3/3/21 Power Five

1. The Four Basic Truths of Macroeconomics – “Consider the question of how large a federal budget deficit an advanced economy can run without courting a financial crisis. No one really knows. Nonetheless, there is agreement that high-return public investments will strengthen a country’s fiscal situation, even if financed by borrowing. Those returns will boost both output and tax revenue, at least in the medium term, and usually markets are capable of seeing those gains coming.”

2. The Challenge of Chess – “Any skilled endeavour entails concentration, but chess is unusual in requiring that we concentrate not for a few minutes at a time, but for several hours at a time, within tournaments, for days at a time, and within careers, for years at a time. Concentration is the sine qua non of the chess experience.

3. Basketball’s Nerd King – “But Daryl Morey believed—if he believed in anything—in taking a statistically based approach to decision making. And the most important decision he made was whom to allow onto his bas­ketball team. “Your mind needs to be in a constant state of defense against all this crap that is trying to mislead you,” he said. “We’re always trying to figure out what’s a trick and what’s real. Are we seeing a hologram? Is this an illusion?” These interviews belonged on the list of the crap trying to mislead you. “Here’s the biggest reason I want to be in every interview,” said Morey. “If we pick him, and he has some horrible problem and the owner asks, ‘What did he say in the interview when you asked him that question?’ and I go, ‘I never actually spoke to him before we gave him 1.5 million dollars,’ I get fired.”

4. How Ayn Rand Destroyed Sears – “It is no small irony then, that one of Walmart’s main competitors, the venerable, 120-plus-year-old Sears, Roebuck & Company, destroyed itself by embracing the exact opposite of Walmart ’s galloping socialization of production and distribution: by instituting an internal market...And so if the apparel division wanted to use the services of IT or human resources, they had to sign contracts with them, or alternately to use outside contractors if it would improve the financial performance of the unit—regardless of whether it would improve the performance of the company as a whole. Kimes tells the story of how Sears’s widely trusted appliance brand, Kenmore, was divided between the appliance division and the branding division. The former had to pay fees to the latter for any transaction. But selling non-Sears-branded appliances was more profitable to the appliances division, so they began to offer more prominent in-store placement to rivals of Kenmore products, undermining overall profitability. Its in-house tool brand, Craftsman—so ubiquitous an American trademark that it plays a pivotal role in a Neal Stephenson science fiction bestseller, Seveneves, 5,000 years in the future—refused to pay extra royalties to the in-house battery brand DieHard, so they went with an external provider, again indifferent to what this meant for the company’s bottom line as a whole.

5. On His 250th Birthday, Remembering Beethoven the Businessman – “Once Beethoven had poured his creative energy to the fullest into a composition, he regarded it as commercial property, deserving the best possible price on the most favourable terms. Of the hundreds of his letters that have survived, a major chunk deals with the mundane business of getting published: pitching a work, complaining about poor terms, bargaining, and correcting proofs. This is hardly surprising; he is perhaps the first composer whose income depended so much on being published, even more so after his crippling deafness gradually put an end to his career as a performer and to some extent as a teacher as well.”