Saturday, April 6, 2013

Qoute goldmine.

http://quotesaday.com/wp-content/uploads/2012/07/Quotes-A-Day-Albert-Eintein-Quote-2.jpg

I've always considered the man behind the Falkenblog (Eric Falkenstein) to be an incredibly perspicacious man, so it's unfortunate he'll be retiring from the blogosphere. However, he went out with a bang, or, more precisely, over 600 quotes. There are a lot of gems there. You can get it here.

A few I flipped through and copied:

I can usually judge a fellow by what he laughs at   ~ Wilson Mizner

Knowledge can be communicated, but not wisdom   ~ Herman Hesse (a favorite author of mine)

Moderation in all things   ~ Democritus

The most exciting phrase to hear in science - the one that heralds new discoveries - is not "Eureka!" but "That's funny..."   ~ Isaac Asimov (sci-fi favorite of mine)

What was hard to endure is sweet to recall   ~ European Proverb

An expert is a man who has made all the mistakes which can be made, in a narrow field.    ~ Niels Bohr

Anybody can become angry—that is easy; but to be angry with the right person, and it the right degree, and at the right time, and for the right purpose, and in the right way—that is not within everybody’s power and is not easy.   ~ Aristotle

 Holding beliefs proportionate to evidence requires humility

Nobody ever figures out what life is all about, and it doesn't matter anyway   ~ Richard Feynman

To those who think, life is a comedy, to those who feel, life is a tragedy



I'd highly recommend looking into more yourself.

Wednesday, April 3, 2013

Bias.

 https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUukW0gGtKXjWqJO_G4CK4rPMBsRf8eM8hNsct_5bVoPD1ypM0oKyUtS-dWL1PQ4MbFV9YrYFhU60PgdI_9auX4lS7jYPCGrHl_WVmZdOH7O7VOKrnleRwQKEAmAOBV-tDiztOAqdKuIk/s1600/psychology+-+irrationality+-+cognitive+bias.jpg


Alright, as promised here's more on cognitive bias. This is the list off of Wiki regarding some known cognitive biases. Reading down the list is nearly comical. If you go through it and don't admit you commit 95% of these then you must be lying. Here's a couple:

Curse of knowledge – when knowledge of a topic diminishes one's ability to think about it from a less-informed perspective.

Anchoring or focalism – the tendency to rely too heavily, or "anchor," on a past reference or on one trait or piece of information when making decisions.

Recency bias – a cognitive bias that results from disproportionate salience attributed to recent stimuli or observations – the tendency to weigh recent events more than earlier events.

Hindsight bias – sometimes called the "I-knew-it-all-along" effect, the tendency to see past events as being predictable at the time those events happened. Colloquially referred to as "Hindsight is 20/20".

Self-serving bias – the tendency to claim more responsibility for successes than failures. It may also manifest itself as a tendency for people to evaluate ambiguous information in a way beneficial to their interests.

Confirmation bias – the tendency to search for or interpret information or memories in a way that confirms one's preconceptions.


Good stuff. I'll try talking about bounded rationality and other applications of these, but for now I just wanted to lay out some examples to give you an idea of how stupid you are.

Monday, April 1, 2013

Cognitive bias.

 http://media.salon.com/2012/08/ravenous_brain_rect.jpg


So my post about cognitive dissonance and partisan think tanks got me interested in talking about one of the most important fields to emerge from economics in recent decades. Behavioral economics.

Now, as I pointed out earlier, models are essentially what you put into them. They're the assumptions and logic of your hypothesis. Well, the basic models are built around perfectly rational human beings that are able to compute problems down to decimal places and make decisions based off of miniscule differences.

Well, that's not too reasonable, but it has proven to be useful, and definitely mathematically tractable. So what do we do? Well, behavioral economists, using tools and insights from psychology, are trying to figure out the details of how exactly people think. A large portion of the focus has been on bias, or why people deviate from these perfectly rational models. Wiki defines it as:


"A cognitive bias is a pattern of deviation in judgment. Whereby, inferences of other people and situations may be drawn in an illogical fashion. Individuals create their own “subjective social reality” from their perception of the input. An individual’s construction of social reality, not the objective input, may dictate one’s behavior in the social world. Thus, cognitive biases may sometimes lead to perceptual distortion, inaccurate judgment, illogical interpretation, or what is broadly called irrationality"

Once they find it, they apply it to actual models so that their assumptions are much more cohesive with reality. Good stuff. I hope to cover some specific ones, since they're easy topics to talk about and are immensely interesting. 

