Burger King vs. Jack in the Box -- More thoughts on corporate competence

While on the subject of corporate competence, this recent story  seems like a good excuse to do a post on on one of the most consistently incompetent companies on the business landscape.

One of the most intriguing and for those inclined toward schadenfreude entertaining things about Burger King is the way that for about the past thirty years, with a variety of managers and owners, the company has been so bad at so many things.

Their PR is often clumsy (you generally want to avoid headlines about you copying your competitor's products).

Their relationship with their franchisees is terrible.

Relations became so antagonistic that last year the [franchisees'] association took the extraordinary step of filing two class-action lawsuits challenging management decisions. One suit, filed in U.S. district court in San Diego, came after the company sought to divert to national advertising millions of rebate dollars that franchisees get from Coca-Cola Co. and Dr. Pepper Snapple Group Inc. for selling their beverages. That suit was dropped after the company agreed to augment its ad budget by other means.

The other association suit opposed a company mandate that franchisees sell a double cheeseburger for $1. That suit, still pending in federal district court in Miami, contends that management can only suggest prices franchisees charge. Franchisees had voted down the proposed sandwich, arguing they would lose money at $1, but Burger King introduced it anyway. In court papers, the company argued that an appeals-court ruling in another suit involving pricing gave it the right to make the move. Since the filing, Burger King has taken the double cheeseburger off its $1 Value Menu, and raised its suggested price, but announced plans to add more items to that menu.

Burger King also faces a suit brought by three franchisees—two are in the company's Hall of Fame for exceptional franchisees—challenging a mandate that they keep their restaurants open late at night. It "costs franchisees $100 an hour, but they gross only $25 to $30 an hour," says Robert Zarco, a Miami attorney representing the plaintiffs. The two sides are awaiting a hearing on the company's motion to dismiss that litigation, which was filed in Dade County Circuit Court in Florida in December 2008.

The dealings with the franchisees demonstrates another reason why BK schadenfreude is so satisfying. The incompetence often comes mixed with a curious nastiness.

Here's Eric Schlosser, author of Fast Food Nation, writing for the New York Times:

In 2005, Florida tomato pickers gained their first significant pay raise since the late 1970s when Taco Bell ended a consumer boycott by agreeing to pay an extra penny per pound for its tomatoes, with the extra cent going directly to the farm workers. Last April, McDonald’s agreed to a similar arrangement, increasing the wages of its tomato pickers to about 77 cents per bucket. But Burger King, whose headquarters are in Florida, has adamantly refused to pay the extra penny — and its refusal has encouraged tomato growers to cancel the deals already struck with Taco Bell and McDonald’s.
...
Telling Burger King to pay an extra penny for tomatoes and provide a decent wage to migrant workers would hardly bankrupt the company. Indeed, it would cost Burger King only $250,000 a year. At Goldman Sachs, that sort of money shouldn’t be too hard to find. In 2006, the bonuses of the top 12 Goldman Sachs executives exceeded $200 million — more than twice as much money as all of the roughly 10,000 tomato pickers in southern Florida earned that year. Now Mr. Blankfein should find a way to share some of his company’s good fortune with the workers at the bottom of the food chain.

And then there are the ad campaigns. You would be hard pressed to find a comparable company with a worse run of advertising. You have to go back to the Seventies and early Eighties to find effective BK commercials. Since then a variety of agencies have produced a steady stream of mediocre ads ranging from forgettable to off-putting (try Googling "creepy Burger King").

Actually, there is at least one BK campaign that people in the advertising industry are still talking about, but not in a good way. In response to the proto-viral success of Joe Sedelmaier's "Where the Beef" ads, BK engaged J Walter Thompson (who were and are kind of a big deal) to set up a massive nation wide campaign of ads and cash prizes for people who spotted "Herb."



Here's Wikipedia's description of the aftermath:

The promotion met with some positive reviews. Time called it "clever", and a columnist for the Chicago Tribune stated that Herb was "one of the most famous men in America". Ultimately, however, the Herb promotion has been described as a flop. The advertising campaign lasted three months before it was discontinued. One Burger King franchise owner stated that the problem was that "there was absolutely no relevant message". Although some initial results were positive, the mystique was lost after Herb's appearance was revealed during the Super Bowl. Burger King's profits fell 40% in 1986. As a result of the poorly-received campaign, Burger King dropped J. Walter Thompson from their future advertising. The US$200 million account was given to N. W. Ayer.

Recently, an MSNBC article listed this as the second worst Superbowl ad of all time.

Burger King has little competition for worst managed large fast food company and absolutely for worst marketed. McDonald's, Wendy's, Subway, Hardee's/Carl's Jr, and the Yum brands have all had better campaigns, but my vote for best (at least for the past 18 years) is the smart and innovative regional chain Jack-in-the-Box.

The commercials come from the aptly named ad agency, Secret Weapon which has an interesting policy.

We will never take on more than three clients at a time. This means our clients get hands-on attention from the principals of the agency. You may have been promised this before by other agencies, but it’s tough to give 25% of your time to 18 different accounts.

Our three client rule means you get to work with the people you meet in the pitch. And since we rarely pitch we’re able to keep our attention on existing clients, not potential ones. As it should be.

The ads are sharp and funny (sometimes too sharp -- certain competitors were decidedly unamused by an ad for a sirloin burger that pointed at a diagram of beef cuts and asked "where's the angus?"). More importantly, they're good ads; they focus on the product.





Check out Jack's expressions on this one.




The following comment appeared on the site where I found the following mini sirloin burgers ad.  Could say something about the cultural impact of advertising but I'll just leave you with the image.

"Shit you not, guard controlled TV for the cell block, most of 128 inmates singing along to this. Almost magical except for the whole incarceration thing."



And in the did-they-just-say-that-? category.

Interesting article in the New York Times by Motoko Rich on why it seems to be more difficult to raise reading scores than it is to raise math scores. I don't have time to discuss this in depth, but I will say that having taught math, English and  reading, I always found math to be the easiest subject to teach. By comparison I never felt I had a handle on the best way to teach language (or even if there is a best way).

That said, these are all excellent points:

Teachers and administrators who work with children from low-income families say one reason teachers struggle to help these students improve reading comprehension is that deficits start at such a young age: in the 1980s, the psychologists Betty Hart and Todd R. Risley found that by the time they are 4 years old, children from poor families have heard 32 million fewer words than children with professional parents.

By contrast, children learn math predominantly in school.

“Your mother or father doesn’t come up and tuck you in at night and read you equations,” said Geoffrey Borman, a professor at the Wisconsin Center for Education Research at the University of Wisconsin. “But parents do read kids bedtime stories, and kids do engage in discussions around literacy, and kids are exposed to literacy in all walks of life outside of school.”

Reading also requires background knowledge of cultural, historical and social references. Math is a more universal language of equations and rules.

“Math is really culturally neutral in so many ways,” said Scott Shirey, executive director of KIPP Delta Public Schools in Arkansas. “For a child who’s had a vast array of experiences around the world, the Pythagorean theorem is just as difficult or daunting as it would be to a child who has led a relatively insular life.”

Education experts also say reading development simply requires that students spend so much more time practicing.

And while reading has been the subject of fierce pedagogical battles, “the ideological divisions are not as great on the math side as they are on the literacy side,” said Linda Chen, deputy chief academic officer in the Boston Public Schools. In 2011, 29 percent of eighth graders eligible for free lunch in Boston scored at proficient or advanced levels on federal math exams, compared with just 17 percent in reading.

The (ongoing) War on Data

I know we've been through this before, but from the New York Times (via ataxingmatter):

One bill, introduced in the House by Jeff Duncan of South Carolina, would effectively end all surveys by the bureau, except for the decennial census, and even that would be limited to counting noses — a silly interpretation of the census’s mandate. Banning the surveys would make it impossible to compile reliable data on employment, productivity, health, housing, poverty, crime and the environment, to name a few of the affected fields.

