Janne Jutila

Developing digital identity for better society. Observations about economy and life near North-Pole in worlds happiest country #Finland

[Janne Jutila @JanneJutila]

AI ja verot. Kevään 1848 paluu, kun työn verotuksen pohja murenee. Radikaaleja uudistuksia kaivataan. Kykeneekö syväjäinen kolmikanta tupo-koneisto tähän? En löisi vetoa sen puolesta. https://t.co/KRU6Ds60aN

[Janne Jutila @JanneJutila]

Vähän pitkä mutta kiinnostava artikkeli siitä miksi asiat menee pieleen. Pätee erityisen hyvin mm. Suomen talouden ja politiikan konkurssin kehittymiseen.

[Jaynit @jaynitx]

Charlie Munger spent 50 years studying why intelligent people make catastrophically stupid decisions.

It is the most useful thing I have ever watched:

1. Incentives are more powerful than anyone thinks. Munger says he has been in the top 5% of his age cohort his entire life in understanding the power of incentives and he has still underestimated it every single year. Federal Express could not get their night shift to work efficiently until someone realized they were paying by the hour. They switched to paying by the shift. The problem disappeared immediately.

2. People rationalise terrible behavior when their incentives point that way, and they do not even know they are doing it. A doctor in Nebraska was removing perfectly healthy gallbladders for years. When Munger asked an old colleague whether the doctor knew he was harming patients, the answer was no. he genuinely believed the gallbladder was the source of all medical evil and that removing it was an act of love. That is incentive-caused bias at its most extreme.

3. Psychological denial is real, and it is not just for weak people. A family friend's son flew off a carrier in the North Atlantic and never came back. His mother, a completely sane woman, simply never believed he was dead. Reality was too painful, so she distorted it until it was bearable. Munger says we all do this to some extent, and it causes terrible problems.

4. Consistency and commitment tendency are one of the most powerful forces in the human mind. Once you have stated a position publicly, you are psychologically locked into it. Max Planck said the really important new physics was never accepted by the old guard. A new guard came along that was less brain blocked by its previous conclusions. If this happened to the deans of physics, Munger says, imagine what it does to ordinary people.

5. The Chinese brainwashing system used on prisoners of war worked better than torture. They did not start with big demands. They maneuvered people into making tiny little commitments and declarations and slowly built from there. The same mechanism operates in every cult, every sales system, and every ideology that gets deeply embedded in people's heads.

6. Pavlovian association shapes buying behavior at a level most people never consciously process. Munger estimates three quarters of all advertising works on pure Pavlov. Coca-Cola does not want to be associated with funerals. They want to be associated with the Olympics, wonderful music, heroics. The association itself changes how people feel about the product at a subconscious level. Raising the price of a product can actually increase its market share because price and quality are associated in the human mind, and people use price as a signal of value.

7. Persian messenger syndrome is alive and running every major organization. The Persians killed the messenger who brought bad news. Bill Paley in his last 20 years, did not hear one thing he did not want to hear. everyone around him knew bringing bad news was dangerous. The result was that one of the most powerful men in media made terrible decisions for two decades because reality never reached him.

8. Social proof causes otherwise intelligent people to follow each other off cliffs. When one oil company bought a fertilizer company in the 1970s, practically every other major oil company rushed out and did the same. There was no rational reason for oil companies to own fertilizer companies. But if Exxon was doing it, it was good enough for Mobil. Every single acquisition was a disaster.

9. The efficient market theory persisted in academia for decades despite Berkshire Hathaway existing as a living contradiction. One economist kept adding sigmas to explain away the anomaly. two sigma, then three, then four, eventually six sigma. Munger's observation: It is better to add a sigma than change a theory just because the evidence comes in differently. That economist later went into money management himself and sank like a stone.

10. Contrast bias warps perception constantly and invisibly. Put your hand in hot water, then room temperature water. It feels cold. Put your hand in cold water, then room temperature water. It feels hot. same bucket. The human sensory apparatus has no absolute scale, only a contrast scale. Real estate agents exploit this deliberately. They show you two overpriced, awful houses first, then take you to a merely overpriced house, and it feels like a bargain.

11. The frog in slowly heating water is the business version of contrast bias. If something bad comes to you in small pieces, you are likely to miss it entirely. Munger says he has known many high-powered brilliant businessmen who were destroyed this way. not because they were stupid but because each incremental change was too small to trigger alarm. The contrast was never large enough to notice.

12. Authority bias is so powerful it can make trained professionals watch a plane crash. In flight simulator experiments, when the pilot, the authority figure, does something that any trained co-pilot knows will crash the plane, 25% of the time, the co-pilot sits there and lets it crash anyway. They have been trained to know better. The authority relationship overrides the training.

13. Deprivation super reaction syndrome explains why people go insane over small losses. Munger's neighbor had a 180 degree view of the harbor. the neighbor put in a pine tree about 3 feet high that turned it into a 179 and three-quarter degree view. They had a blood feud that went on for years. The New Coke disaster is the corporate version. Coca-Cola told customers they were changing a flavor and triggered a deprival super reaction so powerful that Pepsi was weeks away from releasing old Coke in a Pepsi bottle. smart engineers. brilliant lawyers. armies of psychologists. All missed it.

