Robert Wyatt quit Twickenham when it started to gentrify, he complained.  I feel partly responsible because my moving in coincided with his moving out.  I don’t think it was my fault, although I did arrive with two cars — a cardinal error for a cycling campaigner — but neither was a BMW.

In fact, one was a 1981 Mark V Ford Cortina Estate, beige, purchased specifically for the move.  In subsequent years it didn’t do much: being lent to visiting family and friends, or used occasionally to transport our tandem.  It cost me less than one month’s car allowance. OK,  the car allowance makes me sound yuppie.  I was a 28-year-old bureau chief:  precocious perhaps,  but I think the Cortina shows I was handling it well.  The other car was a Citroen 2CV6 Dolly, cream and maroon, about which there is no denying that it was a convertible.

I’m not an avid Robert Wyatt follower, but he does hold a special place in my musical affections  because when I was about 17 I rushed out to buy Shipbuilding on 12″ vinyl the moment I heard it, even though its melancholy reflection on the Falklands War, if I’m honest, probably did not fully reflect my politics at that time.  The record contained a haunting version of Thelonius Monk’s Round Midnight.

Some of you will know that “Wyatting” is a verb for entering a pub and playing  weird tracks on its  juke box to upset the regulars.  In response to a Guardian question as to whether he would himself “Wyatt”, the psychedelic jazz-rock guru uttered this immortal line:-

Oh no. I don’t really like disconcerting people. Although often when I try to be normal I disconcert anyway.

On New Year’s Day, Wyatt was the guest editor of BBC Radio 4‘s flagship news programme Today, and he did a bit of disconcerting there too.  Wyatt revealed that, despite having no god, his private passion is to wander up to his local parish church in Louth, Lincolnshire, and listen to the choir — his argument being that amateur choirs, lacking the ticks of professionalism with which he’s all too familiar, are what music is really all about.  How odd.

It’s true enough, the parish choir is about as unsung in our culture now as it’s ever likely to get, unless you think Wyatt’s advocacy is a sign of some incipient church choir revival.  That said, the National Secular Society recently celebrated the forecast that church attendance will fall off a cliff.  So maybe the days of the church choir are truly numbered, Wyatt or no.

And when you think about it, what a peculiar thing the parish choir is.  What motivates people to turn up at least twice a week first to practice then to sing to and with an ever-narrowing community of the faithful?  Surely, these musicians, and especially those with the skill to lead such ensembles, have better things to do with their time?  Why not ply their art on You-tube or Britain’s Got Talent?

For my own part, I hesitate to disconcert those who come here for an intermittent dose of skepticism but, despite a consistent pattern of anti-clericalism since childhood, for the past five years I have been been climbing into a threadbare blue cassock and surplice (which may have already seen in excess of half a century’s service) to supply my inadequate baritone voice to a local church choir. This choir, on some winter nights,  had looked so thin that there were doubts whether it could rally a quorum for the next weekend’s communion service. My own voice — which, from the point of view of the choirmaster, probably shares many of the handling characteristics of a Mark V Cortina Estate  — sometimes feels that it has barely improved despite all the practice; it still struggles over the familiar, and can fall apart when overly exposed. But, like the Cortina did all those years ago, it normally gets me from A to B, and (with a following wind) sometimes other notes in the octave too.

From the choir stalls, a modern congregation can look like a strange perversion of the Pareto principle.  Twenty per cent may be over eighty.  Or is it that eighty per cent is under five? — a function of making church attendance mandatory for entry to any associated faith-controlled school.  All garbed up in an elaborate frock, you might be forgiven for thinking that you are just window-dressing to the young urban-professional parents’ will to secure the best for their little ones in an Ofsted-mediated educational world without having to pay.  They disappear after a while, when the school gate has been opened to them, which is incidentally where you will next see them.

Then there are the times at the weddings of young women, who you might be lucky to have seen three times before,  when you feel you may be not much more than a bridal accessory, helping those among their family and friends who have lost their voices through decades of their own neglect stumble through what were once familiar rousing hymns to some common heritage.  You earn your money by filling the gap while registers are signed and witnessed, money which for some time  in our case has been hypothecated to a fund for new robes.  By the way, I heard tell of one bride (not local) who, when asked why she didn’t have the parish choir sing at her nuptials, replied that it was because they were too ugly.  Nice to know that, for some ladies, the parish choir is  in a category below corsages.

