Friends,

It’s been a heavy week. I wrote more up top here so Money Angle is just one section today.

First, here’s one small thing you can do to not feel helpless.

Khe lives in LA (not in the fire regions) and our families both have seen too many pics from friends in affected areas.

Living in the Bay Area you hear your share of fire anecdotes ranging from the Oakland Hills fires in the early 90s to the fires in recent years north of SF. A friend of mine was a top official in Contra Costa County Fire and I’ve listened to some harrowing stories including a time he called his wife from a fire battle on a local mountain with the “I want you to know I love you and the kids”. CA firefighters are a badass breed knowing full well what they’ve signed up for.

There’s a lot of finger-pointing already and the fires aren’t even close to being contained. Getting to the bottom of the pile to find the ball when this is over (sorry to even minimize the current moment with a “when this is over”) is gonna be an ugly mess of scratching, eye-gouging, and nut punches.

If you live here with your eyes open you can see how CA is a devil’s bargain. When I sold my house in 2020 it was under a red sky. PG&E was in the news. Large chunks of people’s net worths being uninsurable just didn’t strike me as sustainable. I was wrong because all home prices did was go up since then.

[Contradicting that thought is my simultaneous hunch that a major natural disaster would super spike the prices of remaining homes when the demand to build devours supply. I thought a widespread disaster in the congested area would have come from a faultline.]

Nothing’s changed. Insurance math ain’t gonna math unless the kindling is cleared. This is a good thread on some ground truth. It’s comforting because physically there are possible solutions. Realistically, it’s TBD. To be doubted.

California’s troubles run generations deep.

1988’s Prop 103 kneecapped the insurance market’s ability to find clearing price for the risk. So the risk is socialized. And when risk is socialized it’s there’s less incentive for its true owners to internalize it. If “crabcakes and football is what Maryland does”, California is sunny weather and price distortions.

Prop 13, enacted the year I was born basically granted landowners a call option on inflation while wage earners were left short convexity via state income taxes required to feed the beast effectively subsidizing landlords. This is not “unintended consequences.” These were obvious second-order effects. Great job all around, direct democracy.

[A side note: I’m not unsympathetic to seniors who don’t want to be displaced because of property taxes but there can be targeted programs for freezing taxes beyond a certain age. But even absent that, you have to look at the problem holistically and in the counterfactual. If you don’t have Prop 13 distorting the cost of living here, people would be forced to plan better. Ya know, like they do in other states. I don’t know enough about what I’m about to say but my guess is the closer the tax receipts are to where people actually live the better aligned elected officials are to the constituents. That compliance usually prohibits hedge fund employees from donating to local officials but not national candidates affirms that intuition. In compliance’s case, the stronger influence is a bad look. In general governance though, it’s better.]

In any case, it’s hard to focus on what happens once the patient is no longer in shock. It’s easier to just fall into the loop…what would you do if you lost your home, your kids lost their school, maybe you didn’t have insurance?

Even if you have insurance it must feel overwhelming. I was chatting with someone yesterday about how 8 years after the Sonoma fires there is so much that is not rebuilt. And that’s not even an urban area.

What if your house is still standing but your neighbors’ houses are gone? At that point you might want to start over somewhere else but your put option didn’t pay out. It makes me think of this dark bit of humor. “My family!!!!”

5 years ago we were, without knowing it, heading to a lost year or more. The fire victims are staring down a similar barrel. The New Year’s resolutions scribbled a week earlier. Literally gone. What’s the difference, no time for that now. Got a full plate for the next million hours just to get back to stable.

[As a matter of commiseration it’s not helpful to relate a story back to yourself. I have no idea how these people really feel. But I’ll share that my apartment burned down in college. Thankfully a roommate noticed the smell and quickly got us to knock on doors…realizing that nobody knew where the smell was coming from we evacuated across the street not knowing what was going on. Until I saw the flames burst out of my bedroom window on the second floor. The fire was in the walls, starting from the take-out joint’s oven below us.

We were fortunate because both the university and Red Cross were able to quickly get us cash and concessions on due dates. And most importantly a friend housed and fed a bunch of us for days as we tried to secure apartment leases elsewhere. Despite the experience, I can’t fathom what it’s like to go through anything like this with your own home and when it happens to everyone around you. But I suspect even small gestures will go a long way.]

I can’t find the link now but someone who lost their house in Hurricane Milton wrote a good thread about how confusing it is. It can take a while to be allowed back to your site (I still remember the day we went back to the building and it does stay with you. And again that was small potatoes). The person explained how you collect little bits of info from everyone as nobody can see the whole picture.

Embodying what it must be like every day for the foreseeable future will hopefully focus the rest of us on being useful right now. But yeah, we are going to need to learn from it.

I hate to say it, but I’m not optimistic.

I don’t wanna be a drag every week in this letter so maybe I just get it all out now so I can get back to sharing educational things.

An unpleasant musing

The “algorithm” knows you can’t hate someone so vastly different from yourself.

Our deepest hate is reserved for those similar enough to remind us of ourselves. You find the Taliban, serial killers, and cartel bosses disgusting but they are too far to hate. They didn’t betray you. You were never on the same team.

If 9/11 were to happen today, would we unite?

Not if the algorithm is in charge.

This leads to a haunting question: is Twitter/X or whatever social media you look at real life? The line feels blurry even when I’m “touching grass” with people in meatspace. I’m increasingly noticing convergence between socials. Which makes sense. If the meme works there, copy it here. (Related: playing video games with my son has made me more aware of Twitterisms that are really gamerisms because there’s no way he would know them otherwise). The “memes” start as compressed thumbnails of an idea until they gradually terraform its host’s personality.

Luigi as a vigilante is a meme. That arsons might plausibly be flaming the original fire feels like it’s coming from a similar place. The Joker is here. I’m not here to point fingers because as wrong as the Joker is, as unjustified as his actions are they start with pain. Explaining the source of pain will never justify the evil it produces, but pretending it’s gonna just go away is begging for the spiral to accelerate. And we are so far from addressing that pain.

Hey, but I hear SPX earnings are expected to grow 15% this year.

Is Twitter real life? Elon says it is. He says it’s the media now. The truth. Ok, do you know what the “truth” is telling us? It’s telling us you have two years to get rich because capital, not labor, will be all that matters. That soon enough as quickly as you can imagine it an AI army will build it. You just need enough capital to pay the electric bill.

For people who still put gas in their car, this sounds like a death sentence. And if you shrug and say, “Well, it’s the truth,” then okay—Jokers everywhere. Don’t be shocked.

Positional Scarcity and the Human Condition

The accelerationist dream of post-scarcity is a fantasy. It sells itself on utopian visions without addressing the reality of positional scarcity. Status, sorting, and competition are zero-sum. They don’t vanish, even in a world of abundance. These instincts are baked into the human condition.

Nature reminds us of these instincts. My kids have been home sick much of the past week as the plague gets traded in our house like Pokemon cards (this is also weighing on my mood. Sick kids are not themselves and it’s sad, pathetic sight). TV has been on a lot. We were watching a nature vid of male humpback whales chasing a female trying to protect her calf. The males all wanted to do the “humpty dance,” but the mom wasn’t interested in Irish twins. The eventual victor was the male who escorted her to safer waters, perhaps hoping she’d “repay” the favor. The narration projected human motives onto the whales, and as awkward as that felt, it refreshed my sense that our capacity to trade, to make mutually beneficial exchanges, is what holds us together.

To situate this capacity truthfully we acknowledge the tense contexts. There’s social Darwinism. Life is competition. As I alluded to earlier, this remains even if we solve hunger. But we also cooperate at least at the tribal level. “Tribe” encompasses many scopes. “America” itself is a tribe that contains many tribes. And one tribe that encompasses even “America” is civility. A tribe that believes in inherent human dignity. It’s an ideological tribe. It’s from that tribe that we sense the trade-off between equity and efficiency. Efficiency means it’s important that our surgeons have proven their steady hands and sound minds. Equity means we don’t throw handicapped babies in Lake Tahoe. These are the outer boundaries of the tribe’s beliefs. Within the boundaries, “reasonable people can disagree”.

What’s happening right now is confusion about the boundaries and whether being part of the civility tribe is even desirable. The tribe is very large. Almost everyone starts within it. But the Joker is outside it by choice. Because of the betrayal of either boundaries or usefulness.

This is colliding with another human impulse.

Just Because

Humans do bizarre things. Flip through the Guinness Book of World Records, and you’ll see countless examples of this: we set records “just because.” Why did you climb the mountain? Because it’s there. Why do you want to go to the moon? Or Mars? Why not?

There are instrumental answers to these questions. Justifications or rationalizations depending on your own leaning. But they are beside the point. It’s gonna happen because humans gonna human.

Injecting some chaos and mutation into an evolutionary system is natural. If we survive it, it will turn out to have been species-level adaptive. We stand on the cusp of great acceleration. People trying to literally cure death. The stakes feel massive. Like humanity forking. The rhetoric sounds like something someone committed to the tribe of civility would say. We “need” to do this.

But today and increasing so…

…when the speaker says “we” the listener doesn’t trust the “we” includes them.

At least not a version of them that is dignified.

The lack of trust doesn’t come because the speaker is evil. It’s because we know from experience that humans will do things just because they can. Steve-O is the kinda guy that would have been a Jackass for free. Curiosity drives us forward. But poison is the dose. Morbid curiosity is what we call an overdose.

Society is looking at a group of people at a party and thinking, “Should you be taking that much?” Some dude in the corner funneling beer is egging them on and the normies who have to wake up early to go to work say “You know it’s getting late, I’ve had a bit to drink and if I wait any longer I won’t be able to catch an Uber?”

Huh?

Bruh, don’t you know that Waymo never sleeps?

A thought that didn’t fit

“Just because” isn’t always “just because”. Doing anything unusual has an algorithmic incentive. My kids watch YouTube basketball channels constantly. I saw an episode where they were record-book maxxing. Just trying to set records for various things like “dunks in a minute”. These videos get tons of views, but I find something deeply unsettling about them.

Making money is a reasonable proxy for “created value”. But you’d have to be pretty far up your own rear to think that there aren’t people who have gotten rich destroying value via deception, excessive rent-seeking, or simply getting away with crimes.

