# A serious question for Sam Stone on Factual Errors **URL:** \ **Category:** The BBQ Pit\ **Created:** [December 11, 2021, 12:32pm UTC](https://boards.straightdope.com/t/a-serious-question-for-sam-stone-on-factual-errors/955881 "2021-12-11T12:32:19Z")\ **Posts on this page:** 1\ **Showing post:** 351
**Author:** ![JohnT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnt/32/15048_2.png) [@JohnT](https://boards.straightdope.com/u/JohnT)\ **Post date:** [September 22, 2022, 11:55pm UTC](https://boards.straightdope.com/t/a-serious-question-for-sam-stone-on-factual-errors/955881/351 "2022-09-22T23:55:29Z")
You know, I was giving thought to replying in the original thread, but I think this is a perfect illustration of the issues addressed in this thread. Decisions, decisions. Anyway, this has been bugging me since it happened, so here goes. Sam posted the following (you do not need to click, this is just documentary. Keep reading): > [@The Fundamental Rules of Economics](https://boards.straightdope.com/t/the-fundamental-rules-of-economics/971357/132): > > One more thing. Here is a graph of a supply chain: [[image] ](https://interestingblog.ca/wp-content/uploads/2021/11/complex-interwoven-supply-chains.png) The first thing to notice is that it looks more like an ecosystem web than a human-planned thing. Also notice how many lines connect between suppliers. Every single line on that graph represents information and created value. Manufacturers don’t just pick suppliers from a phone book. They send out RFPs, they order samples and test them for conformance to their specs, and they work with supplier… In that post, is this graphic, which Sam calls a Supply Chain chart. [![Imgur](https://live.staticflickr.com/65535/52377868935_5541318995_b.jpg "complex-interwoven-supply-chains") ](https://www.flickr.com/photos/68782016@N08/52377868935/) Sam talked about how every line created information and value, that this was a miracle of modern freedom, that central planners couldn’t create such a thing, etc. But the chart is a fake. Rather, it’s a dumbed-down version of a McKinsey report [Risk, Resiliance, and Rebalancing in Global Value Chains](https://www.mckinsey.com/capabilities/operations/our-insights/risk-resilience-and-rebalancing-in-global-value-chains) which contains the same graphic - but without the colors and the fake labels: [![Imgur](https://live.staticflickr.com/65535/52377463926_81103f546c_z.jpg "Dell2") ](https://www.flickr.com/photos/68782016@N08/52377463926/) (For example, there is no “maritime” classification in the McKinsey chart.) Now, the issue isn’t that Sam grabbed the wrong cite when a better one was available - we’ve all done that. The internet is a big place, after all. It was in the following exchange, when I, well, parodied Sam’s post with a picture taken from _The Devil’s Derivatives_ showing a CDO-cubed derivative. Using 95% of the same wording, I talked about how every line created information and value, that this was a miracle of modern freedom, that central planners couldn’t create such a thing, etc. (Again, you don’t have to read): > [@The Fundamental Rules of Economics](https://boards.straightdope.com/t/the-fundamental-rules-of-economics/971357/133): > > Here is a picture of a CDO-cubed deal put together by Merrill Lynch [[Imgur] ](https://www.flickr.com/photos/68782016@N08/6325010078/) The first thing to notice is that it looks more like an ecosystem web than a human-planned thing. Also notice how many lines connect between derivatives. Every single line on that graph represents information and created value. Merrill didn’t just pick mortgages from a phone book. They depended on rating agencies, who themselves were paid by the very entities they were ra… The graphic: [![Imgur](https://live.staticflickr.com/6233/6325010078_d72df6e23b.jpg "Eyes of Satan") ](https://www.flickr.com/photos/68782016@N08/6325010078/) The above graphic shows the supply chain of actual derivatives, with the derivative in the center being the one under review. Every node you see within the circle is another CDO-cubed deal, some (the thick one above the middle node) thicker than others (that small CDO at about 7pm of the central node, halfway to the edge). In addition, all the dots at the edge of the circle represent _additional_ CDO’s and their related investments. And each of the dots are invested in hundreds, thousands of mortgage bonds representing tens of thousands of American homes, these mortgage bonds not shown due to simplicity. So what did Sam do? Did he recognize the parody? Did he argue against his own words (which would have been delicious)? No… Oh, wait. That’s exactly what he did (you can read this one if you wish): > [@The Fundamental Rules of Economics](https://boards.straightdope.com/t/the-fundamental-rules-of-economics/971357/145): > > It may or may not be. It has an ‘inner ring’ of CDOs that invest with each other, an ‘outer ring’ of additional CDOs. Lines are drawn between the CDOs that invest with each other. Now, the graph represents the relationship between CDOs. How were those relationships established? What made one CDO decide to invest in another? Did a central planner make all those decisions? Someone in a head office decided that CDO X should invest in CDO Y but not CDO Z? Are all of those connections part … Which left me so gobsmacked I had to let him know what’s what: > [@The Fundamental Rules of Economics](https://boards.straightdope.com/t/the-fundamental-rules-of-economics/971357/146): > > Sam, I’m sorry, I don’t think you got my point. My post regarding the CDO chart was literally a direct lift of sections of your supply chain chart & post, modified to fit my example. In both posts, we literally make the same argument, but yours is about food and mine is about Buffet’s ‘financial weapons of mass destruction’. In short, Sam, the post was a parody meant to highlight how the same argument can lead to wildly different outcomes depending on the example being discussed. My apologies,… Sam hits back with the _of course I knew that!_ defense which worked so well after the 400 well-intentioned words cited above in post 145. > [@The Fundamental Rules of Economics](https://boards.straightdope.com/t/the-fundamental-rules-of-economics/971357/147): > > I recognized my own words. I thought you were using that graph to say it was identical to the other one in concept, so all my words should apply equally to it. I’m simply saying that the critical information about the graph wasn’t in evidence, which is how the connections were established in the first place. But I’m happy to drop it. But here’s the thing. I actually brought a supply chain graph. Sam brought a fake one. Sam then denied the reality of my _cited_ (it’s right there in the bottom-left corner of the graphic) supply chain… and why? > [@The Fundamental Rules of Economics](https://boards.straightdope.com/t/the-fundamental-rules-of-economics/971357/140): > > No, it doesn’t. It’s a circle of things with straight lines connecting them. It’s logical and orderly. It’s exactly what I would expect a human planner to make. Look again at that supply chain graph, and see if you can spot the differences. The supply chain graph looks like a spontaneous network, like the world wide web or a brain network or an ecosystem. They are vastly different things. … because it’s a “circle of things” which “a central planner would make”. There’s a literal description in my graphic explaining that it is a core product of one of the Titans of American Capitlalism and Sam here is denying its reality because the artist decided to use straight lines and actual CDO’s rather than McKinsey’s more general, curvy, representation of what’s happening with Dell. And to Sam, that made my citation fake news. Because it lacked curved lines. To deny my own citation by presenting fake evidence while simultaneously arguing against his own words… Sometimes, team, I literally cannot believe that this site is free, as the entertainment value can be damn near infinite. --- _[View the full topic](https://boards.straightdope.com/t/a-serious-question-for-sam-stone-on-factual-errors/955881)._