Overachievers.

http://image.noelshack.com/fichiers/2013/13/1364656984-northkoreanmilitarymedals-zps7714ecd2.jpg 


 Stealing from Daniel's blog again. 

That's a shit ton of medals for....what again? They literally ran out of room on their jackets and had to go to their pants. Wonder what their backs looks like. Anyways, if a group of people has to award themselves this much whilst having done nothing then they must be 1) begging for attention, 2) overcompensating, 3) both. Good thing they have their priorities straight. 

Speaking of their priorities, here's a chilling documentary about what it's like inside the boarders of North Korea. Awful medical conditions, terrible poverty for even those who are the best off, and, apparently, the lack of nutrition is so bad that people often go blind. To make matters worse, they don't have the training needed to use the medical equipment that was donated to them by...the United States. Not getting a single fucking medal from me.

Thursday, March 28, 2013

Politics, empirics, dissonance.

 The Earth Is Flat! Christopher Columbus is an idiot…

I didn't go into depth regarding why I think that the justification behind partisan think tanks may not be as innocent as "promot[ing] what they believe." Which is certainly true in some sense. Like-minded individuals may group together to promote what they believe to be true via research institutions. But here's a sentence off of Wiki that I picked up regarding cognitive dissonance:

"Dissonance is aroused when people are confronted with information that is inconsistent with their beliefs. If the dissonance is not reduced by changing one's belief, the dissonance can result in restoring consonance through misperception, rejection or refutation of the information, seeking support from others who share the beliefs, and attempting to persuade others."

I guess no one likes to admit they're wrong. Eerie how closely this matches up with think tanks. On a side note, we better check up with our friends over at the "Flat Earth Society". Here's their purpose as a totally credible and non-partisan think tank:

"Enter the Flat Earth Society. For over five hundred years humanity has believed the "round Earth" teachings of Efimovich and his followers. But all hope is not lost. For through all that time, a small but diligent band of individuals have preserved the knowledge of our planet's true shape. And now, after centuries in the Dark Ages, we believe that mankind as a whole is once again ready to embrace the truth that has forever been the Flat Earth Society. Using whatever means are deemed necessary and relying heavily on a callous disregard for the lives and well-being of our members, we have slowly but steadily been spreading the news."

When do these become cults again?


From the source I got the picture from the article started:

"Society decided to check in on the Flat Earth Society and be all, 'Hey, so you guys still crazy?' And the FES was all like, 'Totes.'"
 

Had to.

 http://billsmovieemporium.files.wordpress.com/2009/01/russell-crowe-a-beautiful-mind-c10102591.jpeg?w=500

Bad economics humor:

 "As everyone knows, Russell Crowe invented game theory"

Taken straight from Daniel's blog.

Tuesday, March 19, 2013

Nonsense econometrica.

http://research.microsoft.com/en-us/projects/s-gps/graphimage6.png
A social network.

I made a new blog tentatively titled "Econometric Nonsense."

Here's the first post titled "The Science of Society":

I'm creating this blog to divert the math away from my other blog, found here. Although I do love writing non-rigorous and non-technical posts, I also enjoy the occasional proof and econometric work. So that's what this blog is for. I'll give off simple and intuitive proofs, explanations, etc., of anything mathematically related, with an emphasis on econometrics. Since I'm just starting out with statistical software as well, I could give out beginner lessons so that I too can get practice. Best way to start is a few quotes, so here goes:


"Science cannot solve the ultimate mystery of nature. And that is because, in the last analysis, we ourselves are a part of the mystery that we are trying to solve."
-Max Planck 
"Imagine how much harder physics would be if electrons had feelings!"
-Richard Feynman


Hopefully that'll make this one less technical. If you're actually interested in that, then by all means check it out.

Pretentious.

http://www.pablopicasso.org/images/paintings/guernica.jpg




Now for one of the most pretentious topics known to man. Art. A friend of mine inspired this one.


I remember someone telling me once that outside factors shouldn't be brought into consideration when looking at art, because it isn't relevant to the piece itself. They said this was "basic aesthetic philosophy". For a while I thought about that. Sure, there's some reasonable stuff there. The age of the artist, for instance, doesn't matter at all. Whether or not the artist was convicted of murder, that doesn't matter either. None of it matters. If it's a good painting, sculpture, whatever, then you don't need to be enticed with compelling stories to enjoy it. If you do, then it's probably not good enough on it's own.

