Trends don't continue

All good things must come to an end; bad things too. Things seem to stay the same for a long time, then suddenly shift. Punctuated equilibrium. We didn’t notice the inflection point. I mentioned decline of Hispanic immigration and the unexpected reduction in U.S. CO2 emission elsewhere, things that seemed would never end. Now the prison boom is ending. Prisons are closing because there are fewer prisoners.

I think we are surprised when trends end "so fast" because we tend not to notice the trend at all until it is completely manifest in a mature stage. In other words, trends are often peaking and nearing decline by the time we see them.

There is the old and somewhat cliché story about a pond being covered by lily pads. I will repeat for those who have not heard it. People walk by a pond every day w/o noticing many lily pads. Finally, they notice some and then in a few days it seems that the whole pond is full. This seems like magic, but it is simply the result of normal growth, which under some conditions is essentially exponential. Here is the hypothetical. One lily pad covers 1/100. Two cover 2/100 four cover 4/100; 8 cover 8/100. 16 cover 16/100. This is when you might notice them. The next squaring gives us 64/100 and next the whole thing is covered in what seems no time at all. Trends can collapse just as fast. Extending our lily pad story, by the time we notice that half the pond is covered, they are beginning to shade each other out. The decline is started by the time we see the climax.

The Hispanic tsunami ran out of power because of rapidly falling birthrates in Mexico and better job prospects there. We COULD have seen that back in the 1990s. Dropping U.S. emission came from shifts to natural gas and higher prices for oil. We could have seen that back around 2000. The prison population follows the crime rate. Crime rates were growing until the early 1990s; then they fell. With some lag time, fewer criminals mean fewer inmates in prison. We could have seen this coming by around 2005. What is the next trend that will grow and collapse? If I knew things like that, I would be rich. In retrospect they are easy to see; not so easy in prospect.

What I can predict with near certainty is that many of the predictions that we are making today will look silly in five years and that many of you who believe them now will claim that you knew the changes were coming.

I have been reading an interesting book called "Anti-Fragile". It is by the the same guy who wrote "Black Swan" & "Fooled by Randomness." The main idea is that we cannot really assess risk and certainly cannot predict the future, so the best strategy is to create systems robust enough to absorb the shocks we know will come but cannot predict in sufficient detail to address or avoid. I think that makes sense.

Posted by Christine & John at February 11, 2013 7:46 PM
Comments
Comment #361555

There is a great deal of distance between saying a trend can collapse, and saying a trend will collapse.

My sense of robust systems is that they’re a blend between having a well thought out set of main options, and a well trained set of leaders who can come up with additional options should things turn out differently than predicted.

It’s not about expecting one outcome or another, but rather about preparing for different possibilities, and then being prepared, as our brains are evolved to allow us, to consider possibilities in real time that may not have occurred to us in the planning stages, even as contingencies.

Posted by: Stephen Daugherty at February 11, 2013 11:52 PM
Comment #361563

Stephen

If I knew when trends would collapse, I would be rich, as I wrote above. I am just pointing out the prosaic fact that nothing continues to grow forever and we should make plans accordingly.

After something happens, many people claim it was evident that it would. People fool themselves. I follows a method to try to counter that and have since 1990. I recommend the method. Before I make a big decision, I write down my predicted outcomes. After the result - BEFORE I review what I wrote - I write down what I THOUGHT would happen. It is amazing how our memory of our prescience is greater than fact. Since I am only writing to myself, I am not trying to lie.

This method has helped me make better decisions. It doesn’t make me right, but it does identify patterns in decision making of which I was unaware. I have also developed a greater skepticism of predictions.

My operating plan today is to develop expertise in myself and my colleagues that can address a range of probable options, but we don’t waste time on excessive detailed preparation. This is a hard leadership challenge. It requires that you forgo the usually cover your ass busy work and be willing to take shit for it.

You have to do against what Keynes said re “Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally.”

Posted by: C&J at February 12, 2013 7:02 AM
Comment #361573
The prison population follows the crime rate. Crime rates were growing until the early 1990s; then they fell. With some lag time, fewer criminals mean fewer inmates in prison. We could have seen this coming by around 2005.

The use of lead fell due to regulations here many years ago. The crime…well read it for yourself.

http://www.motherjones.com/environment/2013/01/lead-crime-link-gasoline

For conservatives who wouldn’t believe MJ-

http://www.guardian.co.uk/commentisfree/2013/jan/07/violent-crime-lead-poisoning-british-export

Posted by: j2t2 at February 12, 2013 1:06 PM
Comment #361574

j2t2

I heard theories that the decline and fall of the Roman Empire was caused by lead poisoning.

But we would need a more rigorous study than a correlation. We had lead pipes in our house in the bathroom. My father always cautioned us not to drink water from the bathroom sink. Our house was built in 1921. We stopped using lead in pipes in residential buildings in the 1930s in most places. Lead from gasoline was a problem. We started to phase it out in 1973.

I think you might stretch the lead argument for the decline of the crime, since young males would start to have less lead around 1990, but the start is problematic. Lead concentrations from pipes and gasoline would have been higher in the generations growing up in the 1920s in urban areas than they would have been after lead pipes began to be phased out. Crime rates didn’t start spiking until the 1960s.

But this is just interesting speculation that doesn’t directly impact the idea that crime rates are coming down and prison populations follow. Perhaps it is true that lead makes people crazy, but that would be an even stronger argument to get them off the streets and would give us greater hope that when this affected generation passes we could expect less crime.

BTW - I indeed do not trust Mother Jones, but I usually check sources, so if Mother Jones was right and did a good job of research, I would believe it. Truth is more important than sources. I am not a liberal after all. But it is interesting that you give me a Guardian article. First, the Guardian is a kind of British Mother Jones, but more importantly the Guardian article cites as its source Mother Jones. What really counts is the source. It doesn’t matter how many times it gets laundered.

Posted by: C&J at February 12, 2013 1:46 PM
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