This bill would be too wacky to worry about, but its lunacy makes the other know-nothing bill look moderate. That bill, introduced in the House by Ted Poe of Texas and in the Senate by Rand Paul of Kentucky, targets the American Community Survey. Started in 2005 to replace the long-form census, the survey is the indispensable source of information on factors that define American life, including family configurations, education levels, work and living arrangements, income and insurance coverage. Credible information is the basis for a responsive government, an efficient economy and, by extension, a functional society. It also gives American policy makers and businesses a competitive edge, because it encourages decisions based on hard data as opposed to guesses or other faulty rationales that dominate in the absence of credible data.

About three million people receive the survey every year, and, as with the census, answering it is required by law. Mr. Poe and Mr. Rand want to make it voluntary, which would make the results less reliable, and potentially worthless, because fewer people would answer and those who did would not be a representative sample.

Canada recently replaced its mandatory long-form census with a voluntary survey — and now lives with the sorry results. To try to get an adequate level of response, the voluntary survey was sent to one in three Canadians instead of one in five, which increased costs. The response rate plunged anyway, from 94 percent to 68 percent. In a staggering one-fourth of Canadian communities, not enough people responded to make the data usable.

There are bets then there are bets -- developments in the rabbit ears war

Fox launched its terrestrial superstation, Movies!, on Memorial Day with the following line-up.

8:00AM / Take a Hard Ride

10:10AM / House of Bamboo

12:20PM / Backlash

2:25PM / Michael Shayne: Private Detective

4:10PM / The Man Who Wouldn't Die

5:45PM / Jumpin' Jack Flash

8:00PM / High Anxiety

10:05PM / Silent Movie

The channel is a collaboration with Weigel Broadcasting and there's definitely a Neal Sabin touch with lots of dog whistles for movie lovers (Goldsmith, Fuller, Sturges, Brooks), widescreen format and an emphasis on the pretty-good but hard-to-catch (Emperor of the North is playing muted as I write this). The channel also introduces the welcome practice of not editing for length.

Looking through the schedule for the next few days, I see a number of interesting titles, more than I'll have time to watch. I also see indications that a great deal thought went into scheduling, making NBC's COZI secure in its position as worst run terrestrial superstation.

When I rescanned my channels to pick up Movies!, four other new channels also showed up, including what appears to be a new subchannel from the CBS affiliate. At present, it simply rebroadcasts the same programming as the main channel, but if they really have gone from broadcasting one channel to broadcasting  two, it would seem to indicate that CBS is at least considering jumping into the terrestrial market (which would mean that all four of the big four networks would have terrestrial-only channels).

In the past week I also noticed an LA company that sells and installs outdoor antennas has launched a fairly sizable ad campaign. Along similar lines, I recently started seeing store windows in East and Central LA carrying a wide selection of motorized and/or amplified indoor antennas.

As we've mentioned before, there are two wildly divergent pictures of the state of over-the-air television: healthy and growing according to the 2012 Ownership Survey and Trend Report; or small and shrinking according to Nielsen. It appears that pretty much everybody with first hand knowledge and skin in the game (networks, broadcasters, regional media players, retailers, manufacturers) are putting their money on the first scenario, while the only prominent backers of Nielsen appear to be reporters for the New York Times and Reuters.

Noah Smith recently observed that trivial bets do not necessarily reveal beliefs. That's true, however the multimillion dollar ones do indicate a certain level of sincerity.

One more of these and I'm back to writing about old TV shows...

It's late, I hadn't planned to do another on this and I've got a logjam forming upstream, so I'm going to rush through this one.

Take a look at the following from the the Hartford Courant:

Rates Of Suspension Vary

The difference in rates of suspension between suburban and urban districts is substantial, with West Hartford and Farmington having five or fewer incidents of suspensions in this age group in 2012, while Bridgeport had 293 and Hartford had 238.

In some cases, the rates of suspension are quite different even between somewhat similar districts and schools.

For instance, Hartford has only about 240 more children enrolled in kindergarten and first grade than New Haven, but had 238 instances of suspension compared to 89 incidents in New Haven.

Amistad Academy in New Haven and Achievement First Hartford Academy are both public charter schools run by Achievement First, with very similar enrollment numbers in the early grades. But while Amistad had 38 instances of suspension during the last school year among children age 6 and younger, Achievement First Hartford Academy had 114 in the same age group.*

An even more dramatic comparison: The incidence of suspension of kindergartners and first graders at Achievement First Hartford Academy last year was an estimated nine times the rate in Hartford public schools.
...
Marc Michaelson, regional superintendent for Achievement First, said the school, where students annually out-perform their Hartford peers by significant margins on state standardized tests, has "a very high bar for the conduct of our students and that's because we've made a promise to our scholars and our families that we are going to prepare them for college."

And from another Courant article:

For the 2012-13 year, the state is spending about $67.7 million on 17 charters with 6,451 students, including Achievement First's network of schools in New Haven, Bridgeport and Hartford, said Jim Polites, a spokesman for the state Department of Education. Last fall, the state budget was $52.8 million for nearly 6,100 charter school students.

State Education Commissioner Stefan Pryor is a former board member and co-founder of Amistad Academy, Achievement First's flagship school in New Haven.

A few points:

1. There is a great deal of money changing hands, often with little scrutiny...

2. And despite decidedly mixed results, the money seems to be increasing.




3. Selection effects matter.

4. These effects can be amplified by social dynamics.

5. Add to that the natural extremes of childhood and you get certain kids who are 80/20 for experienced teachers and 95/5 for the newbies.

6. Thus even a small change in class roster can cause a big change in class behavior and performance.



7. Under movement reforms, one of the best ways to get ahead financially and politically, is to find a way to dump certain students.

8. If you repeated suspend five-year-olds, their parents will take them elsewhere.



9. The hardest-to-reach kids should be the ones you care about the most.

10. If you don't feel that way, you shouldn't be working with kids.



* In case I haven't mentioned it lately, there is a huge range in quality and professional ethics among different charters.

More on the looting phase of the education reform movement

Having watched the rise and fall (?) of the education reform movement for years now, I often find my attention split the story and the metastory. The story is what's being done in education, how it's working and what should be done differently. The metastory is about the way the reform narrative grew and entrenched itself (particularly with parts of the left) and about the way movement reformers (again, particularly on the left) failed to deal with certain longstanding concerns.

Putting aside the question of political agendas (which really shouldn't be considered when assessing arguments -- bad motives don't preclude good reasoning), the concerns fell into three broad categories:

1. The underlying pedagogical and economic assumptions were flawed;

2. There were intractable data issues that were being overlooked;

3. The system was vulnerable to (and had huge incentives for) gaming at a level that could undo any of the benefits that might come from the proposed reforms.

It is the third concern that prompted me to speculate about affinity effects (a point disputed here). Though evidence supporting all three has been accumulating for years, discussions of the first two got very technical very quickly. Support for the third, though, was obvious on a common sense level.

When a group repeatedly fails to notice something as it becomes increasingly obvious, you can legitimately start looking for some external influence, and the problem with gaming has become increasingly obvious. We started with clear vulnerabilities, then saw the rise of charismatic figures who asked us to trust them with tremendous amounts of money and power based on extravagant but questionable claims. Almost immediately after this, reports starting flowing in of suspicious test results, extensive student dumping and other signs of aggressive data manipulation.

How were so many otherwise alert and skeptical movement reformers caught off guard by problems anyone could have seen coming? I believe part of the answer lies in the culture and narratives of the reform movement. Cultural affinity meant that reformers (who generally had good intentions themselves) tended to project similar values on those who displayed the correct cultural signifiers while hero/villain narratives made it difficult to accept the idea that some of those cast in heroic role might be corrupt while some of those cast in the villainous parts might be right.