But then, there are the times when you have to contain your own tears at the funeral of a fellow singer whose participation has lasted decades and for whom singing provided a source of sustaining health and inter-generational companionship.  Or the time when you glance up momentarily from your score in a quotidian service to catch the doleful eye of  someone recently bereaved, or otherwise troubled, or the transfixed gaze of a musical toddler, someone who may later be driven to sing too, arm stretched aloft as they are dragged down the aisle to be blessed at the communion rail, perhaps witnessing real music for their very first time.

There is no shortage of music in the world, most of it now free at the point of download, but it sometimes seems that, for the handful of minutes that we pipe up every second Sunday, and perhaps this is what Wyatt is driving at, some power law of love is in operation, disproportionate to the music’s duration and even its absolute quality.

All that said, if we can press the pause-button on self-deprecation for a second or two, it is not always as haphazard or mark-missing as it sounds.  In the week before Christmas in a great many churches, and for as far back as it now matters, secular and liturgical have met as some sort of equals in the traditional carol service, something for which most choirs put in many hours of disciplined practice.  Doubtless, Wyatt was invoking this when he referred to his favourite piece of music as being Vaughan Williams’ arrangement of the Herefordshire carol This is the Truth Sent from Above, a truth he  nevertheless rejects.  As chance would have it, it was part of our candlelit Nine Lessons & Carols this year too. Through little bits of luck that brought in some new voices, our choir finally delivered a performance worthy of its tireless director: better, in his estimation, than any in the previous 20 years.

It’s a little rehearsed fact that English church music is the oldest Western musical tradition, stretching back 1400 years. Is it worth it? Only time will tell.

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There seems to be a move to make the Lehman Brothers’ collapse the central turning point in the whole financial and economic crisis.  But this is what Nouriel Roubini thinks:-

Some people suggest that letting Lehman go in this way was a mistake and if we had just bailed out Lehman everything would have been fine. We would have avoided this global meltdown, this global recession. I believe this interpretation of history is totally incorrect, because by the time Lehman had collapsed the housing recession had already started two years ago and was getting worse. So the idea that the crisis started with the collapse of Lehman and if we had only bailed out Lehman everything would have been OK in my view is just total nonsense.  We were already in the middle of a severe economic and financial crisis, and a mortgage problem and a greater credit crunch that had been developing and worsening step by step for almost two years.

Why might it be attractive at this stage in the crisis to draw attention to Lehman as a key turning point? I wonder if such a simplified narrative, and one that hinges on a relatively recent policy error (if that is what Lehman’s collapse was), lets a lot more of us off the hook. If you did not appreciate the enormity of what was happening before Lehman collapsed and weren’t prepared — whether in business, journalism or just in your own household — you can draw a line under your ignorance and apportion blame more specifically. I suspect for journalists, analysts, investors and executives who found themselves adrift as events started turning sour post-February 2007, it allows them to reinvent themselves as more knowledgeable than they in fact were.

It must be some kind of memory bias at work.  But which one to choose?

More from Roubini and the notion that we may still face death by a thousand cuts:-

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Since I heard about social proof, and more specifically Joshua Bell’s famous busking experiment, I’ve wondered what in fact determines my own musical taste: how independent is it of others?  Like anyone, I want to think I’m a free spirit.

This may not be helpful, but the only sure example I have where I responded independently to a piece of music was Michael Jackson‘s Billie Jean.  I really did not like his music in the period up to 1983 for very particular reasons: Off the Wall had been played in our house for several years till it drove me up the wall.

From what may have been the very first UK airplay of Billie Jean, I immediately went out and ordered the 12″ version, making the record an outlier in an LP collection of otherwise orthodox neurotic-boy-outsider (NBO) teenage angst music. That’s if you exclude the bootleg Buddy Guy album that found its way to small-town Lincolnshire by some miracle or another.  Much is made of the revolutionary impact the accompanying video had on the success of Billie Jean, and that may all be true, but I know that did not influence me.

It didn’t stop there.  Soon after, and in a similar fashion, I heard the roughly contemporaneous Walk Right Now, penned and performed by Jackson and brothers.

