Three Sigma Systems

So what’s the big deal about 3-sigma? Is it just 6-Sigma for under-achievers? Is it only for statistical geeks? Why should anyone give a hoot?

As with all powerful ideas, 3-sigma is simple, yet difficult to get your head around. Although there is no short explanation, here’s the shortest answer I can provide.  It goes like this…

——–Sticky Post——–

Read more…

NYT 8/31/2010 – Trapped Chilean Miners Forge Refuge

“…at 62 years old, Mr. Gómez is the oldest of the 33 miners trapped nearly half a mile underground here and has become the spiritual guide to his men…” Aside from Mr. Gómez, there is Luis Urzúa, the 54-year-old shift leader who organizes their work assignments, is helping to map the path of their rescue hole…”

I can think of no situation more likely to reduce a human being into a whimpering terrified animal greater than that of being buried alive almost 3000 feet underground. Given the generally accepted view of the economics of human nature we should expect initial panic to give way to a King Rat scenario in which the strong prey upon the weak and thereafter, even the strongest give in to the paralysis of terror and hopelessness.

But nothing of the sort is happening among the 33 Chilean miners trapped a half mile below the surface of the earth. What is happening is that these desperate men are acting out their human nature, which is to confront the challenges that life has placed before them with purpose and method. Given the problem they face, they have created a leadership hierarchy that defers to the wisdom of the eldest among them (Joseph Campbell’s “Gray Beards”). These elders have embraced the task assigned to them by willing followers, of focusing the group’s thoughts, deliberations and actions in ways that help them survive.

This self-organizing principle, in which human beings come together to confront the challenges that life puts before them with shared purpose and method is the essence of human nature. Over the millennia the forces of natural selection have built this modus operandi into our genome. This is what human beings do naturally —-unless that is, they are constantly bombarded with messages that intentionally obfuscate the nature of the challenges they face and systematically promote fear and loathing among them.

The misguided “sciences” of psychology  and economics base their sales pitch about human nature on the idea that humans function as economically self-interested individuals. But the economics of human existence are meaningless when regarded in terms of individuals. It is only in terms of our relations with one another in addressing life’s challenges, that human survival becomes possible. Then again, as Dr. W. E. Deming was fond of saying, “Survival is not mandatory”.

Current events should make it abundantly clear that the human race is in no less dire straights then the Chilean Miners buried deep in the earth. We need to stop listening to the “King Rat” claptrap that’s being dished-out in generous portions and come to grips with the challenges that life is putting before us. Once we do that, all that remains is for us to do what comes naturally.

A few days ago I sailed Songline down the California coast with the help of a few friends.

It was cold and windy and confused steel-gray seas heaved our bows this way then that.

For three days we helmed our little ship down each big wave with a rumbling whoosh and a seething sigh.

Hour after hour the miles rolled away under our keel. Whoosh then sigh. Whoosh then sigh.

For a few short days we four became one crew aboard a tiny wind machine, synchronized with the relentless rhythms of the sea,

Whoosh then sigh.

Now I am in port again and listening to news of Glenn Beck’s rally for God and country. No Whoosh. All sigh.

Time for a rant.

It seems to me that America has become a nation paralyzed by fear into impractical inaction. Our greed bubble has popped. The wizards of finance have been unmasked and the pyramid has collapsed. The double-dip recession is a depression produced by wanton double-dipping. The marks have been fleeced out of what they had and then what they didn’t have. Now there’s no blood left to suck. All that is left is to point fingers at someone — anyone but ourselves. So we roll about in the dung of our empty opinions, bolstered by the opinion making pundits on TV, radio, and blogs, unwilling to take on the challenges that are burying us alive. We want our free pass at the candy store back, but it’s gone, gone, gone.

To paraphrase Viktor Emil Frankl, to be human is take on the challenges that life puts before us. In our blame-shifting, name-calling, do-nothingness — health-care? (Hell no), financial reform? (Hell no!), help our fellows who are out of work? (Hell no), tackle climate change (Hell no!), dig ourselves out of the pit of our greedy folly? (Hell no!) — we are failing the test of being human.