Though overt cheating has been getting most of the press lately, larger, more systemic data manipulation is potentially the bigger concern. Mike the Mad Biologist has been on this beat and sends us to this depressing data point.[emphasis added]

One of the first things a visitor sees when stepping into Kipp Academy is a graph that shows how Kipp is outperforming Metro schools in every subject.

However, Kipp Academy is also one of the leaders in another stat that is not something to crow about.

When it comes to the net loss of students this year, charter schools are the top eight losers of students.

In fact, the only schools that have net losses of 10 to 33 percent are charter schools.

"We look at that attrition. We keep an eye on it, and we actually think about how we can bring that back in line with where we've been historically," said Kipp Principal Randy Dowell.

Dowell said Kipp's 18 percent attrition is unacceptable.

MNPS feels it's unacceptable as well, because not only are they getting kids from charter schools, but they are also getting troubled kids and then getting them right before testing time.

"That's also a frustration for the zoned-school principals. They are getting clearly challenging kids back in their schools just prior to accountability testing," said MNPS Chief Operating Officer Fred Carr.

Nineteen of the last 20 children to leave Kipp Academy had multiple out-of-school suspensions. Eleven of the 19 are classified as special needs, and all of them took their TCAPs at Metro zoned schools, so their scores won't count against Kipp.

"We won't know how they perform until we receive results and we see. We would be happy to take their results, frankly. The goal is getting kids ready for college. The goal is not having shiny results for me or for anyone on the team," Dowell said.

There's a surreal quality to Dowell's responses here. The kind of attrition we're talking about in this case is almost entirely at the administrator's discretion. What's more, it generally takes a great deal of time and paperwork to make it happen.

As mentioned before, these schools already have selection bias and social norming working in their favor. If, on top of that, a principal like Dowell selectively gets rid of almost one out of five students based on behavior and performance, it is difficult for a school not to look good.

In a sane society, this would have been the lead story the day it broke

David Biello writing for Scientific American (via Thoma):

That's the message from the U.S. Geological Survey's evaluation of how the U.S. is managing its aquifers. Or mismanaging. For example: water levels in the aquifer that underlies the nation's bread basket have dropped in some places by as much as 160 feet.

The rest of the world isn't doing any better. A conference of water scientists just issued the so-called Bonn Declaration, which declares that this lack of foresight will cause the majority of people alive in 2050 to face "severe" freshwater shortages.

Ethics and Ayn Rand

James Kwak:

This idea is obviously echoed in Ayn Rand’s novels, which celebrate the individual genius standing out against the backdrop of collectivist mediocrity. It has also trickled into the contemporary conservative worship of the ultra-rich. The phrase today is “job creators” (whatever that means), but it has the same moralistic overtones as in Nietzsche and Hayek—a class of people who are better than the rest of us, on whom we depend for our salvation and prosperity, and whom we should not presume to question or constrain through, say, safety regulation or higher taxes (“penalizing success,” in the jargon).

This really has been one of the more insidious ideas of the twenty-first century-- that wealth and success are evidence of moral character.  One problem with this philosophy is that it replaces a creed of "it isn't whether you win or lose, it is how you play the game" with an unfortunate alignment between moral virtue and business success.  Under these conditions, how do you restrain the quest for wealth to within a code of ethics?

Instead we have a purely outcomes based ethic, that talks about the good that comes from the wealthy without asking hard questions -- like would things be better if wealth were more equal?  In particular, the logical connection between rich people becoming more rich and more employment opportunities being created are less than completely clear.  I don't want to say that the effect size is actually zero, but rather that it seems odd to neglect other possible sources of variation.

The Project Gutenberg Project

Joseph and I have been going back and forth on the best way to get the most out of the tidal wave of open data of which we are only seeing the beginning.

Joseph tends to be more skeptical on this subject. He almost has to be. He's approaching this both as an epidemiologist (where privacy and ethical issues create huge headaches) and an academician (where open data can create tremendous perverse incentives to rush out mediocre work in order to beat out other researchers looking at the same data). The promise of open data is very much field specific.

I tend to be more optimistic about the subject. I'm more the data miner of the blog and to find myself living in an age when anyone with a refurbished desktop computer, a copy of R and Python and a decent internet connection can do real, interesting research is tremendously exciting.

There is at least one area, though, where I am possibly more skeptical than Joseph and that's in the chances of these huge data initiatives self-organizing along anything near an optimal configuration...

I started to write something here about market forces in research and incentives and non-rival goods but then the phone rang and by the time I got off I realized that would be a lot of work (at least it would if I did enough research to make sure I wasn't making an idiot of myself). Chances are, that discussion would just be a long winded way of saying if we want to effectively coordinate all these researchers so that information flows where it needs to flow and data is fully explored and we can keep track of what's going on, we need to think this thing through.

Which brings me to the Project Gutenberg Project. Project Gutenberg has, of course, a huge and growing database. It's set up to be researcher-friendly and the system readily lends itself to automated approaches. The possibilities for text-mining are endless and a tremendous number of interesting research questions can be addressed with nothing more than a reasonably up-to-date computer and some free software (I previously posted a couple of examples here).

This would seem to be an ideal test case for setting up procedures and sites for dealing with large, open databases . Here are a few possibilities:

A place to submit and comment on proposed hypotheses;

A place to report preliminary findings;

A place to report negative findings;

A place to report confirmation of previous findings;

A database connecting approaches, hypotheses and data points;

Multiple ranking systems;

A way of identifying under-explored parts of the data.

Obviously this is a first pass and I'm just throwing out some ideas. Some might be impractical. Others, as Joseph would point out, will not be applicable to other data sets. And I have a nagging feeling that I've left something obvious out.

But that, of course, is the nature of a blog post.

Maybe they're hinting at something

I've been experimenting with different blog formats over the past few years with a couple of pop culture blogs and a fairly serious one (You do the math) on education. They've definitely been on the back burner recently but they are active and they continue to improve slowly in traffic and page rank so if I decide to put one in gear (which I may do with the You Do the Math fairly soon), I won't have to start from zero.

These sites run ads. To date I haven't seen any money from them (my account is around forty dollars and you apparently have to have one hundred for them to cut you a check), but like I said they've been in a groundwork stage and I have plans to go after at least one of them more aggressively in the future.

Which is why this email from Google is a tad troubling:

Hello,

As part of our internal audit review, we identified a credit under your AdSense account that may be due and owing to you.

Since the date of your last transaction, there has been no activity from your account. As such, these funds are in danger of being escheated to the state. Unless we are informed of your ownership or beneficial interest in these funds, they will be placed in the custody of the State of California. If these funds are transferred to the State, you will be required to submit a claim in accordance with the statutory provisions of the State's unclaimed property laws in order to recover it.

Should you wish to discontinue using AdSense, you can close your AdSense account. If you close your account, you'll no longer have access to the Google code and you'll receive no further emails from us. Your remaining earnings will be paid out according to the payment schedule outlined in the AdSense Terms and Conditions. Provided there are no holds, you have accrued more than 10 USD and we have a valid form of payment on file, you should receive your payment in the cycle following your account closure. For detailed instructions on how to cancel your account, click here.



Sincerely,

The Google AdSense Team

Here's the funny part... There doesn't seem to be any way for me inform them of my ownership other than to click the link and cancel. There is no link in the middle paragraph. The email was sent from a no-reply address. When I go to the Adsense contact page I am told that my account is not eligible for direct email consultation and I am limited to "specialized contact forms," none of which seem to come even close to fitting my situation.

Are they trying to get me to leave or are they really this bad at business communications?

Weekend blogging -- Uncle Art's Funland

Art Nugent doesn't have the mathematical following that Dudney or Loyd (he seldom hit the depths of those two), but he was a pretty good puzzle maker and a damned fine cartoonist and his output was extraordinary. For more than forty years he put out newspaper features and comics pages filled with puzzles, games, riddles, activities and magic tricks.

