Bad Ideas

"There’s dem dat’s smart. And dere’s dem dat’s good." Brer Remus

"Anything you want to see," was my answer.

The question was what play we should try to see while we were in London. Maria is nearing her 16th birthday. As a present, I let her decide.

And so we went off to see "Fame," in the West End.

It is not a play I would recommend to you, dear reader. The dancing was lively. But the music was neither memorable nor clever. Instead, each singer seemed to outdo the other with a Barbra Streisand-like screech of sincerity.

Perhaps the idea was fresh in the ’80s, but by the 3rd millennium the plot has become as thin as graffiti and the characters so familiar and so shallow they are no longer interesting. There, at what is supposed to be the New York public high school for the performing arts, is a girl who overdoses on drugs…an awkward Jewish kid who plays the violin, but wants to do rock and roll… and a smart-assed black guy who can’t read. Still, the show seemed to be a big hit on Saturday night.

"People are getting dumber," said my friend Michel at lunch last week. Michel publishes serious books, including the classics of the Greek and Roman periods. But fewer and fewer people seem to be interested.

"A few years ago, we left the footnotes in the original, that is to say in Latin or Greek," he explained. "Now, nobody can read them." All over Paris and London, bookshops are stuffed with picture books – Studebakers, herbal plants from the south of France, Shaker furniture…no subject is too narrow to fail to find a wide audience of page-turners. But thoughtful, difficult books? "It’s a shrinking market," says Michel.

The subject, stupidity, same up again in an argument with Elizabeth.

"Obviously, smarter people have a competitive advantage," she pointed out. "They are better suited for survival. Being smarter is better."

"Oh…if that is so," said I, pompously…"then why are there so many stupid people around? How come they haven’t been eliminated by Darwinian selection?"

I’m afraid, dear reader, that I have nothing much to contribute today to our ongoing inquiry into the moral lessons of markets. Still, today’s obiter dicta suggests that the same moral lessons may apply in the rest of life.

Nature, like markets, is intensely competitive. Over time, it is said, the "weak" are culled out by Darwinian selection. The "strong" survive…and reproduce. But all around us are examples of weak businesses, people, and ideas that Darwin seemed to miss. How come?

"You misunderstand how natural selection works," I argued with Elizabeth. "It is not the strong who survive and reproduce. It is those who – often for reasons that we will never understand – don’t die."

"The giraffe doesn’t have a long neck because it helps him eat leaves…" I continued. "He has a long neck because the giraffes with short necks died out. If long necks, per se, helped animals survive…then horses and cattle would have long necks too.

"And if smarter animals had a better chance of surviving…how come elephants aren’t smarter than humans?…they have plenty of room for big brains. I’ll give you the answer. Because big brains don’t really give elephants an advantage. At the margin, the big brained elephant dies.

"And you know something else," I continued, revealing our Daily Reckoning secret without elaboration, "it’s true for humans too. Smart people seem to have an unbeatable advantage. But everywhere you look, people don’t seem so smart. Why? Smart people don’t really seem to have an evolutionary advantage at all. It’s people who do the right thing who survive and prosper, not people who do the smart thing…"

There are holes in the theory of evolution, of course. But there are even more holes in the way people understand it. But then, most people are knuckleheads.

One of the very interesting conclusions of the British crime report was that more education doesn’t seem to do much good. "Research…shows that at the age of five, black children perform better than white and other ethnic minority youngsters. But by the age of 16 the achievements of Afro-Caribbean boys are lower…" The longer they stay in school, the dumber they get – relative to the other boys.

Larry Summers, President Clinton’s Secretary of the Treasury, left the official government to become president of Harvard and found as many knuckleheads in America’s leading university as in Washington. One of the most flamboyant of the knuckleheads on Harvard’s campus, he discovered, was Cornel West, a man who built his career on the idea of racism. Summers thought West should take time out from his rap music and giving all his students above-average grades in order to do some serious work…Of course, the Rev. Al Sharpton and other race opportunists jumped to West’s defense.