At some point, however, this starts to break down. For most pieces of art the meaning and purpose aren't entirely clear, and you need to understand the context. This sometimes requires outside information. Occasionally it's as revealing as the title, and occasionally you have to dig deeper. Take, for instance, the painting above. This one is incredibly popular, but for those of you who don't know it, you're probably experiencing pain, suffering, chaos, and, with the complete lack of color, perhaps you're feeling depressed and dreary. For those of you who do know, this piece is called "Geurnica", and it's by Pablo Picasso. It's about the bombing of a city with the same name, which mostly consisted of civilians. Now all those feelings make more sense, and it enhances the effect of an already powerful painting. You could even look further into the inspiration behind it to understand the symbolism.

But that's all the point. Sometimes outside factors are relevant. Now the question is only of discerning when that is.

I'm liking these short posts.

Since we're on the topic of abstract Spanish artists, here's Salvador Dali:

http://www.salvador-dali.org/images_flash_portada/imatge_f05.jpg

Answered before asked.

 http://www.postwesternworld.com/images/2011/12/2003-02-17-Bush-think-tank-on-Iraq-1.jpg

I've had a hard time understanding "partisan" think tanks. For instance, let's say that a think tank considers itself a "Conservative" think tank. Well, that seems like they have their questions answered before they're asked. What does the minimum wage do to employment? What do you think the Liberal "Center for Economic and Policy Research" will say? Well, you're right. No surprise there.

Before I get wild and say something like that's the opposite of science and people are starting with their conclusions (I guess I did just say that), I will say that there's something at least reassuring about it. They're being ingenuous. I don't blame them. I have my own beliefs, and going into a question I already have a pretty strong hunch as to what I'll say (although that's certainly subject to change given strong enough counter-evidence). So it makes sense. People are Liberals, and they have a tendency to believe Liberal things. Therefore, Liberal think tanks exist to promote what they believe. Same with Conservatives, Libertarians, and so on.

But for Christ sake it still leaves a terrible taste on my tongue. I think it was Daniel Kuehn (Who now works at one, strangely enough. The Urban Institute.) who brought up the question of how exactly their interviews go. Do they go out and ask them if they have a certain ideology, and whether or not they'll promote it? Do they not hire people who have different opinions? Funny, since there are laws against that.

But just quick thoughts. This is more the length I'm going for.

Marmite.

 https://si0.twimg.com/profile_images/37902202/Official_Portrait__cropped__September_2007.jpg

A while back I wrote a concerned letter to Chuck "The Truck" Grassley, and it went something like this:



"Dear Senator Grassley,

Over the years the citizens of Iowa and I have had the privilege of having you as our senator. Through these years we have become well aware of your views on a variety of issues ranging from health care to religion. However, there has been one issue that has constantly evaded the public eye. That issue is Marmite. Marmite, as you probably know, is a by-product of beer brewing. It is a sticky brown paste that has a very powerful flavor that is both sweet and savory. With its distinct flavor it has become a favorite to many people throughout the world.
                However, here is where the problem comes in. In the United States (Iowa specifically) we have all but ignored the importance of this underrated necessity of life. As of now, neither budget proposed by Republicans or Democrats (as well as any state budget) has made any proposition to increase spending on Marmite, or Marmite technology. This is an issue that I believe cannot be ignored. With a tremendous budget deficit, three foreign wars, and a damaged economy the last thing we need is a Marmite shortage. Unfortunately, I believe this is exactly what will happen.
                I first became aware of this issue when I looked through the menu of my local public high school. I was very disappointed to see that not one of the meals on the menu included Marmite in any of its various forms. My disappointment quickly grew to fear when I found that not even my local grocery stores supplied Marmite on their shelves. Unfortunately, this is not the end of it. I decided to investigate further by randomly asking the citizens of my town. My fear instantly turned to full blown panic when I realized that most citizens of Iowa had no clue as to what Marmite was.
                This experience has led me to believe that Marmite is the number one issue facing Americans today. In fact, I have reason to believe that all current problems are simply side effects of a low amount of Marmite and Marmite awareness. Every problem facing us today, ranging from crime, poverty, the breaking down of family values, and even terrorism, are all undoubtedly caused by a decrease in the consumption of Marmite. Although I am not an expert of the adverse effects of Marmite shortages, I believe that casualties in Iowa alone will number in the hundreds of thousands.
                With this overbearing and immense problem facing America I knew there was only one person I could turn to, and that was you Senator Chuck Grassley. Well, actually, I did email David Loebsack, Thomas Latham, Steve King, Leonard Boswell, Bruce Braley, Thomas Harkin, and the president first. Also, I did email other prominent figures such as the Dalai lama, the Pope, Queen Elizabeth II, Michael “The Situation” Sorrentino, Sarah Palin, every member of the band “Kiss”, and even Chuck Norris (In retrospect, I’m not exactly sure why I emailed half of these people, but I regret nothing.). Finally, I also emailed NAMA (National Association for Marmite Awareness) and pleaded that they raise their Marmite alert level from a code orange to a code red. However, after every one of them turned me down I knew that you are the only one who can help. Please Senator Grassley, I know this is a large burden to put onto one person, but I know that you can, and will, help. Thank you so much for your time, and god bless.