From Just a Pile of Old Comics.

Spinach is supposed to make you stronger -- Infrastructure and the Kinsley/Krugman fight

Virtually everyone who reads this blog has heard about (and is probably sick of hearing about) Michael Kinsley's contrarian defense of austerians that ended with this analogy:

Austerians don’t get off on other people’s suffering. They, for the most part, honestly believe that theirs is the quickest way through the suffering. They may be right or they may be wrong. When Krugman says he’s only worried about “premature” fiscal discipline, it becomes largely a question of emphasis anyway. But the austerians deserve credit: They at least are talking about the spinach, while the Krugmanites are only talking about dessert.

To get a feel for just how odd this analogy is, you need to remember that a large part of this 'spinach' is saying no to people who want to borrow money almost interest-free and spend it on infrastructure, education and research thus avoiding far greater costs in the future.

These are all urgent issues but the infrastructure crisis in particular demands immediate action. Civil engineers have been ringing this alarm bell for years:

Back in March, when the American Society of Civil Engineers issued an infrastructure report card for the entire country, its very best grade — a B-minus — went to solid-waste disposal. Thanks to our decent progress in recycling, the United States’ overall grade-point average in subjects ranging from aviation to water systems actually ticked up from the previous GPA.

To a pitiful 1.30, that is, on a 4.00 scale.

Those warnings became considerably less abstract yesterday:

SEATTLE — A large section of a bridge on Interstate 5 north of Seattle collapsed Thursday evening, sending vehicles and people plunging into the swirling, frigid waters of the Skagit River.
Three people were hospitalized in stable condition, officials said. No one was killed.

The bridge failed without warning between the towns of Burlington and Mount Vernon on the major route linking Seattle with the Canadian border, the Washington State Patrol said.

"Without warning" here is a bit of a relative term:

The 58-year-old bridge in Washington, a crucial link to the Canadian border traveled heavily by trucks, was inspected every two years, most recently in November, state Department of Transportation spokesman Bart Treece told the Los Angeles Times.

“It’s an old bridge. We have to look into the specifics. We do have a lot of old, aging structures, and a lot of them hold up really well,” he said.

The National Bridge Inventory lists the bridge as “functionally obsolete,” with “somewhat better than minimum adequacy to tolerate being left in place as is.” It received a sufficiency rating of 57.4 out of 100.

Putting aside for the moment the question of public safety, the economic impact of bad infrastructure can be huge (from the same story):

Washington’s main north-south thoroughfare, though, was likely to remain closed 60 miles north of Seattle for an indefinite period, state officials warned. The nearly 71,000 vehicles a day that travel the bridge between Mt. Vernon and Burlington were diverted through city streets to another nearby bridge.

Just to be clear:

dessert = making repairs now

spinach = deferring repairs now and making more costly ones later when interest rates will be higher

Kinsley's analogies are like America's bridges; they need a lot of work.

Notes on an unwritten paper -- Naive Bayesian Classifiers and Order of Composition

[Update: I've got some more thoughts on Gutenberg-based research in my latest post.]

I'm planning on writing some posts on the potential of and the potential concerns about open data (possibly even getting Joseph to join in) so I thought I'd dust off a somewhat relevant idea I had a few years back. If anyone wants to see if they can get something publishable out of this, feel free. In the meantime, I plan on getting some mileage out of it as an example.

A few years ago, I wrote some code for text mining. It was really basic, standard stuff -- using naive Bayesian classifiers and n-grams (normally techniques for assigning authorship) -- but it worked well and was fun to play around with. I used various books from Project Gutenberg as test data and selected authors with styles and backgrounds ranging from close (Dickens and Trollope) to out there (Thorstein Veblen) with a translation of Verne as someone neutral. The two Victorians also had the advantage of having written lots of books over many years.

The idea was to approach this less as a classification problem and more of a question of distance between points in a literary space. Here the "likelihood score" was more a measure of similarity. As you would expect, Great Expectations was more similar to Nicholas Nickleby than to Barchester Towers, more similar to Barchester Towers than to a translated Master of the World and more similar to Master of the World than to Theory of the Leisure Class. It also worked as expected when you compared works of the same author written at different points in his career: Great Expectations (1860 to 1861) was more similar to Our Mutual Friend (1864 to 1865) than to Nicholas Nickleby (1838 to 1839).

Obviously this was a tiny trial run, but it did suggest that there's something out there, as did a recent literature search which turned up at least one related paper from 2011 ("Predicting the Date of Authorship of Historical Texts" by A. Tausz) which used NBCs to determine absolute rather than relative dates. Still even with Tausz' paper (which is very interesting, by the way) there still should be room for research into intra-author questions and, more importantly, into lots of other questions using data from project Gutenberg.

And on top of that you can apparently find interesting stuff to read at the site as well.

Scandal, metareporting and the dumber-reader theory

Everybody has heard of the greater fool theory of investing where you buy a stock not because you think its assets are undervalued or because there's a good chance that the company will make money but because you believe there is someone out there who will pay significantly more than you paid.

I've noticed a somewhat analogous trend in journalism today, particularly involving the coverage 'scandals.' I apologize for the quotes but they're there for a reason I'll get to in a bit. In the traditional model of reporting, the journalist implicitly claims that the information being reported is accurate, representative and significant enough to justify the readers' time.

Over the past few years, though, journalists seem to have gotten more likely to downplay these traditional elements (what we might call the fundamental value of the story) and focus on what the impact of the story will be if people other than the reader believe it (the dumber-reader theory). In generic form, the stories go something like this: "A made accusations against B. There is no reason to believe these accusations but if they gain traction, they could hurt B."

Perhaps the most dramatic example of the past few years was swiftboating where most of the attention was paid to how Kerry's handling of the charges would affect his campaign while relatively little was given to the charges' validity (a question that in previous times would probably have been considered a necessary condition for the story to advance).

Don't get me wrong. Coverage has always included questions about the impact of scandals, but it seems like the process before had more of a tree structure: ask question A and then, based on the answer, ask either question B or C. I'm not saying that this rose to the level of hard and fast rule, just that it was the norm. First you asked if an accusation was true. If the answer was yes you asked how serious was the offense; if the answer was no you asked if the accuser had been deliberately misleading. And so on...

I can see how moving away from that structure is a good thing for journalists. For the rest of us, however, it does not look like a good thing at all.

Pets

Frances Woolley:

Indeed, when a person selects a pet, life expectancy is one of the last things considered (see, for example, this pet selection guide, or this one or this one). Instead, "experts" recommend choosing a pet who will be a good match for his or her owner in terms of activity level, sociability, and so on. Good health matters - sensible owners avoid breeds prone to health problems. But not life expectancy per se.

I think there is a good point here -- life expectancy is not the only good that people are interested in.  Sure, I do not want to die young.  But if terrible quality of life was the only way to extend one's life span that would seem sub-optimal too. 

Really what we want to maximize is high quality life.  In cases where high quality and life contradict each other then one has to choose (and it is never an easy decision).  So it is not surprising that people adopt pets that they are compatible with.  But just ask a dog owner what they will do to extend the life of a sick Labrador Retriever and you might be surprised . . .

So which preference is dominant?  The breed decision or the attempt to prolong the life of one's furry friend? 

Un-self-awareness at the New Republic -- more Rhee-views

Michele Rhee has popped up in a couple of notable posts this week.

