a child, especially a young child, a balance is thus needed. Children do need discipline and to have the importance of learning instilled into them, but at the same time, they also need free time, time to play, and probably should not be pressured to be some super student that excells in everything. Create a baseline standard for grades that they must get, but otherwise, then just make it where excelling beyond that is up to them.
     I would think that this would result in a person who grows up having an appreciation of learning and education, but who doesn't outright hate learning or education or any particular subject because of it having been forced onto them in a way where if they do not succeed at it, they fail. I would not parent like a Tiger Mom, but I also wouldn't parent in a way completely devoid of discipline either.

Education

     So I thought I'd write out my thoughts regarding education. I have always found it interesting that there seem to be two ways of thinking about education, one which seems to be practical and the other focused on learning for learning's sake. In America, a country which prides itself on its rugged individualism, the view towards education has often been more practical. As in, learning for learning's sake is all well and good, but if you don't learn a skill to produce something of value on the market, then you are not going to be able to make any money to support yourself. I guess it goes back to the old pioneer spirit, where you had to go out and cultivate the land, grow your own food, build your own home, hunt animals, etc...things like philosophy and art were fine and nice, but those aren't going to get the field plowed.
     I agree wholeheartedly with the importance of practicality in one's education. Even if one wants to earn a great liberal arts education, one still should make sure that when they go to college, they learn something that will be valuable. On the flip-side of the coin, is learning for learning's sake. This is the education you receive that is supposed to enable you to be a good and responsible citizen. For much of history, it seems to be that the two were more balanced: people would work to learn a trade or a acquire a degree in something of practical value, but also understood the importance of being well-grounded in things like the basic workings of government, history, geography, literature, and so forth.
     One thing I've noticed though is that some people are prone to going to extremes with each of these philosophies. On the one hand, you have the people who will only learn something if it is practical, i.e. can make money. This was to a good degree the Roman mindset. Unlike the Greeks, who were into studying mathematics, astronomy, philosophy, poetry, etc...for the sake of expanding their minds, the Romans had no interest whatsoever in fields like mathematics except for its military and commercial value. In modern times, it seems a lot of people have this similar view.
     A person who really had this view was Henry Ford. He was very, very uneducated. His philosophy was that he didn't need any education because he had access to the world's knowledge at the press of a button. To me, this is where this shows the extreme of learning things only of practical value. I mean, "yes," you don't need education in that sense because at any time, you can just call up an expert to provide the knowledge for you. But the problem with this is that, without the foundation provided by a liberal arts education, you are essentially guaranteed to be an idiot in many ways, no matter how crafty you otherwise may be.
     There are multiple reasons for this. For one, a sound liberal arts education doesn't just teach you facts to memorize, it also teaches you how to actually think critically, how to reason critically, skills that you otherwise likely will not have. In addition, it also teaches you things such as history, which is important for the old saying "those who do not know history are doomed to repeat it." It is for these reasons that many elites, if you will, throughout history have sought to limit the level of education that the mass population could obtain. The American public education system, for example, was not originally intended to educate children, it was intended to school them, to delay their development and make them not have critical thinking skills.
     John Taylor Gatto, a man who taught in the New York City public school system for multiple decades, and who also was the New York City and New York State Teacher of the Year, has written multiple books about this subject, one of the best being called The Underground History of American Education: An Intimate Investigation Into the Prison of Modern Schooling. Essentially, the book is about how the people involved with the creation of the American public school system were not in it to design a system that could result in a learned, critically-thinking populace, but rather to create a populace malleable to the requirements of big government and big business (this was the era of the large, inhumane, bureaucratic, machine-like big business corporation). It also ties into the whole history of ideas such as scientific management, how to manage workers properly.
     Many do not know it, but it was big business that pushed to end child labor from behind the scenes. This wasn't because big business cared about children, but because child labor is one of the things that will make a child grow up very quickly. You take a fourteen year-old and have him out plowing the field, hunting, working a job, etc...and by twenty-five, he's a much more responsible, mature adult then the stereotypical twenty-something of today. Big business did not want workers who could think critically. It wanted workers who would obey and follow orders. It also wanted a population malleable to marketing so that it could create a lot of consumer products to market to them. And of course big government, which goes hand-in-hand with big business, wanted a malleable population so that they could easily win votes (the last thing politicians want is a critically-thinking populace!). It also worked well for military as well. It was a top-down mindset, in that you wanted the enlisted soldiers to not think, just to follow orders. This came from the old method of warfare where you'd have the soldiers marching in rows with their muskets at each other, and had to be able to do so even when the other side would stop and open fire or fire cannons. The officers would stand off to the side, and command the troops. In modern warfare, such non-thinking soldiers aren't very workable. One of the advantages modern Western militaries have is that even the lowliest Private is allowed to think for themself to a degree and be creative in following orders.
     Now in saying this about the public school system being "designed" to limit critical thinking skills, I'm not saying that there's some secret cabal somewhere that plots how to design the public school system to brainwash Americans. That is not the case. It's just that this was the over-riding philosophy among many of the people involved in designing the school system. This whole philosophy changed a good deal when the Space Race kicked in, where all of a sudden, the government realized it needed people who could think and who were educated, and lots of them, and hence there was the push for all Ameircans to go to college and studying mathematics, science, engineering, technology, and so forth, in order to prevent the Soviets from beating out America.