Sincerely,
Brandon"


Although he didn't do much to help ease my concern, I still trust him fully to get the job done. He also sent a letter to me (I'll never find it), which was obviously not written by him. He only answered my concerns in one statement, which went:

"I know you made the letter in jest, but do not hesitate to let me know of any real concerns you may have."

I almost feel he doesn't take me seriously.

Thursday, March 14, 2013

Science and politics.

 http://www.biofortified.org/wp-content/uploads//2013/02/Aquadvantage1.jpg

If you bother to keep up with the contemporary definitions of "Right" and "Left" in American politics, you'll notice that there are some consistencies within them and their value systems. However, at some point (when you take them to their extremes) you end up with contradictory nonsense.

Here's an example.

John Cochrane brought up an interesting article titled "Don’t Be Afraid of Genetic Modification". the moral of the story is that for 17 years now AquaBounty has been patiently awaiting approval from the FDA of it's "AquAdvantage" fish, which is a genetically modified fish that reaches adult size in half the time.

You can imagine this is the textbook definition of a technological advancement. Costs go down, price goes down, quantity demanded goes up, PPF shifts out, etc. etc. What you don't know are some of the other benefits, such as:

"It’s a healthy and relatively cheap food source that, as global demand for fish increases, can take some pressure off our wild fish stocks."

So more food for the growing demand, and we get to protect the environment? Seems too easy. Who's against this?

"Many of the members of Congress who oppose the modified fish represent states with strong salmon industries. And some nonprofit groups seem to be opposing the modified salmon reflexively, as part of an agenda to oppose all animal biotechnology, regardless of its safety or potential benefits"

And:

"In December, Jon Entine, the executive director of the Genetic Literacy Project, a nonpartisan nonprofit group that promotes education about biotechnology issues, wrote an article in Slate suggesting that the holdup wasn’t with the F.D.A., which had completed the report, but with the Obama administration, which had just finished a re-election campaign. He wrote, “The delay, sources within the government say, came after meetings with the White House, which was debating the political implications of approving the GM salmon, a move likely to infuriate a portion of its base.” A few days after the article appeared, the F.D.A. published its assessment. The date on the report — May 4, 2012 — seemed to confirm Mr. Entine’s account that it had been ready for months. "

What happens when your love for the FDA, your unsubstantiated belief that buying locally and naturally is better, and the environment, contradict each other? Exactly this. I mean, as bad as the Conservatives are (stem cells, evolution, on and on), can we really call the Democratic party the pro-science, and pro-environment party? The sad thing is that this would be the first transgenic animal allowed for human consumption. So it's not just this, but nearly all other types of foods that are more efficient, and scientifically proven to be healthy. Now, there is real concern, such that:

"Some environmentalists fear that the modified salmon might wriggle free from fish farms, start reproducing, and ultimately drive wild salmon populations to extinction"

Which is a perfectly legitimate concern, and we should consider whether or not it's likely, or even possible. So, does the FDA think it is? Nope:

"But scientists, including the F.D.A.’s experts, have concluded that the fish is just as safe to eat as conventional salmon and that, raised in isolated tanks, it poses little risk to wild populations"

Not to mention that waiting 13 years hasn't had one problem (as well as the fact that all the salmon are sterile females). But why are they so against it, if one of the few concerns (if you look at Wiki this is the ONLY concern) doesn't actually concern them? They're pushing politics. That's why. The sad fact is that this is one of the few cases that are so tangible. Technological growth and advancement like this is constantly stifled, creating counter-productive results for those who oppose it for environmental, or "healthy", reasons. 

To sum this up, here's quotes from both Cochrane:

"GMO foods are, potentially, a huge game changer. Once every 50 years or so, we bump up against a Malthusian limit, and a new idea frees us again. Fixing airborne nitrogen. Green revolution. Now, GMO foods. GMO plants are being bred to use less fertilizer and insecticide, i.e. to be better for the environment, as well as to cure vitamin A deficiency, produce less waste, and so on. No, dear Greenpeace, organic farming is not the answer, unless we use a lot more land for agriculture, starve out half the people, or believe in magic.  (It's too bad organizations like this suffer such mission creep. I would happily support their efforts on behalf of endangered species.)"