Tomorrow I will set sail in my little boat. My intention is to make a 300-mile run down the windy coast of California. It has been a great relief to devote my mind and body to the tasks of preparing her. It will be an even greater relief to give myself over to the the challenges that life will put before me on the open sea. Out there, my opinions are of no consequence. All that matters is that I tether my mind and body to the challenges at hand. I do not even contemplate the price of inaction in such a circumstance.

While our nation languishes in inaction, the seas of change are washing over her. America is drowning in her own fear, reaction, and despair over lost treasures it never possessed.

In today/s NYT Economix, Princeton economics professor. Uwe E. Reinhardt, demonstrates that the economist’s beloved idea of”efficiency” is more capable of creating misery for the greatest number of people than happiness.

“Efficiency is the seemingly value-free standard economists use when they make the case for particular policies — say, free trade, more liberal immigration policies, cap-and-trade policies on environmental pollution, the all-volunteer army or congestion tolls. The concept of efficiency is used to justify a reliance on free-market principles, rather than the government, to organize the health care sector, or to make recommendations on taxation, government spending and monetary policy.”

If your read his article carefully, you will see that his explanation drives a stake through the heart of the vampirish beliefs that are driving us toward ruination.

I have on previous occasions discussed what I call the myth of efficiency. The so-called “science” of economics is built upon the idea that human beings will seek out the most “efficient” means to fullfil their needs and desires — to achieve maximum happiness. In other words, economists begin with the assumption that individual actors will seek to minimize their investment of personal resources and maximize their return. From this we get the notion that all human behavior is driven by a natural “profit motive”.

Challenging the economist’s view of the human drive for “efficiency” is a difficult proposition if only because you and I see day-in and day-out, that most, if not all, of the people we deal with seem to act in exactly that way. The evidence of our senses tells us that others can only be trusted to do what they believe will produce for them, the greatest gain. So pervasive is our belief in the economist’s blood-sucking axiom of human behavior, that it is often extended to include our relations with those closest to us. We regard our spouse with cautious suspicion. We expect that our children will engage in duplicity to get what they want. We lay awake at night wondering which child our parents most favored.

And, given the evidence of our senses, are we not required to respond in kind?

“What a world, what a world”,  said the Wicked Witch of the East.

The question we need to ask ourselves is if  ”efficient”  blood-sucking is the way of the world as it “is” or if it is the way of the world as we “make it”?

A world of people seeking the greatest efficiency, which Reinhardt casts in terms seeking optimums, tends to produce misery in greater proportions because those who suck more blood must do so at a cost to others, and in doing so, successful blood-suckers acquire a vested interest in perpetuating the myth of efficiency that keeps them sucking large.

Perpetuating the myth is not as difficult as it sounds. For the religiously minded, God’s grace will do. For those who prefer science, the discipline of economics seems “logical”. And for those who prefer more practical reasons, differentials in reward and remuneration — doggie bon-bons — are powerful myth-sustaining incentives.

Wait a minute, you say, doesn’t the fact that differential rewards motivate belief  prove of the economist’s theory?

No more nor less than than the observation that dependence on a daily regime of heroin drives a person to the happiness of  self-annihilation.

It is no surprise that we see vampires everywhere about us. From the day our children are born, we hover over them in training and judgement, lest they be weaker than other vampires. Then we send them off to schools in which the blood-letting is reinforced by grading on a curve. We pit children against children and children against teachers. And once school is out, we divide workers against workers and workers against bosses and neighbors against neighbors. All the world is made a blood-bath of suckers and suckees.

All of this self-made reality seems to us, the natural order of things, and we cleave to it as if it was the word of God Herself. Until that is, we actually need to address tasks of deadly importance.

When we train our young to fight our wars, in which we want to suck the blood of others, or keep others from sucking our blood, we happily do a turn about. We train those who will engage in the most difficult and deadly of enterprises to work together. We teach them that each depends on the others. We teach them to trust one another and to trust those assigned to coordinate and lead. An army of vampires who devour one another just won’t cut it!

So now we find a very different idea of efficiency in which mutual trust and collaboration take precedence over individual self interest.

