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Daily Archives: July 23rd, 2012


July 23, 2012 – 5:15PM
Academics have come up with a new twist on the adage ‘more haste, less speed’ – speedy decisions can ruin careers, lose money and cost lives. William Leith on the art of procrastination

Mel Gibson ... if only he'd waited.

Mel Gibson … if only he’d waited.

On a hot summer evening in 2006, and over the next few days, Mel Gibson, the actor and film director, did several things that were impulsive. If he’d given himself a moment, and thought about it, he wouldn’t have had that first drink.

Having begun to drink, he would not have continued. Having become drunk, he would not have got into his car. Once arrested, for drunk driving, he would not have made sexist remarks to a female police officer.

We’re always being told to be quicker, or else – to communicate, cook, learn, buy and sell in double-quick time. But Partnoy tells us to slow down. Waiters can be winners

And, having begun to shout abuse, he would have reined himself in before making a series of anti-Semitic slurs. If only he hadn’t done the first thing that came into his head, over and over again. If only he’d thought. If only he’d waited.

In his new book Wait, Frank Partnoy, the American academic, examines the benefits of delay in all sorts of circumstances, and comes up with a new take on an old-fashioned idea: it’s good to wait.

Of course, in today’s world, this feels counter-intuitive. We’re always being told to be quicker, or else – to communicate, cook, learn, buy and sell in double-quick time. But Partnoy tells us to slow down. Waiters can be winners. If you have a day, he says, make your decision at the end of it. If you have five minutes, take four minutes and 59 seconds. And if you have a split second, wait until the very end of that split second; this is likely to result in the best possible outcome. It might even mean the difference between life and death.

Why is it so good to wait? I ask Partnoy, via email, to explain his argument. He’s a professor of law and finance at the University of California, San Diego, and a world authority on financial regulation. He replies the next day. “Given the crush of technology, email, social media and 24-hour news, most of us react and decide too quickly. We’re hard-wired to snap respond to fast, salient stimulus even when it is to our disadvantage.”

In other words, the world has become too fast for us. In his influential 1968 book The Peter Principle, Dr Laurence Peter claimed that corporate employees were always promoted beyond their level of competence, which explains why so many bad business decisions are made. If there were a Partnoy Principle, it might be that the speedy modern world pushes us beyond our natural reaction time; we’re always trying to do things too quickly, which explains why we often make mistakes.

In Wait, Partnoy describes an experiment conducted in 1992 at Stanford University, in which four-year-old children were given a choice. A marshmallow was put in front of them; they could either eat the marshmallow now, or wait 15 minutes, after which they would be given two marshmallows. Researchers met the kids again as teenagers. What do you think happened? Those who waited turned out to be better in various ways: they got better marks, “were less prone to impulsive behaviour” and, according to tests, were “more likely” to be well-adjusted.

After the marshmallow test came a deluge of other, similar tests, with similar results. Patient children don’t often become impulsive teenagers. Which means they don’t often turn into fat teenagers, or drug-addicted teenagers.

Now think of the adults who drink too much, who get arrested for assault, who binge on fast food, who make poor investment decisions, who blow all their money. As children, they would have scarfed down that marshmallow.

The world expert on impulsive behaviour, and decision-making in general, is the Nobel laureate Daniel Kahneman. In his book, Thinking, Fast and Slow, he explains that the brain has two basic decision-making systems: System 1 and System 2. To demonstrate, he shows us a picture of a woman’s angry face. When we see this, he says, we interpret it automatically. We can see, instantly, that the woman is angry. When our brains perform this function, it’s as if we’re not thinking; it’s as if the thought is happening to us. This is what he calls System 1. This is the way impulses work.

Next, Kahneman asks us to do a sum: 17 x 24. To do it, your brain must perform a sequence of actions. These actions feel “deliberate”. You must do complicated things simultaneously; hold one bit of information in your head while you’re calculating another. This is System 2. The answer is 408. How long did you take to get it?

Of course, we need our impulsive thoughts. We hear a bang, and we duck. We run from snakes, fear heights and make snap judgments about distances between objects.

But System 1 is simple, because it evolved in a simpler world – a world without complicated maths, without investment decisions to make, without interest rates to calculate. Also a world without many marshmallows. Or chocolate bars. And this is why, unless you’re an expert, unless you’re the grandmaster playing blitz chess whose gut instinct on a move is likely to be right, System 1 can come a cropper.