And Anthes:

"The F.D.A. must make sure that other promising genetically modified animals don’t come to the same end. Of course every application needs to be painstakingly evaluated, and not every modified animal should be approved. But in cases like AquaBounty’s, where all the available evidence indicates that the animals are safe, we shouldn’t let political calculations or unfounded fears keep these products off the market. If we do that, we’ll be closing the door on innovations that could help us face the public health and environmental threats of the future, saving countless animals — and perhaps ourselves"

(please read about Enviropigs on his article as well.)

Point? There's plenty of scientific illiteracy on both sides. One is just more blunt about it, while the other is subtle.

Wednesday, March 13, 2013

Procrastination is the best policy.




I ran across this post recently about "noble lies". Here's the Wiki definition (links all from Wiki):

"In politics a noble lie is a myth or untruth, often, but not invariably, of a religious nature, knowingly told by an elite to maintain social harmony or to advance an agenda. The noble lie is a concept originated by Plato as described in the Republic."

Miles then goes on to quote a personal favorite of mine, "On Liberty", by an author I find particularly interesting. I'll quote it in it's entirety:

"In the present age—which has been described as “destitute of faith, but terrified at scepticism”—in which people feel sure, not so much that their opinions are true, as that they should not know what to do without them—the claims of an opinion to be protected from public attack are rested not so much on its truth, as on its importance to society. There are, it is alleged, certain beliefs, so useful, not to say indispensable to well-being, that it is as much the duty of governments to uphold those beliefs, as to protect any other of the interests of society. In a case of such necessity, and so directly in the line of their duty, something less than infallibility may, it is maintained, warrant, and even bind, governments, to act on their own opinion, confirmed by the general opinion of mankind. It is also often argued, and still oftener thought, that none but bad men would desire to weaken these salutary beliefs; and there can be nothing wrong, it is thought, in restraining bad men, and prohibiting what only such men would wish to practise. This mode of thinking makes the justification of restraints on discussion not a question of the truth of doctrines, but of their usefulness; and flatters itself by that means to escape the responsibility of claiming to be an infallible judge of opinions. But those who thus satisfy themselves, do not perceive that the assumption of infallibility is merely shifted from one point to another. The usefulness of an opinion is itself matter of opinion: as disputable, as open to discussion, and requiring discussion as much, as the opinion itself. There is the same need of an infallible judge of opinions to decide an opinion to be noxious, as to decide it to be false, unless the opinion condemned has full opportunity of defending itself. And it will not do to say that the heretic may be allowed to maintain the utility or harmlessness of his opinion, though forbidden to maintain its truth. The truth of an opinion is part of its utility. If we would know whether or not it is desirable that a proposition should be believed, is it possible to exclude the consideration of whether or not it is true? In the opinion, not of bad men, but of the best men, no belief which is contrary to truth can be really useful: and can you prevent such men from urging that plea, when they are charged with culpability for denying some doctrine which they are told is useful, but which they believe to be false? Those who are on the side of received opinions, never fail to take all possible advantage of this plea; you do not find them handling the question of utility as if it could be completely abstracted from that of truth: on the contrary, it is, above all, because their doctrine is the “truth,” that the knowledge or the belief of it is held to be so indispensable. There can be no fair discussion of the question of usefulness, when an argument so vital may be employed on one side, but not on the other. And in point of fact, when law or public feeling do not permit the truth of an opinion to be disputed, they are just as little tolerant of a denial of its usefulness. The utmost they allow is an extenuation of its absolute necessity, or of the positive guilt of rejecting it."

What I love about J.S. Mill is that he is as elucidating as he is moderate and reasonable. If you didn't bother to read, the points were that sometimes it may be in the best interest of a group of people to believe something even if it's not true. This does not, however, absolve us from deciding what is useful and what is not. It's just now the question of truth is whether telling a lie would be better than telling the actual truth.


But that's not really what interests me. What I find so appealing is that it's not idealistic in the slightest (especially since I find Mill to be exceptionally idealistic). If anything, it reeks of practicality. As great as it would be to make broad sweeping generalizations like "truth is always desirable", or "honesty is the best policy", they aren't always correct. Or, at least, they're too idealistic to be taken seriously. I'll admit, people who know me might catch me saying "painfully honest is painfully helpful", which to an extent I believe. But at the same time I believe that with youth comes idealism, and with maturity comes pragmatism.