So it stands to reason that if we can create armies of selfless fighters to tackle the greatest of challenges, then the economist’s vampirish “instincts”, if they exist at all, do not determine our modes of behavior after all. It seems that our human nature is what we chose to make it.

(Now that I think about it, the movie “Daybreakers” was quite clever.)

Theory underlies ALL human experience including every seemingly raw observation or assertion of true fact. Theory is the vehicle of all conscious experience.

Simply put, theory-making consists of setting forth an assertion, no matter how trivial or grand, in which we claim “If this, then that”. In other words, theory is prediction.

My theory of consciousness is that it is rooted in our genetic predisposition to construct theory (Darwinian). The structure of theory is narrative. Theory is “story” that we tell to, among, and with others, real and imagined, as in our imagined “selves”.

The construction of narrative (i.e. theory), is no more mysterious than the behavior of birds gathering twigs and bits of string to shape into a nest in which they will thereafter reside, along with their developing offspring.  Instead of twigs and string, we gather up our self-created vocal and gestural material and shape it into symbolic-narrative nests of varying utility, in which we reside, and without which we are not and cannot be conscious.

Every conscious being comes into existence in the context of theory shared by others as narrative, and thereafter in continuous interaction with others and the substantive world at large. It is in this complex ongoing interaction of story-tellers predicting their way through the world that theory comes to be accepted and taken-for-granted. Theory that comes to be taken-for-granted (e.g. Self-evident or “proven”) forms the foundation for the edifice of subsequent theory we construct continually.

We cannot extricate ourselves from theory — we cannot be conscious of ourselves from outside our narrative nests. I think of this as a “belief barrier” that we can only overcome by practices designed to give-up self-awareness (i.e. Non-consciousness). OOOOM!

In the business of formal theory-making that we call modern science, the predictions made — the “if this then that” stories told — can never be proven for the simple reason that in prediction, the totality of all possible future outcomes is unknowable. A theory can be falsified by one disconfirming outcome, but never proven.

But as we approach the belief-barrier, the falsification of theory that forms the foundations of our consciousness threatens our very conception of the socially constructed self. To actually break the belief-barrier would be to descend into incoherent madness — a bird’s nest distorted into useless form —rather than sublimely pure awareness. An individual bird of a nesting species who, for whatever reason, becomes incapable of building a functional nest, is incapable of surviving, and so too for the conscious creature who becomes incapable of constructing a narrative nest.

This helps us to understand why down here, near the belief-barrier, theory often stands despite repeated falsifications in practice. The coherence of our symbolic narrative nest is of paramount importance and evidence-be-damned, such coherence must be sustained at all costs, lest the story-teller be plunged into incoherent, suicidal, madness.

The boundaries of theory-making down near the belief-barrier are circumscribed by what “works” as prediction, more or less, but also by the symbolic material itself. Like twigs and string, the structure of “if this, then that”, prescribes a form that is self-limiting and self-bounding, but infinitely variable within those limits.

In consciousness, we cannot overcome the belief-barrier but we can characterize it. In doing so, we can eschew illusions of truth and proof that restrict our ability to improve the form of our nest with purpose and intention, while sustaining our nest’s functional coherence.

I believe that the process of theory-making down near the belief-barrier is universal in nature and can be both described and explained as a whole. These essential elements transcend the variety of forms regarded as “proven” that continue to confound our inquiry.

People often ask why the work of W. E. Deming and his mentor, Walter Shewhart, figure so promintenlty in my thinking about the nature of human endeavor and the human enterprise as a whole. My answer is that these two men recognized that the human faculty for predicting the future is what sets we humans apart from all other creatures. Prediction is the bread and butter of our existence and the quality of our predictions determines whether we live or die. Deming and Shewhart understood that our principal aim in acting must be to reduce variation, and thereby, increase predictability.

Our penchant for prediction is more than a hobby, it is a genetically hardwired obsession that causes us to imagine patterns, cycles, and rhythms in all events related to our activities. To our minds, the regularities of events, real and imagined, are the keys to predictions by which we organize our actions along useful lines. We call these patterns “systems”.

