Monday, March 02, 2009

The Honest Broker and the Yellow Pages

The Pielke fan club is meeting over at Tobis' Salon, with some characters making out in the backseat. It is not Eli's nature to pass the average pinata by without taking a free whack, but, since this is Rabett Run, and since Ethon is always on the lookout for a good feed, perhaps a more filling meal can be placed on the table. Something that engages.

Ms Rabett, among her other sterling qualities is a broker, actually she is someone who makes sure that the brokers follow the rules, a principal. Over the years Eli has learned a bit about what brokers do for good and ill. What Roger thinks they do

. .an honest broker works to expand (or at least clarify) the scope of choice available to decision makers. I have contrasted this with the issue advocate who works to reduce the scope of choice available to decision makers.
and what brokers actually do are diametrically opposed. His naive injection (let's be nice) of the "honest broker" into climate science policy has pushed discussion into a fruitless direction. As with many such things, reality shows how hollow this is. IEHO looking at what brokers do in the real world better illuminates the issue.

Brokers do not expand the scope of choices available to clients, they narrow them. Brokers make markets. Brokers make a living by matching buyers to sellers and taking a commission (You thought they do it for free? What carrot wagon you fall off of bunny?). Ethical brokers will go out on the market seeking product suited to clients and will seek clients suited to products available to them. Ethical brokers have mutual obligations to sellers and buyers, to qualify the buyers and vet the sellers, not to sell every piece of nuclear waste to every rube with a cell phone.

Good brokers know what is available for purchase and what their buyer's needs are. They select the best matches (with allowance for the front and back end fees they are going to collect). The broker you want often tells the client NO, don't do that. Where the client insists on comitting financial suicide the ethical broker is obligated to tell the buyer to take the business elsewhere. Contrast this with Roger's model of how the "honest broker" gives advice on how to find food
. . you might instead provide your visitor with information on all restaurants in the city, basic information on each (cost, menu, etc.) and let the visitor face the challenge of reducing the scope of choice (i.e., making a decision). Such "honest brokering" could also be strong (e.g., a comprehensive guide to all restaurants in the city) or weak (e.g., a guide to all those within a 5 minutes walk). The defining characteristic of the honest broker is an effort to expand (or at least clarify) the scope of choice for decision making.
Pielke's "honest broker" is a Yellow Pages salesman. His argument is that all choices are political/personal by nature and the proper broker's role is to show all products and not advise the client based on technical knowledge and experience.

Boiler room marketing (Heartland) is not brokerage. Used climate salesguys are of two types. They don't care about the clientel because there is always another sucker. They sell to the buyer's expectations. Anyone say Marc Morano?

Which brings us to Roger, the issue advocate. Stay tuned to the Bunny Channel



Arthur said...

Over at Tobis' I compared him to Bernie Madoff, but perhaps that was charitable - obviously he has never achieved the levels of trust Madoff did, and I think Madoff actually knew a thing or two about being brokering before he went bad.

When we purchased a house for the first (and only) time we used a "buyers' broker". I heartily recommend it. In contrast to the usual realtor, the deal with the buyers' broker is his commission comes not from the sale of the house, but is a fixed sum, or from the difference (if less) between listing price and what you manage to purchase it for. The broker works for you, the buyer. We told him what we were looking for and our price range. He told us our price range was ridiculous and we'd have to go a bit higher, or scale back what we wanted. We asked him to find the closest things he could out of the tens of thousands of houses for sale in the area at the time, and he came up with a dozen properties to look at, with his various recommendations. All of them were good; one of them was, and has been (almost) perfect.

The perfect match for us was luck, but using your expertise to narrow down tens of thousands of choices to a dozen good ones as this broker did for us is great service. Would that there were more real "honest brokers" out there!

Carl C said...

Is this "honest broker" all just a straw-man invention of RP Jr's to make a name for himself (as distinguished from his dad)?

It seems to just be a way to empower the idiots - I mean, in no political or social endeavor is there really an "honest broker" - and at least with politics we all know the corporations & lobbyists run everything. And this is the realm of the s(k)eptics; hence isn't it a bit silly to start screeching about "honest brokers" amidst this scum of the earth? ;-)


Anonymous said...

The idea of a completely "objective adviser" (the role RP's Honest broker" seems to be taking on) is simply a myth. Such a beast does not exist (not in the human world, ate least).

Some advisers are better than others -- eg, those who actually know something about the issue they are advising on -- but none is really "objective".

A pet peeve of RP, jr's seems to be "scientists using their credibility in the science realm to influence policy".

So what?

if they know more about the science -- and the possible repercussions of action and/or inaction -- why shouldn't they speak up?

The idea that scientists should not be using their scientific knowledge and credibility to influence public policy is simply absurd.

If we were to accept this idea at face value, it would basically put us back in the dark ages when anyone with a scatterbrained idea got a hearing; eg, about how to cure schizophrenia by drilling a hole in the head and letting the evil spirits out.

Carl C said...

Exactly - RPJr's whole thesis is one of intellectual as well as moral cowardice. As if the scientists should just stay in their labs, wait another 50 years, or run another 1000 simulations just to be sure, before confronting the likes of Senator Inhofe, Rush Limbaugh, the American Enterprise Institute, et al.

Anonymous said...

It is occasionally said in finance* that if you make a claim to be 'honest' then you aren't.

* Meaning that I was once eviscerated in these terms by a senior trader when I used the term 'honest broker'