14. Envy and jealousy are far more powerful than greed and almost entirely absent from psychology textbooks. Munger says Warren Buffett has said half a dozen times that it is not greed that drives the world but envy. In a thousand-page psychology textbook, the index entry for envy and jealousy is blank. One of the most powerful forces in human behavior and academia essentially ignores it.

15. Gambling addiction is not explained by variable reinforcement alone. Skinner thought he had fully explained gambling by showing that variable reward schedules pound in behavior more powerfully than fixed ones. But the people who design modern slot machines know things Skinner did not. Lotteries where you pick your own number get far more play than lotteries where the number is assigned to you. People who commit to a number believe it has more validity because they chose it. Near misses on slot machines trigger deprival super reaction syndrome. It is four or five psychological tendencies working together, not one.

16. The most dangerous situations are when multiple psychological tendencies combine toward the same end at once. Munger calls this the lollapalooza effect. Tupperware parties use four or five tendencies simultaneously. Moonie conversion methods combine multiple tendencies and work extraordinarily well. alcoholics anonymous achieves a 50% no drinking rate when everything else fails because it also combines multiple tendencies toward a constructive end. The Milgram experiment is not just about obedience. it involves authority bias, consistency and commitment tendency, and contrast effects all working together. That combination turns human brains into mush.

17. Boards of directors are structurally designed to fail as corrective mechanisms. The top executive is the authority figure. He is doing something questionable. You look around, and nobody else is objecting, which is social proof that it is fine. He flies you around in the corporate jet and raises your director fees every year, which triggers reciprocation tendency. Munger's rule: boards only act when the behavior gets so bad it starts making them look foolish or threatens legal liability. That is the only forcing function that reliably works.

18. John Goodfriend of Salomon Brothers destroyed his career and reputation because he did not fire a trusted employee who had lied to the government. Every psychological tendency pointed toward keeping the man. He was a close colleague. His wife was known. He was part of a group that had made over a billion dollars for the firm. He said he had never done it before and would never do it again. Goodfriend looked into his eyes and believed him. The man did it again. The lesson: everyone who gets caught embezzling says they have never done it before and will never do it again. That is what they all say.

19. Darwin avoided confirmation bias by deliberately seeking out disconfirming evidence. Munger says Darwin was not especially smart by ordinary standards of human acuity. Yet he is buried in Westminster Abbey. Munger studied how Darwin worked and realized he had psychological tricks worth learning. Darwin always paid extra attention to evidence that contradicted his theories. Munger started doing the same and credits it as one of the most important intellectual habits of his life.

20. Why is the most important word in communication? Carl Braun designed oil refineries with spectacular skill, and you got fired in his company if you wrote a communication without explaining why. not just who, what, where, and when, but why. Braun knew that in a complex system where things can blow up, a communication system that always explains the reason behind an instruction works dramatically better than one that does not. Forstein, the general counsel of Salomon, told Goodfriend on multiple occasions that he had to report the employee's misconduct. He explained it was the right thing to do. He never explained what would happen to Goodfriend personally if he did not. he failed to use the most powerful tool of persuasion. Goodfriend ignored him. When Goodfriend went down, Forstein went with him.

[Janne Jutila @JanneJutila]

@TereSammallahti @SarasvuoJari @AnttiLindtman Sosialistin lupaukset pitävät niin kauan kun voi käyttää muiden rahaa. Kunnes ne aina loppuvat.

[Janne Jutila @JanneJutila]

@OsakeKeisari @SarasvuoJari Tämä on se kuuluisa Kreikan tie kohti pahoinvointiyhteiskuntaa.

[Janne Jutila @JanneJutila]

Muistikkaaksi @kokoomus - Suomen julkisen sektorin osuus on maailman korkein. Korkeampi kuin Neuvostoliitossa ennen romahdusta.

[Thomas Sowell Quotes @ThomasSowell]

“Socialism only works in two places: Heaven where they don't need it and hell where they already have it.”

— Ronald Reagan

[Peter Girnus 🦅 @gothburz]

Last quarter I rolled out Microsoft Copilot to 4,000 employees.

$30 per seat per month.

$1.4 million annually.

I called it "digital transformation."

The board loved that phrase.

They approved it in eleven minutes.

No one asked what it would actually do.

Including me.

I told everyone it would "10x productivity."

That's not a real number.

But it sounds like one.

HR asked how we'd measure the 10x.

I said we'd "leverage analytics dashboards."

They stopped asking.

Three months later I checked the usage reports.

47 people had opened it.

12 had used it more than once.

One of them was me.

I used it to summarize an email I could have read in 30 seconds.

It took 45 seconds.

Plus the time it took to fix the hallucinations.

But I called it a "pilot success."

Success means the pilot didn't visibly fail.

The CFO asked about ROI.

I showed him a graph.

The graph went up and to the right.

It measured "AI enablement."

I made that metric up.

He nodded approvingly.