Based on this understanding, Deming and Shewhart both concerned themselves with methods for recognizing useful and meaningful patterns and, given our limited powers, for reducing the variability of those patterns in order to enhance our ability to predict the outcomes of our activities.

Two articles in todays NYT deserve our attention. Both deal with instances in which we, who rely on predictability for our survival, have by our own misguided actions, increased variability and thereby reduced predictability.

In Weather Chaos, a Case for Global Warming

Double Dip? A Tipping Point May Be Near

Everything varies, but it is not the direction of change that matters most but rather, the range of change that threatens our survival as a species.

Slater OR Orr?

NYT, August 9 2010 – “Fed-Up Flight Attendant Makes Sliding Exit“

After a dispute with a passenger who stood to fetch luggage too soon on a full flight just in from Pittsburgh, Mr. Slater, 38 and a career flight attendant, got on the public-address intercom and let loose a string of invective. Then, the authorities said, he pulled the lever that activates the emergency-evacuation chute and slid down, making a dramatic exit not only from the plane but, one imagines, also from his airline career.

We know he’s crazy because he didn’t ask.

“There was only one catch and that was Catch-22, which specified that a concern for one’s own safety in the face of dangers that were real and immediate was the process of a rational mind. Orr was crazy and could be grounded. All he had to do was ask; and as soon as he did, he would no longer be crazy and would have to fly more missions. Orr would be crazy to fly more missions and sane if he didn’t, but if he was sane, he had to fly them. If he flew them, he was crazy and didn’t have to; but if he didn’t want to, he was sane and had to. Yossarian was moved very deeply by the absolute simplicity of this clause of Catch-22 and let out a respectful whistle.”

Catch 22 by Joseph Heller

Been there, done that!

Over the years I have had ongoing discussion with my friend and colleague, John S. Dowd about Israel’s plight in the Middle East. He argues that Israel’s miliary responses to the threats that surround her are only making her situation worse as world opinion increasingly sides with the plight of the Palestinians. I argue that Israeli concessions and accommodations with various national, tribal, and extra-legal interests will never appease all or even most of her adversaries, at least some of who who will never relent until the Jews are “driven into the sea”.

I contend that, at its root, of the Israeli conundrum is not about Middle East real estate. It is about the historical events, predominantly European, that led to the creation of Israel itself. It is about a 2000 year history of anti-Semitism in which the Jew was cast as the “other”. This protracted real-world passion play provided the impetus and legitimacy for the ongoing exclusion and brutalization of Jews in Diaspora throughout the Christian world and culminated amid the ashes of the Holocaust and creation of the Jewish state of Israel. The Jews and the state of Israel are not just one more case of the illogical or problematic drawing of national boundaries by which one group gains more and another group gains less. The creation of the state of Israel was a Christian attempt  to compartmentalize the real consequences of the Jew’s role as “other” in the mythic narrative of Christianity.

John sent me a link to a series of conversations between Christopher Hitchens, the noted atheist-intellectual, and Atlantic Magazine writer, Jeff Goldberg. Hitchens’ facile thought process succeeds in making some key points that have been particulary difficult for me. If you are interested in the process by which consciousness is constructed as well as the problems of the Middle East, you should find it interesting. Note that the interview is published in segments so you will need to click additional links to hear them all.

My reply to John after viewing the interviews, follows the video link.

John,

Interesting (and a bit gut wrenching). On the whole I have not been a great fan of Hitchens, if only because his arguments, with which I tend to agree, leave off where I begin. Read more…

NYT, August 2, 2010 – “F.B.I., Challenging Use of Seal, Gets Back a Primer on the Law”
The bureau wrote a letter in July to the Wikimedia Foundation, the parent organization of Wikipedia, demanding that it take down an image of the F.B.I. seal accompanying an article on the bureau, and threatened litigation: “Failure to comply may result in further legal action.”

What sets human beings apart from all other creatures is their penchant for investing inanimate things with transcendent power. In the early going the behavior of prehistoric man was shaped by animistic beliefs in which symbolic power was vested in the things of nature. Inspired by cautionary tales about the consequences of hubris, told and retold generation after generation, mountains, plants and animals, the clouds and the stars, where all vested with the powers of prediction, retribution, and forgiveness. These symbols served to shape man’s relation with nature into a moral whole that actually worked!

