I found that Nature article disingenuous. It just so happened I sat
down to dinner with a couple of bigtime modelers on Tuesday night--one
models mathematically, one heuristically. They hadn't ever talked about
it with each other, but they found out they'd done the same thing:
they'd done the arithmetic, saw that whatever was happening in the
markets was a bubble, and closed most of their positions within the
last eighteen months. Is Nature asking us to feel sorry for people who
couldn't do arithmetic?
On Oct 17, 2008, at 12:32 PM, peggy miller wrote:
Models don't replace ownership and smaller sized business
responsibility...unless can figure out a model for Caring.
When I was doing bank work in D.C. for Consumer Federation, I ended up
with the position, due both to intuition, as well as hard facts from
studies that were performed by Harvard and other fairly reputable
places-- showing that good banking judgement becomes reduced (like
with any management) as ownership is eliminated replaced by ever
larger scale operations managed by non-ownership managers.
Translation -- statistics and common sense verified that the larger
the operation becomes, with noticeably poorer decisions happening at
the size of business over $1 billion in profits, matched by
replacement of ownership/manager with non-owner managers, judgment
fails. Caring appears to be a part of ownership. Somethings counter
this problem, like profit sharing -- giving workers part of profits --
but ownership of business and smaller size seems to be almost
irreplaceable. Small banks and credit unions, owned locally, rarely
fail. The owner's name, reputation and thus decisions are on the line.
How many names of the managers of these large failed institutions do
we know? a couple? and they get paid handsomely either way ..
There was discussion of linking pay of all managers more directly to
following of safety standards .. but I don't think that happened. Also
.. just fyi .. when we went to have a hearing on this before Senate
Banking Committee .. with the studies showing that size of
institutions relates to poor management -- when you get over $1
billion, management quality noticeable deteriorates -- suddenly the
group of professors and academics who performed the studies said they
could not testify (they were silenced somehow.)
Have a great day!
Peggy Miller
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"But this I know: the writer who possesses the creative gift owns
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strangely wills and works for itself."
Charlotte Bronte
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