But there’s a wide swath of activity (think legal grifts) that always has at least a few redeeming stories that end up whitewashing the whole enterprise in the eyes of its few satisfied customers. (The rest of the customers churn because grifts are usually short-sighted, constantly hungry for new marks).

And then you have things stuff like Mr. Beast videos.

I just don’t know. It feels really dark in the same way I couldn’t watch more than one episode of Squid Games.

Sure, people point out all the good he does, but here’s my problem: attention is zero-sum. Every minute watching him is at the expense of another entertainer who will recycle that income through the economy or charity. At a macro level, there’s no additional good being done here. It’s just more noticeable when it’s a single ticket.

Maybe this is my “old man yells at clouds” moment. There’s always been nonsense content. But when I see these videos, I feel like I’m staring into Palpatine’s horrific face: “Oh I’m afraid the deflector shields will be quite operational when your friends arrive.”

We’re entertaining ourselves to death.

Related reading

• There’s Always Something Going On

Money Angle

On Friday I tried a little experiment.

I opened a voice channel in our Discord called The Moontower Subscriber Hoot.

[Back in my floor days it was common for traders on the floor wear a headset to be on continuous conference with the traders streaming quotes upstairs in the office. At the fund, we also had an open conference line on our turrets to be able to talk to other traders on the team. I don’t know the origin of the term in the industry, but these conferences are called “hoots”.]

I wasn’t writing or working on something that needed deep attention so I figured why not open the hoot and chat while I tried to sell some TLT puts. [I didn’t get filled because I was cheeky with a limit a penny above the bid.]

I narrated what I was doing which I though could be a nice “over-the-shoulder” way to explain what I’m thinking as I do it plus enjoy the banter, something I miss from the old job.

Regarding TLT, I decided to toe into some bond delta with TLT being down more more than 2 st devs over the past month, more than any other liquid name in the Cockpit view.

I decided to express the delta through short vol as TLT vols in the belly of the term structure look attractive enough to sell on both our DASHBOARD and REAL view.

I chose a 35d put…skew is a bit elevated and the strike vol on the options were up a lot that morning.

We talked about several other trades on the hoot and I got to explain a juicy rev/con trade that turned out to not be a real opportunity but people came away with a better understanding of how synthetic futures work!

In narration, the group was able to see how I use greeks to make sense of what’s going on in real-time. Makes a topic that seems abstract super practical and useful. For example, if I sell .30d puts at $1.85 vs stock at $65 and buy them back at $1.88 when the stock drops to $64.50 why that’s a big winner if I traded them delta-neutral.

You can also use greeks to discuss vol changes from tick to tick.

“See how the option is offered at $1.80 again 20 minutes later even though stock is a dime lower? The option only has a penny of theta, so it wasn’t erosion. It has a .30 delta and .15 vega so that means IV is down .2 clicks”

Overall a great experiment that I’ll make a trend. Not committing to a schedule but when I host them it will be on a Thursday and/or Friday.

A few weeks ago Nick Pardini had me on his podcast Analyzing Finance.

I know Nick from his days as a researcher for Parallax, we sat a few desks from one another.

It was fun to catch up. We cover options, volatility, and how options theory principles are found in all kinds of life or business decisions. The options stuff is really perfect for people trying to learn, it’s not heavy, and touches on a lot of practical questions around when you should consider using them or not and why volatility behaves the way it does.

Stay Groovy

☮️

These are my favorite bits from an outstanding (albeit 3+ hour) chat between Rick Rubin and Rory Sutherland

Spotify link to the episode

One of the things I’ve noticed about modern behavior revolves around the question: Do you want to win arguments or solve problems? We’ve mistakenly equated the two, assuming that the person with the best arguments has the best solutions. I believe we’ve both concluded that sequential logic in problem-solving doesn’t necessarily lead to the best outcomes. It’s fundamentally sub-optimal. Problem-solving is much more Darwinian and iterative. It also relies on subconscious mental processes or tacit skills that we can’t fully articulate or codify. This raises an interesting question: Is the creative process actually a process? You subtitled your book “A Way of Being,” suggesting that creativity is something you embody, not a skill that can be easily replicated.

One must acquire a sort of “third eye” to truly engage in it.

Creativity

Creative work is kind of a Galapagos Islands for understanding how you solve wicked problems. Because every day you have to go and solve a wicked problem where you can rewrite their advantages. You can rewrite the rules. You can get rid of assumptions. But fundamentally coming to a conclusion is difficult because you don’t know what success looks like before you. I mean, if you’re solving a physics problem or an engineering problem, you know when you’ve succeeded. Yes. And in this case, genuinely, you know, it’s much closer to a penicillin or a Viagra than it is, you know, you know, being able to actually spot moments of fortunate accidents or whatever. So many of the discoveries that have changed the world happened by accident. And there seems to be a blindness to this.

Newcomer advantage

On the ‘newcomer advantage’, where a fresh perspective often proves beneficial to problem-solving as it lacks the influence of preexisting assumptions:

It’s incredibly easy for experts to bring all their assumptions with them. One thing that doesn’t happen enough is that areas of scientific expertise, instead of engineering expertise, could benefit enormously. This is my main concern. This is what I spend my time fighting against, a very simple asymmetry. All creative people must present their ideas to rational people for approval. There’s someone in finance, someone in legal, someone in compliance. Well, I accept that. It never happens the other way around. Finance people with a spreadsheet never say, “I’ve arrived at this figure and my recommendation is 3.7, but before I share that with the board, I’m going to present it to some slightly wacky people to see if they have an alternative idea, or to see if they can redefine the question.” It never happens.

Artistic breakthroughs can have no sense of proportion

1. That’s when inspiration happens, when you’re moving from one thing to another. You can cheat the odds, but you can’t force it. Anyway, John Hegarty, the great guy, told this story. He once worked with Paul McCartney on a business venture. Paul didn’t quite like John’s initial work, so he said, “I think we need to come back with this.” John said, “Well, you said next Tuesday, but can we actually have about two or three weeks because nothing good ever comes in a short time?” Paul McCartney replied, “That’s not true. I wrote ‘Yesterday’ in 15 minutes.”

   Two points to that.

   One, John Hegarty, ten minutes later, to this day, regrets not replying with, “Imagine how much better it would have been if you’d taken some time over it.”

   But the second point, which I think often causes misunderstanding, is he didn’t write it in 15 minutes, but he didn’t choose which 15 minutes. They were in the past. You could write it in 15 minutes if you have the dream the night before, of the melody, which is what happens. And so much, of course, so much of waiting to get lucky looks like laziness, actually. Or looks like a complete lack of focus.

2. Artistic breakthroughs can have no sense of proportion

   I’ll tell the story, which I always love, which is that the decision in ‘Ring of Fire’ to use the trumpets was a kind of whimsical one, wasn’t it? So Johnny Cash was basically, you know, that moment where he just goes, “Okay, what we need here is trumpet.” I think he had an idea about the sound of like Mexican trumpets. It just painted a picture in his mind. Now, we don’t know the counterfactual. Without the trumpets, it’s not the same. It’s not the same. And so not having a sense of proportion is actually appropriate, I think, to the job in hand, where it is actually the small thing that is utterly transformative, and so not having a sense of proportion is part of the job. Sometimes the thing that makes it great is a tiny difference, not a big change. That’s also out of our control.

   Everybody, when they look for a reason for something serious, is looking for a serious reason. Yes. That the cause has to be commensurate in importance with the outcome. But actually, great things happen for stupid reasons. And stupid things happen. People trying to be important create stupid effects, whereas, people sometimes trying to be stupid can create great effects. And actually, this idea of proportionality, that the world is kind of Newtonian and that there are equal and opposite reactions and so forth, is a great model if you’re a physicist. It’s a disastrous model if you’re an economist.

   The famous case where the Beatles were turned down by the record label, which was EMI, wasn’t it? They were turned down by everyone, at first.

   They can seemingly come from nowhere:

   And so the Beatles turn up, which was interestingly on New Year’s Day, I think, where they get lost driving through London, and they go and play their demo tape to whoever it was who says, you know, small bands with guitars or on the way out and all this sort of thing. We don’t like their sound, you know, etc. And they signed I think Brian Poole and the Tremolos instead. One of the reasons for signing them was they were more of a local band, so when you recorded with them, you only had to pay for a travel card in on the tube rather than paying for return train tickets from Liverpool, which is the procurement decision of all time, if I say so.

   But was it the right decision? Because if you look at the evidence then, ‘Love Me Do’ isn’t that great a song, right? It’s like, you know, I mean, if that was all they recorded, it wouldn’t have been remembered, okay. On that demo tape, there was no evidence of greatness that anybody could reasonably be expected to notice. And indeed, you know, the Brian Poole who may sign, you had some slightly earlier success. So my question is, what was it? So it’s ‘Love Me Do,’ and then it goes to what does ‘I Want to Hold Your Hand’ as next? Or is it? I think so. I think so, okay. What happened between those two songs?

   You can ask the same question between Radiohead’s first album and their second album. Okay. If you listen to Radiohead’s first album, it has ‘Creep’ on it, which is an amazing song. But if you listen to the album you wouldn’t know this is a special group. And then they made arguably the best album of the next 10 years. So it’s hard to know what happens.

   I look at it in a spiritual way. To me, it’s like proof of the existence of God. It’s like something changes. I’m friends with Chris Rock, the comedian. And when we first became friends, he was my comedian friend who was not funny.* Sorry he was not funny. He was my comedian friend who wasn’t funny. And our relationship was about music because he loved music and had great taste in music. But he was a not funny comedian.

   And then after several years, he invited me to the Comedy Store. He said, “Oh, come see my new set.” And I went… And I went doubtfully because he’s my not funny comedian friend. And I walked in. And he was the funniest person I had ever seen. Now, for the last four or five years of our friendship, he was not that funny. I don’t know what happened. It shifted. In a moment. It was like someone upstairs pointed, it’s like, “Now you. It’s you.”

