Linearity vs Cycles
Jul13

Linearity vs Cycles

Take a deep breath. Now hold it. Without letting it out, take another deep breath. You can’t do it can you? Now go back to breathing normally before you pass out. The point of all that was to show you in a visceral way that at the core of your being are cycles, in this case breathing in and breathing out. Cycles are all around us. The entire universe revolves on cycles: day and night, the seasons, the moon, and even most important for your immediate survival, breathing in and breathing out. Problems don’t arise from cycles, though we often look at the nadir of the cycle and say that it’s problem. It’s not; it’s just nature. The problems are invented in our own human cortex when we deny that cycles are necessary or we imagine were in a different part of the cycle from where we really are. An example of that is our country’s monetary policy. It’s based loosely on the Keynesian philosophy of stimulating the economy in a downturn and withdrawing that stimulation when the economy is an upswing. Our modern central bankers are very good at stimulating downturns but seem not to know how to take their foot off the gas during an upswing.  Their goal of a world with no recessions is like the house of a hoarder. At first he feels wealthy because he has so much stuff, but soon he isn’t able to move around to get anything done. By believing in linearity and not allowing the natural cleansing cycle of recession/expansion we have cluttered our economy and made it less productive. Another example is our national policy on addiction. For a hundred years this country has treated addiction like a set of voluntary behaviors that can be changed with appropriate legal and economic disincentives. This has led to endless repetition of a pattern of moving from one drug crisis to another only to find the next as soon as we solve the last. Only in the last 10 years, and especially the last two, have the leaders of this country come to call addiction an actual disease. And unfortunately it looks like it might be too little, too late. Strauss and Howe’s The Fourth Turning describe how national moods change every generation lasting approximately 15 to 25 years. They tell us that these moods repeat every 4 cycles like the seasons. Their work suggests that since the world financial crisis of 2008 we have left the autumn unraveling and entered the winter crisis period. Such periods are marked by increasing social order, lower crime, increasing government power, public condemnation of substance use, and in general would be consistent with the pull away from the idea of addiction...

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Modern Monetary Theory and Addiction

I was in a debate this morning on twitter about the validity of Modern Monetary Theory (MMT – not to be confused with Methadone Maintenance Therapy in this post), but ran into problems with the 140 character limit. For those of you who don’t know, MMT is a theory based on government’s monopoly of excreting fiat currency as a basis for an economy. Basically MMT says that money is what the government says it is. If the government wanted us to pay our taxes in chocolate, we’d use chocolate for money. But the government wants Federal Reserve Notes (or their bank deposit equivalents) and so that’s what we use as money. It’s a compelling theory that fits the facts of our lives today and has gotten a lot of followers lately. The point I was trying to make in my twitter debate was that the flaw of MMT, the thing that makes it not something to base long term predictions on, is its original assumption. That assumption, that money is money because the government says it is, might be true today in America, but it isn’t always true. In fact, it isn’t even true most of the time in most places in our history. The word money comes from Jupiter Moneta, a temple at the center of Rome which was used as a mint. The ancients saw money as part of the natural world. It was a gift of the gods like trees, rivers, and thunder. You could use it, you could modify it, but you could not have total dominion over it. And you certainly could never forget its natural power. Greek myths are replete with examples of mortals who, in their hubris, denied the power of nature. Man can control nature to an extent, but as soon as he thinks he has it licked it’s game over. Money is money because several billion interdependent economic actors all making decisions about what is best for them bring about its emergence. Money is an emergent property of a complex natural system. There have been many forms of money over many thousands of years, many governments that went along with them, and many governments that tried to deny money’s emergent nature. So my point about MMT was that money isn’t money because the government says it is, at least not always and in all circumstances, and when governments forget money’s natural force, it’s game over. So what does this have to do with addiction? Addiction is an illness, a natural phenomenon. It emerges from nature because of forces that aren’t in our control as individuals or as a professional field....

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The Big Short
Jun06

The Big Short

By now, most American’s have heard of the book, The Big Short by Michael Lewis, and the movie of the same name. (To short is to sell something you don’t own because you believe it will go down in price or value a great deal) Most people know that the book is about people who saw the collapse in the housing market before it happened and made money from it. That’s not really what the book’s about. The book is about how hubris and cluelessness of government officials and establishment organizations allowed imbalances to get so great that when they finally balanced (as imbalances always do) the entire financial system was at risk. The fact that individual traders saw the imbalances and acted on them should be no surprise. What is a surprise is that those very traders tried to tell people something was wrong. They went to the rating agencies and told them they were wrong; they went to the big banks and told them they were wrong; they went to the government and told them they were wrong. The reaction of all these people was that the traders didn’t know what they were talking about. “How could they know?” the establishment seemed to say. “The system had worked just fine all these years. Who are they to tell us that there are hidden costs that we don’t see?” Well history has decided who was right and who was wrong on that score, and it was an expensive lesson for all of us. The problem behind the Big Short was the assumption that housing in America could never go down across the country at the same time. It hadn’t happened for over 70 years, so it couldn’t happen, right? As long as it didn’t happen, even the crappiest sub-prime mortgage bond would be good. Turns out the assumption wasn’t true, the bonds were worthless, and the pyramid of derivatives built on them were as well. Is there a “big short” in addiction today? Is there a situation in which entrenched establishment groups or regulators are so sure they are right that they can’t see the hidden costs of their system? Is there a situation based on an assumption so old that no one today can question it? I think there is, and it’s also about 70 years old, but that’s long enough for generations of academics and clinicians to have been trained by people who were trained by people who were trained by people who assumed that this was the truth. The Big Short was a best selling book with hundreds of thousands of copies in print. There’s another bestseller that is...

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Calculating Costs
Mar08

Calculating Costs

When I was a kid, calculating costs was easy. I made $5 a day working in my family’s store for 8 hours on Saturday. A piece of gum cost 5 cents. So 8 hours got me 100 pieces of gum, or figured another way, each piece of gum cost me 4.8 minutes of work. Now, I must say, I never did this calculation back then at age 10 but I understood it alright. I knew that I was buying the gum. I knew that I was working to get the money to buy the gum. I knew that a decrease in what I got paid meant less gum. I knew that if I paid less for the gum, I didn’t have to work as long for each piece. Things seemed simple when I was a kid. Now fast forward to today. Calculating costs seems so much more complicated. I had no idea back then that with every piece of gum I chewed I was increasing the sugar content of my saliva and changing the microbiota of my mouth. I had no idea that such a thing would lead to cavities and on going problems with fillings and crowns, so that now at 55, I’m facing the expensive replacement of a lot of dental work. I had no idea that the sugar was increasing the metabolic load and hastening the day when I’d have age related increase in insulin production in an attempt to keep my glucose down. Even aside from health costs, I had no idea that chewing the gum affected the customers I waited on in the store, and may have decreased my sales. Of course you’re thinking that such things are ridiculous to think about, even if the crowns cost thousands of dollars, averaged across the years and the number of pieces of gum I chewed the additional cost wouldn’t be worth noticing. Also, it’s not the like gum was the only thing that influenced these costs. The costs need to be averaged over all of the things I ate and drank that had an effect in that direction. Okay, I agree with you, but even if the cost increase was 10% I wouldn’t have noticed it. What’s the difference between 5 cents and 5.5 cents when you’re 10? So given it was more like 1% it would have been even harder to notice. But then again, my teeth aren’t the point of why I’m writing this. I’m just pointing out that everything is connected, even a kid’s gum. The point is how we calculate costs. We have a tendency to calculate only the primary savings or...

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