Good for the goose is good for the Summers
By Thoreau
Greenwald points out the way that Larry Summers raked in cash from investment banks before becoming the new President’s economic advisor, and he smells corruption. Maybe. Or maybe Summers advocates pumping money into EPIC FAIL enterprises because men are just bad at math. Look, I know this is going to sound politically incorrect to some people, but facts are facts: When you look at the distribution of mathematical talent among the sexes, the male distribution has a larger variance, which means you’re going to find a lot more men at the lower extreme. So obviously the reason why so many financial institutions did such dumbass things with money is that they’re full of men, so you’re getting the far left end of the bell curve distribution of mathematical talent. You can’t expect a bunch of men, with their lower mathematical abilities and their testosterone impairing their reasoning, to make good decisions with money. They should be working with their hands, not making decisions that involve numbers.
Comment by Ken Shultz —
April 4, 2009 @ 1:44 pm
This can be a little hard to get across, especially since hindsight’s 20/20, but going with the crowd in a situation like that isn’t necessarily a dumb thing to do.
Going against the crowd, when the competition’s making money hand over fist, it can actually get you fired.
In commercial real estate, I took a lot of flack for not doing more deals than I did between 2005-early 2007. Everybody else was making money, land wasn’t overpriced for them–what made me so much smarter than everyone else?
Now I get questions about why we did the deals we did.
Think about the internet boom of the 90s. From dot coms to telcos, that market was overpriced for years before it finally went bust. And if you were keeping your investors on the sidelines because the market was overpriced, a) your investors probably missed out on a lot of upside and b) you very well may have been fired.
Comment by ChrisWWW —
April 4, 2009 @ 3:49 pm
There may be a genetic reasons for our financial mess, but I’m skeptical that it explains the suspicious behavior of gov’t economic “experts.”
Comment by The Raven —
April 5, 2009 @ 2:14 am
Krawk! Krawk! Congratulations! You win The Raven’s croak of the day award.
Comment by kid bitzer —
April 5, 2009 @ 8:39 am
snarkalicious!
Comment by Uncle Kvetch —
April 5, 2009 @ 10:13 am
[golf clap]
Comment by joe from Lowell —
April 5, 2009 @ 10:45 am
Higher testosterone levels, and bad ad math?
I’ll show you! I’ll kick your ass!
Comment by Robert Waldmann —
April 6, 2009 @ 6:34 pm
What’s gravy for the goose is required return for the gander.
I wish you were joking. The fact is that there is overwhelming evidence that men just aren’t very good at investing
see this pdf http://faculty.haas.berkeley.edu/odean/papers/gender/BoysWillBeBoys.pdf
It does seem to have to do with testosterone.
Also note the one of the few surviving Icelandic financial firms was founded by a woman so women could work in finance.
http://www.vanityfair.com/politics/features/2009/04/iceland200904?currentPage=7
Comment by Wells —
April 7, 2009 @ 6:38 pm
Irrespective of the gander’s gender, you just cooked Summers’ goose. Well played.