Summers was immediately charged with being "insensitive" and dismissed by much of the academic community as just another suit.

Cornel West, a tenured professor at Harvard, must have been in school as long as just about anyone. By the logic of British study he must be about as dumb as you can get. His book, Race Matters, seems to confirm it. West thinks "racism" explains almost everything worth explaining.

Racism is a big idea. It can be used to explain why black teenagers boost mobile phones in London…and why test results show them doing more and more poorly the longer they stay in school…and why Robert Mugabe feels entitled to overthrow the rule of law in Zimbabwe.

Big ideas appeal to people. Retaking the Holy Land, the Divine Right of Kings, the Yellow Peril and the Red Menace, Domino Theory, Lebensraum, The Social Contract, the Population Crisis…and 60 years ago this next Sunday, reports the TIMES, "15 men gathered at a grand villa on the shores of Lake Wannsee in a prosperous suburb of Berlin." Ten of these men had university degrees. There, they agreed upon one of the most lunatic big ideas in history…the "Final Solution of the Jewish Question."

It takes smart people to come up with such dumb ideas and good people to ignore them.

Your correspondent…just thinking about things…

Bill Bonner
January 14, 2002 — London, England

average." The problem, as Kasriel sees it, is that consumers have continued to borrow and spend throughout our mini-recession. "If household-related spending did not take its usual hit during the recession," he reasons, "then it might not have its usual recovery surge."

– Or, as Bill wrote in the latest issue of Strategic Investment, "You cannot recover from good health…And that is the problem. Having endured no illness, America can expect no convalescence."

– Kasriel continues: "The second argument for a less- robust-than-average U.S. economic recovery is that the rest of the world is in a bit of an economic funk, too…Japan has entered another recession and Germany is flirting with one."

– And the final reason to expect a sub-par recovery, says Kasriel, "is that the private sector is in no financial shape to go on a credit-financed spending spree in the immediate future." Corporate debt as a percentage of corporate assets stands at a record high.

– All of which makes the richly valued stock market a rather uninviting destination for capital.

– "The S&P 500, even after two down years, is more than fully valued," asserts money manager Donald Smith in a recent interview with Welling@Weedon. "The S&P sells at over five times book value. That’s unsustainable…that shows you how crazy this market has been. And leads me to feel there’s considerable risk in the market… there’s always some valuation that’s crazy, but in this case, it’s the whole large cap S&P market that’s crazy…the market in general has to have a huge earnings recovery, which we don’t see on the horizon, to justify these kinds of prices."


Back in Paris…

*** I spent the weekend in England, accompanied by my daughter, Maria. Britain’s newspapers seem to have abandoned their naughty vicar stories over the weekend in order to make room to discuss the findings of a major government report on crime.

*** "Young black men," according to the TIMES, are causing a huge increase in crime. "Nationally, while they represent only 2% of the population, black people were arrested for 28% of the robberies," reports the TIMES. "Black gangs prowl cities for white boys’ mobiles," shouts a headline from another paper, referring to a surge of mobile phone thefts.

*** Over in the "World News" section, another black man makes the news in London: "Mugabe sends in his young thugs to crush opposition." Zimbabwe’s president has found that politics pays better than hustling mobile phones. His "war veterans" run riot – taking over farms and murdering opponents. His latest edicts require journalists to register with and avoid criticizing the Mugabe government.

*** The Economist described his campaign as a "new war against democracy." Mugabe believes in "one man, one vote." He also believes that he should be that man.

*** On Sunday, Maria and I went off to St. Paul’s Cathedral for matins. "I will make you fish for people," the priest read from the gospels, using the new version.

*** "What a dopey translation," I said to Maria, "no wonder no one comes to church."

*** "I will make you fishers of men," was the line before it was made politically correct. Jesus meant that his disciples would be trawling for other people to add to the cause. But the new translation can be misread in a couple of different ways. It could mean that Jesus was going to force them to work for his cause…or that he would turn them into mackerel. Neither is what the Nazarene intended.

The Daily Reckoning