I first read about John Maynard Keynes as a great investor, not the famous economist, in the “Adam Smith” book, The Money Game, in 1970. Smith noted that Keynes piled up a small fortune for King’s College, Cambridge from 1922 to 1946 demonstrating a skill unmatched in his time and now maybe for all time. We get an update on this story.

From 1924 through 1946, while writing numerous books and overhauling the global monetary system, Keynes also found time to run the endowment fund of King’s College at Cambridge. Over that period, according to Messrs. Chambers and Dimson, Keynes outperformed the U.K. stock market by an average of eight percentage points annually, adjusted for risk.

If you chase down the Chambers and Dimson paper and look at Table 2 on page 46 you find that the index average per year for that time period was 7% but Keynes averaged 15%, doubling the index over a 20 year period. That is staggering good, like Keynes must have known the Queen of Tomorrow. His record is better than Lance Armstrong’s Tour de France winnings or Barry Bonds home run record or Roger Clemens, and you see where I’m going with this.

Note one little observation about Lord Keynes during 1922-46.

As a director of the Bank of England, Keynes was privy to inside information about interest-rate changes, although there isn’t evidence that he traded on it.

During the time period in question, the Bank of England was the most powerful bank in the world. Stated another way, Keynes was the Ben Bernanke of his time only with considerably more power and considerably less transparency. If Keynes was not an insider, the term has no meaning.

How could Keynes have NOT traded on insider information? He always had his memory with him and his formidable mind, too. After he walked out of meetings with the world’s top bankers and investors, generals and politicians, should we believe he forgot those conversations when he made his moves for the endowment at Cambridge? It would be psychologically impossible for him to literally take off his insider hat, put on his outsider hat, and do his buying and selling for Cambridge.

Please realize that I am not saying that Keynes did criminal trading. What he did was legal then, as it was for Joseph P. Kennedy! But, if today Ben Bernanke was also functioning as the chief for the Princeton endowment fund, people would raise more than eyebrows. Bernanke could not legally do today what Keynes did then. And, with good reason. The opportunity for corruption is obvious.

I am claiming that Keynes may not have been such a great investor after all. Good grief, look what Warren Buffett did as a public trader in Omaha, Nebraska. Imagine him as the head of the Fed during the same time period. You think he might have done a little better still?

There’s a Difference between Persuasion, and Smoke and Mirrors; With Persuasion the Illusion Lingers.

P.S. The painting at the top of the post is from the National Portrait Gallery in London and depicts Keyes with the famed Bloomsbury Group. Keynes remains the most unusual economist. Near the end of his life he declared, I should have drunk more champagne.

The NY Times speaks truth to power and comes away with a mouthful of apple. Voice recognition technology is upon us!

VLAD SEJNOHA is talking to the TV again. O.K., maybe you’ve done that, too. But here’s the weird thing: His TV is listening. “Dragon TV,” Mr. Sejnoha says to the screen, “find movies with Meryl Streep.” Up pops a list of films like “Out of Africa” and “It’s Complicated.” “Dragon TV, change to CNN,” he says. Presto — the channel flips to CNN.

Mr. Sejnoha runs a voice recognition firm that is changing the world through spoken interaction between humans and computers.

It is a wildly disruptive idea. But such systems are already beginning to change the way we interact with the world and, for better and worse, how we think about technology. Until now, after all, we’ve talked only to one another. What if we begin talking to all sorts of machines, too — and, like Siri, those machines respond as if they were human?

How disruptive?

Humans are wired for speech and tend to respond to talking devices as if they were kindred spirits, says Sherry Turkle, a professor of the social studies of science and technology at the Massachusetts Institute of Technology. “I’m not saying voice recognition is bad,” Professor Turkle says. “I’m saying it’s part of a package of attachments to objects where we should tread carefully because we are pushing a lot of Darwinian buttons in our psychology.”

The first voice recognition software I used was Dragon which was going to revolutionize writing sometime back in the 1990s. You talk, it understands, the computer screen fills with your words: an essay, poem, or novel, a textbook, the Gettysburg Address. I fought the Dragon until I saw him smile and then I grabbed the keyboard.

If you do even a little reading you know that various experts have been trying voice recognition since the 1960s and Bell Labs. (Jeepers, do you remember when Bell Labs and telephones were the cutting edge of technology?) In other words, the science here is almost as old as I am and Siri is the crowning achievement. Sure, if you have a highly restricted vocabulary of words and further ensure that the sounds of each word are distinct, unique, and easy to produce, you can get voice recognition that works about as well as my Spanish does when we’re in Mexico. You can get a taxi, a drink, or a hat.

Beyond a few real-time missions there’s nothing close to normal conversational voice recognition. And, after 50 years of smart people whacking at this, you’d have to say it’s not coming to a home theatre near you anytime soon.