We're "AI-enabled" now.

I don't know what that means.

But it's in our investor deck.

A senior developer asked why we didn't use Claude or ChatGPT.

I said we needed "enterprise-grade security."

He asked what that meant.

I said "compliance."

He asked which compliance.

I said "all of them."

He looked skeptical.

I scheduled him for a "career development conversation."

He stopped asking questions.

Microsoft sent a case study team.

They wanted to feature us as a success story.

I told them we "saved 40,000 hours."

I calculated that number by multiplying employees by a number I made up.

They didn't verify it.

They never do.

Now we're on Microsoft's website.

"Global enterprise achieves 40,000 hours of productivity gains with Copilot."

The CEO shared it on LinkedIn.

He got 3,000 likes.

He's never used Copilot.

None of the executives have.

We have an exemption.

"Strategic focus requires minimal digital distraction."

I wrote that policy.

The licenses renew next month.

I'm requesting an expansion.

5,000 more seats.

We haven't used the first 4,000.

But this time we'll "drive adoption."

Adoption means mandatory training.

Training means a 45-minute webinar no one watches.

But completion will be tracked.

Completion is a metric.

Metrics go in dashboards.

Dashboards go in board presentations.

Board presentations get me promoted.

I'll be SVP by Q3.

I still don't know what Copilot does.

But I know what it's for.

It's for showing we're "investing in AI."

Investment means spending.

Spending means commitment.

Commitment means we're serious about the future.

The future is whatever I say it is.

As long as the graph goes up and to the right.

[Janne Jutila @JanneJutila]

Orpo rantaradan junalla Turkuun. Meillä ei ole enää varaa pitää häntä Helsingissä päättämässä. Tarvitaan kynsisaksien sijasta moottorisahaa. https://t.co/NS91RNqG49

[Janne Jutila @JanneJutila]

@PaavoRusava @MLuonuansuu Reaalinen BKT ei ole kasvanut lainkaan 2008 jälkeen.

[Janne Jutila @JanneJutila]

@TereSammallahti K: Miten Espoon kaupunginvaltuusto tyri kunnan talouden noin puolentoistatunnin junalla? V: tekemällä tyhmiä päätöksiä.

[Janne Jutila @JanneJutila]

@TereSammallahti Suomen talous on syvässä kuopassa. Ensimmäiseksi pitää lopettaa kaivautuminen syvemmälle. Kokoomuksen kannatuskuoppa Espoossa tulee olemaan eeppinen.

[Matti Viren @viren_matti]

Suomen julkinen sektori on maailman suurin! Vihdoinkin niskalenkki Ranskasta! 5 vuodessa löimme asterixeille luun kurkkuun (lisäys + 5 %). Italiakin jo 7 pinnaa jäljessä. Sveitsi peräti 25. Onko markkinatalous päässyt koskaan näin lähelle sosialismia!

[Janne Jutila @JanneJutila]

@SuominenJyrki Hinnanlaskua on vielä 100% jäljellä. Puolet siitä toteutuu, kun Suomi oikaisee sairasta sosialistista talouttaan IMF:n ja EKP:n ohjauksessa.

[Janne Jutila @JanneJutila]

The Economistin artikkeli sananvapauden rajoittamisesta Euroopassa. Kärkiesimerkkinä Suomi. Voisiko syyttäjät vaihtaa ideologeista ammattilaisiin?

Europeans are becoming less free to say what they think (from @TheEconomist) https://t.co/7d5DVWlUvf

[Janne Jutila @JanneJutila]

@VilleKopra Suomen yksi suurimmista ongelmista on keskitetty, jäykkä, liittovetoinen työmarkkina ja -säätely. Jos se katoaisi näin pienellä, niin oikein hyvä.

[Janne Jutila @JanneJutila]

@pbyrokraatti Näistä kommenteista näkee, että hyvinvointivaltion lopetus tulee useimmille yllätyksenä. Mitään valmiutta talouden tosiasioiden tunnustamiseen ei näkyvissä.

[Janne Jutila @JanneJutila]

@elonmusk Economics 101 - In the long run we are all dead.

[Good Morning Liberty @GoodAMLiberty]

Milton Friedman was right. The true tax is what government spends.

[Janne Jutila @JanneJutila]

@yleuutiset lähti pesukarhujahtiin Elon Musk yleisön tervehtimisestä. Tässä on muitakin aloituspisteitä. Onnea metsästykseen.

[Libs of TikTok @libsoftiktok]

Can someone direct me to the articles where the media expressed outrage over this? Can’t find any…

[Janne Jutila @JanneJutila]

⁦@JohnHelin⁩ . Korjaus ⁦@hesari⁩ artikkelin otsikkoon. Länsimaat palkitsivat Assadin. Mm. ⁦@TarjaHalonen⁩ myönsi hänelle yhden Suomen korkeimmista kunniamerkeistä lehtitietojen mukaan. https://t.co/WJSEJq6dBP

[Janne Jutila @JanneJutila]

Ollaan talouskeskustelun uudelleensemoinnin kynnyksellä? https://t.co/SKzbDJABU2