Incessantly innovative, it did not take a very big leap for animistic man to begin manufacturing his own transcendent symbols. These man-made symbols were also vested with power, but not the power of the natural world, but rather the power of men. Man’s MANufacturing of symbols marked the beginning of history, in which symbolic artifacts came to signify, legitimize and sanction differentials between human beings.

The symbolic power of manufactured artifacts — shamanic trinkets, totems, religious paraphernalia, badges, cash money, numbered accounts, and WMDs for example —  does not reside in the real and practical use of these artifacts, powerful though such use may be, but in imagined meanings experienced as inhering in these objects.  Once such objects become vested with meaning, their intrinsic meanings convey power to those who are able to possess and monopolize them. By this means, their possessors become able to exert dominion over others merely by displaying such objects. It stands to reason that if these manufactured symbolic objects can be readily reproduced by unauthorized agents, the system by which possessors exercise power and control over others is in serous danger of collapse.

The great revolution of the 21st Century is the ability to reproduce symbolic artifacts with great accuracy and ease, and to disseminate them at little cost. This is why for example, the U.S. Treasury has gone to such great lengths to protect the powers vested in our currency against high quality copying machines — an exercise in futility as Bernie Madoff proved and Goldman-Sachs continues to prove. It is likely that, in our digital age, the horses have already left the barn. Today the symbolic artifacts that embody power are readily counterfeited.  A fake Rolex and a fancy car purchased on no-down-payment credit can open locked doors. Need the powers of a Ph.D degree? Try here. Want to wield the priest’s cross? Go here. Want to flaunt the emblem of a United States Senator? Talk to Mr. Green. Need to instill fear and loathing with an FBI badge? Go here.

For better or worse, the legitimized power that resides in manufactured artifcats is fast becoming obsoleted into meaningless gibberish by technology. In a new age of constant con, the symbolic power that is generated by virtue of shared meanings invested in manufactured artifacts, can no longer be trusted. Perhaps we are in need of a new paradigm by which to organize our relations. Maybe there is a way to move forward towards a system of shared-meanings vested on our creative powers rather than in mystical objects of our own manufacture.  Such a system would not be built upon our belief in the power of our artifacts but upon the power of our responsible relations with others. This idea is not really all that novel.

“There lives more faith in honest doubt, believe me, than in half the creeds.”
Alfred Lord Tennyson

The difference between science-based and faith-based approaches to explaining the world is one of degree rather than category. The scientific method is undeniably powerful but we should always remind ourselves that it is in fact, faith-based.

The faith-based nature of scientific inquiry is instantly apparent to us when when we consider the familiar axiom that although a theory can be disproved, it can never be proven. As we move forward in the process of constructing knowledge, the explanatory edifices built by those who profess to follow the discipline of scientific method, are based upon belief that is deemed to be increased by degrees with each experimental or experiential confirmation of predicted outcomes. It is of practical rather than metaphysical consequence that all “scientific” belief is falsifiable and therefore always conditional, but this methodology of negation in no way obviates nor diminishes the seminal role of belief in all “scientific” assertion!

If we take a bit of “time” to consider the implications of this well accepted but often overlooked axiom of scientific inquiry, those of us who want to explain consciousness scientifically must grapple with the nature of belief itself. Our intentions, the questions we ask, the efficacy of our investigations, and the measurements we make, are all bounded by the circumstances of our existence and the narrative by which we make sense of our circumstances.

So we can say that scientific inquiry is efficacious in terms of our circumstances, aims and intentions, but we must also recognize that what we “discover” (better said, what we “construct”) will vary with the circumstances, aims and intentions that constitute our socially constructed, faith-based reality narrative.

We construct our world as intentional actors, based upon our belief by degrees in our theories tested in terms of the efficacy of our actions as causal agents. The tautologies of mathematics notwithstanding, the strength of the scientific method lies in pragmatic falsification of theory but that process is in itself, subject to the conditions of belief that bound our inquiry and govern our assertions.