A lot of this is down to “anchoring”. If you ask one group of people whether Gandhi was more or less than 114 when he died, and another group whether he was more or less than 35, and then ask both groups to estimate his actual age when he died, the first group will always guess a higher number. System 1 searches for an anchor, and uses it. It can be crude. It can lead you astray. And that’s how illusionists such as Derren Brown are able to perform their tricks. Because, sometimes, our brains can’t bear to wait.

Stephen Macknik is a neuroscientist; he runs the Laboratory of Behavioral Neurophysiology in Phoenix, Arizona. He believes that consciousness, as we call it, is a simulation – a brilliant illusion. One day, as he was driving through Las Vegas, along the Strip, past billboards advertising various illusionists, such as Penn and Teller, Mac King and David Copperfield, he had a eureka moment. Illusionists, he realised, are, in a way, practising neuroscientists. They know, better than anyone, how our impulsive brains work. The result of this epiphany was his brilliant study of illusionists, Sleights of Mind, written with his wife, Susana Martinez-Conde, also a neuroscientist.

Speaking from Arizona, Macknik told me how easy System 1 is to fool. Take the red dress trick, as performed by the Polish-American illusionist The Great Tomsoni. The illusionist’s assistant appears on stage in a white dress.

Tomsoni tells the audience he’s going to make the dress change colour. He waves his wand. A red light is projected onto the assistant, making her dress appear red. But it’s clearly not a red dress. It’s just a white dress with a red light shining on it. The audience groans. The stage lights are dimmed, and switched on again. The assistant’s dress still looks red. Then she walks across the stage. You expect her dress to become white again. But it stays red.

This is how the trick works. When somebody flashes a red light on an object in front of your eyes, and then switches it off, your eyes “see” a red afterimage a fraction of a second after the red beam has gone. So when the stage lights are dimmed, your eyes tell you there is a field of red light in the shape of a dress in front of you. But there isn’t.

In fact, in this half-second, hidden wires pull the assistant’s white dress off her body and through a trapdoor in the stage. Of course, she’s wearing a red dress underneath. The lights come on again. You think you have haven’t been fooled. You think the apparent red dress is still a beam of red light. And then she moves. That’s when you gasp.

“Your brain,” Macknik tells me, “is a prediction machine. It’s always jumping to conclusions.” Mostly, these conclusions are correct. But sometimes they’re wrong.

Macknik has analysed countless card tricks, and cup-and-ball illusions; he’s also made a study of pickpockets. He knows how easy it is to confound System 1.

Partnoy points out that, in the fast-paced world of the 21st century, we often betray ourselves by being too impulsive. You might say that the modern world is our Derren Brown. We see this every day on Twitter; people have an impulsive thought, and tweet it, there and then. Five years ago, they might have walked to their desk, pondered a bit more, and put the thought in a blog, by which time they would have edited out the dodgy bits – the parts that were sexist, for instance, or the parts that might be open to misinterpretation. Diane Abbott, the Labour MP, fell foul of her tweeting impulses last year when she made a generalisation about white people. We could see what she meant. If she’d waited for a few hours – or even for five minutes – she might have been fine.

Then there are the instances in which just a moment’s delay would have averted a tragedy. In his book Blink, Malcolm Gladwell brilliantly analyses the seven seconds leading up to the death of a New York street peddler called Amadou Diallo. He was standing outside the door of his apartment building when he was spotted by four cops. They thought he might be a burglar. As the cops approached, Diallo put his hand in his pocket. He started to pull something out. It was black. One cop started shooting, and within moments, all four had fired. Diallo died instantly. If the first cop had waited half a second longer, he would have seen what Diallo was taking out of his pocket. It was a wallet.

As Partnoy argues, panic can turn experts into amateurs. It can make us think we have less time than we actually do. And, as Partnoy notes, our environment also alters our perception of time. As consumers, we respond more quickly to bright lighting, for example, which is the reason why shopping centres are so well lit. And research has shown people who live in a city with a population of over one million move, speak and react on average twice as quickly as those who live in a small town, so a pause seems twice as long to you if you’re the former than if you’re the latter.

