→ I was born on third base.
The Dunning-Kruger effect posits that dumb people are too stupid to know they are dumb. They are not perplexed by difficult situations but overconfident — not knowing what they don’t know. As few people believe they are stupid, or a bad driver, a more relatable component of Dunning-Kruger is incorrectly believing one area of skill translates to another
Mr. Son has mistaken luck in venture investing for the ability to responsibly allocate billions based on a gut feeling.
Conflating luck and talent is dangerous. As I get older, I’m struck by how big a part luck played in my life, and how much I mistook it for skill, well into my forties. The Pareto principle shows that even if competence is evenly distributed, 80% of effects stem from 20% of the causes.
Not recognizing your blessings feeds into the dark side of capitalism and meritocracy: the notion that success is a choice, and that those who haven’t achieved success are not unlucky, but unworthy. This leads to regressive policies that further reward the perceived winners and punish the perceived losers based on income level. The most recent example of our belief that poor people are guilty: The US now has the fourth-lowest tax rate in the world, and billionaires have the lowest tax rate of any cohort.
Rich, fabulous people are the ideal billboards for luxury brands. Our nation’s best universities have adopted the same strategy. Universities are no longer nonprofits, but the highest-gross-margin luxury brands in the world. Another trait of a luxury brand is the illusion of scarcity. Over the last 30 years, the number of applicants to Stanford has tripled, while the size of the freshman class has remained static. Harvard and Stanford have become finishing school for the global wealthy.
According to @thetweetofgod, intelligence looks in the mirror and sees ignorance; ignorance looks in the mirror it sees intelligence. The sectors that have enjoyed the greatest prosperity spread across increasingly few people — technology and finance — have created an unprecedented level of arrogance among people born on third base.
When we feel threatened, we are more prone to see each other as an enemy, rather than someone who has a different opinion. We want to dismiss and fight the whole person, rather than just what they said. From primeval times, our brains have been set up to identify "enemy" or "one of us," that simple binary distinction. Do I trust them as a person or are they not "one of us." When we are in our more evolved, slow thinking mode (Daniel Kahneman), we evaluate arguments. When we are in our knee-jerk, threatened fast thinking, we decide the person is our enemy and argue from our amygdala, not our forebrain.
When we are threatened, we are also less empathic. Altruistic behavior decreases in times of greater income inequality. The rich are more generous in times of lesser inequality and less generous when inequality grows more extreme. When the poor need our help more, we are less likely to offer it, because we don’t see the poor as one of us. They become "them."
Michael Lewis writes, "The problem is caused by the inequality itself: it triggers a chemical reaction in the privileged few. It tilts their brains. It causes them to be less likely to care about anyone but themselves or to experience the moral sentiments needed to be a decent citizen."
Capitalism is sort of this gangster construct that leverages a species’ selfishness and creates all sorts of prosperity from that selfishness. But the key to successful capitalism has always been a middle class.
Creative destruction is good for young people and bad for the entrenched. The shedding of skin from existing players to new innovators — it’s a means of transferring wealth. Unless you let the winds of creative destruction blow, all you’re doing is cementing the wealth and status of the incumbents.
The U.S. has survived for 250 years in part because its leaders have worried about, fortified against, and repelled a wide range of emerging threats. Many threats are obvious and popularly understood; however, many others are self-inflicted, uncomfortable to acknowledge, or come hidden under the guise of opportunity. These threats can register the greatest damage, as fewer defensive measures have been taken against them. In sum, it’s productive to worry about things that others (e.g., the media, colleagues) do not.
Worsening economic prospects affect men and women, but not equally. Despite generations of effort and real improvement in gender equality, men are still expected to be providers and are told from an early age that financial success is a critical measure of manhood.
The United States government plays a vital role in world security and economic prosperity. Large-scale criminal enterprises, extremist terror organizations, rogue nations such as North Korea, and authoritarian powers like China and Russia seek to undermine the American way of life. The bulwark to these threats is our nation’s ability to deploy unrivaled economic and military force in pursuit of U.S. interests and defense of our citizens.
A pillar of this strength is the primacy of the United States Dollar. The dollar is the world’s default currency, preferred store of value, and medium of exchange. Because global investors are eager to hold dollars, we have tremendous latitude regarding our own liquidity and influence over organizations and sovereigns that trade in the dollar. Because global commerce is settled in dollars, U.S. law enforcement maintains visibility into — and authority over — flows of capital and influence. The dollar is a ubiquitous countermeasure to adversaries that does not present the risk(s) of escalation of military force.
As John Connally Jr., Richard Nixon’s treasury secretary, put it in 1971, "the dollar is our currency, but it is your [every other nation’s] problem."
Widespread use of currencies that evade the existing financial system could blind U.S. authorities to tax fraud, sanctions evasion, and other criminal conduct. Indeed, it would degrade the ability of governments across all democracies to collect taxes and enforce financial laws. Less investor interest in the dollar would increase U.S. government borrowing rates, and reduce discretionary spending as interest on debt increases.