01 Apr Our Bizarro World
In the 1960s, DC Comics introduced a fictional cube-shaped planet into American comic books known as htraE (“Earth” spelled backwards). Everything on the planet was the opposite of what one might normally expect on Earth. On the Bizarro World, as htraE was known, good was bad, up was down, right was wrong. The main characters on the planet were awkwardly inverted versions of Superman (known as Bizarro) and his companions. This concept of a backward world was later popularized in a Seinfeld episode that included Kramer working as a professional, George dating gorgeous women, and Jerry acting irresponsibly.
The comic series even profiled a salesman marketing Bizarro bonds that were “guaranteed to lose money.” And while it was funny at the time the comic was written precisely because it was laughably unrealistic, it’s actually not uncommon today. There are trillions of dollars of debt in the world yielding negative interest rates. Bizarro debt? Sure seems so.
But it’s not just bonds that have gone Bizarro. Think of the global economic rhetoric. The United States, long a champion of open markets and free trade, has been increasingly adopting nationalist and protectionist policies. Meanwhile, the communist Chinese have begun preaching the benefits of trade and globalization, as typified by Xi Jinping’s speech at Davos earlier this year. What?!? Bizarro indeed.
Just yesterday I had the pleasure of interviewing Bain Capital founder Josh Bekenstein on stage at the Yale Private Equity and Venture Capital conference. During our conversation, he noted that despite being illiquid and highly leveraged, private equity outperformed the less leveraged public equity markets during the financial crisis. I had to pause and reflect: more leverage going into a crisis resulted in better returns? Yup.
And lest you think this Bizarro World of ours has only infiltrated financial domains, think again. It’s creeping into many walks of life, and the classrooms at Yale are not immune. Last month, a friend forwarded me an online documentary (“What Has Yale Become?”) about the dynamics of expression in New Haven. The short video does a good job of explaining what’s been happening since the 2015 Halloween emails that generated national attention.
I’ve been discussing the topic of free expression with students of mine at Yale…and what some have said is both shocking and disappointing. Several students state they do not feel safe expressing controversial perspectives in classes or even with peers. Sure, it’s conceivable that the students who take my classes are a self-selected conservative bunch (they are, after all, studying financial bubbles and are therefore concerned with finance…) that don’t represent the student body. But even students not in my class that I’ve gotten to know over the years have suggested it’s risky to engage in debate on topics for which there is an accepted politically correct answer. One student noted his reluctance to speak freely if his thoughts differ from the prevailing classroom dynamic: “There is no upside in doing so…I’ll be socially shamed and called out as insensitive.”
It’s particularly ironic, nay Bizarro, that this environment might be emerging on the very campus that drafted the definitive blueprint for intellectual inquiry and expression on university campuses. The Report of the Committee on Freedom of Expression at Yale, also known as The Woodward Report, was quickly adopted in spirit by many American institutions of higher education in the 1970s and beyond. The first paragraph of the 31-page document captures the essence of the report:
The primary function of a university is to discover and disseminate knowledge by means of research and teaching…The history of intellectual growth and discovery clearly demonstrates the need for unfettered freedom, the right to think the unthinkable, discuss the unmentionable, and challenge the unchallengeable.
Several paragraphs later, the report notes the critical role that free speech plays as means to protect minority opinion:
…value freedom of expression precisely because it provides a forum for the new, the provocative, the disturbing, and the unorthodox. Free speech is a barrier to the tyranny of authoritarian or even majority opinion as to the rightness or wrongness of particular doctrines or thoughts.
Compare the sentiments conveyed in these paragraphs with those that emerge from the video documentary. Could the current attempts at creating an environment of free expression at Yale instead be creating a culture of self-censorship? Bizarro indeed.
What this Bizarro world of ours has taught me is that we must constantly think about the unexpected developments that can derail our most cherished plans. What assumptions have we made that may not be valid? In the current environment of radical uncertainty, it’s critical we explore multiple scenarios and consider outcomes that, regardless of how likely (or unlikely) they may seem, can meaningfully impact us.