Deep insight about framing and ultimately the stories we ascribe to big concepts like “capitalism”

There’s a friend of mine who’s an economist called Nicholas Gruen, who Martin Wolf, a brilliant man from the FT, describes Gruen as the best economist you’ve never heard of. And he thinks that one of the worst things that economics foisted on the world was the idea of the trade-off. That most problems are a trade-off between one thing and an opposing thing, and the optimal thing is somehow somewhere in between these two opposing variables.

Economics encourages people to look for a trade-off, treating it as though it’s effectively inexorable, and simply look for the optimal point between these two things. He would argue that it’s basically created a massive creative deficit because people don’t look for magic, and they don’t believe it when it’s presented to them. Yes. And if all creative things are, to some extent, if not magic, by the way, you practice magic. Is that right? I did as a child. You see, this is fantastic because the understanding that actually by changing our perception of something, you can make absolutely remarkable things happen, and the usual trade-offs that are assumed need no longer apply.

By enshrining trade-offs in the mode of thinking of policymakers, and business people, and problem solvers, what you’ve actually done is create an incredibly infertile ground for creative ideas. Because you basically treat the trade-off as if it’s kind of just part of the system. I have to ask the question of this kind of obsession with efficiency. So the way I describe it in the book is that what worries me about free market capitalism is that economists and most people, management consultants, like it for entirely the wrong reason. And it’s a bit like liking Bob Dylan for his maleficent singing voice, okay? It’s very healthy opinion to like Bob Dylan, but probably his singing voice isn’t why. It’s a bad reason to hold a good opinion. And I would argue that most of the appreciation of capitalism, which is driven by the idea of its efficiency, not its inventiveness, is exactly the same problem, that we tried to optimize free market capitalism for what you might call narrow efficiency at doing preordained tasks under the natural constraints of these trade-offs, what we should have been doing is optimizing capitalism for inventiveness. So capitalism is not bad, the way that we view it is maybe not necessarily the best way. I think we’re not using it to its fullest capacity. We’re not using it to its fullest capacity. Because our appreciation of what its value is. Now, in fact, I’m not saying that consumers don’t care about efficiency entirely. If you can find a way to do something ten times cheaper, that’s a breakthrough. You know, that’s completely transformative. But given that most purchases nowadays in the developed world are from discretionary income the extent to which efficiency is prized by consumers as opposed to, for example, meaning, calls into question lower price as a strategy.

Capitalism is often viewed as an efficiency mechanism, when in reality, it’s an exploration and discovery mechanism. The Austrian School of Economists recognized this. The miraculous strength of capitalism isn’t its beautiful singing voice or fantastic lyrics. Its true strength is not efficiency. In fact, a controlled economy can be very efficient within narrowly defined parameters. The real joy of capitalism is the discovery mechanism.

Doing the wrong thing efficiently is actually worse than doing the right thing badly.

Applied “framing”: the interface

Most human behavior is strangely path-dependent. It’s significantly affected by strain and heuristics. By the way, if you sent that phone-only response out to my children’s generation, you’d get a 0% response rate because they really, really hate talking on the phone. What you do now is, for anyone under the age of 30 or 40, you provide a text response because that’s the only thing they prefer, or a WhatsApp response or something similar. The idea of talking to a human being on a phone fills them with absolute paranoia. But the fact that the short-term nature of the interface has such a massive effect is fascinating. The other benefit I had through that test was that it got me really interested in the internet because I thought when you present a choice on a screen, people will make a totally different choice than the choices they make in a shop and a totally different choice than the choices people make, for example, in a mail-order catalog. [Kris: very “medium is the message” vibes]

An interesting thing is in McDonald’s, now you order on a screen rather than face to face. Now, bear in mind, particularly men, when they order their McDonald’s from a screen not face to face, they are vastly more likely to include two burgers in a single order. This is really interesting because the screen is revealing a preference. It’s not about money or cost. It’s just that the guy might feel awkward asking for two burgers. Well, you know, do you want fries with both burgers? It could be an awkward conversation. Whereas the second you do it on a screen, apparently, the whole thing changes.

Now, if you think about it, all I can say is that the speed with which McDonald’s rolled out those screens. I’m not privy to any inside information, but the speed with which fast food outlets rolled out those screens, which was almost unprecedented, suggests that they are unbelievably lucrative in terms of changing what people order.

Now, there are other factors which are fascinating, which is that there’s another interesting psychological thing about those screens, which is that it’s more annoying waiting to place your order than waiting for your food to arrive. Because you can reframe the food coming to arrive as well, they’re preparing the food it’s adding to the quality of my meal, whereas waiting to tell people what you want is doubly frustrating. And so there is a kind of mental mind hack in that it may not reduce the end-to-end wait, but it reduces the more irritating part of the waiting, which is waiting to tell them what you want. So there are other mind hacks in that, but I find it so interesting, the extent to which the interface determines the behavior.

Decision-making

2-Way Doors

What if we need to innovate, but the only way we’ve innovated so far is by extrapolating from past successes. What we need to do is we need to actually imagine something here. We need to imagine a different reality, okay? If you can get just a proportion of people to do that sometimes where it makes sense to do so. Now I’ll give you a great thing which everybody can steal, which I only heard about recently, but within Amazon there’s a phrase which is called the two-way door where if you try it and it doesn’t work, it doesn’t really impose significant costs so you can reverse.

In Amazon, when they’re arguing something, they’ll go, why are we arguing this? It’s a two-way door. Don’t argue it. Test it. Because we can test it, we’ll very quickly find out at low expense. And if it doesn’t work or it has deleterious effects, we’ll just cancel it and revert to the status quo. They’re very conscious of the fact that you spend a load of time arguing about one-way doors, but arguing about two-way doors is stupid.

It’s exactly to your point that if you argue about it in theory, it’s a much more hotly-debated thing than if you just show it in practice. You know right away when you do it in practice. So why argue about the theory? We call it the burden of proof because proving things in advance is a massive pain in the arse, and it wastes a lot of time and it wastes a lot of effort.

Now the most interesting thing is apparently Amazon Web Services came up as an idea where someone said, we’ve got all this server capacity, why don’t we sell it to other people? And apparently, this may be anecdotal, they put together a paper that wasn’t very good. You know, it didn’t make a great business case. It was just this vague paper. And so everybody’s saying, okay, so that doesn’t work in theory. And then somebody said, yeah, but this is a two-way door, right? We’ve got the server capacity anyway. If we can sell it and make more money, it’s good. If we don’t, what have we lost, okay? And of course that’s now the most profitable bit of Amazon. The business of actually selling their server capacity to third parties. And basically selling the robustness they need as a retailer to other people who want that level of robustness. That’s what makes them the most money. Amazing.

And of course, 99% of companies will go, nah, you haven’t really made the case there, right? Without asking the question, why do we need to make that greater case? Because if it fails, it’s cost us peanuts. It’s an asymmetric bet with a manageable downside, both in terms of time and money. The upside is potentially huge. Go for those bets.

Predictive Mind Hypothesis

The predictive mind hypothesis suggests that our brain is constantly predicting, and it uses our senses only to the extent that we perceive reality differing from the prediction.

• There are sound experiments, such as sine wave voices, where a spoken sentence is reduced to a sine wave. Initially, it sounds like modem noise, but after reading out the sentence and replaying the sine wave, it becomes impossible not to hear the sentence in the sine wave. There’s a view that these experiments, like the McGurk effect, demonstrate this.
• In the McGurk effect, if you record someone saying “bar” repeatedly, and then record a video of the same person saying “par” or “far”, particularly “far” with the teeth, and play the video over the audio of “bar”, you hear “far”. This is because your brain effectively overwrites the audio component with the unconscious lip-reading component. There are many interesting illusions and experiments that illustrate this.

The data architecture also makes sense, as it’s similar to the algorithms used to compress photographs. These algorithms predict what the next pixel will be and only use data to describe how reality differs from the prediction. This is a much more data-intensive way of constructing a photograph than using raw files, where you have massive megabyte files because you want to be able to edit every single pixel, which can only be done in a raw file. This approach would make sense in terms of making the most efficient use of available bandwidth in the human brain. Prediction combined with Bayesian updating makes more sense as a data architecture than perceiving everything and then forging it into a whole. If this is true, it explains many oddities, like the fact that advertising changes the taste of a product.

The tension between “customer is always right” and “customers don’t know what they want”

Marketers, and creative people in general, are looking for anomalies, unique anecdotes, and outliers. They’re not really seeking the mainstream because that area is already overpopulated. Consider these two statements: “The customer is always right” and “The audience doesn’t know what they want.” Both seem true, creating a tension. They are both true in the sense that if you offend or upset a customer, you’re doing something wrong. However, this doesn’t mean you should ask your customer to design your customer service program.

Every time you upset a customer, you should learn from the experience and try not to repeat it. But don’t assume that the customer’s definition of what they want is really what they want. This is where a deeper search is needed. I don’t completely reject market research, but it must be handled very cautiously. For example, one might assume that first-class air travelers want the finest wine and magnificent food. In reality, these individuals often have access to such luxuries at home. A large part of what they want is to be left alone. The assumption that top-tier service should be very attentive may not always hold true. While customers may say they want attentive service, the trick is to maintain a distance where you can always be hailed, but not to continually approach them offering more wine or food. Even though they think they’d like that, it can actually be a nuisance. This is an interesting way to resolve the tension.

When the truth is not adaptive

If believing something untrue leads to good consequences, is it therefore rational to believe things that aren’t true? Absolutely. However, this leads to consequences such as victim culture, where it becomes complex. You may have to acknowledge that, yes, it is undoubtedly true that you are victims, but it is not beneficial to dwell on it. There’s evidence that individuals, not necessarily collective groups, who constantly blame external forces for their misfortunes, are probably right in some cases. However, the consequences of that belief state are not healthy. Therefore, it’s a good idea to move on. Similarly, there’s an opposite concept, which is believing positive things that aren’t true. If it leads you to make better decisions and therefore enjoy better consequences, go with that.

We can post rationalize. We can pre rationalize. So why make the ability to rationalize something a prerequisite for trying something? There’s no reason not to try things to find out where they lead.

Rory’s goal when he gives a talk

I have a kind of heuristic, if I do business talks, which is very simple, okay? If the AV guys are paying attention to what you’re saying, you’re doing okay. If the security guy likes it, I’m doing okay.