Luckily, we can train our impulses. Partnoy tells us how tennis players, who have half a second to return a serve, can improve their game by teaching their impulsive side to wait until the very end of that split second before reacting; the longer they delay their return, the more information they have about the trajectory of the ball. He explains how, in 1988, the naval captain, William C. Rogers III, averted disaster when he elected not to shoot at two Iranian F-4s during the Iran-Iraq war, even though they had locked their radar onto his ship. Knowing that pilots were perfectly capable of making idle threats during military exercises, he quickly decided they weren’t really preparing to attack. He was right and the skirmish passed without incident. (Tragically, just three months later, Rogers would inadvertently cause the deaths of 290 people when, in a far more complex and high-pressure situation, he mistook a descending passenger liner for an enemy plane.)

Counter-intuitively, waiting can also be a trader’s greatest asset in the financial markets. As the economy heated up during the last decade, hundreds of traders bought into the housing market. But a few, including John Paulson, the hedge fund manager, decided to wait, reasoning that the market was bound to overheat. Paulson chose the correct moment to bet against the market. He waited and made $15?billion for his fund.

I ask Partnoy if he is a procrastinator. “I am an inveterate procrastinator,” he tells me. He’s been this way since he was a child. The theories in Wait, he says, “came from arguments with my mother about making my bed”. In a fascinating analysis, he explains that procrastination is merely another form of impulsiveness; when you put something off, you are impulsively not doing it. But, since you can only do one thing at a time, you must always be procrastinating. Life is about procrastination. The trick is to do it right.

It’s a lesson for Mel Gibson. According to Partnoy, Gibson’s impulsiveness defined, and ruined, his apology. “It was a disaster,” writes Partnoy. He apologised the next day. He was brisk and cold. It didn’t work. Partnoy says that Eliot Spitzer, the governor of New York, who was caught using prostitutes, got his apology just right.

Unlike Gibson, he waited for two full days, while the media storm raged. Then he apologised. Spitzer’s delay meant that his apology was not seen as an attempt to shut down the reaction to his bad behaviour. The public believed he meant it; it was generally agreed that he had been forgiven. All because he had waited.

Sunday Telegraph, London

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July 23, 2012 – 2:53PM
Michael Pascoe

Michael Pascoe

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 The week ahead with Michael Pascoe

Update It’s 15 years since the Reserve Bank’s core inflation measures fell below the bank’s target range. It’s highly likely we’ll find out on Wednesday that inflation is again too low.

The June consumer price index hasn’t had the same media build up as the March figure as the RBA hasn’t signalled that this Wednesday’s announcement will have any particular bearing on its next board meeting. Three months ago, the CPI was anticipated as the final plank in the platform for RBA to cut rates. This time, the latest board minutes as good as promised monetary policy will be held steady.

It took the Asian financial crisis in 1997 to push the RBA’s trimmed mean, weighted median and the CPI-excluding-volatile-items below two per cent. This time round it’s the European financial crisis. (The American financial crisis, the GFC, didn’t get a look in as inflation has been running away from the RBA, heading towards 5 per cent, before Lehman Brothers went under – the GFC just gave us a soft landing.)

The “headline” year-to CPI dropped to 1.6 per cent in March, but the smoothed nature of the RBA’s core measures held over 2 – and that was something of an illusion, relying on the rather old June and September quarters. Annualising the most recent six months showed inflation was running at 1.8 per cent and that’s about what the annual figure will prove to be on Wednesday.

Over-utilised coverage

Public inflationary perceptions, egged on by tabloid media and self-serving politicians, remain fixated with utility bills and blind to the areas where prices have come down, even “down, down”. The forecast contribution by the carbon tax of an extra 0.7 points on the CPI will help fuel those perceptions.

The RBA has already stated it’s ignoring the carbon price impact, as it did the GST. With most people compensated for the rise, it’s of little moment to the genuine cost of living. Yet just this once, our central bank might be happy to include the carbon count.

The RBA’s job is to keep inflation within the 2 to 3 per cent range “over the cycle” so it’s hardly going to panic and dramatically slash rates on a couple of quarters’ figures, but the core inflation rate starting with a one should give RBA board meetings a different tone to what we’ve generally been used to.