Walk Right Now certainly does illustrate my early experiences of social proof in action.  I upset and embarrassed a good many of my adolescent chums with this one, particularly one who was a dyed-in-the-wool Joy Division and Morrissey fan. He loathed it, until his big brother (whom he worshipped) returned from Cambridge porting it in his own diminutive singles collection.  Things were crossing over fast in 1983 for those of us with parochial musical tastes and where the only good record shop occupied the tiniest of former corner stores.  Within a few months of Billie Jean’s release, my friend found his erstwhile NBOs, New Order, going all techno-dance on him, creating a yet more legendary 12-inch.

It seems impossible to know the truth about Michael Jackson.  Maybe, with Billie Jean, he flew too close to the sun.  I understand New Order, meanwhile, retired and went yachting.

And here, as promised, we cross over from maudlin to up-tempo.

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One of the most unanswerable questions you’re likely to be asked in a job interview is “Do you think you’re tough enough to stand up to Piers Morgan?” Unfortunately I’ve had that question put to me.

Several years ago, by dint of having the two words “managing” and “editor” next to one another on my CV, Trinity Mirror called me in to see them in the possibly mistaken belief that I could help dig them out of a very big hole. I was pretty sure I could help in some way, but I think we had a different view of what type of hole they were dealing with. Given Piers Morgan‘s inexorable rise on two continents as the mean-spirited arbiter of folksy talent, might I humbly propose that this is the mother of all interview posers? Top it if you can.

To be sure, I was in the wrong place at the wrong time, as usual. There was a small coda to this interview conversation which involved another legendary Fleet Street figure: an experience which finally persuaded me it was time to steer a reciprocal course to the one Fleet Street was headed down and, boat-hook in hand, retrieve my bedraggled dignity. As tabloid journalists allegedly say in potentially compromising situations: “I made my excuses and left.”

Rightly or wrongly, and with rare exceptions, my approach to news management had been unusually low-key: a function of personality combined with the demands of real-time, I think.  I was always more interested in process than result. That’s what I offered in that interview, and I suspect that it was mistaken for weakness and (worse still) inexperience, whereas for them it should have represented a diverse perspective. My interviewer, I could tell, was not convinced.

Mercifully one of us escaped. I think it was probably me, though maybe it was Piers. So, in my sotto voce way, this  knackered hack is finally taking a hyper-linked opportunity to stand up to Piers Morgan: something that in real life only a handful of people seem ever to have done, and the Fates denied me the opportunity to chance my arm at.

Morgan was honoured this week with a slot on the BBC radio show Desert Island Discs: the longest-running music programme in the history of radio. It is the mama of all mixtapes: you get to choose the records that define your experience and broadcast them to the nation. Although Bob Geldof famously said that it is only a radio show, I reckon an invitation to appear is greeted by most in the same way as being tapped by Buckingham Palace for the Queen’s birthday honours.

Piers Morgan’s life is a catalogue of rather ghastly errors, none of which seems to have been a setback to his advances to fame and fortune: a modern day Bel Ami, perhaps?  So it seems like a category error for our public service broadcaster to accord him such high-quality attention. But hey, there goes the neighbourhood. For those who want to see if theirs is a match for his musical taste, this link should do it. Me, I’m averting my eyes.

In at least one of those counter-factual universes of infinite mathematical possibility, the Knackered Hack has himself been granted the honour of discussing his own desert island discs before an eager nation. In this same universe, Piers Morgan blogs and nobody reads.

Here’s a small taste of what my list contains. Until a few weeks ago Haydn would not have been on my modest mixtape.  For undisclosable reasons he has now hopped in.  The words, courtesy of the ChoralWiki, are below.  And for those who read me for stuff on decision-making, Haydn seems to have been on to heuristics and biases long before any of us.  You may have to think about this one a little bit.

Insanae et vanae curae invadunt mentes nostras,
saepe furore replent corda, privata spe,
Quid prodest O mortalis conari pro mundanis,
si coelos negligas,
Sunt fausta tibi cuncta, si Deus est pro te.