An area where Rory has changed his mind: the minimum wage

I’ve definitely changed my mind about behavioural science, in the sense that there is always a danger that organisations default to paying people the minimum they can afford. It isn’t actually good business, by the way, but it’s just a very easy thing with which to win an argument. Why should I pay my staff more than I need to recruit them? Actually, there are lots of reasons, but they’re hard to argue. And that’s the problem with economics. It’s a sharp science, but it’s hard to argue with. Because it’s got this artificial internal consistency that, even though it’s not actually rooted in reality, it’s an impressive kind of edifice in terms of its own internal lack of contradictions.

A foolproof way to get engagement is post this thing on Twitter every couple months. Sometimes my mood is to hate on such dredging but in this case, screw it, let’s take this sucker apart and see how many things we can learn from it.

Let’s start with the obvious.

• The expected value of choosing green is $25mm
• Many people would choose red. Some of those people know the expected value of green is $25mm and choose red anyway.

There’s no dissonance here. The red button guarantees an entirely new life to most of the world’s population. The green button means they still might have to set an alarm for work tomorrow.

The joy of wealth has diminishing returns. I just found $40 in a pair of pants I hadn’t worn in a while (plus a covid mask). If that happened 25 years ago, it would have been a serious enough discovery that I’d hoof it to the local bank branch with a deposit slip.

Economists talk about the “utility” of wealth. They will demonstrate the concept with a sub-linear function to relate “utils” to the quantity of wealth. It’s typically a logarithmic or power function. The sub-linear part means “if your wealth doubles your happiness increases but not by 2x”. The empirical shape of the function is something academics will split hairs about.

I’m going to make one up in the spirit of Nick Maggiulli’s post Climbing the Wealth Ladder.

We will say your “utils”, the made-up satisfaction units, are equal to the cube root of wealth:

Let’s start with the simplest chart.

• As your wealth goes up by 100x from $10k to $1mm this function says you get “only” about 5x happier.
• As your wealth goes up by 2,500x from $10k to $25mm this function says you get “only” about 13x happier.

The function is reasonable — happiness increases at a slower rate but maintains that more wealth is always better than less (which I’d describe as a “no-arbitrage condition” — if it wasn’t you could just give money away).

But just as you want to look at long term investing returns on a log chart (compounding is an exponential function), we want to compress the chart for a more zoomed out view. Plus, there’s a non-negligible number of 🌙 readers with more than $25mm and we want to be inclusive around here, right?

Let’s transform the wealth axis to a log(wealth) axis by invoking 10^x (ie $1,000 = 10³)

The underlying table:

We use log charts to frame insights in a more functional way.

By using log (base-10) to transform the wealth axis, we can now see what cube root utility means:

For every order of magnitude increase in wealth, your happiness doubles.

Your wealth goes up by 10x, your happiness increases by approximately 2x.

But another fun learning moment is upon us.

When I look at that semi-log chart I’m bothered because it’s still exponential. Utility is growing by 2^x.

In the case of exponential functions (like compounded returns in an investing context), a semi-log chart creates a straight line.

But a cube-root function is a power function. To get a straight line, we must use a log-log chart instead of a semi-log chart!

Let’s do that and see why such a transformation aids interpretation. First the table:

It’s handy use log (base-2) for the utility axis because utility is growing by 2^x

Here’s the log-log chart:

Observations:

• The x-axis is log base-10(wealth) and the y-axis is log base-2 (utility) and we get a straight line — that leads to an easy inference: Every order of magnitude in wealth doubles our happiness.
• It’s obvious why many would choose a guarantee of $1mm over an expected value of $25mm — if you have $10 today your happiness doubles more than 6x (it increases more than 50x, 2 to 100) over 5 orders of magnitude. Happiness only increase about 3x (100 to 292) between $1mm and $25mm. Those $24mm are worth less than the very first $1mm.

Of course, this utility function needn’t describe any individual but is qualitatively inferred from the idea that your lifestyle looks pretty similar until you climb to a higher order magnitude of wealth. We can quibble over the actual rate but unless you are a megalomaniac it’s almost certainly sub-linear.

Next time you see the red/green button question you can appreciate how people’s answers are self-rational despite any EV-maxing wonkiness.

Addendum

This walk-through showed how to select log transformations to convert exponential charts into linear charts and maintain intuition by saying things like

• “Y increases by a fixed rate for order of magnitude increases in X (log base-10)”
• “Y increases by a fixed rate every time X doubles (log base-2)”

Deriving the linear transformations of semi-log and log charts:

1. Why exponential functions are linear on semi-log chartsStart by taking log of both sides of an exponential function:

   Y = a^X

   Log(Y) = X log(a)
   
   which looks like a line: Y = mX + b

   where:

   X log(a) corresponds to mX therefore slope or m= log(a)

2. Power functions are linear on log-log chartsDerivation by taking log of both sides of power function:

   Y = aX^b

   log(Y) = log(aX^b)

   log(Y) = log(a) + log(X^b)

   log(Y) = b log(X) + log(a)

   which looks like a line: Y = mX + b

   where intercept is log(a) and slope is the exponent b

Money Angle

Now if you have trader blood you look at the question above and say “I’ll just auction this red/green option off to the highest bidder.”

So what price do you think you’d get?

Let’s reason through this.

Someone that is truly risk-neutral is ambivalent between a certain $1mm and $1mm in expectancy.

The red button is worth $25mm so our risk-neutral friend Spock would not pay more than $24mm for the chance to push the button.

Proof of $1mm in expectancy if you pay $24mm:

.50 * -$24mm + .50 * $26mm = $1mm

Unfortunately, all we did was identify an upper-bound of $24mm that one might pay for this option.

But what do you think someone would actually pay?

🤔🤔🤔

Let’s make this more relatable and see if we can scale our logic up.

Imagine the green button guarantees just $1 and the red button is a 50% chance for $50.

Would you pay $24? Probably not unless you were risk-seeking but it’s not out of the question. I mean Robinhood has millions of users who trade for the lols and the E-trade babies were back in the Super Bowl ads.

Would you pay $23 to push the red button? $22? If you are unwilling to pay $20 please just close this tab right now.

What I’m getting at with this thought experiment is to have you feel that the answer to the question depends on:

1. your bankroll (gambling with $20 is feasible and acceptable, gambling with your net worth not so much)
2. your risk preferences

With this in mind we can move to the next section, where we’ll generate a concrete answer to the original question.

Money Angle For Masochists

$24mm to someone worth $100b is the same as $24 is to someone with $100k.

There’s 10 people in the world who can nonchalantly take this bet as easily as someone just gambles with $20.

But like finding the upper-bound of what someone might pay, this is barely a start.

This is actually a great place to use the Kelly Criterion. In short, the Kelly Criterion is a formula that prescribes the ideal percentage of your capital to wager. The prescribed fraction is the mathematical solution to “For a given amount of edge, how much should I bet to maximize my compounded growth rate?”

I created a collection for those who want to learn more (caveats, history, and much more):

🏇🏽Kelly Criterion Resources

…but for now we want to focus on our question.

The Kelly formula for what fraction of your bankroll to bet is simply:

f* = Edge / Odds

where

f* = bankroll fraction

Edge = expected return

Odds = percent profit when you win

If my original investment is $24mm and I expect to make $1mm then:

Edge = $1mm/$24mm = 4.17%

When I win I make $26mm for a $24mm bet:

Odds = 26/24 = 108.33%

f* = edge/odds = 4.17% / 108.33% = 3.85%

Kelly prescribes betting 3.85% of your capital on this proposition.

$24mm is 3.85% of a capital base of $624mm

The number of funds, trading firms, or even individuals who could reasonably take this bet is way larger than just the 10 richest people.

And remember this bet is a game — it’s uncorrelated with markets or economic growth. Trading firms diversify across bets like this all the time. As a market maker, I’d describe the business as “pay me $10,000 up front and I’ll flip a $1mm coin with you”.

If the coin is fair it’s worth $500k and I’m basically buying it for $490k or selling it for $510k. Either way I’m getting 2% edge.

My odds are $510k/$490k = 104.08%

The prescribed bet size is 2%/104.08% = 1.9% which is only half as good as the red button for $24mm! [Market-making biz in 1 sentence: Make a dime of edge on a $5 option a few dozen times a day, make sure the edge is real, and manage the risk.]

So yea, I expect this red button opportunity to trade for about $24mm by some large firm that is used to absorbing risk for a fee.

Byrne Hobart wrote a fantastic post recently in his educational Capital Gains letter that gets into related real-world messiness:

What’s The True Bankroll?

Matt Levine referenced it as well:

The Kelly criterion tells you what percentage of your money you should put on some favorable bet. If you work in financial markets, you want to make a bunch of bets where you think the odds are in your favor, and if you can estimate the odds then Kelly gives you a guide to how much of your money you should put on each bet. Kelly gives you an answer that is a percentage of your current bankroll. But what is your bankroll?

We talked a few times last year about a dumb story from Sam Bankman-Fried’s internship at Jane Street, where he kept making the maximum bet on slightly favorable coin flips, and I was like “well that’s not very Kelly is it.” But probably I was wrong. Jane Street interns were limited to losing $100 per day, so I sort of took $100 to be the size of his bankroll and thought he was aggressive to bet it all on a 51% coin flip. But readers pointed out, no, come on, his net worth at the time was not $100; $100 was nothing to him even though it was all he could bet that day. As a percentage of his actual bankroll that was a fine bet.

Anyway here is a fun post from Byrne Hobart titled “What’s the True Bankroll?” Sometimes the true bankroll is much bigger than the obvious bankroll: Sam Bankman-Fried’s $100 daily betting allowance was much smaller than his true bankroll, and Hobart points out that if you start your first job and have $1,000 to invest, your true bankroll is more like your lifetime expected savings than it is your current $1,000. Other times the true bankroll might be smaller than the obvious bankroll: If you are a portfolio manager at a multi-manager hedge fund, and you run a $500 million portfolio, you might think that your bankroll is $500 million. But if you know that you’ll get fired for a 10% decline in your portfolio, is your actual bankroll $50 million? No, but also maybe a little bit yes.