     Today's public school system involves some leftover remnants of the old design that was geared towards social control. For example: the constant changing of classrooms in public schools. You go to a class, the bell rings at the end, and you go to another classroom. In private schools, that isn't how it works. Each grade has their own classroom. T Boon Pickens, in his book The First Billion Is the Hardest, inadverdently points out how the public school system was designed for social control. He pointed out that in the 1950s, when you went to work as an employee for a company, it was often just like public school. You'd go into work in the morning, have a bit of free time, then the bell would ring, you'd have a certain number of minutes to be at your desk, and then the bell would ring again, signaling work had begun. Bells would ring for lunch breaks and so forth. People thought nothing of it, because you had been conditioned to respond according to this like a robot from the first grade.
     This method of schooling was derived from the Prussian system of education, which had three levels of education, one for the working masses, another for the professionals in society, and then the full classical education for the ruling elite. This system was very good at producing soldiers and employees. This school divide still exists to a degree even today in America, where poorer and middle-class children must go to public school, while more affluent and wealthy children can go to private schools, where there is none of this business of bells and changing classes.
     One interesting thing to think about is how simplified much of the modern English language has become. Seriously, try reading a book written in English during the 1800s or beforehand. It's virtually impossible! Everyone talks so wordy. Oftentimes modern versions of such books have notes in them so that you can understand just what the heck they are actually saying. If an educated person from these times was to come to modern America and look at our current version of English, they'd probably wonder what happened to the language. A person who naturally could read and easily understand the incredibly wordy prose of those times would probably have no problem picking up on the more simplified English of modern times. But for a person who has only known the simplified English, learning the wordy English is tough.
     So going back to my original point, one needs aspects of a liberal education as well, even if one is mostly concerned with having a practical education and otherwise isn't interested in learning. Without the foundation provided by the liberal education, one isn't going to have the requisite critical-thinking skills and knowledge one needs to be a good citizen. Where Henry Ford's philosophy comes into play is when you're talking various forms of practical knowledge that nobody really needs to know unless you just really have an interest in it or its your profession. For example, I do not need to know how to design a jet engine. Or what materials it must be made out of. Or how to knit a sweater. Or how to land an aircraft. Or how to wire a building. And so on. You call an expert for that kind of thing. But EVERYONE should be well-read and learned in the basics of government, history, geography, rhetoric, grammar, the important works of literature, and I would also incorporate economics.
     Economics is one of those subjects that one must know both ways of thinking about, because otherwise, if all one knows is right-leaning libertarian economic thought, then any left-leaning person is a socialist in their eyes, and to a person who only knows left-leaning economic thought, any right-leaning person just "doesn't care" in their eyes (because to them every problem can be solved by more government). Unfortunately, most people seem to know either nothing about economics or just one way of thinking about it, which is what leads to much of hyper-partisanship we have today. For too many people as well, economics becomes a set of talking points for promoting a particular political agenda as opposed to being a way of just trying to understand how the economy and society actually functions.
     Now some may reason, "Well I can understand learning the basic foundation mentioned, but otherwise, I see no reason for continued learning and education, except with regards to what my profession requires." To this I disagree. To be a well-rounded person, one should always keep learning, as it exercises the brain. Another important thing about studying various subjects is how it further teaches you to think. For example, the law. Studying the law will teach one to think in different ways and to reason in different ways. Economics is no different. Studying economics will teach one to think and to reason in ways they had never fathomed before. What's especially neat is if you read two opposing points-of-view in economics and yet both of them seem to make sense! Mathematics is the same. It will teach you to think and to reason in different ways, as creativity is needed in solving math problems. Philosophy, that subject alone will wrack your brain when you study it. Physics as well. Learning to solve physics problems involves a tremendous amount of creative thinking and problem-solving. Computer science, that too, involves some rigorous thinking about how to solve problems.
     And so on. Now I'm not saying one must study all those subjects, but I mean continually reading and studying different areas will teach your brain to think in all sorts of new ways that you previously might never have even considered. And all of the above is ignoring the whole wide world of the arts as well, subjects like music, painting, architecture, etc...which are very fascinating fields in and of themselves.
     I was mentioning about how there are extremes, starting with the extreme of people who only want knowledge for "practical" purposes, otherwise whom find learning to be a waste of time. Well this goes in the opposite direction as well, with people who only want to learn the liberal arts education, but find learning anything practical to be beneath them. That is a bad mindset to have. One should always make it a point to have a practical skill of some type, as society functions off of the practical skills.
     Overall, what one should have is a balance. One should make sure to learn practical knowledge, both for making a living and just for getting through life (things like knowing how to change a tire, fix the pipe under the sink, etc...), but at the same time, should also make sure to learn about other subjects that increase their education and critical-thinking skills. This makes for a very well-rounded person. One other added benefit of being educated is that it will smash down many a class barrier you might encounter. You could be a plumber eating dinner with a group of professors and wealthy Wall Streeters let's say, but if you can talk as fluently about subjects like the Greek classics, Shakespeare, history, government, the economy, etc...and hold your own fine against these people who may have great formal schooling, well then they know that the only difference between you and them is that they have more money then you. So if you had to go to some fancy party with people who think you will be some idiot, you can show them that, while you may not be a lawyer or doctor or make their kind of money, you are equal to them in knowledge.