First Nicholas Lemann writing in TNR:

Rhee is not one for exquisite sensitivity. She closed schools, fired teachers, and (though she assures us that “I had never sought the limelight”) became famous. She was on the covers of Time (holding a broom) and Newsweek, and was one of the stars of Waiting for Superman. It is usually a fundamental rule of politics that a department head isn’t supposed to do anything to make her boss unpopular or to upstage him. Rhee did not follow this rule. She has a special scorn for “politics” and often praises Fenty for not considering it when making decisions, but this is both un-self-aware (Rhee’s policies were very good politics in white Washington) and impractical. We live in a democracy, so officials have to contend with public opinion and with groups organized to promote their own interests. Many American politicians over the last generation, including all of the last five presidents, have been able to push education policies in the same realm as Rhee’s in a way that kept their coalitions together. That is what Rhee and Fenty were unusually bad at doing, and Rhee’s insistence that “politics” is a terrible thing that only her opponents practice was surely a big part of the reason why.

Lemann represents the pivot phase of the press's relationship with Rhee, not quite ready to address painful topics, but moving away from the hagiography that until recently marked much of Rhee's coverage (particularly at the New Republic).

It is, of course, difficult to pivot gracefully so it's not surprising to see an awkward turn or two here. Most memorable is the description of Rhee's stated view of politics as "un-self-aware." Not only is the term itself good for a chuckle, but by this criterion Rhee's un-self-awareness would apply to the vast majority of politicians (think of all the times you've heard candidate express a similar scorn). It is the most standard of standard campaign lies, made all the more transparent by Rhee's relentless and ruthless political maneuvers (including reaching her current position by climbing over the still-warm corpse of Adrian Fenty's career).

The press is slowly coming to terms with how badly it was played by Rhee, but they are getting there. The question now is how will the fall of one reformer affect the movement? Andrew Gelman sees this as indicative of something bigger.

My impression is that there has been a shift. A few years ago, value-added assessment etc was considered the technocratic way to go, with opponents being a bunch of Luddite dead-enders. Now, though, the whole system is falling apart. We can learn a lot from tests, no doubt about that, but there’s a lot less sense that they should be used to directly evaluate teachers. We’ve moved to a more modern, quality-control perspective in which the goal is to learn and improve the system, not to reward or punish individual workers.

This shift may have not happened yet at the political level, but it’s my sense that this is the direction that things are going. The Rhee story is symbolic of the fallacies of measurement.

I'm not so sure. From the beginning there have been at least four major concerns:

1. Given the ugly nature of the data (confounded, nested, etc.) we would not get anything usable out of the two or three years of data window we would have to evaluate a teacher;

2. The test might give us an inaccurate or incomplete picture of what students were learning;

3. The system would be vulnerable to cheaters;

4. The tests would distort education priorities.

Rhee's crash drives home 3 but I don't know that it says that much about the rest which is troublesome because those are the ones that bother me more.

A smart post from Felix Salmon

Felix Salmon:

My point here is that technology has a tendency to create its own norms. The classic example is the automobile — a technology which kills more than 30,000 Americans every year. From the 1930s through the 1990s, societal norms about who roads belonged to, and what people should do on them, were turned on their head thanks to the new technology. The dangerous new activity allowed by the new technology became the privileged norm, to the point at which just about all other road-based activity — and roads have been around for thousands of years, remember, since long before the automobile — essentially ceased to exist. Eventually, we reached the point at which elected representatives were happy saying that if a bicyclist gets killed by a car, it’s the bicyclist’s fault for being on the road in the first place

.I think that this is a very interesting point at two levels.  One, is that it does point out that society can change around innovation just as much as innovation can change society.  I think that this will be broadly applicable to innovations like driverless cars that are legal nightmares now, but could easy become the standard with enough adoption.  It's never clear when a technology will win this sort of breakthrough success (the innovation grave-yard is full of such examples).  But it does point out that some classes of argument are less likely to succeed.

But the second point is also really salient -- it is often amazing how much we overlook the subsidization of activities are social norms.  We don't see the use of roads for cars and not bicycles as a subsidization of the car.  Heck, I am often annoyed by bicyclists who can't decide what set of rules they are following (when they switch back and forth between being a fellow vehicle and a pedestrian it makes me nervous as I have a life-long goal to never hit a cyclist).  But the roads could just as easily be claimed by walkers, horses, bicycles and so forth in a much easier form of mixed use. 

Maybe he meant the toolbox of some economists...

Greg Mankiw has a piece up at the New York Times that opens with this assertion: "Nothing in the toolbox of economists makes us good stock pickers."

The article does a good job explaining the relevant economics concepts to a lay audience (as expected given the author), but I did notice a slight but amusing omission from this:

Advocates of market rationality now say that stock prices move in response to changing risk premiums, though they can’t explain why risk premiums move as they do. Others suggest that the market moves in response to irrational waves of optimism and pessimism, what John Maynard Keynes called the “animal spirits” of investors. Either approach is really just an admission of economists’ ignorance about what moves the market.

I'm not entirely sure Keynes would have conceded that point:

Keynes was ultimately a successful investor, building up a private fortune. His assets were nearly wiped out following the Wall Street Crash of 1929, which he did not foresee, but he soon recouped. At Keynes's death, in 1946, his worth stood just short of £500,000 – equivalent to about £11 million ($16.5 million) in 2009. The sum had been amassed despite lavish support for various causes and his personal ethic which made him reluctant to sell on a falling market when if too many did it could deepen a slump.[135]

Just imagine how much Keynes would have socked away if he didn't have that live-for-today attitude.

Weekend Blogging -- Puzzles! Puzzles! Puzzles! (from our side of the pond)

Having just done Dudney, it's only fair that we give equal time to America's turn of the century puzzle master, Sam Loyd.

If the name is new to you, here's a quick introduction from Wikipedia:

Loyd is widely acknowledged as one of America's great puzzle-writers and popularizers, often mentioned as the greatest—Martin Gardner called him "America's greatest puzzler", and The Strand in 1898 dubbed him "the prince of puzzlers". As a chess problemist, his composing style is distinguished by wit and humour.

However, he is also known for lies and self-promotion, and criticized on these grounds—Martin Gardner's assessment continues "but also obviously a hustler", Canadian puzzler Mel Stover called Loyd "an old reprobate", and Matthew Costello calls him both "puzzledom's greatest celebrity...popularizer, genius," but also "huckster...and fast-talking snake oil salesman."[4] He collaborated with puzzler Henry Dudeney for a while, but Dudeny broke off the correspondence and accused Loyd of stealing his puzzles and publishing them under his own name. Dudeney despised Loyd so intensely he equated him with the Devil.[5]

[For an in depth look at both Dudney and Loyd, Gardner is the go-to guy.]

Loyd was a master of all sorts of mathematical diversions but he is best remembered for his geometric puzzles. Perhaps the best known of these were the "Trick Donkeys." The object is to cut this picture into the three pieces indicated and rearrange them so that the jockeys appear to be riding the donkeys. No tearing or folding allowed and the donkeys cannot overlap.

One of the interesting things about this puzzle is that there are relatively few ways of arranging the pieces but people trying to solve the puzzle will almost invariably keep retrying the same unsuccessful arrangements.

Another famous puzzle (and one I'd like to revisit if I have the time) is Back from the Klondike:

From Wikipedia:

Back from the Klondike is one of Sam Loyd's most famous puzzles, first printed in the New York Journal and Advertiser on April 24, 1898. In introducing the puzzle, Loyd describes it as having been constructed to specifically foil Leonhard Euler's rule for solving any maze puzzle by working backwards from the end point.[1]
The following are Sam Loyd's original instructions:
Start from the heart in the center. Go three steps in a straight line in any one of the eight directions, north, south, east, west, northeast, northwest, southeast, or southwest. When you have gone three steps in a straight line you will reach a square with a number on it, which indicates the second day's journey, as many steps as it tells, in a straight line in any one of the eight directions. From this new point, march on again according to the number indicated, and continue on in this manner until you come upon a square with a number which will carry you just one step beyond the border, thus solving the puzzle.

Over at the Mathematical Association of America site. Ed Pegg Jr. has put Loyd's magnum opus, Sam Loyd's Cyclopedia of 5000 Puzzles, Tricks, and Conundrums online.