At some point in all scientific reduction, we will always encounter an impenetrable belief-barrier that constitutes the fundament of our consciousness in which we always tell the story of how I, you, and we are, were, and will become.

See my post: “The Blinding Stupidity of Unconditional Belief“

Do you remember a few months back, when the U.S. media was busily burying Toyota’s reputation as the be-all and end-all of automotive quality? To me, the media’s myth-busting paroxysms came off more like a witch-hunt than investigative journalism. Now that their fear-mongering Toyota-bashing is no longer in the headlines comes this from NHTSA, who have been carefully investigating Toyota unintended acceleration reports.

“The early results suggest that some drivers who said their Toyotas and Lexuses surged out of control were mistakenly flooring the accelerator when they intended to jam on the brakes.”

And,

“In spite of our investigations, we have not actually been able yet to find a defect” in electronic throttle-control systems, Mr. Smith told the scientific panel, which is looking into potential causes of sudden acceleration.

In the wake of the great Toyota panic of 2010, Toyota’s senior managers have tearfully apologized in public and Toyota’s engineers have created numerous fixes for problems still not found. As of February of 2010, Toyota estimated that their cost for recalls and lost sales at about two billion dollars.

In past posts on this blog I have expressed my feeling that there was a hidden agenda designed to play on the xenophobic tendencies of a declining nation that has squandered its edge in quality manufacturing and is now trying to claw its way back, not by rededicating itself to creating great products, but by denigrating its competition.

As I have said before, Toyota is just another automaker in business to make a profit. Their products are far from prefect, but have thus far been much better than anything produced by U. S. automakers. To begin to understand why this is the case we need only study Toyota’s corporate response to the media witch-hunt. Rather than dig their heels in with denials and blame-shifting (see BP oil spill), they bowed, apologized, bent with the wind and went on about the business of improving their products. Their response reflected what has come to be known as “The Toyota Way”. Meanwhile GM, having learned nothing, is giving lip services to digging itself out of the grave it dug itself into with a taxpayer funded sham product called the Volt (see NYT “G.M.’s Electric Lemon“)

No design is perfect and the imperfect design of Toyota vehicles certainly contributed to crashes. After all, if the operator of a vehicle can accidentally apply the gas rather than the brake, the gas-pedal next to the brake-pedal design could stand improvement. But the two billion dollar rush to judgement in the media was most certainly fueled by a desire to take the number-one automaker in the world (not made in America) down a few notches rather than a legitimate concern for product safety.

This is the same con as the one being used by the Republican Party in the U.S.  Rather than earn the respect and loyalty of customer-audiences by creating great product and improving it continuously, the Republican party spends all their effort attacking the other party’s products. This method has the benefits of being cheap, requiring no thought, and by creating nothing, immunizing it perpetrators from responsibility for their (not) products.

But there’s a downside to this technique as well, and I am not defending Toyota. I am attacking the con-artistry of U.S. business interests and media lackeys and more importantly, the gullibility of American audiences who mistake creating nothing for doing something. People who are lost in the funhouse had better wake up soon. These con-artists are shoveling dirt into our grave faster than we can dig ourselves out!

Half the harm that is done in this world
Is due to people who want to feel important.
They don’t mean to do harm — but the harm does not interest them.
Or they do not see it, or they justify it
Because they are absorbed in the endless struggle
To think well of themselves.

T. S. Eliot, “The Cocktail Party”

To love and be loved and to hate and be hated are two sides of the coinage that makes us real. Love and hate do not exist on a quantifiable continuum. We do not love a little less or more nor do we hate by degrees, inches, or yards. Our experience of love and hate makes us real because, at great risk to our “self”, we give ourselves over to the others we love and hate and allow them to become a part of ourselves. Loving and hating is being and becoming.

It may be that half the harm that is done in the world comes from the hate that is the flip-side of love but the other half most certainly comes from that absence of either that attends our futile, risk-averse struggle to think well of ourselves by measures of gain.