Here’s the persuasion pivot. We can’t create functional, easy to use, practical voice recognition software that any healthy person can use. The science just isn’t there.

But, we do have the science for Global Warming, Health Care Reform That Works, Green Energy, and on and on with the Cool Table litany of scientific science. The next time you read a Tooth Fairy tale about soda pop or red meat or glaciers or flooded cities or solar powered cars, just ask yourself. If we understand galactic weather, why doesn’t Siri understand me all the time?

And, if you want to see why we’ll never have practical voice recognition, watch this YouTube video.

All Bad Science Is Persuasive!

P.S. What happened to journalism speaking truth to power? This NYT article is nothing more than a PR puff piece for Nuance which is apparently French for Dragon.

Listen to the persuasive music coming from Facebook.

The company announced a plan on Tuesday morning to encourage everyone on Facebook to start advertising their donor status on their pages, along with their birth dates and schools — a move that it hopes will create peer pressure to nudge more people to add their names to the rolls of registered organ donors.

Hope with Nudge? That’s a persuasion plan?

It is a rare foray by Facebook into social engineering from social networking, and one with a potentially profound effect, according to experts in the field of organ donation.

Potentially? Profound? What experts?

BJ Fogg, who studies how technology can change attitudes as director of the Persuasive Technology Lab at Stanford University, said the prominence of organ donation on the Facebook site “will trigger people to make an important decision about whether to be an organ donor, a decision most people in the last year haven’t even considered.” Dr. Fogg added: “If you see all your friends do it, or have the illusion all your friends are doing it, it sets up an expectation of sorts and it may become a social norm.”

Facebook with 160 million American account holders. Organ donor as part of the status line. Nudges. Social Norms. Important decision making. How can it miss?

Easy. Spot the McGuffin.

Previous efforts to encourage organ donation have struggled, Dr. Cameron said, because the issue is sensitive and personal and because the decision is made at the motor vehicle department, where many people may not want to focus on the prospect of dying.

Did you see it? People can only do the TACT at the DMV when they get their driver’s license. Thus, all the Facebook Nudge Social Norm Trigger Important Decision stuff occurs away from the only time and place the Other Guy can do the TACT. And, worse still, people rarely go to the DMV, once every few years. Yet, somehow Experts believe that Facebook will create such powerful change that people will remember it over the course of several years and then when standing in line at the DMV, cursing the slowness, cursing the bureaucracy, just plain cursing, they will certainly remember all that Facebooking and check the Organ Donor box.

And these folks are Experts?

There is no, none, zip, zed, nada proven persuasion that works like this. It is a Queen of Tomorrow play. If indeed anyone could deliver persuasive messages that triggered an explicit TACT in one place at one time three years in the future, she could control the world. The hypothesis is stupid in itself. But, let me pile on.

Why would you clown around with this Facebook FauxItAllery when we’ve got scientific evidence of something that works killer good. Remember Tyler Harrison and Susan Morgan? Of course, you don’t because you are a Facebook Expert. Go reread this post on their research with organ donation.

They produced a 1900% increase, yes, a 1900% increase, in organ donation with a small media and point of TACT persuasion campaign. Real people. Real time. Real DMV. If Facebook Experts wanted to address the problem of getting more organ donors they would call Susan Morgan or Tyler Harrison and LISTEN TO THEM.

But, they didn’t, which tells you that they are not serious about the stated TACT and given that Facebook is aiming at an IPO in a couple of weeks, you might think a little deeper about this. Like the Ad Council and Clear Channel this is a fabulous self promotion play even without Ashton Kutcher. The Facebook play will have no impact on organ donor rates or even organ donor signups, but it sure makes Facebook look good. Concerned. Caring. Thoughtful.

And, don’t overlook the self persuasion effects here, too.

Dr. Cameron played a role in the change at Facebook. A 1991 graduate of Harvard University, he had written about his transplant efforts — and the struggles to find donors — for a class reunion booklet. That was read by a former classmate and friend, Sheryl Sandberg, the chief operating officer at Facebook. At a reunion last May, Dr. Cameron recalled standing at a mixer when Ms. Sandberg told him that she had read about his efforts and had been thinking about the struggle to get more organ donors. “She said: ‘I think we can fix that,’ ” Dr. Cameron recalled. “It was a chills-up-the-spine moment.”

Veritas smeritas. The reunion notebook of Harvard connects old school chums who know the handshake and at a party over crimson and canapés, two power brokers unite to the save the world. That should send chills up your spine because it shows the vapid world of Experts. Whatever it took for Cameron and Sandberg to achieve their status, it clearly did not include a working knowledge of persuasion. Hey, I’m a world class surgeon. Hey, I’m a world class COO. Of course we’re persuasion Experts. How can we not be?