Let me explain with an example. When I was younger I was fairly religious. Most of my family is. But as I grew I became skeptical. Now I don't consider myself religious or superstitious in the slightest. At first I just assumed it would be self-evidently better if everyone knew the truth about the matter. For me, I thought we all lived in a linear world where tiny changes would be unambiguously better for everybody. I know better now. There can be exceptions, and the world isn't so simple.


To make sense of that, here's a more personal example. My Grandmother is very religious. She's a very devout and loving woman. Let's say that she's on her deathbed and asks me if I think there's an afterlife, God, master plan, the works. Know what I'd do? I'd look her in the eyes and lie through my fucking teeth. Because she's my Grandmother and I care for her. I wouldn't put physical pain like that on her for the sake of "public discourse", or "promotion of truth". I understand some of the limits and exceptions. Sometimes honesty isn't the best policy, but rather discretion. 

All of this (as is usually the case) reminds me of something else I want to talk about. I told a friend recently that "principles are for the well fed". Part of being idealistic and young is subscribing adamantly to philosophical and moral standpoints. I was the same. I still do it often. But, like my intentionally whimsical statement implies, circumstances matter. For someone who's well fed it's so easy to say they'd never steal food, or kill someone, lie to their dying grandmother, or all sorts of debauchery and moral decadence. When you're actually starving, you won't be so philosophically inclined. Now, she made the brilliant rebuttal of "I plan on remaining well-fed", which at the time went right over my head. But now I understand it to mean: Yes, if we're in those situations we can be nothing more than glorified monkeys, but I plan on staying out of them. Of course she probably didn't mean that. I'm probably picking up wise and perspicacious insights where there is no intention. Still, I'll nobly lie to her to make her feel better, since she has a weak self-esteem anyways.

Moral of the story is stop being so idealistic and lie and steal if you have to. Also, if you have a midterm don't procrastinate by writing a blog post about useless nonsense.



Friday, March 8, 2013

100 Friday nights of solitude.

So many stories in such a small space.


The "literature" portion of my subtitle has been getting pretty lonely. Well, since I'm nearly finished with "One Hundred Years of Solitude", I might as well mention a few things (turned out to be much more than a few things).

There's been a strange dichotomy between books that go for longevity, and those that are short and sweet. Certainly, longer stories have the tendency of dragging you in. At a certain point you feel like you've grown attached to the characters and their decisions. Almost as if you have a stake in their well being and development (Fuck you Andrei Bolkonsky. Why'd you have to die?). But at the same time it's quite a time commitment, and can drag on (Like that shitty philosophical ending to "War and Peace"). Likewise, short stories have the tendency of being expedient and efficient, while at the same time giving you no emotional attachment. Short enough to get strong points in (or at least not waste too much of your time), but also too short to become a part of you.

Solitude had a fairly decent mixture of both. Shoving one hundred years into a little over 400 pages certainly seems like a rush (and at times it is), but even as your favorite characters (that you just got to know) get thrust around by the vicissitudes and vagaries of life, you can't help but relate to them. Part of the reason is that Marquez, in the middle of these paroxysms of change, goes into extreme depth to give you a deep understanding of each character. Then, he goes through the painstaking process of beating the shit out of any warm and fuzzy predictions or hopes you might have had. Oh, you like the humble, motherly, innocent, and caring nature of Remedios Moscote, and the pensive and devoted nature of Aureliano Buendia? Happy that they got married? Want to see them live happily ever after? Go FUCK yourself.

But it's amazing at the same time. You feel the impact of each twist, and as much as you'd want to change it, you wouldn't dare. Each incident seems so necessary to this long concatanation of events that the slightest change could destroy the grand scheme.

But that's not at all anything new. Stories like that are a dime a dozen. Where does this differ? It has a magical charm that only someone deeply infatuated (indoctrinated?) with third world superstitions could construct. There are flying carpets, there are 17 brothers who are magically marked with indelible ash, there are ghosts, there are humans that transcended earthly life and death, there are men and women who defy the limits of size and shape and beauty and intelligence and honor and so on. There are strange deaths that have no suspects other than the ripping of the fabrics of time and space under the heavy strain of importance and magic that surrounds the once unassuming town of Macondo.

And this is what makes this story so nostalgic. When the giant Jose Arcadio was killed by a gun that was never found, and a murderer who may not have existed, his blood drained all the way through the town only to stop at his mother who, after disowning him years earlier, rushed to find the body of her son.