In a recent interview conducted at the University of Oregon, Seymour Hersh (no relation), a Pulitzer Prize winning investigative journalist who writes for the NYT and New Yorker, invokes the Quaker wisdom that the moral imperative of the journalist is to “speak truth to power”. As I see it, the Quakerism applies to more than just journalists.

Hersh goes on to discuss two subjects of great interest to me: the myth of objectivity and the reality of our futile wars of adventure that prove most tragically, that we do not learn from history! I see his comments against a backdrop of ideologues and fools battling over petty self-interests in which we become caught up in deadly games of lies and deceits that render us helpless in solving the problems that threaten our survival as a nation and a species.

For a breath of fresh air, watch and listen to this interview.

NTY – “U.S. Economic Growth Slowed to 2.4% Rate in 2nd Quarter“

• The United States economy expanded at an annual rate of 2.4 percent in the second quarter, after expanding a revised 3.7 percent in the previous three months.
• Nonresidential fixed investment…was a key driver of growth in the second quarter, rocketing up at an annual rate of 17 percent.
• Consumer spending… a leading indicator of a recovery in part because it accounts for such a large share of the economy, has been leveling off. It grew at an annual rate of 1.6 percent in the second quarter, after an annual increase of 1.9 percent in the previous quarter.
• The personal savings rate in the second quarter was estimated to have been 6.2 percent.
• Imports spiked at an annual rate of 28.8 percent, the biggest jump in a quarter-century, compared with an annual increase of 10.3 percent in exports.
• Government spending shot up more than many anticipated, growing at an annual rate of 4.4 percent after a decline of 1.6 percent in the first quarter.
• Residential fixed investment spending on items like new homes grew at an annual pace of 27.9 percent in the second quarter. “This will almost certainly reverse hard next quarter,”
• Many economists to believe the recession that began in December 2007 is technically over… [but] The nation’s unemployment rate continues to linger just below 10 percent [and] Some forecasters have predicted even slower growth in the second half of the year, perhaps close to an annual rate of 1.5 percent.

“Given how weak the labor market is, how long we’ve been without real growth, the rest of this year is probably still going to feel like a recession,” said Prajakta Bhide, a research analyst for the United States economy at Roubini Global Economics. “It’s still positive growth — rather than contraction — but it’s going to be very, very protracted.”

Huh!?

So what do all these gyrating numbers — these supposed course indicators  — really mean?

The book “The Heart of the Sea” tells the story of the whaling ship Essex. Along with other whalers of the day, the entrepreneurial spirit led the captain and crew of the Essex to take ever greater risks in order to find and harvest the diminishing population of profitable whales.  On November 20, 1820, while killing the members of a sperm whale pod they located some 2000 miles west of the coast of South America, a member of the pod turned and rammed the Essex twice, breaking the ship’s back and sending her to the bottom. Regrettably, in their enthusiasm for the hunt for profits, the ship’s lifeboats were under-provisioned and neglected, as were any contingency plans should the complement’s adventures go awry.

The officers and crew of the Essex were competent sailors but in their recklessness, they became cast adrift in a situation in which the course indicators that had served them well in the past —- their charts, their ship’s performance characteristics, and their count of whales rendered — no longer applied. In their quest to profit their quarry had turned against them, transforming their intention to profit into a problem of survival.

During the three months that followed, the officers and crew of the Essex struggled to keep their lifeboats afloat and to divine some course of action that would take them to safety. As their situation grew more dire they repeatedly changed their plans, sometimes going this way and sometimes that. The numbers that had guided them in the past were no longer reliable in their new circumstance and in their final calculations they came to see their only salvation as cannibalism. By the time the last of the eight survivors from the original compliment of twenty-one were rescued on April 5, 1821, they had consumed the corpses of seven of the fellows.

It seems to me that in our obsessive drive to profit by entrepreneurship, we take ever greater risks in the interest of profits. As our harvests threaten to become diminished we reach ever farther for resources and markets that can be profitably exploited.

In some cases our folly comes in the form of our over reaching belief in our technologies of which the BP oil spill on but one small example. A confusion of senseless numbers continues to proliferate in that event. The confusion of numbers associated with climate change provides another indicator that we treading uncharted waters.