Beautiful Libraries

Here is an awesome website about libraries: Beautiful Libraries

And here is a video of Jay Walker's private library:

Tuesday, March 13, 2012

Will Israel Attack Iran?

     I am of the opinion that Iran's nuclear program is not for peaceful purposes. It is a dictatorial government that used force to put down an uprising from its own people, and despite harsh sanctions, it continues to press on with pursuing its nuclear program. That is not the behavior of a country that is pursuing a peaceful nuclear program. The problem is, what else to do about Iran? Israel sees Iran's pursuit of a nuclear weapon as a fundamental threat to its existence, so the concern right now is, will or when Israel attack Iran?
     Israel's fear is not that Iran will acquire a nuclear weapon soon, but rather that they will reach a point after which they have secured their nuclear program to the degree that they cannot be stopped. The thing about Iran is that striking it isn't some simple one-strike operation. There isn't one facility and it isn't a simple matter of flying over the border. Striking Iran's nuclear program facilities would mean hitting multiple targets multiple times. Israel would also have to fly through the airspace of countries that would likely not grant it such permission in the first place just to reach Iran. All of this will take a lot of aircraft. They need strike aircraft to carry the weapons to strike Iran's facilities. Then they need fighter planes to protect the strike aircraft. They also need aircraft to jam Iran's air defenses. And because of the distance, they need refueling tankers, which can refuel all of the aircraft so they can fly back to Israel. They then need fighter planes to protect those refueling tankers.
     So the operation alone is a huge risk. Then there are Iran's various ways of retaliating, which could cause all hell in the region to break out. The current American administration does not believe that the Iranians are as close to reaching this point of no return regarding their nuclear program as the Israelis believe. I also think there is an element of politics regarding President Obama's behavior on Iran. Attacking Iran right now could well be political suicide for him. If he decides Iran must be attacked after he is re-elected (assuming he is re-elected), well then yes his poll ratings may tank, but he's already in for his second term (I say political suicide because the American people do not want any more major U.S. military involvements and especially with a country like Iran, where attacking it could result in oil prices skyrocketing where we end up with $5 or higher gasoline for example).
      I believe that as bad an attack on Iran would be, that Iran getting a nuclear weapon is a far greater danger. Iran acquiring a nuclear weapon would result in the following:

1) A likely arms race in the region to acquire nuclear weapons among other nations

2) Iran will be able to threaten closing the Strait of Hormuz. Right now, they can threaten it on paper, but the U.S. Navy could force it back open and if attacked by the Iranians, that would be an act of war, which would give the U.S. the right to attack the Iranian military outright. But with a nuclear-armed Iran, it makes it a whole new ballgame.

