From a letter to the editor in today’s WSJ:
A few years after retirement I had a chat with an eager young fellow a month away from his MBA in finance at the Wharton School. I asked what appealed to him about finance. “It is so scientific,” he replied. I then asked him what he thought about Long-Term Capital Management. “Never heard of it,” was his answer.
When I was young, Yield was all.
The idea of growth, buying for growth was considered gambling.
I think this young man will find life much different from what he prepared.
My post the dictatorship of theory is relevant here. In it, I cited a passage from C S Lewis’ novel That Hideous Strength. Describing his protagonist, a sociologist, Lewis says:
“..his education had had the curious effect of making things that he read and wrote more real to him than the things he saw. Statistics about agricultural laboureres were the substance: any real ditcher, ploughman, or farmer’s boy, was the shadow…he had a great reluctance, in his work, to ever use such words as “man” or “woman.” He preferred to write about “vocational groups,” “elements,” “classes,” and “populations”: for, in his own way, he believed as firmly as any mystic in the superior reality of the things that are not seen.”
This is not just a hazard for sociologists, but for people in any career field where excessive emphasis is placed on academic credential, especially as if (apparently in the case of this guy’s Wharton education) the education does not seriously discuss the issues that arise when applying the elegant conceptual frameworks to the confusing and sometimes ugly realities.
Numbers don’t make a field scientific. Repeatable measurement and predictive power make a field scientific.
To many people believe that because they have numbers they have facts without considering where those numbers came from. Numbers are just ways of recording and manipulating information gathered from measurements. If the measurements are gibberish then the numbers are gibberish. If you take highly precise measurements with a mismarked ruler then it doesn’t matter how many numbers you end up with, they have no predictive power.
Most of our political and economic decisions are made on the basis of nonsense numbers produced from measurements that can’t even in theory be precise or accurate.
Hence the inevitable repeat of boom/bust cycles
Obama never heard of it either.
http://firstconservative.com/blog/top-ten/obamas-top-ten-accomplishments-his-first-100-days
Charles Murray was interviewed on C-SPAN 2 about his new book on education.He thought that the biggest failure was not educating the brightest students.What the top five percent needed above all was to be humiliated-to have their ignorance pointed out. He used the term humiliated for a good reason.
False humility won’t cut it either.Anyone,genuinely capable,appreciates his own knowledge and also knows its limitations.
A friend of mine, a fellow former Value Line analyst, audited some Columbia MBA courses and was unimpressed by the students.Ignorant and incurious, he thought.
As for our chief executive, I would be surprised if reality doesn’t humiliate him and his minions.Too bad we will have to share it.