 Just look how a story like this develops. He wasn't a large man. He wasn't a bigger than average man. He was a giant that redefined what was humanly possible. He wasn't killed by another human being, or a disease. He was mysteriously and magically killed by a bullet that was never found, and that never pierced him. The blood didn't stop at his door, it drained all throughout the town to find his mother.

This reeks of a genuine story that, through the process of exchanging ears and tongues and through tiny nuances of detail became so over-exaggerated that it's sole purpose was to one-up any challenger and at the same time grab your emotions and conventions so that they could be beaten savagely. And that's why it's so nostalgic. You haven't heard stories like these since you were a child and that strange Uncle that you're still not sure you're related to told it to you for the sole purpose of exciting awe and wonder. And through that blissful ignorance the world seemed so unpredictable and strange. As if you could never get to the bottom of it completely, and instead of being dissuaded or discouraged, you feel invigorated that you live in a dynamic and capricious world that will never fail to surprise or excite or destroy you in the most poetic and meaningful ways possible.

And I believe all of this was intentional. Looking back for a quote I liked (I bleed for you ungrateful fucks), I finally realized what it meant. I'll give you it in it's entirety, since I'm no good with words:

"Aurelianio Segundo was deep in the reading of a book. Although it had no cover and the title did not appear anywhere, the boy enjoyed the story of a woman who sat at a table and ate nothing but kernels of rice, which she picked up with a pin, and the story of the fisherman who borrowed a weight for his net from a neighbor and when he gave him a fish in payment later it had a diamond in its stomach, and the one about the lamp that fulfilled wishes and about flying carpets. Surprised, he asked Ursula if all that was true and she answered that it was, that many years ago the gypsies had brought magic lamps and flying mats to Macondo.

'What's happening,' she sighed, 'is that the world is slowly coming to an end and those things don't come here anymore.'"

The world of the old days, as told by ancient and sometimes anonymous sources, was not moved and shaped by gods and demi-gods and heroic beings and magic. Those interpretations were by naive, fallible, and fanciful people who had no clue how the world worked, and their interpretations clung tenaciously through perpetuity until arriving generations were smart enough to know better. This is that painful moment you realize that all of this is a gigantic allegory of changing times and beliefs. It's not that times are less magical, or the world is coming to an end. It's that now we know differently. It's not that giants and beauties used to walk the Earth, but that they never did. It's not that the world seemed less magical as you grew up, but rather you were gullible and stupid enough to fall for superstitious fairy-tales, and as you learned and grew you stopped wasting your time with misleading fables meant for children. No matter how happy they used to make you. Now you realize that the world isn't unpredictable. It moves like clockwork, and the only sort of youthful awe you get out of it are strange stories like this that grab you and, despite your better judgements, force you to forget about truth and logic and facts, and instead tempts you with the disingenuous, the apocryphal, and most importantly the divine and absurd.

I need a drink.

Oh, and I'll give Gabriel the last word to sum everything up.

Smile, but go fuck yourself.

Thursday, March 7, 2013

Insert relevant title here.



I was reading through the survey questions over at Booth's IGM forum (it's basically just where economists from prestigious universities give their opinions regarding certain issues, policies, whatever), when I came across Austan Goolsbee's responses. Most look like they came from a bad Twitter account, but his opinion regarding the minimum wage caught my interest. The first question was:

 "Raising the federal minimum wage to $9 per hour would make it noticeably harder for low-skilled workers to find employment."

Which received an overall "meh" from the judges. Certainly, part was due to the question (noticeably?), but for the most part they agree that the effects are small (although, as Caroline Hoxby put it: "Unemployment among low-skilled workers is already high by historic standards, indicating that wages are already too high for market-clearing", so perhaps now is different?). 

Then comes the second question. Here:

"The distortionary costs of raising the federal minimum wage to $9 per hour and indexing it to inflation are sufficiently small compared with the benefits to low-skilled workers who can find employment that this would be a desirable policy."

Now that question is a little less black and white than the first, but here's Goolsbee's response:

"Depends what your social welfare function looks like"

Which reminds me that this is a good excuse to mention something relatively important. Does the minimum wage have an effect on employment? This is a standard yes, no, hypothesis, null hypothesis, etc., sort of question that can be proven correct or incorrect, and there's no lack of empirical work testing it. But what about the second? Goolsbee's response is perfect. Depends on what society desires.What do we consider a benefit? Cost? Where do they meet?

