Daniel Kahneman has done as much to change the way we think about economics as anyone—and yet, he is no economist, or at least not as we would traditionally think of one. Kahneman is a psychologist; a psychologist, however, with a Nobel Prize in Economics and the acclamation for having:
"Pretty much created the field of behavioral economics and revolutionized large parts of cognitive psychology and social psychology."
To illustrate how our brain works, Daniel Kahneman devised two systems of thinking. System 1 is the unconscious thought process that effortlessly manages the majority of our behavior (generally, without error). System 2 comprises our active cognitions and requires concentrated effort to apply. System 1, unbeknownst to System 2, automatically makes a number of serial errors that Kahneman has masterfully identified.
The best interviews are rarely, if ever, brief. With a tight window, the interviewer is never able to establish a rapport with their subject. They are never able to coax their guest into believing, if only for just a moment, that there conversation is private, amongst friends. There is no breadth, no backstory, and the topic of the day is lost in staged soundbites and niceties.
Of the interviewers who have earned a broadcasting format with the necessary time and structure to achieve great interviews, three standout to me for their excellence: Terry Gross, Howard Stern (if you have never listened to one of his interview, check out this one with film mogul Harvey Weinstein), and of course, Charlie Rose.
Charlie Rose's interviews span film, current events, and science to dive deep into the world around us with guests at the apex of their fields. Using an all black backdrop that elicits the desired seriousness and intimacy with guests, Charlie Rose has the gravitas to almost always deliver the right questions. With that said, these are my top 5 favorite Charlie Rose interviews:
Steven Pinker is a prolific psychologist and linguist whose research into the origins of the human language, the mind, and evolution have made him both revered, and in some small-minded circles, reviled. His book The Blank Slate—named for the theory, which he duly strikes down, that the human mind is blank at birth and programmed in its entirety by exogenous culture—is brilliant and I highly recommend it. In this interview, Professor Pinker discusses his book The Better Angels of Our Nature in which he argues that we are living in the most peaceful period of human existence. Pinker is a genius and he doesn't disappoint here.
As he begins this clip proclaiming, DiCaprio is loathe to give long form interviews because he believes it detracts from the audience's ability to detach the actor from the character. That he steps away from this reluctance is what makes this interview such a treat. I have seen virtually all of his films, but other than the tabloids about his understandable taste for supermodels, felt like I had never really heard him speak. You get a bit of it here and he is surprisingly eloquent.
David Foster Wallace
Several years after his suicide, Wallace is back in the news this summer with a new film depicting a few esoteric days in his life—I have yet to see it but the reviews have been quite good. This interview dates from 1997 and follows Wallace's ascent into the, relative, mainstream of literary culture with the success of Infinite Jest. In this interview, Wallace is visibly (and admittedly) uncomfortable, but also painfully himself, while he spouts his brilliant observations across literature, films, and life. Knowing how his life ends makes this interview all the more dramatic and tragic.
Christopher Hitchens was one of the fortunate few to speak his mind and maintain his mantel as a public intellectual. Even when taking positions I wholeheartedly disagreed with—like initially supporting the Iraq war—his wit, intellect, and charm prevented me from thinking worse of him. His later book God Is Not Great is, for lack of a better word, holy to the secular movement and a must read for anyone (religious or not) that is interested in religious history or dogmatic implications. I could have picked any of Hitchens interviews on Charlie Rose, he did many and was it seems a good friend of Rose's, but landed on this timecapsule from 2001.
Lee Kuan Yew
Sitting like a weigh station in the Strait of Malacca, Singapore has long been of strategic importance to global commerce despite being geographically baron of any vital resources. Following an acrimonious rift with Malaysia, Lee Kuan Yew almost singlehandedly turned the Singaporean island into a prosperous city state that rivals only the Venice of yore. Forgiving his benevolent autocratic tendencies, Lee Kuan Yew—who passed away in March of this year—was one of the most brilliant political thinkers of the 20th century. This interview, even in his old age, gives you a brief taste of his wisdom.