Here are some sample pages including the yellow-menace puzzle, Get Off the Earth. Solutions are found in the links that follow each page.

http://www.mathpuzzle.com/loyd/cop340-341.html

http://www.mathpuzzle.com/loyd/cop362-363.html

At last a candidate Maureen Dowd can support

Jonathan Chait has a good column about President Obama's recent comments about "going Bulworth," an allusion to the 1998 Warren Beatty movie about a politician who as a result of a drunken but honest rant finds his career reinvigorated.

The trouble is that these [frank] answers, while true, don’t actually help Obama. Any political scientist will tell you that the scope for possible legislation in this term is very narrow: The median House member is a very conservative Republican who represents a district that voted for Mitt Romney, and whose biggest political risk is losing a primary to an even more conservative Republican.

But most political reporters and analysts don’t pay attention to the political science. They like narratives that revolve around the president as a protagonist. When you confront them with structural analysis that confounds their narratives, they just get upset with you. It serves no purpose. That’s why I advised Obama to use “less real talk and more bullshit.”

A post-presidency Obama who actually spoke his mind, rather than fashion himself a post-partisan eminence, as post-presidents do — now that would be awesome. But the reason politicians don’t go Bulworth is that it doesn’t work. The truth about legislative dynamics is complicated and depressing. People don’t want to hear it.

Last night, for example, Obama said of the IRS scandal, “The good news is it’s fixable, and it’s in everyone’s best interest to work together to fix it.” That is some prime-caliber bullshit. Of course it’s not in the Republicans’ best interest to fix the problems with IRS enforcement. It’s in their interest to prevent any fix and let the problems linger as long as possible.

But if he had said that, there would have been a huge outcry, and probably a presidential apology. Nobody objected to Obama’s faux-naïve claim that Republicans will naturally want to solve the problem. Bullshit works. Bulworth doesn’t.

Bulworth is variant of the "straight-talking everyman takes control from the politicians" genre. Bulworth starts out as a standard politician then becomes a straightshooter, but the underlying fantasy is basically the same as that of Dave and Mr. Smith Goes to Washington: a political savior who would cut through the corruption and needless complexity with plain talk and common sense.

Not surprisingly, this notion holds a special appeal for Maureen Dowd.

Mr. Obama’s errors on the helter-skelter stimulus package were also self-induced. He should put down those Lincoln books and order “Dave” from Netflix.

When Kevin Kline becomes an accidental president, he summons his personal accountant, Murray Blum, to the White House to cut millions in silly programs out of the federal budget so he can give money to the homeless.

“Who does these books?” Blum says with disgust, red-penciling an ad campaign to boost consumers’ confidence in cars they’d already bought. “If I ran my office this way, I’d be out of business.”

But if we're going to go down this road, why not take it to its logical extreme?




[and in case you're wondering, the sketch preceded the movie]

"America’s Most Profitable Products"

I always worry about the methodology when I see one of these lists, but with that caveat, I still found this interesting. What especially caught my eye was how much brand drives the success of these products. Apple charges a significant premium for the logo, but it's the next three that really demonstrate the value of marketing.

With Apple, it's difficult to say how much success can be attributed to brand and how much is due to superior quality (they do make good stuff) and patents. With Marlboro, Monster and Coke, numerous comparable, even indistinguishable products are available at a significantly lower price.

Brand is the philosopher's stone of business. No one knows exactly how it works (and those who claim otherwise are not to be trusted), but there are people who are good at it and for those who are good and very lucky, the pay-off is amazing.

1. iPhone

Operating margin: 40%
Revenue: $80.5 billion
Market share: 20.9%
Industry: Computer hardware



2. Marlboro

Operating margin: 30%
Revenue: $19.0 billion
Market share: 42.6%
Industry: Tobacco



3. Monster

Operating margin: 26.7%
Revenue: $1.9 billion
Market share: 37.2%
Industry: Soft drinks



4. Coca-Cola

Operating margin: 25%
Revenue: $14.3 billion
Market share: 41.9%
Industry: Soft drinks



5. Enfamil

Operating margin: 24%
Revenue: $2.3 billion
Market share: 15.1%
Industry: Packaged foods and meats



6. Folgers

Operating margin: 23.6%
Revenue: $2.3 billion
Market share: 11.8% (U.S.)
Industry: Packaged foods and meats



7. Garmin nüvi

Operating margin: 15%
Revenue: $1.2 billion
Market share: Greater than 50%
Industry: Consumer electronics

Affinity cons and the looting phase in education

Affinity cons work in large part because when people see someone with similar background and cultural signifiers, they assume other similarities: common goals, values, approaches.

Movement reformers, particularly those who came in through Teach for America (and that's something you see a lot)  often get sucked in by something similar. They look at someone like Michelle Rhee and the rhetoric and the resume feel familiar. They see something they recognize in the upper-middle class upbringing (including private schools for junior high and high school), the Ivy League education, the TfA stint in a poor urban school. Lots of leaders in education today have that exact same bio and since the vast majority of them genuinely care about kids, they assume Rhee does as well.

Viewed without the affinity bias, however, Rhee's record mainly shows a pattern of intense self promotion, often the expense of students:

She appears to have started her career by greatly overstating test score improvements during her Teach for America days;

As an administrator, she was charged with abusing her authority to political ends:

and covering up a major cheating scandal;

She lent her political capital to anti-labor measures only tangentially related to education (but vital to her allies);

She oversaw the creation of a convoluted metric that assigned the top ranks to schools she and her allies were responsible for (despite those schools' terrible performance on the very metrics Rhee had previously championed);

And she endorsed a Bobby Jindal  initiative which pretty much guaranteed wide-spread fraud.

From Vickie Welborn and Mary Nash-Wood (via Charles Pierce):

Southwood High School junior Randall Gunn is a straight-A student.

So when the school’s principal saw his name come up as registering to retake several courses online, it immediately raised a red flag. Gunn was called into a counselor’s office and told he was enrolled in three Course Choice classes — all of which he already had passed standardized tests with exceptional scores.

“I had no clue what was going on,” Gunn said. “I have no reason to take these classes and still don’t know who signed me up.”

More than 1,100 Caddo and Webster students have signed up to participate in what some say are questionable Course Choice programs. According to parents, students, and Webster and Caddo education officials, FastPath Learning is signing up some students it shouldn’t — in many cases without parent or student knowledge.

A free tablet computer is offered to those who enroll, and some educators believe that’s all the potential enrollees hear. Money to pay for the courses comes from each school district’s state-provided Minimum Foundation Program funding.

Half of the money — courses range from $700 to $1,275 each — must be paid to FastPath and other providers up front. Neither students nor their parents are responsible for the tablet devices if they are lost or stolen. And they can keep them even if they don’t pass the course.

“This all goes back to all of the education reforms that were passed within eight days during last year’s session. This is what you get,” state Rep. Gene Reynolds, D-Dubberly, said of the apparent lack of oversight. “I’m not saying the idea was bad, but they are not doing it the way it should be done.”

[Update: the story continues here]

What the Zuck is wrong NBC?

Despite the title, this isn't a joke. NBC raises all sorts of interesting questions about why some massive companies have long periods of excellence and others have runs of incompetence, or more specifically a period of excellence followed immediately by a period of gross incompetence (one that shows no sign of abating).

Here's Ken Levine (who knows what he's talking about on the subject) assessing the current state of the network:

But the message is clear. NBC was a disaster last year. It’s hard to build an audience with so many new shows but what choice did they have? Last year they had star vehicles (like Matthew Perry in GO ON), the Olympics to promote their schedule, THE VOICE, and SUNDAY NIGHT FOOTBALL. And still they finished the year in shambles.  