Learn more:

• Fortune’s Formula on The Kelly Criterion (Moontower)
• My notes on Kelly Criterion (Moontower)
• Understanding Risk-Neutral Probability (Moontower)
• Bet Sizing Is Not Intuitive (Moontower)

☮️

Stay Groovy

Mark Manson, author of The Subtle Art Of Not Giving A Fck*, went on the Erika Taught Me podcast.

• Episode link: https://www.erikataughtme.com/the-subtle-art-of-not-giving-a-fck-life-lessons-with-mark-manson/
• Otter.AI transcription

Pound for pound some of the best self-help advice condensed into a 1-hour conversation.

My favorite excerpts including my own comments below.

On what you should be doing

“I realized I actually didn’t want to be a musician. I thought I wanted to be a musician. I thought I wanted to be on stage and people cheering and everything but I didn’t want the process that was required to achieve that. With writing it’s the opposite. I enjoy the cost. I enjoy sitting by myself in a room quietly, rewriting a paragraph over and over again. That feels very natural to me. There’s something exciting about that challenge to me in a way that there was never any excitement with the challenge of practicing scales or runs. One thing that I always tell people is that it’s easy to want the reward. It’s hard to like the struggle. When most people ask themselves, what do I want to do with my life or what am I passionate about? They think about the rewards, they don’t think about the struggle. You should be asking yourself, what is the struggle that I like? What is the struggle that I’m passionate about? What is the challenge that excites me rather than drains me?”

[Kris: thinking of “passions” as something fixed or innate is probably not constructive. You can become passionate about something that you get good at and of course, at any point in time you never know the whole menu, so passions can be discovered by trial and error or having a curious non-instrumental approach to what you spend your time on.]

‘Screw Finding Your Passion’

Even in your dream job, you’re going to be annoyed 20% of the time. There’s no such thing as a job, relationship or endeavor where you are happy all the time. Even in your dream relationship, you’re still going to be sick of the person 10% of the time. That’s just life, and there’s no escaping it completely. So, I think the goal here is not Happiness with a capital “H.”

[Kris: Denis Leary’s version —Happiness comes in small doses folks. It’s a cigarette, or a chocolate chip cookie or a five second orgasm, that’s it okay? You come, you eat the cookie, you smoke the butt, you go to sleep, you get up in the morning and go to fucking work okay? That is it, end of fucking list!

The tone of this sounds like ‘settling’ but I interpret it as not focusing on some endpoint to make you happy. Enjoy the bits along the way, but they aren’t the end all be all and stop imbuing achievement with the expectation of actualization or whatever.]

The angst advantage

[Kris: In Ambition As An Anxiety Disorder I discuss Andrew Wilkinson’s comment that Most successful people are just a walking anxiety disorder harnessed for productivity. This hints at an example of hormesis — the right amount of a “bad” thing like stress or angst can be useful while too much is destructive. Just one of those ambiguous tensions life requires we modulate.]

I don’t think being happy all the time is the most adaptable strategy in life. If you think from an evolutionary perspective, imagine two creatures: one is happy all the time, always optimistic, thinks everything is great, and everything’s going to go great. Then you have another creature who’s a little bit paranoid, a little bit freaked out every time there’s a rustle in the bush, thinking it’s a tiger. Which one’s going to survive longer? It’s the slightly paranoid one. The slightly anxious one. The one that’s constantly dissatisfied. The one that says, this food’s not enough. I need more. That’s the one that’s going to survive and procreate. So, in that sense, a moderate amount of dissatisfaction with our lives is, from an evolutionary standpoint, highly adaptable. If you look at like research on happiness and wellbeing it is an inherent part of our nature to be mildly dissatisfied most of the time.

Happiness as an indirect pursuit

People are overly focused on the feeling of happiness. They should focus more on spending their time well and doing things that are worth doing. There’s a curious thing about human emotions, which we’ve all experienced. Let’s say you’re angry and you don’t want to be angry anymore. It just makes you more angry because you get upset about your anger, or if you’re anxious and you don’t want to be anxious. You get anxious about being anxious. The peculiar thing with happiness is that if you constantly ask yourself, am I happy? How can I be happy? I want to be happy. You make yourself less happy. It’s one of the few things in life that putting more effort towards it or more focused attention towards it decreases the result. It’s one of the few things in life that by simply letting it go and not trying to control it, it happens more often. A lot of people get caught up in how they feel. Emotions are important, but you’re going to feel things all the time. You’re always going to be anxious or angry or happy or sad. Life is always going to put you in those situations. What matters is what you do. It’s how you react to the emotion. If you develop the capacity to consistently perform good actions, despite whatever emotion you’re feeling, then more often than not, you’re going to feel good about yourself.

[Kris: If I say “Don’t think of an elephant” what do you think you are going to do? You’re going to think of an elephant of course. Happiness is a byproduct. It’s an indirect pursuit. The harder you try the more elusive it is. Reminds me of Michael Crichton’s quote: If you want to be happy, forget yourself. Forget all of it—how you look, how you feel, how your career is going. Just drop the whole subject of you. People dedicated to something other than themselves are the happiest people in the world.

My friend Tom Morgan echoes the futility of focusing on happiness: Happiness often lies in the temporary suspension of our ego’s desire to explain and control everything]

Gratitude Is An Action You Can Take

Gratitude is useful because it is forcing you to take a certain perspective of just being appreciative of the things that you have. Gratitude is slightly different than happiness even if the two often coincide or happen together. Gratitude is more like an antidote to misery than it is a cause of happiness. When you feel miserable, you’re so focused on the one thing that you don’t like that you’re forgetting the 100 things that are good. The practice of gratitude forces you to take your attention off that one thing you don’t like, and realize “my life’s pretty sweet.”

[Kris: This is a key practice in our household. It keeps the angst that drives you from tipping into envy or unhealthy emotions. As hokey as it sounds, I mean it when I say any day that I get to wake up is a good day. Because is the grand scheme, it could be worse.]

The 3 pillars of well-being

• What are we spending our time working on?
• Who are we spending our time with?
• How much are we taking care of our bodies?

If you can answer all three of those things satisfactorily, you’re probably a happy person most of the time. All these other questions, the philosophical ones or productivity ones, they’re window dressing. They’re not the real thing. Have a few good relationships in your life, work on a project that you care about and feels important to you, and don’t mistreat your body. That’s the 20% that drives 80% of happiness.

[Kris: A fulfilling life, like anything worth pursuing, is a simple formula. Simple, but not easy. Like losing weight. Mark just distilled it for you.]

Reconciling unconditional love with the practical need for boundaries

You set this ‘if-then’ statement within a relationship. “This thing drives me crazy, please don’t do it. If you do it, this is how I’m going to react.” It’s healthy because it sets expectations for both people. Now my wife knows what upsets me and how I’ll respond. There’s no ambiguity or uncertainty around it. A more intense example is monogamy: if you cheat on me, I’m going to leave you. That’s a clear ‘if-then’ boundary. I’m still going to love you, I’m still going to care about you, that’s unconditional. But we’ve set these boundaries, these expectations, and if you don’t live up to them, we don’t have a relationship anymore. Many people who are entangled in unhealthy relationships struggle to set boundaries because they don’t want to displease their partner or start a fight. What they don’t realize is that by setting that boundary, despite the discomfort and potential for a temporary argument, you’re preventing dozens of future fights. It’s the one fight that prevents the next 20.

[Kris: “The single biggest problem in communication is the illusion that it has taken place.” – George Bernard Shaw]

Being responsible even when you’re not at fault

You should take responsibility for everything in your life. It’s a common piece of advice, but the most frequent objection is: ‘Well, bad things happen to good people. What if I’ve been wronged or a tragedy has occurred? That’s not my fault. Why am I responsible for that?’

I differentiate between fault and responsibility. We often assume that fault and responsibility are the same thing, and legally, they usually are. However, from a personal psychological point of view, you can be responsible for many things that are not your fault. If someone leaves a newborn baby on your doorstep, it’s not your fault, but it’s absolutely your responsibility to do something. Similarly, if you get hit by a car and end up in the hospital, it’s not your fault, but it’s your responsibility to recover, take care of your health, and do everything you can to get healthy again. There are many situations in life for which we are responsible, but it’s not our fault. We had nothing to do with how it happened. I believe this concept opened many people’s eyes to separate the fault component from responsibility, helping them to accept this piece of advice more comfortably.

[Kris: This strongly aligns with my opinion that you should “put your oxygen mask on before you help your neighbor”. You have a responsibility to care for yourself so you can help others. This also means accepting help. In my own life, I’ve had a loved one refuse help thinking they have spared me a burden, but I know that by not inconveniencing me today they would become a larger burden in the future when they are less capable of helping themselves even with my aid. This experience has given me the imperative to make sure I take care of my health, my finances and my well-being. Not just so I am not someone else’s burden but so I can continue to be a source of support for others.]

The self-help advice that drives Mark crazy

The traditional “law of attraction”. Like The Secret. Manifestation. The idea is to visualize and believe something, and it will happen. It’s not entirely wrong. I addressed this topic in an extensive article on my website years ago. The concept in psychology known as confirmation bias plays a key role….It occurs consistently and the law of attraction leverages this bias in our favor. For instance, if your goal is to become rich, you’ll start noticing opportunities that were always there but went unnoticed because you hadn’t been thinking about your goal.

There’s nothing magical or cosmic about it. It’s a common, well-documented perceptual bias. When used effectively, the law of attraction trains you to use confirmation bias to your advantage. The problem is, it’s often shrouded in cosmic jargon and extends beyond simply thinking about your goal. There’s a crucial distinction between focusing on an external goal and the identity you want to inhabit. If, for example, I decide I want to be seven feet tall and play in the NBA, no amount of thinking will make it real. That’s not success; it’s delusion.

I have several issues with the law of attraction. I’ve been quite critical of it, despite recognizing the grain of sound advice within. It advises to look for the positive in anything that happens to you, which can be helpful but should not be applied indiscriminately. It’s perfectly normal and healthy to feel sadness when tragedy strikes.

[Kris: Notice how calls to be indiscriminately positive backfire by setting impossible expectations. Happiness is the gap between reality and expectations.]