Does anyone believe you will see a fair evaluation report out of Facebook on this? My guess is that in a year or two you’ll see some little nugget that counts Organ Donor Status change on Facebook as the indication of campaign effect. As if what people write on Facebook is the truth. Doing the grubby work of tying exposure to Facebook messages to actual DMV records costs time and money and if Facebook engineers can’t write a PHP script for it, it’s not Science. Look for more Big Data with lots of Relative Ratios. But, you’ll find thousands of people dying while waiting for a transplant.

Still, mavens, you gotta give credit where credit may be due. If indeed this is all about IPOs and self persuasion, then the Facebook Organist is playing sweet persuasive music.

Potentially Profound Effect with Hope and a Nudge.

P.S. If you can find the angle, you can make a killing on Facebook, but not with their stock or their persuasion. They are vulnerable the way all hunters are when focused upon their prey. Facebook is looking to make its killing leaving them ripe for the taking. Think about it.

Sure, the CDC can’t get anyone to change anything about their behavior and sometimes manages to make it worse, vaccines anyone? But, now the for-profit guys are weighing on lifestyle. This time for sure!

THE ADVERTISING COUNCIL has joined forces with Clear Channel Media and Entertainment to run a new series of radio ads about childhood obesity on Clear Channel’s 850 stations for three months . . . According to the Ad Council and Clear Channel, the value of the advertising is $30 million.

First, my compliments to the mavens at the Ad Council and Clear Channel. This is great brand building. Clear Channel really cares about you and is putting $30 million on the line to show it. Of course, it’s all tax deductible and part of a charitable project. So, look like you are doing good and along the way you can do well, too. Wonder if Ashton Kutcher is on board?

Second, this $30 million campaign will have the same effect as the current CDC $50 million campaign on smoking and the former $400 million campaign on childhood activity. That would be zero. If anyone takes the time to do a serious evaluation study of the Ad Council/Clear Channel partnership they will find zero change in behavior. Lots of Reception and Exposure. Lots of kids and their parents will know and recognize words like “Ad Council” and “Clear Channel” and “we care.” But any change to youthful waistlines? No.

At least one academic spills the beans while playing nice.

Dr. Marlene Schwartz, deputy director of the Rudd Center for Food Policy and Obesity at Yale University, said that although she appreciated the campaign’s effort to address childhood obesity issues, she was concerned it “almost gives people too many choices. Research has shown that people get overwhelmed when they are given too many options and sometimes choose to not act at all.”

Excellent observation. The campaign, like virtually all activity campaigns, cannot focus upon one TACT for one targeted set of Other Guys, but instead includes messages on a wide variety of actions that count as Being Active! (The exclamation point is important.) All those different messages and all those different TACTs destroy effectiveness. Of course, as I already noted, the Ad Council and Clear Channel avoid that scatter when it comes to sourcing the ad. While no one knows exactly what to do, everyone knows exactly who’s saying it.

Let me play the arrogant know-it-all. With my research colleague, Bill Reger-Nash, we ran the famed Wheeling Walks! physical activity campaign that collected hard numbers to demonstrate real change in people’s activity as a result of a media campaign. It was easy. Define a TACT. Target the right Other Guys. Pound them with Arguments that address the Easy, Fun, and Popular elements from the Theory of Planned Behavior. And, use an exclamation point!

You can persuade people to change on physical activity as long as you aim at persuading people to change on physical activity instead of trying to build a brand, satisfy a committee, or play a hunch. Trust me. I’m a blogger.

But past my trivial concerns about behavior change, see the Good Persuasion hiding in the Bad Persuasion in this campaign.  Everybody knows your name!

The darkness gathers.

“Companies like Google are creating these enormous databases using your personal information,” said Paul Hill, senior consultant with SystemExperts, a network security company in Sudbury, Mass. “They may have the best of intentions now, but who knows what they will look like 20 years from now, and by then it will be too late to take it all back.”

You might recall this PB post about some guy who obtained his file of personal information from Facebook: 1200 pages!

We’re well into the Age of the Database now and what have we got to show for it? Where’s the Darkness At Noon? Where’s all the bankruptcy from overspending? Where’s the fixed election?

I’m just not seeing the downstream behavioral effects all this Big Data should produce. I appreciate the efficiencies and interesting insights (like the Target pregnant teen and her dad), but the New New Thing that Changes Everything is just not happening.

You could argue that there’s a Queen of Tomorrow out there who is using Big Data with Lawful Persuasion, but She’s being careful to avoid detection. But again, if you’ve got Lawful Persuasion and Big Data, who cares if anyone knows? You can persuade against that.

I will continue in a line of idiocy all my own. Nobody with Big Data is reading the Persuasion Blog like a philologist. You only appreciate Plato in the original Greek!

P.S. εξακολουθεί να μην υπάρχει αύριο βασίλισσα της? Still no Queen of Tomorrow! Opa!