Vain and raging cares invade our minds,
Madness often fills the heart, robbed of hope,
O mortal man, what does it profit to endeavour at worldly things,
if you should neglect the heavens?
If God is for you, all things are favorable for you.

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In the middle of that 2001 Chapter 11 process, I was being primed for information in the Tipperary pub in Fleet Street. The “Tip” is the oldest Irish pub in England and the first ever to sell Guinness here, or so the free information on the internet tells me today. I did not know that then. There was plenty of free information available in 2001 despite a relative shortage of comprehensive pub histories. All the same,  you still had to pay for the Guinness. And that’s invariably the case today.

I was with a very senior colleague who was plying me with the black stuff; I think he’d been asked to keep an eye on me and my rank-breaking entrepreneurship. I said to him that I thought part of the problem for even highly specialized subscription content businesses, like the one we were proposing to launch out of the bankruptcy, was that so much generic news was then free on the internet. This factor perhaps had already tipped investor sentiment away from the concept of proprietary news content. I suggested that one of the principal reasons for this may have been the example set by our competitor, the news agency Reuters, in selling its news feed to search engine/portal Yahoo!, without obvious limitations on what could be published.

“Oh, I did that deal!” said the executive. Imagine the Knackered Hack coughing into his artisan-poured pint, spraying his “mentor” with white foam. [For sure, that's not what happened exactly, but I'm not a factual journalist any more; I don't carry an NUJ card these days and even my poetic licence is provisional.]

Some of us had known for a long while that the value proposition of unbundled real-time news was not what it once was. It wasn’t a good time to be giving so much of it away. Reuters seem to have wised up a couple of years ago because they no longer operate that Yahoo! deal.

But I still wonder, in my counter-factual way, if such a vast organization as Reuters had not taken that fork in the road so prominently would other news media have felt so compelled to provide so much stuff for nothing? And thence GoogleNews. Would a viable subscription model not have been built by now to get the more innovative news organizations [oxymoron warning] cleanly out of the ink-on-dead-trees business? Perhaps not.

There may be more lessons from the real-time news industry of the ‘80s and ‘90s for today’s media to illustrate the tragedy/farce heuristic. Anyone interested in another chapter on that soon?

Photo credit tricky

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As heuristics go, just as the most expensive wine on the wine list is not to be trusted, writers should be given a wide berth if they quote the first lines of books, especially if they are quoting Marx paraphrasing Hegel.

At the start of The Eighteenth Brumaire of Louis Napoleon, a book which I probably have read in its entirety (but don’t quote me), the bearded one says this:-

Hegel remarks somewhere^[*] that all great world-historic facts and personages appear, so to speak, twice. He forgot to add: the first time as tragedy, the second time as farce.

Chevy Tahoe, first a gas-guzzler, then a hybrid?

I risk getting into even deeper water with the mathematicians for suggesting there is something of the self-similar in Marx’s statement, and then with historians for invoking the idea that history repeats itself.  Perhaps I’d be safe with Yogi Berra: “It’s like déjà vu all over again”.

Yesterday General Motors announced it had filed for Chapter 11 bankruptcy.  This is on a grand, publicly-listed, credit-fuelled scale (GMs’ annual revenue was $149 billion last year, and it’s lost more than $80 billion in the past four years, its market capitalization collapsing from a surprising $26 billion in October 2007, when the credit crisis was well underway, to next to nothing.)  The German and US governments have intervened to save jobs.

My own experience of Chapter 11 in 2001 was a less remarked upon affair (less than $1billion in revenue).  But at their respective times, within their respective universes, the two Chapter 11 incidents share significance: the words “too big to fail” were uttered in both instances.

There is no shortage of animal spirits evident in either, some interesting uses of expenses, and for those observing closely (perhaps that’s just me in my Chief Brody hat ) the one may have heralded the other. Did the one in fact scale into the other?  GM is now perhaps the most iconic victim of the credit crunch, which through my long-path-dependent-tinted spectacles was hinted at way back when, in the perennial struggle between debt and equity.

The Chapter 11 that dissolved the news organization I worked for merited very little press comment; ironic  given that 600 global journalism jobs disappeared more or less overnight. Almost without exception those jobs were engaged in purely factual reporting: the scrutinizing of financial markets, banking and economic and monetary policy.  Instructive perhaps, given the current collapse of news businesses the world over, that they were entirely online, publishing by corporate subscription, and over internet protocol for several years already.  They could not be saved because the consensus then was that this market was already oversupplied.  News was a commodity, and only so much was necessary to lubricate the inner workings of global financial markets.