What many attribute to the law of attraction is often just confirmation bias, accountability, and goal setting. When you set a goal, it provides a finish line. Without a clear goal, it’s difficult to measure your actions. For instance, if you want to make a lot of money, define the amount. Once you decide on a figure, you can break it down into monthly targets and figure out the steps needed to get there. The law of attraction isn’t responsible for this. It’s simply setting a goal, breaking it into subtasks, holding yourself accountable, and using confirmation bias. It’s easy to see why people appreciate this concept, but it’s crucial to remember that it requires action. You can’t merely wish for wealth and expect it to materialize.

[Kris: I beat this dead horse to death but this topic is really about doing the proper attribution. Mark is showing how confirmation bias can be leveraged for good. How goal setting deserves credit for progress, not magic. And notice, if “manifestation” didn’t happen to re-skin confirmation bias it wouldn’t work and therefore it would never have taken off as a self-help concept. It had to have a nugget of truth to woo followers. Every cultish movement will have a nugget of truth that is really just a hand that gets over-played]

Imposter syndrome is healthy

I have a contrarian take on impostor syndrome. I believe it’s healthy. If you made a bunch of money very quickly you should have impostor syndrome. You should be asking yourself, ‘Do I deserve this? Did I work hard enough for this?’ Because that is the opposite of taking it for granted and being arrogant. It’s not fun to feel that and I certainly went through some impostor syndrome after ‘Subtle Art’, but ultimately, it keeps you humble. It keeps you a bit hungry, thinking, ‘I should do something again to show that this wasn’t a fluke,’ and it keeps you grounded. It reminds you that you’re not necessarily better or worse than your buddies that you hung out with last year who are still making the same amount of money they did before. Impostor syndrome is actually healthy, as long as it’s not debilitating. At the end of the day, any sort of self-worth issue comes back to the same thing. Are you doing good work? Are you surrounded by good people? And are you treating yourself well? If you can say yes more often than not to all three of those questions, you’re eventually going to be in a good spot.

[Kris: Echoes Sal Khan’s take on imposter syndrome —

I think some of that impostor syndrome, I actually want to retain. I never want to forget how, like, there, there was a time not too long ago that I would pass on the organic produce. I think it lets you just appreciate the world a little bit. And we all know about hedonic adaptation and the hedonic treadmill. I don’t claim that I’m immune so I don’t want to sound like I’m some guru here. I live in Silicon Valley. We live in that same house, and a lot of our friends have now moved into houses that are multiple of the size of our house. Every now and then it’s “maybe it would be nice to have two saunas.” But I always remind myself, “well imagine their electricity bill, or like, the gardening bill or the water bill or whatever.” But, yeah, I think it’s healthy imposter syndrome.

A healthy one keeps you grounded, allows you to enjoy it a little bit. Like every now and then I get invited to meetings with people or conferences with people, where both healthy and unhealthy impostor syndrome could be at play. The healthy imposter syndrome says  “Wow, you get to meet your childhood hero, or someone that you thought you could only read books about, and you’re meeting this person, and they are interested in what you have to say, and they’re supporting Khan Academy.” That’s kind of fun. I don’t know if that’s impostor syndrome, or that’s just remembering yourself when you’re younger. And you’re like, “Wow, how is little Sal in this meeting right now? That’s kind of wild.”]

Friends,

I’m a bit more than halfway through this summer’s travels. So far we have been to Tahoe, Jupiter, Disney, DFW, and Austin. We are headed to Puerto Plata this week before our last leg in the NJ/NYC area.

I didn’t publish last week and likely won’t publish next week. Other than checking Twitter a handful of times a day, I’m pretty offline this summer. I read maybe an article a day. I’m listening to none podcasts (to borrow my 5-year olds grammar). I’m not even reading a book so any intellectual side I have is being totally starved of stimulus. Total GTL life minus the gym.

The upcoming week is always a fun one. My birthday is on the 12th and Zak is on the 13th. We actually went to the hospital for his birth on the 12th but I guess he wanted his own day. July 12th has captivated me for another reason. It is the anniversary of the horrific shark attacks that inspired Jaws. In another self-centered twist, they occurred a few miles from where I grew up contributing to my and my sister’s obsession with sharks (my sister actually went as far as tagging nurse sharks in FL for a summer job in college. She subscribes to any shark news so she pointed out a video of a Great White spotting in Jupiter two weeks before we went there in June. We hid this bit of info from the rest of the family).

The shark attacks of 1916 make sense as the inspiration for Peter Benchley’s monster which he infused with vengeful intention. From Atlas Obscura:

IN JULY OF 1916, NEW Jersey became the site of a series of vicious shark attacks that would span 12 days and take the lives of four people and severely injuring one.

With previous deadly attacks in Beach Haven and Spring Lake, New Jersey, the shark made its way north and down a freshwater creek in Matawan, New Jersey on July 12, where it would attack and kill 12-year-old Lester Stillwell and 24-year-old Stanley Fisher within an hour of each other. Matawan hadn’t prepared itself for attacks like other shoreline towns in New Jersey, as they were so far inland along a freshwater creek. 

The suspected man-eater would be caught two days later in the nearby Raritan Bay. To be sure it was the killer, the over 300-pound monster was dissected, and 15 pounds of human remains were found in its stomach.

It’s has been determined that the shark was a bull shark, the only shark that can survive in both fresh and saltwater. The incident was a heavy inspiration for Peter Benchley, who would write his 1974 novel Jaws set on Martha’s Vineyard, Cape Cod in the fictional town of Amity.

While it’s unclear if it’s a permanent addition, the site of the shark attack is currently marked by a painted shark. The town of Matawan also has two separate memorials to the victims.

For the full details, check out the Wikipedia page: The Jersey Shore Attacks Of 1916

It’s a great beach read in the same way that it’s fun to read about serial killers in your tent at sleepaway camp in the woods.

The Money Angle

Before vacation, I listened to fund manager Dan McMurtrie’s interview on Howard Lindzon’s podcast. It was provocative and entertaining enough for me to jot some notes.

I recommend taking a full listen. Dan is funny. And gifted at the art of troll.

To see my notes go to Dan McMurtrie with Howard Linzon (Moontower Meta)

Last Call

• FC Dallas MLS games

  We went 2x. For less than $40 you get amazing seats. The overall environment is fun and positive. I have never been to an MLS game before and while I know nothing about soccer, I and everyone we went with found the fan experience to be outstanding.

• Burger’s Lake (Fort Worth area)

  We went here 2x as well (the friends we are staying with have been hosting 2 to 4 families from our NYC/CA crews the entire time we’ve been here, so we repeat activities as the revolving door requires). It’s a lake with high diving boards, water slides, a trapeze swing, and attractions catering to younger kids. Bring your own picnic or use the camping grills to make burgers. You will need to sneak booze in. On weekends they check your cooler, but we got away with it during the week. Your welcome for the tip.

• The Stockyards (Fort Worth area)

  Also did this 2x. Step back into the history of cattle-ranching. There’s plenty of activities for kids and rows of old saloons and restaurants for the grown-ups. And if you want something less rustic, the newish Hotel Drover is a great spot to grab a ranch water (I make this drink all the time, but didn’t realize Texans have a name for it). It also looks like a fun spot for a weekend getaway with a nice pool and access to the stockyards. Time your visit to see the daily longhorn cattle drive up the main drag.

• Deep Ellum (Dallas)

  This is an area of Dallas that reminded me a bit of Wynwood in Miami. Cool restaurants and shops (Jack White’s baseball brand Warstic is headquartered here). Plus lots of locals flexing their muscle cars (my kids are totally obsessed with cars right now especially Challengers with kits such as Demons, Super Bees, and Hellcats. Hellcats come with 2 keys, a black and a red one. The black one is the regular one. The red ones unleash the beastly Hellcat engine. These cars are built for drag racing. If Fast and Furious movies didn’t have cringey sex scenes, I’d take the boys to see F9). If you visit and dig tequila/mezcal you need to go to the Ruins. I tweeted about it.

• Bar hopping in Dallas

  Grab a cocktail at the Mitchell, see the decor in the Adolphus Hotel, and end at the Thompson Hotel. There you can see some prettiness and pretty people at Catbird before grabbing dinner at Monarch or sushi at Kessaku. The sushi was outstanding by any coastal city standard but pricey. Sake choices were underwhelming, but the view is a consolation prize. Finally, end the night, at a ridiculously good mezcal bar hidden in a bridal store. In a strip mall. The empanadas and cocktails are lit at this tiny spot started by two bros from Mexico City. It’s called La Viuda Negra. It was better than the movie we saw of the same name last night in IMAX.

  

Last week, we talked about “chart crimes“. Often these are charts that poorly constructed because the authors have been fooled by correlations or invalid comparisons. These are naive but honest. Then there are charts that use sleight of hand to nudge a conclusion. This author has an axe to grind. 

This week, we will discover the literary version of chart crimes. It’s what Cedric Chin simply calls “sounding insightful”. It’s an approach honed in the internet tournament for attention. Since desire is the only barrier to publishing online we are witnessing “an arms race in writing. The best online writers are able to make something sound insightful — regardless of whether it’s true, or whether it’s useful.”

Ced continues:

This isn’t some evil conspiracy. ‘Writers optimizing to produce insight porn to grab attention’ sounds nefarious, but it’s really more like ‘writers responding to the incentives of the social internet’ — a simple side effect of the attention economy.

My own feeling is that the overlap between universally “good writing” and “optimizing for attention” is much higher than “good writing” and “being right about what you are writing about”. I’m sure there’s some mix of practice, talent, and writing ed that can make you a good writer. But I’m not sure how correlated any of that is with having accurate or well-reasoned thoughts.

A bad writer with bad takes is harmless. Nobody finds them. A bad writer with good takes needs an agent. A good writer with bad takes is hard to detect for 2 reasons:

1. Part of good writing is being effectively persuasive. A good writer has you in a spell. 
2. There are elements common to all good writing so you cannot distinguish good takes from bad takes based on style.

Ced refers to some of these common elements as “tricks”. 

Here’s 2 familiar ones:

1. Use a story.
   
   I started this piece with a story. Preferably from a historical period that the reader isn’t familiar with.
    
