February 2011 Archives

Practice doesn't make perfect; deliberate practice makes perfect

Several wonderful books I’ve read demonstrate that regular practice is insufficient to become truly great (as opposed to merely good). To achieve excellence in a field, practice must be “deliberative.” You must relentlessly look for flaws and potential improvements in your technique. You must never become satisfied or complacent. You must always strive to improve. You must give yourself clear performance improvement objectives and assess your performances frequently and critically. And you must focus your practice on things you find difficult, not things you find easy.

A New York Times Magazine article (on human “memory athletes”) makes this point well:

When people first learn to use a keyboard, they improve very quickly from sloppy single-finger pecking to careful two-handed typing, until eventually the fingers move effortlessly and the whole process becomes unconscious. At this point, most people’s typing skills stop progressing. They reach a plateau. If you think about it, it’s strange. We’ve always been told that practice makes perfect, and yet many people sit behind a keyboard for hours a day. So why don’t they just keeping getting better and better?

In the 1960s, the psychologists Paul Fitts and Michael Posner tried to answer this question by describing the three stages of acquiring a new skill. During the first phase, known as the cognitive phase, we intellectualize the task and discover new strategies to accomplish it more proficiently. During the second, the associative phase, we concentrate less, making fewer major errors, and become more efficient. Finally we reach what Fitts and Posner called the autonomous phase, when we’re as good as we need to be at the task and we basically run on autopilot. Most of the time that’s a good thing. The less we have to focus on the repetitive tasks of everyday life, the more we can concentrate on the stuff that really matters. You can actually see this phase shift take place in f.M.R.I.’s of subjects as they learn new tasks: the parts of the brain involved in conscious reasoning become less active, and other parts of the brain take over. You could call it the O.K. plateau.

Psychologists used to think that O.K. plateaus marked the upper bounds of innate ability…. But Ericsson and his colleagues have found over and over again that with the right kind of effort, that’s rarely the case. They believe that Galton’s wall often has much less to do with our innate limits than with what we consider an acceptable level of performance. They’ve found that top achievers typically follow the same general pattern. They develop strategies for keeping out of the autonomous stage by doing three things: focusing on their technique, staying goal-oriented and getting immediate feedback on their performance. Amateur musicians, for example, tend to spend their practice time playing music, whereas pros tend to work through tedious exercises or focus on difficult parts of pieces. Similarly, the best ice skaters spend more of their practice time trying jumps that they land less often, while lesser skaters work more on jumps they’ve already mastered. In other words, regular practice simply isn’t enough. To improve, we have to be constantly pushing ourselves beyond where we think our limits lie and then pay attention to how and why we fail.

Posted by James on Feb 20, 2011

Why hasn't even a single banker been jailed for fraud?

In an article full of shocking examples, Matt Taibbi writes, “Financial crooks brought down the world’s economy — but the feds are doing more to protect them than to prosecute them.” He explains that no one on Wall Street (aside from Madoff) has gone to jail because Wall Street owns our government and the agencies that exist to regulate Wall Street and punish financial crimes:

A former Senate investigator laughed as he polished off his beer. “Everything’s fucked up, and nobody goes to jail,” he said. “That’s your whole story right there.”

Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world’s wealth — and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.

The rest of them, all of them, got off. Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted. Their names by now are familiar to even the most casual Middle American news consumer: companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What’s more, many of these companies had corporate chieftains whose actions cost investors billions — from AIG derivatives chief Joe Cassano, who assured investors they would not lose even “one dollar” just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick “The Gorilla” Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars.

Instead, federal regulators and prosecutors have let the banks and finance companies that tried to burn the world economy to the ground get off with carefully orchestrated settlements — whitewash jobs that involve the firms paying pathetically small fines without even being required to admit wrongdoing. To add insult to injury, the people who actually committed the crimes almost never pay the fines themselves; banks caught defrauding their shareholders often use shareholder money to foot the tab of justice. “If the allegations in these settlements are true,” says Jed Rakoff, a federal judge in the Southern District of New York, “it’s management buying its way off cheap, from the pockets of their victims.”

…a veritable mountain of evidence indicates that when it comes to Wall Street, the justice system not only sucks at punishing financial criminals, it has actually evolved into a highly effective mechanism for protecting financial criminals….

The systematic lack of regulation has left even the country’s top regulators frustrated. Lynn Turner, a former chief accountant for the SEC, laughs darkly at the idea that the criminal justice system is broken when it comes to Wall Street. “I think you’ve got a wrong assumption — that we even have a law-enforcement agency when it comes to Wall Street,” he says….

Criminal justice, as it pertains to the Goldmans and Morgan Stanleys of the world, is not adversarial combat, with cops and crooks duking it out in interrogation rooms and courthouses. Instead, it’s a cocktail party between friends and colleagues who from month to month and year to year are constantly switching sides and trading hats….

Goldman Sachs was [Obama’s] number-one private campaign contributor. [Obama] put a Citigroup executive in charge of his economic transition team, and he just named an executive of JP Morgan Chase, the proud owner of $7.7 million in Chase stock, his new chief of staff. “The betrayal that this represents by Obama to everybody is just — we’re not ready to believe it,” says Budde, a classmate of the president from their Columbia days. “He’s really fucking us over like that? Really? That’s really a JP Morgan guy, really?”

Which is not to say that the Obama era has meant an end to law enforcement. On the contrary: In the past few years, the administration has allocated massive amounts of federal resources to catching wrongdoers — of a certain type. Last year, the government deported 393,000 people, at a cost of $5 billion. Since 2007, felony immigration prosecutions along the Mexican border have surged 77 percent; nonfelony prosecutions by 259 percent. In Ohio last month, a single mother was caught lying about where she lived to put her kids into a better school district; the judge in the case tried to sentence her to 10 days in jail for fraud, declaring that letting her go free would “demean the seriousness” of the offenses.

So there you have it. Illegal immigrants: 393,000. Lying moms: one. Bankers: zero. The math makes sense only because the politics are so obvious. You want to win elections, you bang on the jailable class. You build prisons and fill them with people for selling dime bags and stealing CD players. But for stealing a billion dollars? For fraud that puts a million people into foreclosure? Pass. It’s not a crime. Prison is too harsh. Get them to say they’re sorry, and move on. Oh, wait — let’s not even make them say they’re sorry. That’s too mean; let’s just give them a piece of paper with a government stamp on it, officially clearing them of the need to apologize, and make them pay a fine instead. But don’t make them pay it out of their own pockets, and don’t ask them to give back the money they stole….

The mental stumbling block, for most Americans, is that financial crimes don’t feel real; you don’t see the culprits waving guns in liquor stores or dragging coeds into bushes. But these frauds are worse than common robberies. They’re crimes of intellectual choice, made by people who are already rich and who have every conceivable social advantage, acting on a simple, cynical calculation: Let’s steal whatever we can, then dare the victims to find the juice to reclaim their money through a captive bureaucracy.

Posted by James on Feb 17, 2011