I’ve long since given up the conceit that the factual information output of my professional career met some fundamental human need (except the feeding of my family).  This was a way that I used to comfort myself: as a journalistic form, economic and financial newswire reporting could legitimately claim a fourth-estate function of representing important facts about the world, even if it was bounded in its day-to-day ability to call policy-makers and financiers fully to account.  It was not the sharpest instrument, but it was probably a lot sharper than print journalism which in effect fed off some of its by-products.

I’ve already described how, in my own attempts to refinance this organization — as I moulted my middle-management plumage and temporarily tried on the peacock feathers of the imagined future CEO — I submitted with my colleagues a restructuring that would focus news reporting resources on the growing and mostly under-reported market in credit derivatives.  That market was the one that made sense to my diverse rescue task force: whether their personal focus was Whitehall, currencies, commodities or companies, Essex-boy, anarchist or Etonian.  In retrospect, it is clear that transparency and scrutiny of those complex markets would have been useful in the post-9/11 world.  But in the summer of 2001, investors came there none.  The lesson, as ever, seems to be: if you’re going to fail, fail big. Don’t pin your hopes for rescue on a knackered hack, but a newly minted Barack.

This takes us back to Robert Shiller and George Akerlof’s qualification of capitalism: “It does not automatically produce what people really need; it produces what they think they need, and are willing to pay for.”  Since 2001, it is clear that a great many people, and at the same time too few, thought they needed GM’s Chevy Tahoe SUV.  President Obama agrees that they need more.  Me? I’m not so sure.

Photo credit Chevy Tahoe: anthonares

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There should be a rule that if Professor Robert Shiller is speaking in public within a hundred miles of you, you must make tracks to hear him. A statistical analysis of my own movements over the past 12 months might show that I’m already following this rule. However, with just the two data points, you should not bet the farm on it…though many have done worse (I know: I’m related to some of them). When they reform Parliament, they should sneak that rule in there for our politicians, and then apply it more broadly to the population at large. Once you’ve read Shiller’s new book, Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism (US edition), with Nobel Laureate George Akerlof, you’ll know why.

I’ve more or less finished Animal Spirits, and the purpose of my Monday trip to Policy Exchange was to hear Shiller discuss the book and his new pamphlet for the hosts: a proposal that the UK adopt an inflation-indexed unit of account, like Chile’s Unidad de Fomento, as a means to cure the population of money illusion. I felt blessed to be invited.

Animal Spirits is surely essential reading for any student of our broken times. And The Case for a Basket, which you can download for free, has a good chance of becoming government policy; when I last saw Shiller in London in the autumn, he’d been in to see Gordon Brown, Alastair Darling and Lord Mandelson, if I recall correctly. Meanwhile, as the leading centre-right think-tank, I understand that Policy Exchange will be the leading source of ideas for any future Tory administration, assuming they can keep their moats clean, as it were.

But I could not help wondering if Shiller’s audience was taking all this behavioural economics stuff in, or whether he was just another speaker on the Westminster agenda to be consumed: knowledge of his ideas being a necessary source of signalling to others in polite conversation. Shiller’s argument that our animal spirits have been dangerously discounted by economic thinking surely makes him a heretic in this milieu; the reformation he foretells has barely started. There are a lot of PPE graduates out there, and a greater concentration within 100 yards of Parliament.  Would they not need to go back to school, or be reprogrammed?

But I digress.

To imagine how the “basket” would work, you have to understand it is a unit of account, a measurement of value that would not alter with inflation. Or deflation, for that matter. If you had your house to sell, and wanted to make sure you got what you paid for it a year later, you would offer it at the same basket level. You would avoid having to perform a complex accounting calculation that, on a day-to-day basis, is beyond most of us, including our elected representatives. We prefer to think in nominal prices rather than real terms. So we get easily persuaded that houses are a sure winner when we should all know there ain’t no thing as sure winners. Shiller shows US house prices actually closely track inflation over the longest time. A basket system would be especially useful for fixing ongoing contracts, like legal fees or alimony payments; the “basket” ensures that a figure agreed today will buy the same amount of goods and services in the future for the recipient.