The 1970s were a period of major upheaval in the United States. Prices were going up, output was going down, and faith in the U.S. political system was going out the window. In the midst of the political upheaval, and with a loss of faith in Keynesian prescriptions for economic stabilization, a heretofore-obscure Wall Street Journal editor mapped an economic strategy for Republican resurgence and the Reagan revolution—famously depicted in this clip from Ferris Bueller's Day Off:
I was recently recommended this roadmap, the ostentatiously named How the World Works by Jude Wanniski. Regardless of one’s political persuasions, the book is worth reading if for no other reason than its marked impact on economic policy in the United States and around the world. A justifiably controversial figure—he found common ground in economics with Louis Farrakhan and endorsed John Kerry for President after calling President Bush an imperialist—Wanniski was foremost a conservative intellectual who disseminated his ideas advising the presidential campaigns of Ronald Reagan, Jack Kemp, Steve Forbes, and Bob Dole. In the case of President Reagan, Wanniski fell out of favor because he famously lacked modesty; his ideas had no such ill fortune. So what were these ideas?
John Maynard Keynes, arguably the most influential economist of the 20th century, posited during the 1930s that the great depression was the result of suppressed aggregate demand and inadequate government intervention. As a solution, he suggested that government deficit spending could compensate for diminished consumer spending to boost growth. While this is a very simple accounting of the Keynesian model, it is the basic premise. Wanniski viewed the cause of the great depression—and many other historic upheavals from ancient Rome to the stagflation of the 1970s— differently. Wanniski believed tax policy, and more specifically tax hikes—whether through progressivity, government growth presaging future tax hikes, or inflation pushing incomes into higher real rates— have invited all major economic collapses and faltering empires. Consequently, the best way to encourage growth is to concentrate policy toward creating the right incentives for exchange in the marketplace through low taxation, free trade, and a gold-backed currency to maintain faith in exchange and the debtor/creditor balance. Focus would be shifted to producers (the supply-side) and everyone would benefit as growth increased government revenue, in spite of rate reductions.
The Laffer Curve
Arguing against a proposed tax increase by then President Ford, economist Arthur Laffer sketched the following curve onto a napkin at a dinner table with Wanniski and Ford aides Dick Cheney and Donald Rumsfeld:
The Laffer Curve--as Wanniski coined it— is on the surface uncontroversial, while in its application it can be extraordinarily so. The curve shows that, for any given point in time, there is one specific tax rate that will maximize government revenues. At points on the curve to the left of the maximizing rate, if the already low tax rate is increased, revenues will increase. If, however, the tax rate is to the right of the maximizing point, a further increase in the tax rate will actually reduce government revenues—producers ‘on the margin’ will no longer be incentivized to grow or start their enterprise and will, according to the model, produce less or evade taxation. In contrast, if the tax rate is at a point to the right of the maximizing point and the tax rate is cut, the ensuing economic growth will outweigh the rate reduction and revenue will increase.
It is on this last point that the curve engenders controversy. George H.W. Bush, running for President in 1980, termed it “voodoo economics” and the political left has long derided it as “trickle-down economics”. Either way, the Laffer Curve was fully embraced by President Reagan and has made tax-cutting a mantra of nearly every Republican, and some Democrats, ever since.
What does the economic evidence say?
There is little dispute that there is a revenue-maximizing rate of taxation. At 0% no revenue is collected for obvious reasons and at 100% people are either producing for the glory of their despot or doing nothing. Somewhere in between there is an optimal rate that accounts for the elasticity of response (i.e. an X% tax change leads to an X% change in compliance/production), but the political left and right are at loggerheads over what that rate is. Dylan Matthews of the Washington Post collected an array of purported expert opinions of what this rate is (for various taxes, but here I will focus on the top federal personal income tax bracket) with the responses ranging from 15% to 70%.
Econometrically arriving at a specific rate is extraordinarily difficult because production and (tax) evasion are influenced by virtually every policy. Controlling for this vast array of relevant variables to identify the causal impact of a tax change on revenue is thus nearly impossible—and never without controversy.
Read my lips: no new taxes!
Wanniski, who was not a trained economist and never claimed to be, provides a vast array of anecdotal evidence to support his theory—including the tracking of market fluctuations during congressional debate over the Smoot-Hawley Tariff Act in 1929 and the debasement of Roman currency post-Aurelius in 180 A.D. Regardless of what you think of his arguments and their subsequent policy consequences, the book is worth a read. As the title implies, Wanniski takes a wide and long view of the world and provides plenty of uncontroversial and interesting analysis of past political events and economic forays.