2. Repackage obvious truths and sprinkle them over the course of an essay
   
   Clichés can thus be repackaged to sound insightful. This is a useful trick because a) clichés are often truths the reader already agrees with, and b) whatever sounds insightful will keep the reader going.
    

Usefulness Separates Infotainment From Scholarship 

Ced warns that what sounds insightful isn’t always true or useful. Some excerpts:

• [Venkat] Rao’s piece is not ok if your goal is to read for career reasons. But it’s ok if your goal is to read for entertainment. It’s ok because Rao’s goal is to attract eyeballs, not create better business leaders. And his writing is so good most people will forgive him for it.
   
• As a writer, I admire what he’s done. But as a business person, nearly everything that [Dave] Perell says in the piece about business is subtly wrong — enough to make me treat his essay as entertainment, not education.
   
• Writers are often seen as smarter because good writers today are trained to optimize for sounding insightful. This bleeds over into reader perception. I think that whether a writer sounds smart or a piece sounds sophisticated shouldn’t affect you if your goal is to put things you read to practice. The questions remain the same: “Is this person believable? How likely is this going to be useful? And what’s the cheapest way to find out?”
   

Clear Thoughts Do Not Equal Correct Thoughts

Ced concludes his post:

A year ago I wrote Writing Doesn’t Make You a Genius. I noticed that people tend to assume good writers are smarter than they actually are. I argued that this was mistaken — that writers sound smarter on paper because the act of writing forces them to clarify their ideas.

But now I have another reason. Writers are often seen as smarter because good writers today are trained to optimize for sounding insightful. This bleeds over into reader perception.


My Own Reconciliation My feeling is the usefulness of writing comes in 2 forms:

• Form 1: The writing helps you make better decisions or predictions.
   
• Form 2: The writing is useful for entertaining or provoking you. If a writer is wrong in interesting ways their work is still useful.

The most common failure is to incorrectly label a Form 2 piece as Form 1. If all you ever read is Malcolm Gladwell or self-help you might never know the difference. 

For a fuller discussion, please check out Ced’s Beware What Sounds Insightful (Link)

As protests flooded the streets in the wake of George Floyd’s murder, I pulled together a stream of thoughts in my weekly letter. One of the questions I wondered aloud about was what standard police should be held to. In tweet form:

So you've heard "not all cops are bad."

This is true. But it would also be true if half the cops were bad.

Defect rates in manufacturing are measured in PPM. Parts per million! We have high standards for widgets

What defect tolerance will we accept for our armed enforcers?

— Kris (@KrisAbdelmessih) June 3, 2020

One of my readers who I chat with responded with illuminating insights on the topic. It turns out he/she had quite a background in law enforcement with a good view into local and Federal practices. As is our national habit, the discourse on police has quickly become politically polarized. Polarization is obscuring the massive degree of nuance endemic to the rich topic of law enforcement. This friend felt compelled to write down his/her thoughts and iterated on the essay over many sessions. I pushed for it to be published but the demands of this person’s current profession require anonymity. So I asked to share it on Moontower preserving anonymity. I don’t have a big platform but I’m happy to share this with those of you who do follow. Thanks to my guest and of course to you for reading.

We have a valuable opportunity to change right now but we are running the risk of not realizing powerful change due to a false equivalency in the dominant narrative.

Contents:

1. What Can You Do Today to Help Create a More Just Society

2. What is the False Equivalency and Which Key Stakeholder is Missing?

3. Worldview and Caveats

4. Race and Fatality in Police Encounters

5. A Baseline for Police Violence

6. Understanding Violent Encounters and Human Limitations

7. Societal Considerations

8. Concluding Thoughts

What Can You Do Today to Help

Before expanding on the false equivalency and its effect, here are some initiatives that I think will, you know, just help make society a little bit better for everyone. No need to look at it through a political ideology, just look at it and say gee, this would help a lot of people. Think of it as trying to move society closer towards John Rawls’ Justice as Fairness without making any normative judgments about the current state of affairs.

• Immediate: Help support bail for underprivileged people. Poor people that can’t afford bail often lose their jobs while waiting for trial, even if found innocent later. I recommend the Bail Project.
• Immediate: Support legal assistance so that disadvantaged groups are more likely to get good legal representation. Anyone who has ever seen Lionel Hutz in action knows what I mean.
• Medium Term: Anything that helps support educational and healthcare disparities between communities. If you aren’t sure, go to CharityNavigator and sort by 4-star charities.
• Medium Term: Take away the power police unions have to protect police officers from losing their job even after multiple complaints. This is a sticky situation because it then brings the wider circle of public unions under scrutiny. Here is a nice overview of the potential problems.
• Policy questions to ponder: ending the criminalization of drugs. Over policing of disadvantaged areas. The militarization of the police.
• I also feel the need to caveat this with the following: When I first wrote this, I forgot to say anything about George Floyd? Why? Because I’ve thought about this problem deeply for years, so Floyd might be the catalyst for me sharing my thoughts, but not the catalyst for me taking an interest in this narrative, that happened a long time ago. Every cop that I know thought the murder of George Floyd was just that, murder. It was heartless, bizarre, and without explanation. 
  
  

What is the False Equivalency and Which Key Stakeholder is Missing? 

We have a valuable opportunity for change and we might fail to capitalize on it. We are missing a critical opportunity to communicate about some very real issues as a society. What’s happening instead? We are screaming past one another with ideology and frameworks. Some very positive changes have occurred but what I fear is that the current narrative completely alienates and vilifies one key group that’s going to be needed in our fight for a more just society.

 On a national level, what is the false equivalency? It is the following: “a complex and long line of historical inequalities and oppression have created a system with inherent racism” is considered equivalent and just as true as the following state “the police are racist.” The first statement is substantiated, the second one really is not. Why do I think this clarification is important? Because you can disarm a lot of hostility in the discussion between the left and the right once you tweak the narrative to allow for this nuance, and maybe we can work on changes that in theory many of us support. The heart of the argument is thus bound up in these three points:

1. Is there a complex and long line of historical inequalities, oppression, and racism that have surreptitiously and latently made the experiences of minorities in the legal and law enforcement realms to be different than mainstream populations? Yes. This is racism.
2. Are police officers en masse a group of racists proactively attempting to discriminate against minorities solely due to their minority status? No.
3. If you accept both points 1 and 2 it allows for constructive dialogue. Also, if you want real reform it makes a whole lot more sense to have the police as partners in that effort and not adversaries. If you vilify the police and blame them for every ugly aspect of the system, threaten their lives, and cut their funding etc. are you going to on average get better or worse qualified people applying to be police officers?

I think most people right now agree on point #1 above, so let me spend some time on point #2 and help explain parts of the law enforcement job that often go unexplained to the general public, to the detriment to all of us in this discussion.

Worldview and Caveats

I’ve already shared some of this writing with friends and was attacked for it, so let me try to be clear upfront and say: I think there are very real problems in society. The outcomes under the current state are discriminatory and there are entire segments of the population crying out saying they haven’t been heard and have been suffering from racism. We should do everything we can to help them. The pain and psychological trauma of literally living one’s entire life in this manner is are burdens that I cannot even begin to fathom.

Race and Fatality in Police Encounters

Three studies from progressive academics concluded the following:

1. Journal of Politics, research from Shea Streeter of Stanford University² has shown that, if you compare blacks and whites coming into contact with the police under similar circumstances, they have a virtually equal likelihood of being killed. “The reason why so many police killings of African Americans have sparked outrage is that, at least to many, the circumstances of those interactions did not appear to warrant lethal force. A jarring implication of my research is that an analogous proportion of white decedents are also killed by police under similarly dubious circumstances.”
2. Proceedings of National Academy of Sciences – Officer characteristics and racial disparities in fatal officer-involved shootings³. “We did not find evidence for anti-Black or anti-Hispanic disparity in police use of force across all shootings, and, if anything, found anti-White disparities when controlling for race-specific crime. While racial disparity did vary by type of shooting, no one type of shooting showed significant anti-Black or -Hispanic disparity.”
3. Ronald Fryer of Harvard University – An Empirical Analysis of Racial Differences in Police Use of Force⁴: On the most extreme use of force – officer involved shootings – we find no racial differences in either the raw data or when contextual factors are taken into account. We argue that the patterns in the data are consistent with a model in which police officers are utility maximizers, a fraction of which have a preference for discrimination, who incur relatively high expected costs of officer-involved shootings.
4. Unrelated to fatal force situations, but also worth reviewing⁵ if you are interested in these meta-studies: 85-90% of all racial groups who called 911 for help felt they behaved properly

I think this broadly helps frame a discussion where we can dispense with the false equivalency and agree on points 1 and 2 above.

A Baseline for Police Violence

There are over 800,000 law enforcement officers in the US⁶. In any given year there are approximately 63 million unique interactions between a civilian and a police officer in the United States (source: US Department of Justice⁷). Police shootings are cataloged and scrutinized by media and the Department of Justice. The FBI has entire divisions dedicated to investigating civil rights violations of local police departments. The Washington Post has a widely publicized police database⁸ which broadly proclaims that “black Americans are killed by police is more than twice as high as the rate for white Americans.”

If we are looking for clearly objectionable police behavior and bias let’s filter this down and specifically look only at shootings of unarmed people and not shootings involving some kind of weapon. Filter the database for 2019 and we see 1,004 people. Filter it again for “Unarmed” and the number drops by 99% to 56 people. Of those 56 people: 25 were white, 15 were African American, 11 were Hispanic, and 5 were other.

There are pretty broad studies from Harvard and Michigan State University that conclude that at least when it comes to fatal force the police are not biased by race⁹. What I think is clear is that minorities are more likely to have contact with police, and more likely to be prosecuted for a crime than white people under similar circumstances. So here you have the paradox of points 1 and 2 on display: as a minority you are more likely to have a police encounter purely based off the demographics of communities and deployment of police assets (point 1 above systemic factors) but once that encounter starts you are of equal or even less likely to be killed than a white person (see footnote 4) i.e. point 2 above police officers, in general, aren’t biased in their application of fatal force.