3) Iran could possibly attack Israel with a nuclear attack

     I sometimes wonder if the current situation with Iran is akin to the eve of World War II with Adolf Hitler and Nazi Germany. Hitler wrote a book saying what he was planning to do; it wasn't a big secret. Iran isn't all that different. The thing is, the world was so terrified of another war, because of World War I having been so recent, that much of Europe deluded itself into thinking Hitler would never start a war. Similarly, it seems many people now are frightened of another major military conflict because of what we just went through with Iraq and are still dealing with in Afghanistan. But in being afraid of this, I wonder if they are deluding themselves into thinking that Iran does not plan to use a nuclear weapon to destroy Israel or that the fears about a nuclear-armed Iran are overblown. Another fear I think is related to how the U.S. was so sure that Saddam Hussein had chemical and biological weapons and then it turned out, he didn't. He did have the ability to start producing such weapons quickly if he wanted, but the actual weapons, he didn't have. It was a major intelligence failure. Now many wonder if we are repeating the same thing with Iran. The kicker is that historically, the U.S. has tended to under-estimate the enemy regarding what weapons it had, rather than to over-estimate it. An example could be the Soviet Union, which developed the largest, most extensive biological weapons program in human history (this done after the United States and the Soviets had signed an agreement not to continue devleoping such weapons).
     Personally, I do not think that the fears about a nuclear-armed Iran are overblown. One thing history has taught us is that a lot of things can seem completely wacky and unrealistic until they actually happen. Terrorists hijacking jetliners and crashing them into major American buildings? Sounds like a plot to a bad made-for-TV action movie. The U.S.financial system almost completely failing? Pure scaremongering. A nuclear powerplant experiencing an actual meltdown? Can't happen. Yet all of these things have happened. Now the thinking seems to be, "Israel getting hit with a nuclear weapon from an aggressive Iran?" Won't happen. Until it does, and then the world will wonder how on Earth it ever let such a horror happen.
     I would hope that in the end, neither Israel or the United States has to attack Iran, but I do hope that if the Israelis go ahead with it, that they are successful. The U.S. will probably be Israel's sole ally if it does that, because the rest of the world, which already tends to view Israel as the problem in the region, is probably going to go berserk if Israel attacks and oil prices skyrocket. Israel could fail and suffer major losses in such an attack, but even if successful, it will likely face heavy criticism globally and retaliation from Iran in various ways.
     I do wonder however if the other countries in the region that do not like Israel, but even moreso do not want Iran to acquire a nuclear weapon, might give Israel a pass if it strikes Iran. Or maybe criticize it publicly, while privately liking that it delayed Iran in getting a nuke (if successful). Some have speculated as to whether Saudi Arabia would allow Israel to use its airspace to travel to Iran. The Saudis don't like Israel, but they also don't like Iran (especially considering how Iran recently tried to assassinate the Saudi ambassador to the United States). Iran is infamous for hating the United States and Israel, but being Shia Islam, it also HATES Saudi Arabia, which is Sunni. And Saudi Arabia in return hates Iran. So maybe this could be one of those "the enemy of my enemy is my friend" instances. There is also the added benefit that Saudi Arabia and the United States have fairly decent relations, I'd assume mostly because of oil (we want oil and they like our money), so perhaps this could also aid in the Saudis being willing to allow the Israelis to use their airspace.
 

Would Oil Independence Really Make a Difference?

     So one thing I have been pondering as of late is, would oil independence from the Middle East, on the part of the United States, really change anything? Everyone talks about "weening us off of foreign oil," so that if chaos breaks out in the Middle East, we wouldn't have any worries. Saudi Arabia cuts production? No biggie. Iran decides to close the Strait of Hormuz (where a massive amount of the global supply of oil passes through every day)? No problem. The flaw with this however, as I see it, is that this view ignores that oil is priced globally and that we have a global economy. The price of gasoline is to a good deal determined by the global supply of crude oil. Now as it is, the United States already gets most of its oil from Canada and Mexico (we don't get most of it from the Middle East as many think, it's just that the ME supplies enough oil to America to really cause harm if the supply were to be cut, and it supplies a major portion of the global supply of oil). So even if the United States was able, through increased domestic production let's say, to make it where we are independent of ME oil, where our oil comes solely from domestic production, Canada, and Mexico, well how does that separate us from the global oil supply? If chaos occurs in the Middle East that cuts the supply of oil there, that still does at least two things:

1) Yanks up the global price of crude oil, which will affect oil and gas prices in the United States

2) Tanks the rest of the global economy that is flat-out cut off from the oil it needs, which then in turn tanks the American economy as well.

So the only real solution to the problem of the Middle East I would think is to make the entire Western world independent of Middle Eastern oil. But I do not see that happening anytime soon.