Shiller maintains that the Chilean system — introduced in Chile in 1967, but only really taking off in the 1980s — has worked successfully, despite local complaints about its long-term viability, and could prove just as useful in low-inflation economies like the UK and US.

What I find attractive about it is that it is a simple solution to a complex set of pernicious social behaviours. According to Shiller, all that the government needs to do is supply its institutional credibility to a calculation and then create a website. Electronic payments systems would enable any number of assets and commodities to be listed in baskets and payment settled via a real-time currency calculation. In effect it stops you being defrauded by history.

The idea of Animal Spirits, meanwhile, is not new. Shiller points out that the phrase was used by John Maynard Keynes. But in their book, Shiller and Akerlof seek to increase the emphasis on non-rational factors which modern economics has tended to ignore. Money Illusion plays a key role. But they also emphasise issues like trust, bad faith, and corruption. And there is a wonderful qualification of the power of capitalism, with perhaps more than a gentle poke at our more optimistic libertarian friends:

…the bounty of capitalism has at least one downside. It does not automatically produce what people really need; it produces what they think they need, and are willing to pay for. If they are willing to pay for real medicine, it will produce real medicine. But if they are willing to pay for snake oil, it will produce snake oil.

Shiller is a curious student indeed. He reads old newspapers in his quest to understand mood and capture the narratives that transmit bad economic ideas. In Monday’s talk he regaled us with a newspaper column from the 1880s deploring the a collapsed property boom in Los Angeles. The columnist boldly asserted that never again would people be so stupid. To be fair, for nearly a century that was correct. So how do these animal spirits get going? This is what he and Akerlof say:-

Why do new kinds of corrupt or bad-faith behavior arise from time to time? Part of the answer is that there are variations through time in the perceived penalties for such behavior. Memories of major government crackdowns against corruption fade over time. In a time of widespread corrupt activity, many people may get the impression that it is easy to get away with it. Everyone else is doing it, it seems to them, and no one seems to be getting punished. To some extent, lowering one’s adherence to principles at such times is a perfectly rational thing to do. Lower principles at certain times may also reflect a social osmosis, as information about the probability of punishment for certain kinds of crimes spreads through a net of personal acquaintances, as Raaj Sah has documented. Such a process may be part of the confidence multiplier, as corruption feeds back into more corruption.

The variation through time in the extent of corruption of bad faith is also to some extent a reflection of the fresh opportunities that arise as new financial inventions of one sort or another appear, or as financial regulations allow innovations to be implemented. These innovations may not be understood initially by the public. This variation occurs because of cultural changes unrelated to fear of punishment or to changes in technology. These changes are clearly within the realm of pure animal spirits. Culture changes over time to facilitate or hinder aggressively competitive or predatory activities. Because these cultural changes are difficult to quantify, and fall outside the field of economics, they are rarely connected by economists to economic fluctuations. They should be.

Shiller and Akerlof continue with examples of how widespread flouting of 1920s US prohibition led to a more generalized disrespect for the rule of law. Then in the depression years things shifted again. By 1941,  bridge was the most popular card game in America, encouraging, as it does, cooperation, while also not being played for money. By contrast, the early years of this century have been characterised by the rise of Texas hold’em, bluffing, and the poker face, both literally and metaphorically.

You don’t have to look far for these animal spirits. If Shiller is now more likely to be the first voice the Tories turn to on matters to do with housing markets, this will be an improvement on a previous foray which enlisted the Honorable Kirstie Allsopp, presenter of property porn TV programme Location, Location, Location. I’ve often wondered why the kindling of animal spirits by one of our public service broadcasters had not long ago been scrutinized by a House of Commons select committee or two. But recent evidence shows the same spirits had taken hold there also.

Now if it were real animal spirits we needed to calm, Louis Armstrong would be our man. In the 1938 film Going Places, Armstrong plays Gabe whose music is the only thing that will settle the unrideable horse Jeepers Creepers.  Yes, you know where this is heading. Tell me I’m wrong, but it sounds like he too is asking “where did you get those PPEers?” How they hypnotize!