Everyone forgets to look at police officers though – the other side of the coin. 48 police officers were killed in 2019, 40 were white, 7 were African American, and 1 was Asian. This means that if you are an unarmed African American as part of the general population in 2019 you die at the hands of police at a rate of approximately 15 per 37.1 million compared to African American police officers who died at a rate of 7 per 106,400. (800,000 police officers, of which 13.3% are African American¹⁰, compared to 12.6% of the general US population).

So even if you assume every unarmed killing (more on that later – use of force, tactics, and the fact a police officer never knows who is armed or not) is entirely without any reasonable cause you have a fatality error rate in 2019 for all citizens, regardless of color, of 56 people per 63 million unique police to citizen interactions per year. Or a rate of .00009%. I think one is one too many but when you have 800,000 people making decisions in 63 million encounters some of which are bound to involve making decisions under conditions of risk, violence, and uncertainty, I would imagine that error rate is broadly representative of the error rate in any human endeavor.

Understanding Violent Encounters and Human Limitations 

“As your heart rate goes up, your tunnel vision can get narrower and your auditory exclusion can increase.” 

— Dave Grossman, On Combat: The Psychology and Physiology of Deadly Conflict in War and in Peace

Everyone sits back and looks at the situation and likes to think about what they might have done. Here are some realities for the people that have seen too many movies. You can start with the first 3 listed in this article: 15 Things The Police Wish The Public Knew About Law Enforcement¹¹:

1.   The police aren’t martial arts or even hand to hand combat experts.

   “People have been conditioned by TV to believe that a properly trained police officer of any size can take down a person of superior size and strength¹², quickly, almost effortlessly, without the use of weapons, and without any injury to either party. This is not true. Few cops are expert martial artists. The defensive tactics training¹³ they receive is fairly perfunctory. Struggles often result in injured joints, lacerations, concussions and other injuries to both parties. There is lots of cursing and screaming involved. The cops usually win, but only because they can get enough cops on the scene to overwhelm the adversary.

   The reality of it is this: if you get physical with a police officer they are going to assume their life is in mortal danger. If at any point you can hit them hard enough to stun them, or are able to grab their weapon, their assumption is that you are going to kill them. So this is why you see multiple police officers tackle and hit people at times – they aren’t experts in hand to hand combatives, they are going to use numbers and brute force to bring the situation under control as quickly as possible.

2.  Performance Under Stress: During a stressful event the human capacity to think and even respond with coordinated physical movements is reduced.

   What you get is brute force gross motor function moves. Let’s talk about people’s reaction under stressful situations¹⁴ for people who have never been a knockdown drag-out fight or have not been shot at:

   • • During a stress event, the SNS is activated and adrenaline, chemicals, and hormones are dumped from the adrenal glands and immediately sent out to the areas of the body needed to primarily support the survival effort. At 145 heart beats per minute (BPM), most people lose complex motor skills, meaning those manual dexterity skills necessary to do several things at once or in unison.
     • At 175 BPM, the pupils dilate and flatten and visual narrowing occurs – or what is referred to as tunnel vision – and since the visual system is the primary sensory system for the brain it becomes increasingly difficult to focus and track objects and targets.
     • In the auditory system, hearing shuts down or is diminished significantly at around 115 BPMs and that is why many people say they didn’t hear anything during a life-threatening stress event.
     • The brain is ultimately affected as well. At 175 BPM, it is not uncommon for someone to have problems recalling what just occurred. This is sometimes referred to as “critical stress amnesia.” Immediately after an event, a person may only recall 30 percent of what happened with memory gradually increasing over many hours.
     • At 185-220 BPM, most people will go into a state of “hyper-vigilance.” This is also commonly known as the “deer in the headlights” or “feedback mode” where a person repeats non-effectual actions or having irrational behavior like moving from behind the protection of a building during a gunfight.
     • Lastly, at a mere 115 BPM, fine and complex physical motor skills become less available and effective. Pulling the trigger of handgun correctly, aiming on target or manipulating handcuffs or other tools becomes increasingly difficult to do. This is in direct contrast to the gross motor skills which become enhanced such as those parts of the body needed to fight or flee.
       
       
3.  Split Second Decision Making¹⁵: Why It Can Look So Bad After The Fact

1. • Go back and re-read the effects of stress on the body and the impact on motor skills and brain function. The average gunfight is over in seconds which means there is not often time for conscious thought. When people receive weapons training they are usually taught to 1. Aim center mass of a target because even when you are aren’t under stress it’s nearly impossible to hit an appendage such as an arm or leg and 2. Keep shooting until the target goes down. Why? Because sometimes getting shot actually doesn’t stop someone from coming at you. I refer to this Apple podcast: Mike Day: Navy SEAL, Shot 27 Times and Never Quit¹⁶ who was shot 27 times and still managed to take out his attacker.
   • So when you read some incendiary article that police shot someone 30 times, what they aren’t saying is that it’s not like the police had a meeting before and decided how who was going to shoot how many bullets, the entire event probably transpired in 5 seconds with no time to coordinate, and each officer drew their weapon as they were trained to do and shot repeatedly until the individual went down. Furthermore, given the effects of stress on the body, each officer was probably not even aware of what the other people around them were doing at the time.

Examples of the Types of Decisions Officers Make: I’ve spoken to people about the death statistics for police officers and the response is so what, they signed up for that job. Well, the counterpoint is that you’ve implicitly admitted then than it’s inherently dangerous and violent. Why is that an important acknowledgment? Because to understand police violence you need to understand what kinds of situations they are confronted with and how they are trained to react.

1. 1. Hint: it’s not easy¹⁷ and unless you’ve undergone the training¹⁸ it’s really easy to read an after the fact headline and become enraged. Footnotes 8 and 9 are really worth going to in order to get a feel for this.
   2. Two quick summary stories from my use of force training: in one class we watched bodycam videos of police shootings and voted after on if the use of force was appropriate. On one of them, the person was running, stopped, turn around really quickly and pulled a gun out. He was shot and killed. 100% of the class voted it was an appropriate shooting. They slowed the tape down and showed us the pictures after, it was a very young man and the gun was actually a cell phone.
   3. It’s not easy when it’s happening in real-time speed and your stress hormones are flooding your system – vision narrows and your brain just reacts at times without time even for conscious thought. In the virtual simulator, I was in a shoot or no-shoot decision and I shot a lady. To me, it looked like she was pointing the gun at another officer to her right. They let the video play through and it turns out she was putting the gun down, I just had a bad angle. It’s terrifying to me how hard it is to make decisions in these scenarios.
   4. Look at this scenario¹⁹ and how fast it plays out – and the officers have the benefit of daylight and helicopter telling them what the person is doing. The reality is you never know who²⁰ has a gun – I carried a concealed weapon and was able to draw it and fire two shots into a target at close range in under 2 seconds
   5. What is the takeaway when you combine these split-second scenarios with human decision making under stress: Police officers are taught that action beats reaction – so if he/she even thinks you are reaching for something that might harm them they are going to attempt to react faster than you and shoot. If you want to see why officers often react the way they do, or attempt to react with a strong level of force to head off any resistance right up front just go on youtube and drop in something about traffic stops gone wrong. Things go from okay to getting shot at in a literal second. A lot of the posturing and domineering behavior is done in hopes to dissuade someone from even thinking about taking that road.
2. The Damage of a Bad Media Narrative²¹ “Atlanta Police Officer Shoots a Black Man Dead at the Fast-Food Drive-Thru” That’s the headline, people are already protesting. The police officer has already been fired and the mayor forced the police chief to resign. You read further details: the man had passed out in his car and was blocking the drive through so police were called. He got out of his car, started wrestling with the officers, managed to take one of their tasers, and was firing it at them, and only at that point did they shoot him. None of that is in the media, instead the officer is fired and the police chief is forced to resign. Any intelligent police officer that can find work elsewhere right now is going to do so and you are going to be left with less qualified and capable candidates. This entire narrative is making the situation more volatile and more error prone rather than the opposite.

Societal Considerations

 Large datasets and false homogeneity: First point and counterpoint: Large sets of numbers hide the truth at times. If you have never worked in law enforcement it’s hard to realize that the police are not a monolithic organization. Police departments are like church parishes – each one has its own culture, leadership, training department, demographic make-up, funding sources, etc. This view enables the following conclusions 1. Don’t just look at the national level averages and say there is no problem. On the other hand 2. The fact that departments vary widely should also make people hesitant to condemn the police en masse as some collective hive mind bent on discrimination. What is clear is that you give police departments a lot of power and authority – hiring practices should come under the ultimate scrutiny.

Lack of Narrative and Effect: Well what about the other side of the story when police are entirely wrong in their actions? I think that is put on display every day, what people don’t understand is what police officers are confronted with daily and just how quickly they have to decide under pressure. When you routinely vilify the police and incite hatred towards them without understanding the demands of their job and how these kind of things can occur you are creating a real problem in the sense that no reasonably intelligent person is going to want to become a police officer and the quality of your candidate pool is going to go down drastically. This will likely make all of the above problems worse over time and not better. There is a very real human element to this that is hidden by the dominant narratives.

“All Cops Are Bad Because They Don’t Turn in The Bad Cops”: People are dismissed from law enforcement agencies all the time – it’s just not publicized. I worked for a smaller agency and over the course of four years just in my local office we dismissed 4 individuals from internal investigations, from low ranking to very high ranking. They didn’t do anything criminal, or even overtly wrong in some cases, but they were judged to have a character not appropriate to law enforcement. That being said, there is a lot of evidence piling up that police unions are a very large problem because they protect officers from complaints and the officers cannot get fired. So even if a fellow officer or citizen files multiple complaints, nothing happens²². We didn’t have a union so people could be dismissed at any point.

Concluding Thoughts

Let’s stop turning police officers into the scapegoat for all the underlying societal problems that nobody wanted to address before. You need a holistic and systemic approach. Reach out to local police departments and include them in the discussion, support politicians to change the laws they have to enforce, support charities that help ensure equal treatment in the justice system. But if you keep vilifying and blaming the police for the entire system you are only going to get less qualified and less astute police officers moving forward, and that will be to the detriment of all of us. The current narrative is largely inaccurate, it’s also damaging.

Breaking Barriers United on Defunding The Police (Link)

Jay Stalien on Being a Beat Cop in Urban America (Link)

Humanizing the Badge (Link)