For a start, it removes one defence against the chorus always calling for interest rate cuts. The strong March quarter national accounts changed some of the chorus’ rhetoric from “the RBA will cut rates” to “the RBA should cut rates”. After Wednesday, the chorus could be asking: “Why not cut rates?”

And, on the monetary doves’ side of the argument, a closer reading of the last board minutes seems to show a little more scepticism about those national accounts than most initial interpretations.

Tame inflation

Last Tuesday’s minutes were generally taken as strong indeed – inflation’s tame, the economy on the up and therefore interest rates steady unless or until something worse happens – but the RBA was also warning that the June quarter scorecard won’t be so flash.

After noting the March quarter stats, the minutes sound cautious: “However, consumer and business sentiment and other timely indicators of activity suggested that the economy was likely to record slower growth in the June quarter.”

And the RBA doesn’t seem entirely convinced the ABS was counting correctly in March: “The strength in goods consumption was somewhat at odds with a range of partial indicators and the Bank’s retail liaison over the same period, though more recent liaison had a stronger tone.”

As for housing: “… indicators suggested that the housing market remained subdued. Dwelling activity was likely to have fallen further in recent months and indicators generally suggested that activity would remain relatively weak in the near term.”

The glass is indeed half full. The statistics say we don’t need further stimulation right now and it’s nice to have plenty of ammunition at the ready while Europe remains so precarious. If low inflation persists, we should see a central banker. Setting monetary policy remains an interesting pastime.


P.S. For those who continue to believe groceries are more expensive, try this paragraph from Woolworth’s annual sales figures released this morning:

“Average prices continued to experience deflation for the second half of 4.4% (first half deflation of 3.7%) and for the fourth quarter of 4.3% when the effects of promotions and volumes are included. The higher deflation in the second half reflects the impact of produce deflation.”

According to Woolworths, the significant produce deflation – 5.7% for the year – came from the high prices caused by the previous year’s natural disasters cycling out of the equation.

By another measure, the “standard shelf price movement index” which excludes specials and promotions, prices were flat for the year. The big difference with average prices indicates just how much effort goes into those specials and promotions, which Woolworths’ suppliers tend to pay for.

Whoever’s footing the bill, it’s simply a nonsense or very poor shopping in the wrong place at the wrong time ignoring the specials, to continue to claim groceries are more expensive.

More likely, it’s a manifestation of the negative group think displayed by a large part of the nation.

Michael Pascoe is a BusinessDay contributing editor.

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by Kyle Wiens | 8:02 AM July 20, 2012

If you think an apostrophe was one of the 12 disciples of Jesus, you will never work for me. If you think a semicolon is a regular colon with an identity crisis, I will not hire you. If you scatter commas into a sentence with all the discrimination of a shotgun, you might make it to the foyer before we politely escort you from the building.

Some might call my approach to grammar extreme, but I prefer Lynne Truss’s more cuddly phraseology: I am a grammar “stickler.” And, like Truss — author of Eats, Shoots & Leaves — I have a “zero tolerance approach” to grammar mistakes that make people look stupid.

Now, Truss and I disagree on what it means to have “zero tolerance.” She thinks that people who mix up their itses “deserve to be struck by lightning, hacked up on the spot and buried in an unmarked grave,” while I just think they deserve to be passed over for a job — even if they are otherwise qualified for the position.

Everyone who applies for a position at either of my companies, iFixit or Dozuki, takes a mandatory grammar test. Extenuating circumstances aside (dyslexia, English language learners, etc.), if job hopefuls can’t distinguish between “to” and “too,” their applications go into the bin.

Of course, we write for a living. is the world’s largest online repair manual, and Dozuki helps companies write their own technical documentation, like paperless work instructions and step-by-step user manuals. So, it makes sense that we’ve made a preemptive strike against groan-worthy grammar errors.

But grammar is relevant for all companies. Yes, language is constantly changing, but that doesn’t make grammar unimportant. Good grammar is credibility, especially on the internet. In blog posts, on Facebook statuses, in e-mails, and on company websites, your words are all you have. They are a projection of you in your physical absence. And, for better or worse, people judge you if you can’t tell the difference between their, there, and they’re.