And did you Twitterers note how Duke upbraids Maxie? “Why don’t you stop thinkin’ up snappy sayings and start concentrating on business…”

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A Scottish doctor today is arguing for a tax on chocolate to tackle obesity and the concomitant rise in type II diabetes. Of course some, including myself, have been labouring under the impression that chocolate might just be good for you, and that this might explain certain cravings, assuming you are eating the very high cocoa solid variety. But an empirical test this morning confirmed that it is not the chocolate I crave but the sugar. I read somewhere on the internet that if you think you crave chocolate because of a nutritional deficiency you should try eating some pure cocoa. So I did just that. It took about a quarter of a teaspoon of Green & Black’s Cocoa powder to convince me that it’s the sugar in chocolate that I’ve been craving. I’m pretty good at acquiring tastes but cocoa is nothing on its own: it needs sugar. And all that sugar does, it seems, is boost your insulin levels and leave you wanting more when your blood sugar crashes again later. Chronically, this will kill you.

A few weeks ago, I finished reading The Diet Delusion by Gary Taubes. If he is correct, the book pictured (above) by John Yudkin is from the graveyard of nutritional science. Published in the US in 1973 for a cover price of $1.95, this copy of Sweet and Dangerous appears to have left a thrift store some time later — somehow riding a wave of inflation to sell for $2.75 — before hopping the Atlantic where it would have been acquired by my late mother-in-law from a UK charity shop for 40p. By this time its bubble had finally burst, and Yudkin’s work is now well out of print. Were it not for the normal prevarication over getting rid of any books in the Knackered household, this battered edition might already have returned to second-hand bookstore oblivion; instead, it has been sitting on my desk for nearly nine months asking to be blogged about, reprieved by Taubes’ mention.

According to Taubes, the hypothesis that sugar consumption could be a primary cause of heart disease and other chronic illnesses was being taken seriously in the research community in the early 1970s. But it was in competition with Ancel Keys‘ prevailing hypothesis that dietary fat was what mattered. This is what Taubes says:-

By the early 1970s, Keys’s dietary-fat hypothesis of heart disease, despite the ambiguity of the evidence, was already being taught in textbooks and in medical schools as most likely true. After Yudkin retired in 1971, his hypothesis effectively retired with him. His university replaced him (at Queen Elizabeth College London) with Stewart Truswell, a South African Nutritionist who was among the earliest to insist publicly that Keys’s fat theory of heart disease was assuredly correct and that it was time to move on  to modifying the diets of the public at large accordingly.

Yudkin became a figure of ridicule, and further research into the sugar and refined carbohydrate hypothesis was avoided by those who knew what was good for them professionally, so says Taubes.

Taubes draws out just how dramatic has been the increase in our refined sugar consumption over the past two centuries, suggesting that Yudkin was right to be more concerned about sugar metabolism:-

But the greatest single change in the American diet was in fact the spectacular increase in sugar consumption from the mid-nineteenth century onward, from less than 15 pounds a person yearly in the 1830s to 100 pounds by the 1920s and 150 pounds (including high fructose corn syrup) by the end of the century.

A fuller review and more mentions of Taubes’s book will arrive in due course. Just to say that I’ve been wondering whether it might be the most important book I’ve ever read. The paperback edition is now out in the UK.

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Anyone who has read Gerd Gigerenzer’s Gut Feelings will recall the description in Chapter 10 of how the pressure to conform creates moral hazard. A powerful heuristic or default seems to operate: “don’t break ranks”. Failure to adhere can result in peer hostility. The experience of Paul Moore in trying to restrain HBOS executives reveals just how powerful and enduring a force that can be, assuming he is an accurate witness to his own experience at the bank. It goes some way to explain how groupthink can operate in the face of compelling contrary evidence. To quote from his memo to Tuesday’s Treasury Select Committee hearing:-

I am still toxic waste now for having spoken out all those years ago!

This might also reflect why today’s FT report leaking of an “independent inquiry” into Paul Moore’s allegations contained the following observations from the HBOS directors of his behaviour. A case of shooting the messenger?

