Steinbrenner, Baseball, and Foreign Exchange

July 13, 2010

George Steinbrenner, owner of the New York Yankees since 1973, passed away today nine days after his 80th birthday.

I submit one cannot completely understand American culture and the country’s distinctive status without some knowledge of baseball and the sport’s history.  What Homer’s Illiad and Odyssey represent for Ancient Greece, where the idea of democracy was born, the U.S. Civil War and baseball are to America as noted in the Ken Burns documentaries.

In most countries soccer, or what is more commonly called football, is king.  Not so in the United States, where football is something entirely different from football elsewhere.  American baseball has been a connective tissue of the unchangeable in a restless land that marches otherwise to a beat of constant change and reinvention. 

Every four years, the World Cup holds great interest even in America and especially in U.S. currency trading rooms.  It’s a stochastic snapshot, like the Olympics, with different players from one frame to the next.  The evolution of baseball happens glacially from generation to generation.  From pre-season to the regular season to the playoffs, a successful team plays over 200 games year after year.  Baseball is a marathon, each game played without a constraint of time, and only by looking back on a season, an era, or a career can one really understand the result of it all.

Born on the fourth of July, George Steinbrenner epitomized the American brand of political self-determination and victory-at-all-costs capitalism.  He had his detractors, but so have other great American entrepreneurs like John D. Rockefeller, Henry Ford, Bill Gates, and Steve Jobs.  The Declaration of Independence speaks about an unalienable right to pursue happiness.  In market capitalism, wealth and victory (i.e., out-competing everyone else) are central elements of measured happiness.

Winning championships are to sports what accumulating profits are to business.  Success in both involves risk-taking and a dedication to the constancy of perpetual change.  George Steinbrenner set the toughest standards for separating success from failure.  Only a world championship would do.  His Yankees accomplished that feat seven times in the 36 completed seasons while he owned the team, meaning they fell short in 29 years.   Only two other teams have won as many as three championships since 1973.  Six teams captured two championships apiece, and nobody else won more than once.  Graded on a curve, the Steinbrenner Yankees deserve an A+, but classes would never be graded on a curve in Steinbrenner’s school.

I got into the fields of economics and foreign exchange analysis because of its similarity to baseball.  It’s not an unusual sequence.  The past two Fed Chairmen, Bernanke and Greenspan, were avid fans of baseball before becoming economists.  As a youth, I’d get lost in following the minutiae of individual and team statistics, and the truly exciting moments occurred when discovering a neat relationship I hadn’t known previously.  Economic and foreign exchange analysis offer the same pleasure.  Sometimes, I focus on the very short term, the morning box scores in ball, the hourly and daily charts in forex or the nuts and bolts that go into a single economic data release.  Other times, I look at the bigger picture.  Watching the shifting leader board of first-through-last place teams in a baseball division over the course of a season is akin to charting the ups and downs of the major currencies.  What a season is to baseball, a calendar year is to foreign exchange.  Other truths are revealed by aggregating the information over decades.

A final parallel between baseball and foreign exchange is that the dollar floated in 1973, the same year that George Steinbrenner bought the Yankees.  Now isn’t that cool?

Copyright Larry Greenberg 2010.  All rights reserved.  No secondary distribution without express permission.

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One Response to “Steinbrenner, Baseball, and Foreign Exchange”

  1. Jimbo says:

    well said!!