Exploring Patagonia

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Last week my Mom and I spent several days in Torres del Paine National Park in Chilean Patagonia. The scenery was spectacular. And there is a rush that comes from being very near the Southern tip of the world.

Within the park you can hike in and around glaciers as well as in lush green mountain areas. Here's a pic of my Mom and I (on the far left) during an all-day hike — we stopped for lunch as a small avalanche rumbled behind us. The rain poured, the wind howled, but hey, it's Patagonia.

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It felt pretty similar to Alaska. Patagonia exists in both Chile and Argentina, though I'm told the Chilean side has more diversity. The National Park is a four hour flight south from Santiago, and I recommend a visit for anyone traveling within the Southern Cone.

Why Nassim Taleb Walks

Nassim Taleb, of Fooled by Randomness and Black Swan fame, has a new-ish essay up on his site called Why I Do All This Walking, or How Systems Become Fragile. He ponders health and fitness strategy by thinking about our ancestors. Our ancestors walked aimlessly a lot and occasionally had to sprint if we were being chased or doing the chasing. Plenty of idleness, he says, some high intensity. He questions the modern obsession with regular exercise and discusses his own effort at sporadic weight lifting sessions followed by several weeks of being totally sedentary. At the end he links it back to his larger ideas around systems theory.

The footer says “do not quote” the piece, so I won’t excerpt here, except by providing a link to the free PDF. Thanks Seth Roberts for the pointer.

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At the bottom of Taleb’s homepage he posts his email address and invites readers to contact him. With some qualifications:

Concise messages are much preferable (say a maximum < 40 words) as I will not be able to read long letters. Please do not 1) send me your papers or other “interesting material” to read, 2) ask finance questions (not my specialty, 3) make me to rewrite sections of my books (I write books, not emails), 4) ask for a list of “other interesting books to read”, 5) ask me to provide career or educational advice, 6) send me passages from Tolstoy or the Ecclesiast on luck and randomness, 7) send me the list of typos in my drafts. Note that I almost always reply (but ONLY to short messages), time permitting (but once) –even to nasty emails. Finally, note that, thanks to my new keyboard, I sometimes reply in Arabic, particularly to academics. [Also please please refrain from offering to “improve” my web site].

He opens his piece on walking by noting that thanks to the “exposure” of his books he came onto theories about fitness by two authors. I imagine this happend by a reader writing in and sharing “interesting material” of the sort he says he does not want. I have never emailed Taleb, but I don’t take his qualifications seriously. It is, in fact, a very naked way to signal busyness and importance.

Quote of the Day

"The great affair, the love affair with life, is to live as variously as possible, to groom one's curiosity like a high-spirited thoroughbred, climb aboard, and gallop over the thick, sun-struck hills every day. Where there is no risk, the emotional terrain is flat and unyielding, and, despite all its dimensions, valleys, pinnacles, and detours, life will seem to have none of its magnificent geography, only a length. It began in mystery, and it will end in mystery, but what a savage and beautiful country lies in between."

— Diane Ackerman in A Natural History of the Senses.

On the same page she says that "uncertainty is the essence of romance," which is interesting.

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James Fallows had the best analysis of what Google pulling out of China means. What Afghanistan can learn from Colombia. Robin Hanson's pithy take on efficient markets hypothesis in response to John Cochrane's piece and the ensuing pile-on against the Chicago School. How DNA Testing is Changing Fatherhood is haunting and well-written.

McKinsey, the World’s Epicenter of Risk Aversion, Still Produces Entrepreneurs

Hence, entrepreneurship must not require as much risk-taking as people think. This is James Kwak's short, persuasive argument, with more substance of course. He's a former McKinsey consultant who co-founded a company, and he does a nice job poking holes in Malcolm Gladwell's latest piece (abstract only) about entrepreneurship and risk-taking while not disagreeing with its essence.

The talk about risk-taking and entrepreneurship is an issue of perception: people think to start a good business requires betting the farm, or that the personalities attracted to the game are sky-diving flame throwers. Not so.

But false perceptions aside, how the heck do we encourage more of the risk-taking that's good and calculated and leads to real innovation? Here Kwak says:

The best encouragements to productive risk-taking are measures that limit the cost of failure for people who are actually creating something new, and this is one reason why Silicon Valley has been so successful. The financial risks of starting a company aren’t that big, for most people. High-tech companies are typically started by people who could pull in low-six-figure salaries working for other companies, so they’re giving up a couple of hundred thousand dollars in opportunity cost; the rest is typically angel investor or venture capital money. More importantly, there is (historically, at least), little stigma attached to failure, so there’s little reputational downside to a failed startup. In a world full of risk-averse people, that’s very important.

I bolded the sentence that is most critical. It is America's secret cultural sauce.

If Economists Were to Write the News Stories About Trade

Mark Perry posted an amusing re-write of a Washington Post article on trade protection, crossing out sentences from the Post and replacing it in bold with how an economist would convey the ideas:

WASHINGTON POST (Reuters) – A U.S. trade panel gave final approval on Wednesday to duties taxes ranging from 10 to 16 percent on cost-conscious firms in the U.S. who purchase low-priced Chinese-made steel pipe rather than high-price domestic pipe, in the biggest U.S. trade case to date against China American companies (and their shareholders, employees, and customers) who shop globally for their inputs and find the best value in China.

Companies in Tthe U.S. imported searching worldwide for the best value purchased $2.74 billion of low-priced “oil country tubular goods” from China in 2008, more than triple the previous year, as a surge in oil prices led to increased demand for the oil well tubing and casing.

Buoyed by success against American steel-using companies and their employees in the tubing case, the Steelworkers union and a number of companies are filing a new petition on Wednesday asking for anti-dumping and countervailing duties taxes on American companies, their employees, and customers that purchase drill pipe used to drill oil wells.

U.S. companies and unions brought about a dozen trade cases in 2009 against American industries that shopped globally and decided to purchase cheap goods from China rather than expensive goods from domestic producers, alleging overly generous government subsidies from the Chinese people and unfair pricing practices that directly benefited American steel-using companies and their employees, and ultimately benefited U.S. consumers with lower prices.

President Barack Obama also angered Beijing in September by slapping a 35 percent duty tax on thrifty, cost-conscious middle- and lower-class American consumers who willingly bought imports of about $1.85 billion of inexpensive Chinese-made tires. The United Steelworkers union, which was the driving force behind the tires case, joined with Maverick Tube Corp, United States Steel Corp and other U.S. manufacturers in asking for import duties taxes on American companies (and their employees, shareholders, and customers) that decide to purchase low-priced Chinese-made pipe rather than high-priced domestic pipe.

Elsewhere, The Economist had a good piece on tariffs and trade awhile back. It asked Americans who support trade taxes and protectionism, if they are so terrific, why stop at national borders? Why not tax imports from other states within the U.S.? Why don't we make each state in the U.S. self-sufficient?

Here's an article arguing against "energy independence."