They told KPMG that while Mr Moore’s technical abilities were “recognised as strong” and he gave his team a “strong sense of purpose”, they doubted his ability to work with his colleagues. His behaviour in one meeting was described by people interviewed by KPMG as “ranging from prickly to ranting to extraordinary to outrageous”.

For those not following these events, Moore was the head of Group Regulatory Risk Management for HBOS until 2005. He alleges that he argued with the board that HBOS’s sales culture was running out of control, creating huge risk for the bank should the economy and housing market turn downwards, and that there was a reluctance on the part of executives to have their decisions or behaviour challenged. At the time, HBOS CEO James Crosby dismissed his concerns and terminated his employment. Crosby then moved on to become deputy chairman of the Financial Services Authority. He resigned yesterday morning.

The full text of Moore’s memo is here. For the time being, it may be one of the most readable and historic documents of modern finance. One suspects there will be others.

Well, in his deposition to the Treasury Select Committee Moore mentions it, but I doubt that this five-minute module is mandatory yet at any business school. Let me know if I’m wrong.

Photo credit: Tim Penn

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Gregory Berns, a professor of neuroeconomics at Emory University and author of Iconoclast: A Neuroscientist Reveals How to Think Differently(UK)/(US), was interviewed this morning on Radio 4′s Today programme exploring the role of neuroeconomics in understanding the current crisis.  He’s in Davos for the World Economic Forum, with all the large fromages.

Back in the day, the Knackered Hack used to dispatch a team of reporters to Davos. Press places were then scarce.  Now I’m watching it all on Twitter, my very own self-organizing newswire, and tossing in the occasional iconoclastic observation of my own.  Who-da thunk it?  Everyone and his dog seems to be there; some shuddering, and not from the cold.

Berns message was about as negative as you can get when considering the current crisis.  He deftly applied the old-dog-new-tricks teaching heuristic to an entire generation:-

One thing that we know is when people make decisions that they are uncertain about is that they look to other people… We have seen along the way how other people’s opinions essentially pollute those judgments. Now,  modern markets are great. Now, economists like to talk about efficient markets and all of that, but the problem is that they are only efficient when people behave as individuals and render independent judgments.  Now I would probably go as far as saying the current crop of adults is a lost cause in that I think we should be focussing our efforts on the next generation and how to teach them to make judgment that are independent of each other and stop this crazy herd behaviour.

So there you have it.  All current adults are sheep.  Better cancel the Twitter account .  You can listen to the whole thing here.  I think it was edited, so there may be some context missing and the above quotation therefore not adequately representative. That’s mainstream media for you.

All that said, like a dog barking in the wind, I myself did tweet the following just a few weeks ago:-

Haunted slightly by counterfactual sense the boom promoted an entire generation of the wrong type of manager”

I’ll come back to that idea soon, I hope.  But in the meantime, given Berns’ imperative that we focus on the cognitive capacities of the next generation, it was a neat little coincidence that a review copy of a new textbook by David Hardman, entitled Judgment and Decision Making, arrived in the post yesterday from Wiley. US version available here.  Just take a look at the contents:-

1. Introduction and Overview: Judgments, Decisions Rationality
2. The Nature and Analysis of Judgment
3. Judging Probability and Frequency
4. Judgmental Distortions: The Anchoring-and-Adjustment Heuristic
5. Assessing Evidence and Evaluation Arguments
6. Covariation Causation, and Counterfactual Thinking
7. Decision Making under Risk and Uncertainty
8. Preference and Choice
9. Confidence and Optimism
10. Judgment and Choice over Time
11. Dynamic Decisions and High Stakes: Where Real Life Meets the Laboratory
12. Risk
13. Decision Making in Groups and Teams
14. Cooperation and Coordination
15. Intuition, Reflective Thinking, and the Brain

Back of the net, as they say in soccer.

David, with others, runs the London Judgment and Decision Making Group, whose seminars I’ve been lucky enough to attend when I’m in town.  If Berns is right, David should be needing a larger venue.  David assures me he will be blogging on the book before too long, so I’ll let you know when that happens.  We can definitely benefit from a regular dose of wisdom from this discipline.  Of course, it’s a little known fact that the Knackered Hack is already one of the leading decision science blogs on the web.  It says so here. And if you are wondering how that happened, the answer remains … well … uncertain.

Photo credit: stephenphampshire

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