Now I know it isn't just me...

For years, I used to joke with my co-author Mauricio Drelichman that the best way to make progress on our papers would be to sit in the office, take another office chair, push it hard against one's kneecaps, and then force oneself to be immobile for the next 4-10 hours. That's what being on an airplane is like, and these days I get a phenomenal amount of work done in flight. Give me a good run to Vancouver, where Mauricio works and lives, and we can put a major revision of one of our papers to bed. What exactly is it? I think it's partly the absence of disruptions - no phone calls, emails, nobody "just dropping by", no regular seminar or lunch appointment. Three times 1.5 h is much less productive than 4.5 h uninterrupted. I think it's also the sheer discomfort. The only way to mentally disconnect from one's miserable surroundings (let's be honest, where is the delight suggested by glamorous airline ads in being stuck in metal tube re-breathing the same air?) is to focus on something else - in this case, work.

Fresh from the New York Times comes the news that there may be another reason why this works, for some - the feeling that one is about to run out of battery power focuses the mind on "just get it done". Sir Raymond Carr, the master of my old college in Oxford, always gave the same advice to incoming Ph.D. students - just write. And doing that seems much easier for Simon Sinek when the battery indicator is slowly crawling towards zero -- see "Fly Me Anywhere, I Just Need To Work". Maybe, enterprises and academic departments should contain "productivity rooms" where we deliberately replicate the misery of airline travel, at what would surely be a low cost. In case of a sudden loss of concentration, masks will automatically... no, let's not take it that far.

Incidentally, Sinek is working on a book that emphasizes the importance of explaining intent to providers, employees, etc. I haven't seen the manuscript, but I hope he points out the analogy with what the German army called Auftragstaktik -- which involved explaining the point of a mission to humble sergeants and privates, so that they could make decisions on the fly about how to best adapt the means to the purpose of the whole exercise. It made for great combat efficiency, and I always thought it odd that an undemocratic country with a pretty authoritarian culture should evolve such a tactic, while the armies of Western democracies in WWI and II mostly believed in often bizarre micro-management, mostly with disastrous effect. The best book on this and other aspects of military HR I have ever read is Martin van Creveld's Fighting Power (a comparison of the US and German armies in WW II).

Beware of the people who cite you...

for the wrong reasons. Over at the Daily Telegraph, Ambrose Evans-Pritchard had lunch with Carmen Reinhart, who (together with Ken Rogoff) wrote a well-timed, erudite and enormously important book on financial crises: This Time Is Different. Evans-Pritchard cites my work with Mauricio Drelichman on the debts and defaults of Philip II. He argues that Greece is a bit like Habsburg Spain -- and that default is inevitable. I actually agree with the conclusion, but I cannot agree with his characterization of why bankers lent to Castilian Crown. Mauricio and I basically say -- the defaults were anticipated; bankers made money, on average; and a default was simply a bad outcome that everyone anticipated could happen. Much like in the case of insurance, the insurer sometimes has to pay out. In good times, they collected a lot of money upfront. It all evens out.

Somewhat oddly, Evans-Pritchard drags out the old chestnut how Philip II's defaults ruined his bankers, including the Fuggers. This is what Fernand Braudel famously claimed, but we find the exact opposite -- the same banking familes who lent to Charles V also lent to Philip, and the ones affected by the early bankrutpcies (in the 1550s) are still there in the 1590s, doing a healthy business, including the Fuggers. Even a default needn't be a calamity, if you play it right.

The implications for today? I think a Uruguayan solution (ie a healthy haircut for the bondholders) would make a lot of sense. It won't be fun for the investors, but we are creating a world of monstrous moral hazard if we bail out Greece and, in turn, the French and German banks who bet that the taxpayer will always help. Will this create another Lehman-style meltdown? I don't think so. Financing costs on sovereign debt are going to go up anyway, by a bit, in the next few years; many people are worried about the overall level of debt as it is. A Greek default won't change a thing. A lot of people received higher interest on their Greek bonds (unless they bought in the last 2 years); the higher return goes with higher risk, which should materialize in their portfolios roundabout now.