Contraria

Edward C. "Coe" Heller is a Los Angeles-based film producer who believes that if everyone knows something to be true it is probably false. A friend, tired of listening to rants has suggested a blog as a harmless outlet. Coe believes it is vanity, and a chasing after the wind, but is unsure it is harmless.

Saturday, September 06, 2008

Photos

I have posted my photo. In fact after watching so many photos of Senator McCain as a Naval officer in the 1960’s I think the world needs to see me. Lt (jg) Me, USNR circa 1969 in my stateroom playing undercover hippie.

I debated, thinking something more current would be nice, so I attach another. My needs are simple, mostly revolving around stuffing my face with an éclair in Paris.

Convention Wisdom

This is a point in time. The Democrats and the Republicans have completed their conventions, the speeches have been made and a 60 day campaign has started.

I intend to vote for Senator Obama, and I say that to establish my bias, so the scribbling will be in context. I think Senator McCain is too old at 72 to be the president, not because 72 is too old per se, but because the 5 years in a Vietnamese prison have taken a toll on him physically and psychologically. President Clinton left office in 2001 at 54, President Bush will leave office at 62, and this is not a time to elect someone at 72, particularly an “old” 72.

The question is whether or how Senator Obama can lose my vote. What could he do to lose my vote? One idea would be to pick a vice president who is a partisan insider to bring out the worst of Washington’s gridlock politics. Done.

A second idea would be to give a pandering, low road, attack dog convention speech. Done. Perhaps I am Contraria because I thought Senator Obama’s speech was the worst I have heard since I was in the hall in Atlanta in 1988 to hear Governor Dukakis say that the election was “not about ideology, it is about competence”. Playing to his weaknesses Obama dropped his promise to bring different people together and spoke to the thousands in the stadium instead of the millions on TV. Are there really people who believe that he will somehow bring the steel mills and coal mines back to the Midwest? Does he really believe that President Bush is the crux of the election? Did he win the primaries because people thought he would bring more tax cuts than Republicans? Senator Obama decided to play former Senator Gramm’s comments about American “whiners”. Does Obama think he’ll come out ahead in a comparison of what a candidate’s supporters say? How much more time does he want to spend discussing Reverend Wright?

In my humble judgment, in a moment with an opportunity for glory, Barack Obama blew it.

What could Senator McCain do to win my vote? Probably nothing, but hypothetically he could pick a vice president from out of nowhere who could somehow combine a Teflon untouchability with a strong rhetorical breath of fresh air. Oh wait, he did that. Governor Palin's speech was a delight, and her attacks on Obama were measured, understated and hit him where he fairly can be hit. Very unlike the Democrats’ “Bush sucks” sort of thing. Attacks on her experience have merely highlighted that she has more experience than Senator Obama, and Senator Biden’s experience is all bad, and somehow through some mechanism we do not understand the Teflon has protected her from personal circumstances that might have been devastating.

Senator McCain’s acceptance speech was maudlin, backward looking and presented no vision. It was pretty much as anticipated, but with expectations low for him, at least he didn’t blow it.

It is early September. The polls, fonts of ignorance, say the race is even, which I do not understand. By anything I think Senator Obama should be looking at a 40 state victory. Senator Obama is a Black Swan, but so apparently is Governor Palin. Senator Obama has my vote and less than 60 days to lose it.

The Black Swan

Nassim Nicholas Taleb’s The Black Swan has filled a summer of discussion at our house. Since everyone knows that “all swans are white” the discovery of black swans in Australia challenged millennia of assumptions about swans merely because no one had seen a black swan. Our assumptions and what we call “the truth” are severely limited, often critically so, by the limitations of our experiences and our knowledge. The author’s friend keeps a 30,000 book library, not to show off what he knows but to be reminded of what he does not know. The future is controlled much more by a combination of luck and what we do not know than by the facts in our limited vision.

Taleb says that Black Swans have three essential characteristics: first they are outliers, outside our prior experience and expectations, second they have a large impact, and third they are, after the fact justified with explanations that make them seem predictable. Taleb believes that wars are frequently Black Swans, events set in motion with predictions of future results based on the past which is actually a poor predictor.

In Taleb’s experience life is non-linear, and experience is a rebuke to both the empirical certainties of Hume and the portfolio managers. The author grew up in Lebanon where cultures mixed more or less easily until fighting broke out in 1975. Everyone assumed the fighting would last a couple of weeks as had prior clashes among the sects. 17 years later with their society essentially destroyed some form of peace came to Lebanon, wholly unanticipated results later explained by “experts”. September 11 was a Black Swan, totally outside of our experience, unpredicted, and having an enormous impact. After the fact talking heads could review writings of Al Qaeda, the 1993 bombing of the World Trade Center and make sense of it all, but as a Black Swan, no one had actually said anything on September 10 that would have left anyone thinking that the country was in imminent danger.

Game theory economists, portfolio managers and TV talking heads are Taleb’s principal targets. Each of them make projections that assume “rational behavior” and that future events will look like recent past events and always be distributed within 2 standard deviations on the bell curve. Both assumptions may be true for a very small sampling, but as the sample sizes get larger the larger number of irrational actors are on the scene, and an events outside the 2 standard deviations are more common with greater impact. Being the beneficiary of or ruined by a Black Swan is mostly a matter of luck.

Barack Obama is a Black Swan. Did anyone believe or predict that a convention speech in 2004 could propel an unknown junior senator to leapfrog the entire Democratic Party establishment? Now, of course everyone knows it was obvious, but it was not obvious at all. It was in fact unpredicted and highly unpredictable, outside the normal margin or error and yet so significant. The talking heads after 2004 were wrong, wrong, wrong in everything they said, and still we watch them as if they know something. What they “know” is that each can reinforce what the others say, and what we know is that the future events will be controlled by events the talking heads cannot even imagine.

I have been reasonably lucky avoiding predictions in these writings. The only attempt I recall, “Iraq” in April 2007 appears in September 2008 to have been almost wholly wrong, precisely because I lacked knowledge of events on the ground, changes of positions, and a million other factors invisible from an armchair. Iraq has been non-linear in many ways, apparently, as of the moment, to our advantage. Waiting for some other Black Swan to appear.