30 Year Fixed Rate Mortgages

When in Doubt, Leave it Out

For many reasons, I will never forget Mr. Muchio, who taught me algebra in the 7th grade.

One of the biggest challenges in learning algebra isn’t the math itself. It’s learning how to parse descriptions into mathematical equations you can then use the rules of algebra to solve. It’s a process of abstraction, figuring out what are the essential details and what is “merely” descriptive and/or reflective of a particular situation. This is commonly known as learning to solve word problems.

We quickly became masters of this…or thought we had.

As Mr. Muchio pointedly kept reminding us, what we were actually doing was leaving stuff out to overly simplify the problem. I still remember his admonition, decades later: “You’re using a silly rule: ‘when in doubt, leave it out’. But it means the problem you solve isn’t the one you were supposed to solve. Be careful about what you leave out!”

Those Pesky Excel Models

Once upon a time I was chief financial officer of a startup biotech company. One day my boss, the CEO, and I were traveling back to meet with investors to pitch them on why they really wanted to keep buying our stock.

During the flight I reviewed the financial models and presentation I’d spent days creating. Somewhere over the Midwest I suddenly realized several of the key summary values, which were central to my analysis, had gotten hard-coded. They didn’t reflect the revised assumptions I’d made.

This meant my beautiful and compelling pitch was completely wrong. In fact, we didn’t look like such a good investment after all.

Needless to say, I didn’t get much sleep that night. I had to revise everything.

Ever since, my Excel models are littered with “check figure” lines, that confirm totals are, in fact, reflective of the data they claim to summarize.

Who Cares What Joe Namath Thinks?

One of my earliest political memories was of Joe Namath, a very talented and famous quarterback in 1968, being asked who he thought should be our next President. I was 13 at the time.

I remember thinking “He’s a phenomenal quarterback. But why in the world would anyone think that’d make him an expert on national politics and the Presidential candidates?”

It takes a lot of time and effort — and focus — to become an expert in anything. Very few of us have the resources to do that in many different fields.

This spillover expertise effect really comes into play, at least in the United States, with business titans and governing.

Just because someone is successful in business, they don’t necessarily have a clue as to how to successfully lead a community in its pursuit of happiness and the greater good. Business, for all its challenges, is a much, much simpler environment to operate in than government. I know this from personal experience because I worked in each for 20 years, as a financial executive and as a local elected official.

In business, you succeed by focusing on making money while not breaking the rules. Or at least not breaking them too much.

In government, at least in a representative constitutional democracy, there is no single goal, and no marketplace in which to value tradeoffs from moment to moment. In fact, there’s often no market at all.

What Took Them So Long?!?

The Michelson–Morley experiment, which produced the data that overthrew Newtonian physics, was performed in 1887.

But it went unexplained until 1905, when Albert Einstein published the special theory of relativity.

What were the world’s physicists doing during those 18 years? Ignoring the data and hoping it would go away? Playing pinochle?

No, they were trying to jam the empirical data into Newtonian physics. Because that just had to be true! It’d successfully explained everything (well, almost everything) for centuries!

Once you accept the box you’re in, it’s damn hard to break out of it. Or even realize you’re in a box.