The Open-Minded Myth

 

One lesson that I have finally learned in my long life is to question whether an opinion that I have is mistaken and, equally importantly, have facts surrounding the issue changed? Another way to look at it is to keep what is known as an open mind.

 

As I look back, I realize that very few people whom I knew, worked with or for or sold to were truly open-minded. Those who began a meeting with “I have an open mind about what you are proposing” were almost always really saying, “don’t confuse me with facts, my mind is made up.”

 

If the topic is a minor one or in an area with no big downside or emotional wallop, many of us can be quite open-minded. In other, more substantive areas, closed minds reign way too much.

 

In the media world, things have changed remarkably over the last 40 years. Getting people to test cable TV as it broke out as an advertising medium was an uphill slog. That was nothing compared to selling people on very modest digital tests over the last 20 years. The “facts” or media landscape had changed but people clung to their beliefs even though their business franchise seemed to be eroding.

 

On a personal note, looking clearly at facts has shifted some of my political beliefs somewhat toward the center. As a young man, I identified very clearly as a libertarian. I had a live and let live approach toward others but felt that when government got involved in many issues things got pretty screwed up. That is still largely true but, as a marketer, I was always observing demographic shifts. As the US and the western world has gotten older, I see the need for maintaining a strong social safety net. Each month some 71 million people in the US will receive Social Security or disability checks. By 2033, projections are that the Social Security “trust fund” will run dry and benefits under the existing structure will need to be cut by 24%. Most of you reading this post could deal with that, but a strong majority of the 71 million receiving checks could not. It would be a body blow to them and reduce some to horrible poverty. So, while I still believe in personal responsibility and for lawmakers to stop spending so much, something needs to be done (and soon) to protect the elderly. Facts changed my opinion once I saw how my simplistic prior view was mistaken.

 

The great economist John Maynard Keynes was a great example of someone who kept an open mind. In charge of King’s College investments after World War I, he began investing based on business cycle forecasts. He was nearly personally wiped out in the British calamities of the early 1920’s. The great man regrouped, dodged some of the 1929 crash and took a new approach. A man recognized by many as the greatest expert on macroeconomics at the time, abandoned that sophisticated thinking and invested in large, strong companies with good management. He said it was good to not try to be too clever.**  When then Lord Keynes died a multi-millionaire in 1946 (a million went pretty far then), his King’s College fund had also grown exponentially as well. He once said, “When my information changes, I alter my conclusions. What do you do, sir?***

 

My path to being open-minded is still a work in progress. May I ask that you join me?

 

 

**Notice how similar this is to the practices of Berkshire Hathaway’s wildly successful Warren Buffett and Charlie Munger. Charlie has said that he never considers macroeconomic variables in making an investment.

***For a different spin on Keynes, read Media Realism, 2/11/2011—“Would Keynes Still Be a Keynesian?”

 

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

My Favorite Governmental Department

 

From the time that I was about 19 years old, I have been a rather enthusiastic believer in the free market system. So, it might surprise long time readers of this blog to see me entitle a post, “My Favorite Governmental Department.” I generally like a light cloak of regulation in many areas.

 

What I am I writing about? The Congressional Budget Office. Sound as exciting as watching paint dry? Bear with me a few moments and read on. It has a very interesting history.

 

In the later days of the Nixon presidency Congress was concerned about the White House overreaching a bit into things on Capitol Hill. So, they wanted a new agency that would provide objective advice based on data about the impact on the federal budget on various policy proposals. With Nixon gone in August, 1974, The Congressional Budget Office (CBO) was established. Its first head was a dedicated and straight arrow pro named Alice Rivlin. Her resume later included being a deputy at the Federal Reserve, president of the American Economics Association, and Director of the Office of Management and Budget.

 

Under her leadership and that of her successors, the CBO became perhaps the most respected and influential institution in the DC swamp. Independent statistical agencies such as the CBO are important and need to be protected. They realize that much of their job is providing simple arithmetic which most politicians of both major stripes do not always want to accept.

 

Things went okay under Jerry Ford but Jimmy Carter did not approve when Rivlin & Co. did not accept the president’s plan for improving energy efficiency. Speaker Tip O”Neill, Speaker of the House, said the CBO ”was not helping.” My fellow Boston College alum did not get it. The goal and value of the CBO was to be impartial and Rivlin made sure that it was.

 

The genial Ronald Reagan who succeeded Carter also had issues with the CBO. In 1981, Reagan’s first year, the CBO projected that the budget deficits over the next several years would be far higher than the White House projected (sound familiar?). Reagan dubbed the CBO numbers as “phony.”

 

Is the CBO perfect? Of course not. What I respect is that they do not appear to make politically expedient errors in their calculations. Most of the time they focus on the gap between spending and tax revenue going out a few years. To my cynical eye on governmental projections, they strike me as unbiased.

 

There are other groups in DC that provide statistics. At the top of the list is the Census Bureau, the Federal Reserve, the Bureau of Economic Analysis, and the Department of Agriculture. All have some fine people on board.

 

Politicians do not like these purveyors of official statistics. When running for president in 2016, Donald Trump talked about how weak the US economy was. Officially the unemployment rate was pegged at about 5%. Trump said in speeches that it was 35%. I found that laugh out loud funny as in the Great Depression of the 1930’s unemployment peaked in 1933 at around 25%.

 

The absurdity gets better. When Trump took office in 2017, the official unemployment rate continued to ratchet down. His then spokesmen, Sean Spicer, said without winking, “I talked to the president prior to this, and he said to quote him very clearly. They may have been phony in the past, but they are very real now.”**  Clearly, he was manipulating data for his own purposes.

 

We need some grownups such as the statisticians at the CBO and other departments to give the politicians and the public a dose of reality. The media does not address this as clearly as they should.

 

As the fight over the debt ceiling goes on as I write, I wonder how many in congress have truly wrapped their heads around what $31 Trillion means and what the debt will be a decade from now.

 

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a message on the blog.

 

 

**Source, The Atlantic, March 2017