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Possible Advantage in Paying Economic Managers In Money Rather Than Power

The managers of Treasury and Federal Reserve aren't paid too much money, it seems to me their primary payment is in power (except for payment in celebrity, which will be a neutral in my proposal). It occurs to that that this form of payment will draw people primarily interested in payment increases in the form of power. Which may be in part what we're seeing today.

In contrast, tech entrepreneurship has been a field where the primary payment has been in the form of money -there's nowhere else where people are regularly paid billions for their work before the age of 30. And these guys don't quickly use up the bulk of their money to buy up political power, which makes it seem to me their their payment motivation genuinely is for money, not power.

So, if we want the type of financial managers that will focus on building US wealth instead of building institutional power for themselves (perhaps an overreduced comparison, I acknowledge) we should recruit and pay accordingly. Perhaps we should be recruting late teens, early twenties cognitive science savants from places like Stanford and Harvard undergrad and grad schools in electrical engineering and computer science,  to run sectors of the economy, offering pay performance incentive packages similar to what they could make starting a yahoo, a google, a facebook, or a microsoft. Then have a difficult to rebutt presumption that they'll be replaced by fresh blood by the time they hit their late 30s.

Mythmaker, Mythmaker, make me a myth

I like this wikipedia definition of myth, presumably copied from somewhere else.

"A myth is a sacred narrative in the sense that it holds religious or spiritual significance for those who tell it, and it contributes to and expresses systems of thought and values. Use of the term by scholars implies neither the truth nor the falseness of the narrative. To the source culture, however, a myth by definition is "true," in that it embodies beliefs, concepts, and ways of questioning and making sense of the world."

http://en.wikipedia.org/wiki/Myths

I think myths are the biggest weapons against empiricism today (perhaps after ignoring empirical inquiry into a topic outright).

I see no consistent heros against the production and distribution of myths in our culture. I'm hardly one, except within the space of this blog, where I'm trying to present (and discern) reality as accurately as I can. There is no sacred myth I seek to be preserved within this space (including the likely myth that there's even a chance of me persisting as a self-reflective, conscious entity), although in my non-anonymous life I'm an active myth-promoter and innovator (of the myths I think serve my interests or aesthetics).

The blogs I read regularly about improving one's ability to see and model the world more accurately such as overcomingbias, seem to me to be rife with their own myths (now more than in instances in the recent past, in the case of OB).

The blogger I read that I think does the least to promote myths while delving into myth battlegrounds? Perhaps mindhacks. But watch out when he starts blogging about race.

Although I can't find it, I recall reading about Levi-Strauss dividing people into the occupational categories of Shamans, Canoe-Builders, and warriors since earliest human cultures. It's plausible to me, but I might more universally call those categories: mythies, techies, and riskies. There is a lot of overlap, but I think the archetypes today would be the writer as mythie, the applied mathematician as techie, and the entrepreneur as riskie.

An area of overlap of particular interest to me is the technocratic mythmaker. A great example of that are the presidential campaign managers. They live and die by how competently their myth narratives for their candidates (and the opposition) are matched to what will influence the public. And it seems to me they have to do it over a longer timeline than most myth producers.

[Grade on how well this post helps me understand reality in order to maximize my persistence odds: A-]

Why didn't we pay Berkshire Hathaway billions to manage Treasury?

I'm trying to go beyond a fanboy post here. I think I've posted about this before. given that the best talent is paid billions, we should be paying billions in salary and incentives to get the best talent to run sectors of our govenrment that have this type of huge economic impact. Going forward, could we get better talent at Treasury and at the Federal Reserve with bigger salaries? I understand the counter arguments (Long Term Capital, 2007 Wall Street bonuses, Fannie/Freddie salaries. How about if the huge compensation was tied more into long term performance? Although one could argue the best talent doesn't want contracts like that, and can get better deals elsewhere. Still, If we could have hired Warren Buffet, James Simon, and the Google founders to run our economy the past 5 years, all for well under $100 billion total, wouldn't that have been a bargain at this point in time?

http://www.marginalrevolution.com/marginalrevolution/2008/10/regulation-a-di.html