This is what might be called the third period of NBC television (when we go back to the radio era, things get complicated, with what was NBC being split into NBC and ABC, but that's a story for another time). For about the first thirty years, CBS was on top, NBC was in the middle and ABC was at the bottom. In the late Seventies, though, everything went topsy turvy. ABC hit number one and actually started poaching stations from NBC.

The second period starts in the early Eighties and is usually associated with Grant Tinker and Brandon Tartikoff. This was the era of Must-see TV. NBC went from last to first and remained arguably the dominant network for almost twenty years.

Sometime around 2000, we hit the third period. The network went into sharp decline and has mostly stayed at the bottom ever since.

The standard explanation for this is good management/bad management (I've used it myself), but I'm starting to have my doubts. For starters, that relies on both great-man and idiot-in-charge theories and though I find the second somewhat more believable than the first (it is almost always easier to screw up something good than it is to fix something bad), both tend to have their impact exaggerated.

Worse yet, if we extend the data in either direction -- pre-Tinker (i.e. Silverman, who had a long string of successes stretching over two networks before he got to NBC) and post-Zucker -- the theory ceases to hold. We can possibly explain away the Silverman era based on timing, short tenure and expectations (Silverman's run was less of a disaster than most people realize and on some ways even laid the groundwork for Tinker's success*).

The post-Zucker era, however, is not easily explained away. Zucker was an embarrassingly underqualified executive who oversaw what was probably the worst decline in more than six decades of network television,  but he has been gone for almost three years and there does not seem to have been a noticeable improvement or even a significant change in direction.

NBC remains an organization that has no clue about how to do its job: it doesn't know how to develop or cultivate shows; it decided to waste a large chunk of its valuable Olympics real estate promoting arguably the least promising new show it had at the time; developing a new channel for the terrestrial market, it launches one of the most badly thought out ad campaigns you'll ever see and makes programming decisions like pairing Munster, Go Home with a drama about a raped nun killing her newborn baby.

I don't have an explanation for what happened with NBC. I don't even have a good theory. I do however have a different way of framing the question. Instead of focusing on the styles and decisions of different executives, perhaps we should be asking how a company goes from hiring executives like Tinker and Tartikoff to hiring executives like Zucker and apparently many more like him.


* From Wikipedia:

Despite these failures, there were high points in Silverman's tenure at NBC, including the launch of the critically lauded Hill Street Blues (1981), the epic mini-series "Shogun" and The David Letterman Show (daytime, 1980), which would lead to Letterman's successful late night program in 1982. Silverman had Letterman in a holding deal after the morning show which kept the unemployed Letterman from going to another network. ...

Silverman also developed successful comedies such as Diff'rent Strokes, The Facts of Life, and Gimme a Break!, and made the series commitments that led to Cheers and St. Elsewhere. Silverman also pioneered entertainment reality programming with the 1979 launch of Real People. ... On Saturday mornings, in a time when most of the cartoon output of the three networks were similar, Silverman oversaw the development of an animated series based on The Smurfs; the animated series The Smurfs ran from 1981 to 1989, well after Silverman's departure, making it one of his longest-lasting contributions to the network. He also oversaw a revival of The Flintstones.

In other areas of NBC, Silverman revitalized the news division, which resulted in Today and NBC Nightly News achieving parity with their competition for the first time in years. He created a new FM Radio Division, with competitive full-service stations in New York, Chicago, San Francisco and Washington. During his NBC tenure, Silverman also brought in an entirely new divisional and corporate management, a team that stayed in place long after Silverman's departure. (Among this group was a new Entertainment President, Brandon Tartikoff, who would help get NBC back on top by 1985.)  

Journalists vs. Lit Majors

Jonathan Chait has an insightful and sharply written piece up at New York Magazine called "Obama, ‘Leadership,’ and Magical Thinking." The whole thing is worth reading but this passage in particular jumped out at me because it illustrated a topic I'd been meaning to address.

But many political commentators find this analytic mode as dissatisfying as the quant approach to electoral forecasting. They understand politics largely in narrative terms, and the stories they prefer revolve around the success or failure of a lead character, who is always the president of the United States. If they reach back to history, it won’t be in any systematic way, but to tell stories of president Reagan drinking cocktails with Tip O’Neill, or Lyndon Johnson looming over a hapless member in a threatening fashion.

We talk a lot about journalists and narrative but we don't mean narrative of the Twentieth Century sense of The Sound and the Fury or Rashomon. For the past hundred and twenty years or so, the vast majority of serious narrative art has been multidimensional and open-ended. There is often no objective truth. New information often only adds to the ambiguity. By the second half of the Twentieth Century, this type of narrative had also become common (prevalent?) in popular culture where characters like Lew Archer, George Smiley, Matthew Scudder, and even comic book superheroes faced ambiguous, morally and ethically murky landscapes that owed more to Joseph Conrad than to the Strand Magazine.

When we talk about narrative in connection with today's journalists, we're generally using the term in a much older sense associated with a Trollope novel or a well-made play. Events follow a nice, clean causal chain. Moral issues are unambiguous and usually fairly obvious. Characters tend to be simple and fairly static except for some well-defined arcs and the occasional epiphany. All of which adds up to a final, objective truth.

Human beings think in terms of narrative. It's how we're wired and it's served us pretty well so far. The trouble is the narratives that dominate journalism today are excessively simplistic and journalists have an increasing tendency to converge mindlessly on whichever one seems to be the consensus opinion and to cling to it no matter how much evidence builds up against it.

Anti-orthogonality at Freakonomics

In one of the many recurring gags on the Beverly Hillbillies, whenever Jethro finished fixing the old flatbed truck, Jed would notice a small pile of engine parts on the ground next to the truck and Jethro would nonchalantly explain that those were the parts that were left over. I always liked that gag and the part that really sold it was the fact that the character saw this as a natural part of auto repair: when you took an engine apart then reassembled it you would always have parts left over.

Sometimes I find myself having a Jed moment when I read certain pop econ pieces.

"What's that pile next to your argument?"

"Oh, that's just some non-linear relationships, interactions, data quality issues and metrics that won't reduce to a scalar. We always have a bunch of stuff like that left over when we put together an argument."

I had one of those moments recently when I read this Freakonomics post by Dave Berri. Here's the key passage:

Despite what seems like a clear endorsement by the customers of this industry, the Avengers was ignored by the Oscars. Perhaps this is just because I am an economist, but this strikes me as odd. Movies are not a product made just for the members the academy. These ventures are primarily made for the general public. And yet, when it comes time to decide which picture is “best,” the opinion of the general public seems to be ignored. Essentially the Oscars are an industry statement to their customers that says: “We don’t think our customers are smart enough to tell us which of our products are good. So we created a ceremony to correct our customers.”

Andrew Gelman has already pointed out the odd mix of descriptive and normative here (and I think Joseph may have a post in mind that looks at underlying Randian attitudes about the rightness of the markets), but what struck me was how strange this seemed from a statistical standpoint.

Right now we have two metrics that measure related properties based on different data. Though correlated (lots of big hits like Titanic have won major Oscars; relatively few flops have been so honored), these metrics often produce different rankings. This strikes Berri as a problem.

Note, we're not talking  about the quality of these metrics, which are not that good (the Academy has serious issues while box office is confounded with factors like marketing, release date and number of screens), nor are we talking about the Academy's often discussed bias against certain genres.  Those would be valid grounds for criticizing the awards (though I'm not sure how they would figure into a pop econ framework).

Berri is saying that metric B should incorporate metric A to make B more consistent with A. From a statistical standpoint, this is simply a bizarre statement. Statisticians want different variables to tell us different things. Assuming we wouldn't be able to disaggregate the role of box office in these new Academy awards,  Berri's suggestion actually reduces the information in the system.

This is not an entirely abstract point. Movie goers do use the Oscars to make decisions as consumers.

Oscar-nominated films remain in theaters about twice as long as others, according to a report by Randy Nelson, professor of economics and finance at Colby College.
...