Escaping ISIS, the new documentary from PBS’s Frontline, is gut-wrenching in its images of slavery and sexual violence in the ISIS-occupied territories of Syria and Iraq. The story pieced together by British producer and director Edward Watts, focuses on the plight of the dwindling and oft-misunderstood Yazidi minority. Emerging into the public eye last summer during their exodus from ISIS fighters on Mount Sinjar in a remote part of Northern Iraq, the appearance of US and UK Special Forces to shepherd the Yazidi refugees to Kurdish territory marked the first salvo of Western confrontation with the Islamic State and the beginning of a new struggle for Yazidi survival. Click here for a link to the video from PBS.
Who are the Yazidis?
Yazidi faith intertwines elements of the Abrahamic religions with Persian mysticism and local tradition. With uncertain origins- although commonly thought to have begun in Kurdistan in the 12th century- and introverted communal practices, the Yazidis have long drawn undesirable attention from outsiders that have viewed them as devil worshippers and polytheists. Neither of these accusations are true. The Yazidis share a beautiful oral tradition that incorporates Christian and Muslim practices with the belief of transmigration and the indirect worship of one supreme god and his angels. Their faith is a mosaic of the ancient traditions of the region, that doesn’t proselytize, and seeks gradual enlightenment and purification through peaceful worship. Practicing as a minority in a chaotic region, there are estimated to be anywhere between 70,000 and 500,000 adherents remaining in the world.
The documentary picks up some months after Western and Kurdish operations on Mount Sinjar in August 2014. It is the aftermath of the ISIS onslaught and some refugees have been saved, many slaughtered, and many women sold into slavery to act as concubines to ISIS fighters. ISIS does nothing to hide the fate of those who challenge their perverted ideology and Escaping ISIS pulls no punches in showing or detailing the gruesomeness- mass execution, stoning, and sexual violence are common. Escaping ISIS, as its name implies, tells the stories of those who have escaped ISIS captivity and of one Yazidi lawyer, Khalil al-Dakhi’s network to rescue others.
Armed with cellphones, a database of the thousands missing and believed captured, and crude Google maps, al-Dakhi and his underground network are nothing short of heroic in their forays into ISIS territory. While Escaping ISIS shocks the soul of any viewer with its depiction of violence, it strikes a resilient tone that resonates with a slither of hope.
Where is the United States?
As an American watching Escaping ISIS, there is no escaping a sinking sense of culpability for the bedlam- regardless of how you apportion the blame across administrations. The cavernous wound torn into the Middle East with the deposing of Saddam Hussein fundamentally shifted the balance of power in a region that was fragile from its Sykes-Picot origins. The great author and former-Washington Post correspondent Thomas Ricks studiously documented the Fiasco that was the administration of post-Baathist Iraq and famously warned that the real war for Iraq had yet to be fought. Sadly, he was right and the U.S., justifiably or not, will likely play a marginal role.
Ignoring domestic political considerations, two key historical lessons color Obama administration policy against ISIS: (1) the arms supplied to un-vetted rebel groups in Afghanistan in the 1980s were used to kill Americans in the 2000s and (2) Western ground troops in the Middle East (Lebanon 1983, Iraq 2003) can’t pacify a population they don’t understand and can’t communicate with- to say nothing of the cost in lives and dollars. The Obama administration, with the best intentions, was prepared to strike a fresh path of soft power and diplomacy rather than directly manage the fallout of the Arab spring and the rebuilding of Iraq. Unfortunately, what has manifested, rather than the likely worst-case scenario of local sectarian war, is a regional and apocalyptic menace seeking to lay national foundations for international terror.
Belated attempts by the Obama administration to organize and arm a rebel force for Syria have resulted in comically bad early performance- with less than 100 of the 5000 desired fighters trained. While airstrikes have stemmed advance in some areas and eliminated some influential leaders, ISIS continues to advance in Syria and Iraq and acquire ‘emirates’ in Africa and the Caucasus.
This year, Tony Blair’s former chief of staff published a manifesto advocating negotiation with terrorists. While I admittedly haven’t read it, and it is a better strategy for the Taliban than for ISIS (the latter with whom I wouldn't advocate it now), I applaud any outside the box thinking on a path forward. In the mean time, I can only pray that U.S. intelligence services are providing financial and strategic resources to the likes of Khalil al-Dhaki and others that are willing to confront ISIS, not as proxies, but as pillars of reason and peace.
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