The proud mother of Michael Allen Skocpol

I recall when I was in my own fairly elite grad school, I had a professor who seemed like the typical ubercompetent technocratic, meritocratic elite. Like an anti-Palin, she enjoyed the spillover effects of her general competency intelligence, and had an engaging sense of humor/charisma, cordial relations with one and all, and seemed like a perfect, 60s tv mom to her son, whom she spoke about glowingly and regularly in our class. How I hated, despited, resented, was jealous of and envied that kid. More so than if his father was president or the richest man in the world. Because I think we recognize there is that special privilege in that superintelligent, socially powerful, and competently nuturing MOTHER, that for an otherwise talented person (our competition set as proto-meritocrats) is the greatest privilege of all. While many of us randomly smart people struggled our way from banal beginnings to achievement-facilitated educational and occupational privilege, these guys and gals made the same trip with a mom who knew all the tips and tricks, and ruthless spots. If we were lucky, and we had moms that cared, we might have gotten her in her relatively clueless way to help us out -one colleague's mom moved in with her during a difficult licensing exam preparation and coooked and cleaned for her for months. But that's nothing compared to what the Micheal Allen Skocpol's of the world's moms can do for them.

A peer with a powerful father I can sympathize with a bit - George Bush Sr. seemed as much curse as blessing to Jr. -Barbara seems to have been the gift. But Barbara, despite her intelligence, wasn't an elite professor, an expert. The expert mother who cares -it unleashes a peasant vs. ruler rage in me at the beneficiaries.

http://www.wjh.harvard.edu/soc/faculty/skocpol/

Expert opinion on the financial "crisis" and bailout from harvard econ professors

A nice collection of expert opinion written to be popularly accessible:

http://www.economics.harvard.edu/about/views

... and for other purposes. (Looking straight at the Economic Stabilization Frankenbill).

So I skimmed that whole economic stabilization bill that passed Thursday. It actually didn't look as bad as I feared, rather reasonable, rather self-constrained. Even the most self-evidently silly part, the salary caps, were reasonable, except perhaps to the final golden parachute clause.

However, it seems to me to harm transparency to tack this econ stabilizing policy with alternative energy policy, and then a bunch of other random policies. Making sausages may not be pretty, and perhaps I'm naive, but examples from other, more efficient organizations leads me believe that government and policy don't have to be done this way, even in our republican governent.

Overall, I don't think folks should be too worried about this bill. It has a lot of built in self-constraints, even audits. Authority is hardly consolidated into the sole, unchallengeable hands of the secretary of the treasury. It encourages some empircism, but it could encourage a lot more. Also the language and organization of the bill could be much clearer. But overall, perhaps because of my low initial expectations, I'm somewhat impressed by the (think Phil Hartman, Newsradio) adequacy of this economic stabilization bill. Meaning that it adequately met my skim-reading threshhold of "does this read like a plausible, possibly competent, response to the current U.S. economic situation"?" The answer is yes, yes it did, in my layman opinion.

http://www.govtrack.us/congress/billtext.xpd?bill=h110-1424

Team Bernanke knows best?

Kling's despair notwithstanding, the argument that the plan Benrnanke supported IS the expert consensus rests on two points:

1. Team Benanke is as economically competent as any expert alive.

2. Team Bernanke is better informed about the current economic realities than his critics.

http://gregmankiw.blogspot.com/2008/09/if-i-were-member-of-congress.html

I find point two a little distressing: a case could be made for partisan shadow feds, and independent permanent independent auditors of the Fed. The bureacracy shouldn't be the only best informed player in this space, it seems to me. To get real consensus, I think one first needs decentralization and rivalry.

A Random snapshot of the competent

Deborah Isser, became fluent in mandarin chinese, globally advises on building/restoring legal norms in post war third world countries. Her narrative is diverse but at the same time winks at ashkenazi jewish endogamy ("french" husband working for the world bank, pregnant with first child). I think she's a good representative of the meritocratic/technocratic elite -comfortably aligned with ashki/anglo power, unchallengeable on the basis of incompetence.

http://www.law.harvard.edu/news/bulletin/2008/summer/cn_03.php

I've been meaning to do a series of "perfect resume" posts. I don't think Isser quite qualifies, but I do like that she's doing unchallengeably beneficial work (improving rule of law norms, and claiming to ground them in empiricism). It's striking how our county execs, big city mayors, governors, and presidents aren't from this mold.

China most meritocratic nation in governance?

China most meritocratic nation in terms of governance? Is there a global rankings on this? It would be good to get Caplan's take on this.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a2rgoy.plYko

Too few experts on "expert consensus"

Expert consensus is probably the single most valuable decision making tool we have as a species. Things like prediction markets are useless without them. The primary transparent institution for generating expert consensus on topics seems to me to be the Expert Consensus Panel. Used primarily in medicine research and practice, it doesn't even have a wikipedia definition page.

Further, google searches I've done on social scientists studying "expert consensus" have turned up nothing so far.

I suspect this may be a hugely understudied, and hugely underimplemented tool for decision and policymaking.

Who are our experts on expert consensus?