Nelson found that a nomination for Best Actor or Best Actress increases box office revenue by about $683,660 (we adjusted the values from the 2001 report to 2012 dollars). For Best Picture, the boost jumps to $6.9 million.
...

Taking home a big award has an even greater impact: Based on Nelson’s study, a Best Picture win boosts box office sales by $18.1 million, on average, and a Best Actor or Actress win by $5.8 million. Even a Supporting Actor or Actress award increases sales by $2.3 million.

Just to sum things up, Berri is suggesting that we should reduce the quality of a data source that consumers make extensive use of because, since the data sometimes doesn't align with consumers' previous revealed preference, that data is somehow insulting to those consumers.

In terms of the Oscars, this is a trivial discussion. (In terms of the Oscars, pretty much all discussions are.) Somewhat less trivial, however, is the accompanying discussion of the Freakonomics school of pop economics, currently one of the dominant influences on science writing for the mass audience. Writers of this school are noted for going into wide-ranging fields and finding interesting and unexpected results that often differ from the previous consensus.  Sometime, though, those results are based not on logical steps you haven't thought of, but on steps you wouldn't think of as logical.

I don't have time to discuss this right now but I wanted to make sure I at least had a link

Dana Goldstein addresses Jason Richwine.

While we're on a literary thread...

I'm looking for the name of a Lord Dunsany story about a banker who loses his job because he becomes obsessed with chess. The ending has become almost indescribably apt.

I hope I don't get into too much trouble over this

I mentioned game theory in a recent post but I forgot the rule that whenever you mention that field of study, you are required by law to also mention the prisoner's dilemma no matter how completely freaking inapplicable it is to the discussion. See the Los Angeles Review of Books for the latest case in point.

A couple more thoughts on Oregon

Aaron Carroll (writing for the Incidental Economist) points out one interesting result of the new study:

Not too long ago, ACA opponents were claiming that Medicaid was bad for health. Some even claimed it killed people. So I was eager to see if an RCT would find that. The initial results were positive and statistically significant.

All by itself this finding is a worthwhile addition to the discussion; the meme that Medicaid coverage could lead to worse health outcomes was always a bit tricky to understand.  Trying to illicit a causal mechanism where Medicaid was worse for health but private insurance/Medicare were not that led naturally to the policy of "end Medicaid" was always a bit dicey.  If it was malice on the part of medical doctors due to low reimbursement rates then that rather changes the discussion in important ways. 

So I think we should take this argument by Megan McArdle with a great deal of care:

And yet, we did find a significant improvement in catastrophic medical bills, which coincidentally also affect about 5% of the control group.  Yet the folks saying Oregon's sample of diabetics is too small to tell us anything do not think it is too small to tell us anything about catastrophic medical bills.

I think that there are two points here.  One, the point estimates of the changes for chronic medical conditions are well within the levels of clinical significance.  So it is odd to suddenly interpret the data like an extreme frequentist and claim that the only interpretation is "no effect". 

But the other piece that is more important is that this is actually a good result.  If we take Megan's 5% rate, that would mean that 5% of poor Americans have a catastrophic medical bill within a two year period.  How can trying to solve that problem not be a major priority?  Isn't this great evidence that (given how expensive medicine has gotten) that this was a massively successful intervention?

I'd have more sympathy for the situation if we were making hard decisions to bring down costs.  But that isn't a major priority right now.  Medicaid is a very cost effective way to deliver care in a country where care is very pricey.  Why isn't this a major and positive result? 

Thrillers on Economics -- Updated

Noah Smith has garnered a lot of attention for his recent post on economics in science fiction. Not surprising given that much of the genre involves thought experiments about alternate ways of organizing society. Furthermore, lots of economists are fans of the genre (Paul Krugman even wrote an introduction to a recent edition of the Foundation Trilogy).

I doubt you'll find as many fans in the dismal science of crime novels but for those of you out there, here's a post we ran a while back about books that look at econ and business from the noir side, followed by some titles that occurred to me since the initial posting:

Of the many crime novels built around businesses, the best might be Murder Must Advertise, a Lord Whimsey by Dorothy L. Sayers. The story is set in a London ad agency in the Thirties, a time when the traditional roles of the aristocracy were changing and "public school lads" were showing up in traditional bourgeois fields like advertising.

Sayers had been a highly successful copywriter (variations on some of her campaigns are still running today) and has sometimes been credited with coining the phrase "It pays to advertise." All this success did not soften her view of the industry, a view which is probably best captured by Whimsey's observation that truth in advertising is like yeast in bread. 

But even if Sayers holds the record for individual event, the lifetime achievement award has got to go to the man whom many* consider the best American crime novelist, John D. MacDonald.

Before trying his hand at writing, MacDonald had earned an MBA at Harvard and over his forty year writing career, business and economics remained a prominent part of his fictional universe (one supporting character in the Travis McGee series was an economist who lived on a boat called the John Maynard Keynes). But it was in some of the non-series books that MacDonald's background moved to the foreground.

Real estate frequently figured in MacDonald's plots (not that surprising given given their Florida/Redneck Riviera settings). His last book, Barrier Island, was built around a plan to work federal regulations and creative accounting to turn a profit from the cancellation of a wildly overvalued project. In Condominium, sleazy developers dodge environmental regulations and building codes (which turned out to be a particularly bad idea in a hurricane-prone area).

Real estate also figures MacDonald's examination of televangelism, One More Sunday, as does almost every aspect of an Oral Roberts scale enterprise, HR, security, public relations, lobbying, broadcasting and most importantly fund-raising. It's a complete, realistic, insightful picture. You can find companies launched with less detailed business plans.

But MacDonald's best book on business may be A Key to the Suite, a brief and exceedingly bitter account of a management consultant deciding the future of various executives at a sales convention. Suite was published as a Gold Medal Original paperback in 1962. You could find a surprising amount of social commentary in those drugstore book racks, usually packaged with lots of cleavage.

* One example of many:
“To diggers a thousand years from now, the works of John D. MacDonald would be a treasure on the order of the tomb of Tutankhamen.” - KURT VONNEGUT

(If you'd like to learn more about MacDonald, Andrew Gelman doesn't exactly recommend this book.)

I omitted MacDonald's own probable choice for his best business story "The Trap of Solid Gold" because I misplaced my copy of End of the Tiger before I got to it. It is very much on my to-read list.

I also left out Donald Westlake's novel about union organizers, Killy and I have no idea why. This is straight Westlake (as compared with comic Westlake and tough-guy Westlake) and it's quite good, with both characters and institutions growing more morally ambiguous as the story progresses.

You can get an interesting take on the way many economies actually worked in the novels of Eric Ambler, where ill-equipped, often stateless protagonists try to do business (sometimes legally) while navigating the corrupt, Byzantine bureaucracies of multiple countries. Hard to believe that before Ambler, the face of the British spy novel was John Buchan.

Lawrence Block is an exceptionally intelligent writer who can be counted on for sharp observations. "Batman's Helpers" (along with "the Cold Equations" and Block's friend Westlake's Levine stories, one of the most memorable of the anti-genre genre stories) addresses, of all things, copyright while The Burglar who Painted like Mondrian plays a series of witty games with the question of value.

I know I'm missing lots a examples. Maybe Smith will do another science fiction post in a couple of years and I'll take another whack.

P.S. Andrew Gelman nominates George V. Higgins as the crime novelist with the most focus on economics. Having slept on it, I'm wondering if we should stretch things to include game theory. That might lead to an interesting take on Hammett's Red Harvest and its many imitators. In terms of strategically supplying or withholding information in multiplayer games, Erle Stanley Gardner came up with all sorts of interesting variations in his novels and, if the anecdotes are to be believed, in his actual law practice as well (those who like more focus on character should start with the Cool and Lam books). Maybe someone could write a paper of game theory in Black Mask.

P.P.S. Prisoner's dilemma.