TIMnovate

              Economists are Loopy – And So Is the World!

By Shlomo  Maital    

 I regularly respond to a questionnaire sent out by Ifo, a German think tank, in collaboration with the Paris-based Chamber of Commerce.  They sum up the results in an interesting diagram. (See above).  The x-axis represents the current economic situation.  The y-axis represents expectations for the next six months. 

     What we see is this:  a huge clockwise loop, The Great Recession, initiated by the US financial crisis;    then, a second smaller loop, beginning in the 2^nd quarter of 2011.   (First, the economy sinks and so do expectations; then expectatoins improve, and finally the wave of optimism helps the current economy improve too).  We are now in a very weak recovery, stronger in the US than in Europe, and much stronger in Asia than anywhere. 

     What happened to create the second loop?  Why did we have a second, smaller repetition of the Great Recession?

    Because of us economists, and because of the financial markets.  Both preached austerity – budget cutting,  spending cuts, tax hikes, tightened belts.  This, at a time, when neither businesses nor consumers are spending, and exports are flat,  so if the government stops spending, there is no demand to support growth.  Bad idea.  

     Fortunately, in America, political gridlock between Republicans and Democrats prevented sharp budget cuts.  This is the main reason why the US economy is doing better than the EU.  It may not last.  The mandated ‘sequestration’ cuts are already being felt in the US. 

     It’s bad enough when the whole world does a terrible loop owing to economists’ preaching of unfettered free markets, turning loose Wall Street’s criminal speculative financial gambles.  It is  double insult when we REPEAT THE WHOLE THING again, albeit on a smaller scale, this time for a different reason – reckless austerity plans, rather than financial gambling.   By the way: prepare for a new loop — because Wall St. lobbyists have persuaded the US Commodities Exchange Commission to weaken stiff planned regulation of derivatives trading.  As a Silicon Valley prayer bumper sticker says,  “Oh Lord — give me one more bubble.”  They may get their wish.   

     I’m embarrassed to be an economist these days, even a retired one.  When asked my profession, I might just say, serial killer.  It’s roughly on a par.  

 Kill the Ump?  No – Just Fire Him!

By Shlomo  Maital   

   “Kill the ump!   The ump is blind!  ….”     You hear these shouts often at baseball games.  As in football (soccer), decisions of umpires and referees are often blatantly wrong, revealed by slow-motion TV replays, yet UEFA refuses to succumb to technology (which, for instance, has hugely improved line calls in tennis), and so does baseball, mostly. 

    Solution?  A greatly underused principle of innovation:  Subtraction.  Bad umpires?  Get rid of umpires altogether.

    A graduate student at the southern U.S. university The Citadel suggested, two years ago, to his marketing professor Mike Veeck (grandson of legendary Bill Veeck, who owned the moribund St. Louis Browns), to get rid of umpires. Let fans call balls and strikes, with placards (“ball!”,  “strike”).  Let fans all “safe” or “out”.  Bill Veeck once had fans manage his team, while his manager sat in street clothes in a rocking chair atop the dugout.  The Browns, who were awful, won that day, 5-3!). 

    Mike Veeck owns the Gary Southshore Railcats baseball team, which plays in an independent league.  He tried his students’ idea and eliminated umpires altogether.  He had the catchers call balls and strikes.  He had Little League players form a jury, along the 1^st and 3^rd base lines, to call close plays as “safe” and “out”. 

   A small problem arose.  The Little Leaguers got bored and left after the sixth inning.   But overall, the experiment was a success.  And it happened in a week when Major League Baseball umpires made two huge mistakes. 

    Subtraction is a powerful tool for innovation.  Instead of adding stuff – get rid of stuff, especially stuff you think is absolutely essential.   Practice subtraction by removing an essential element from a familiar product (e.g. remove the wheels from cars), and then see what can be done with the result. 

     Umpireless baseball?  It works.  My version is professor-less college.  Get rid of the business school profs. Let the students teach each other. They’ll do it far better, and far more interesting.   Is anyone out there willing to try it?

  By the way, the late Bill Veeck (whose autobiography:  “Veeck, as in ‘Wreck’, is wonderfully entertaining) once had a dwarf, Eddie Gaedel, in his team’s lineup, and had him bat.  Gaedel was 3’ 7”  tall.  He walked on four consecutive pitches. The result was a rule change – you cannot play dwarfs in major league baseball anymore. 

Source:   “Safe or out?  Better let the crowd call it”.  Global New York Times, Sat-Sunday May 18-19, p. 13.  

 What, Are You Blind?  Actually – Yes!

By Shlomo  Maital   

                         Charlotte Brown in action

  A pole vaulter sprints down the runway and misses the slot that anchors her pole prior to the vault.

  What, are you blind? says a track official curtly. 

  Yes, the pole vaulter answers.  I am.

   This never happened.  But it could have.  Blindness seems liks an insurmountable obstacle to sprinting down a runway, planting a pole in a precise spot, vaulting over a bar 12 to 15 feet high while turning your body 180 degrees with precise timing. 

    Charlotte Brown and Aria Ottmueller are several visually impaired – virtually blind.  Yet Brown has pole vaulted 11’  6” and hopes to break 12 feet soon.  She is a sophomore in high school, 15 years old.  She and Ann Ottmueller, who is 17, will compete in their state (Texas) track and field meets in the pole vault.

    There is no pole vault competition for the blind, even in the Paralympics.  But today athletes like Ottmueller and Brown are competing in mainstream events against able-bodied peers.   How do they do it?  According to Jere Longman, writing in the Global New York Times (May 11-12, p. 13),  “unable to rely on sight for vaulting, they have developed a mathematical compensation, counting their strides toward liftoff and trusting that the repetition of training will carry them safely over the bar.”

   “You can’t be afraid of what you can’t see,” Ottmueller said. “[In the air],  for a few seconds, nothing is wrong in the world, and nothing else matters,”  Brown said.

    Each of us builds our own obstacles, our own barriers, our own reasons why we cannot do something, and why we fail when we try.  These self-created obstacles are far higher, heavier and thicker than any the world itself creates.  From two blind pole vaulters, we learn that anything is possible, if you want it enough and if you believe enough.