More significantly is the confusion of numbers that flow from our entrepreneurial adventurism around the world. We should not be surprised when the whales we have been hunting turn against us in an effort to break the back of our predatory ships. Osama Bin Laden is just one example of the ever increasing number of  whales who are turning against us in defense of their pods.

What the numbers tell me is that although we still imagine ourselves as noble hunters, ranging widely aboard a stout and well armed ships, we are actually already in the lifeboats, sizing up our shipmates for dinner.

AP Story: Bernanke: Fed to hold off on steps to aid recovery.

There is a general consensus today that in the upcoming elections the economy trumps all of the cultural issues that have long divided liberals and conservatives. On one extreme of the debate are those who believe that in the midst of our economic crisis, we must commit to spending whatever resources we possess, even borrowing more as needed, in order to restore our economy to a balanced forward motion. On the other extreme are those who say that we must harbor our resources, cut our expenditures and bide our time so that the economy can restore itself to its natural balance and growth.

Let me recount an experience I had that might help you decide which course of action you should support.

As readers of this blog know, I am an avid and lifelong sailor. Sailing is all about balancing natural forces through a process of continuous feedback and control. It is like walking a tightrope in which the enormous and impersonal natural forces of wind and sea can be turned to the seafarer’s advantage by finding and managing a dynamic balance point between those forces that enables forward progress.

At sea it is the situation that determines how the sailor selects a strategy. When the boat is in balance, only very small adjustments are needed to keep it on course and safely moving forward, but once the system becomes unbalanced, the conservatism of small adjustments is no longer sufficient. and more dramatic tactics become necessary.

Some years ago I was doing a solo race that took me some miles off the coast of Santa Cruz, California and well out of sight of other boats. On the upwind leg of the race things worked quite well, but then came the time to turn downwind and set the spinnaker. I clipped into a safety line and as I moved to the bow to hoist the sail an unexpected wave struck the side of the boat and I was thrown overboard into the cold waters of Monterey bay.

Although I had given thought to the possibility of going overboard and had taken the precaution of using a safety harness that clipped me to the boat, I was unprepared for the chaos that ensued once I was in the water and no longer controlling a balanced boat.

At first I wasn’t very worried. I was firmly tethered to the boat. All I needed to do was to get back onto the boat, retake control, and start racing again. But it wasn’t as simple as I had imagined.

To begin with, the boat began to oscillate out of control. First it would right itself because of the weight in the keel. Once righted, the partially hoisted spinnaker would fill with wind and violently knock the boat down again. The effect of these uncontrolled oscillations was to produce a zig-zag motion that dragged me through the water.

My plan had been to use the step at the back of the boat to get back aboard, but each time a tried to use the step, the violent motion of the boat pulled me back down into the water. After several tries I realized that my exertions, along with the cold water, were quickly sapping my strength. I also knew that in the Monterey Bay waters, hypothermia would start killing me after about 20 minutes of immersion.

It then dawned on me that my plan for recovering control of my boat had become untenable. My conservative strategy would be to ball my self up to save my body heat in the hope that, given more time, some external forces would solve my problem. My liberal option was to carefully devise an alternate plan and expend my rapidly waning resources on one go-for-broke effort at self-rescue.

Obviously, I survived that day and now I leave it to you to figure out which approach I used.

In retrospect, my brush with death at sea was a learning experience.

1. I have stopped racing sailboats alone. There is risk enough in putting to sea in small boats.

2. I now have a better understanding the dynamics of being thrown overboard and have created controls that I hope will work better should I ever be in that position again.

3. I know that my mitigation of risk will help make me a safer sailor but I also know that risk can never be eliminated. Sometimes loss of control will create situations in which one must one must go-for-broke to avert disaster.

Solo risk taking, the idea that unmanaged external forces will keep things balanced, belief that you can always be in control, and belief that you can predict all eventualities and devise foolproof methods of self-rescue, are all symptomatic of the thinking that got us into our current economic circumstance. How to go about rescuing ourselves from our delusions is not a matter belief. It is a practical matter that requires a sober estimation of our current situation.