Good grammar makes good business sense — and not just when it comes to hiring writers. Writing isn’t in the official job description of most people in our office. Still, we give our grammar test to everybody, including our salespeople, our operations staff, and our programmers.

On the face of it, my zero tolerance approach to grammar errors might seem a little unfair. After all, grammar has nothing to do with job performance, or creativity, or intelligence, right?

Wrong. If it takes someone more than 20 years to notice how to properly use “it’s,” then that’s not a learning curve I’m comfortable with. So, even in this hyper-competitive market, I will pass on a great programmer who cannot write.

Grammar signifies more than just a person’s ability to remember high school English. I’ve found that people who make fewer mistakes on a grammar test also make fewer mistakes when they are doing something completely unrelated to writing — like stocking shelves or labeling parts.

In the same vein, programmers who pay attention to how they construct written language also tend to pay a lot more attention to how they code. You see, at its core, code is prose. Great programmers are more than just code monkeys; according to Stanford programming legend Donald Knuth they are “essayists who work with traditional aesthetic and literary forms.” The point: programming should be easily understood by real human beings — not just computers.

And just like good writing and good grammar, when it comes to programming, the devil’s in the details. In fact, when it comes to my whole business, details are everything.

I hire people who care about those details. Applicants who don’t think writing is important are likely to think lots of other (important) things also aren’t important. And I guarantee that even if other companies aren’t issuing grammar tests, they pay attention to sloppy mistakes on résumés. After all, sloppy is as sloppy does.

That’s why I grammar test people who walk in the door looking for a job. Grammar is my litmus test. All applicants say they’re detail-oriented; I just make my employees prove it.


Again, the legal framework is way behind the development of new technology and the implementation of that technology…

July 23, 2012

Kim Arlington

Opportunity ... Educators want more relaxed copyright rules so that students can take full advantage of the latest technology. Opportunity … educators want more relaxed copyright rules so that students can take full advantage of the latest technology. Photo: Virginia Star

SCHOOLS are paying millions of dollars to use freely available internet resources under ”draconian” copyright laws that have failed to keep pace with digital learning.

Schools spend almost $56 million a year under a compulsory licence to copy material such as books and journals without permission from the copyright owner. But an unintended consequence of the licence means schools also pay millions for internet material that the website owners never intended to charge for, according to the National Copyright Unit, which provides specialist copyright advice to the schools and TAFE sector.

While it was difficult to calculate the exact amount paid for freely available internet material, the best estimate suggested it was about $8 million, said Delia Browne, the unit’s national copyright director.

Schools also pay millions of dollars so teachers can copy classroom material from books, something individuals can do free.

”Australian schools pay copyright fees every time a teacher prints from the internet, saves a document from a website or asks a student to print a webpage for a homework assignment,” Ms Browne said.

These costs were likely to increase as the national broadband network was rolled out and might ”eventually become prohibitive”, she said.

The unit will make submissions on schools’ behalf to the Australian Law Reform Commission, which is holding an inquiry into copyright and the digital economy.

Educators want more relaxed copyright rules so that students can take full advantage of the latest technology. Many schools are also struggling to navigate the complexity of the copyright system, which was established before the rise of e-books and digital resources and demands different payments depending on the type of material and how it is used.

Uncertainty over copyright and licensing obligations forced Monte Sant’ Angelo Mercy College in North Sydney to cancel its second-hand book sales.

Every student has her own Mac computer but electronic versions of textbooks are usually available only when a new hard copy is bought.

”We were told [by publishers] that if a student purchases a book second hand, the digital licence doesn’t transfer across from the original owner,” Sue Boudakin, co-president of the school’s parents association, said.

”You can’t even pass a textbook down from one sibling to another [or] gift it to another family, so you’ve got this incredible waste of money and resources.

”It’s crazy; we’re in the midst of this digital revolution and we’ve got publishers … failing to evolve and keep up with the times.”

The director of learning and technology at Monte, Maurice Cummins, said copyright licensing was ”draconian” and was preventing teachers making the best use of interactive new media to educate students.

”Some teachers look at copyright and say, ‘It’s too hard’. If these resources are truly being used to help students learn … licensing needs to be relaxed.” Mr Cummins suggested publishers should set up “an iTunes store equivalent for textbooks – one central repository [where] schools pay a fee for basic use and then their students get automatic access to it”.

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