If I'm being convoluted here's an example. Let's say that we knew for certain that unemployment would result from increasing the minimum wage. What then? Well, people would gasp and then cry and complain about lowering it. But why? Because people place negative value on unemployment. That's the thing. Science faces the question of whether things are true or not, but when it comes to a question of good or bad, desirable and undesirable, then we leave that question to political philosophers and moral theorists who will surely answer our problems concretely as they have done so for hundreds of years....Haha, just kidding. They're idiots.

But seriously this is important. Let's say that on top of that we knew that increasing the minimum wage would decrease inequality. Alright, now we have conflicting values. People don't like unemployment, but they don't like inequality either. So now it's how they feel the costs and benefits match up. What about the effect it has on low skilled workers and high skilled workers? Prices? The dynamic abilities of certain markets?

And so on. If there were easy answers that showed something would be unambiguously better then we'd take it. If somehow some supernatural being told us what was morally right and wrong we'd create social welfare functions around that and then maximize. But as far as I know no moral philosopher has transcended to Godlihood just yet. So for now we just give the answers to whether something is true or not, and then the average person can interpret it depending on what they value.

Wednesday, March 6, 2013

Look at that classy fucker.



 I know I'm supposed to be doing homework, and internally I promised myself to keep these to at most once a day, but I got a little gem that relates to how I contrast theory and empirics, summed up well by James Heckman (I had to find a picture that made him look the least like Colonel Sanders.).




"When Friedman died, a couple of years ago, we had a symposium for the alumni devoted to the Friedman legacy. I was talking about the permanent income hypothesis; Lucas was talking about rational expectations. We have some bright alums. One woman got up and said, “Look at the evidence on 401k plans and how people misuse them, or don’t use them. Are you really saying that people look ahead and plan ahead rationally?” And Lucas said, “Yes, that’s what the theory of rational expectations says, and that’s part of Friedman’s legacy.” I said, “No, it isn’t. He was much more empirically minded than that.” People took one part of his legacy and forgot the rest. They moved too far away from the data."


For most theorists their theories are true simply because they're true. Which seems like a non-starter way of looking at things. That's what happens when you "get too far away from the data."

Iconoclast.



Alright, first off what the fuck is a "DSGE" model?

The "D" stands for dynamic, meaning that it moves across multiple time periods. The "S" stands for stochastic, which means that some components are random, or unpredictable. The "G" stands for general (as opposed to partial), which means that it covers the entirety of an economy. The "E" stands for equilibrium, or essentially solutions to the model (A rock rolls down a hill and then rests at the bottom. This is an "equilibrium" point for the rock.)

Together that makes "Dynamic Stochastic General Equilibrium" models. They're about what you'd expect. Models of the economy that take into account everything I just mentioned. Different times periods, random shocks, and so on.

Certainly, as I've stated before, models are incredibly helpful when they're used to understand complex relationships in an economy. Not only that, but you can use them to make predictions about things that haven't happened yet. As well as other benefits, such as having a framework to understand policy with, etc.

Well, what's so bad about that? The problem isn't with DSGE models, per se, but theoretical modelling of economies in general. For example, models are exactly what you put into them. I mean, all you need are basic assumptions that make the internal organs of your model logically consistent, and then you're done. You certainly have to conform it to basic empirical data, but for the most part even if it doesn't no one will notice, since most models leave out many complicating factors (they're usually abstract representations that only measure very strict scenarios), and most empirical evidence isn't strong enough to completely falsify a model. So the more complex models with very subtle predictions will cling tenaciously to life.

Part of this is a problem due to empirical methods not being reliable enough to falsify hypotheses, part is inherent problems with assumptions and simplifications, part is because this shit is hard.

The point, however, is that there's a problem. As Sims pointed out in the last post, though, there are redeeming qualities, even if there are problems. Some models do have the ability to predict. We just need to get the right assumptions and complicate the model a bit to make it more realistic. The point is that as of right now we just need to get the theory right before we can use it for policy, and before we get the theory right we have to validate it with good econometric work.

Now, that's all I wanted to say here, but this is Harald Uhlig at the same conference defending (a bit more ingenuously) DSGE models:

"You know, physicists dream of a theory of everything...it's pretty pathetic...certainly doesn't help us understand the financial crisis."

I also really enjoyed his comparison of abstract art with abstract theory, although I don't think that aesthetically pleasing art and aesthetically pleasing theory are the same. One has the purpose of being beautiful, while the other has the purpose of predicting and understanding. Unless the point of modelling is so that we can make cool models. I'm down, but it seems a little inefficient. So
I hope "beautiful", with regards to economic models, means something else.

Tuesday, March 5, 2013

Long time no see.



So anyways I'm hoping to pick this up again to keep me humble. The problem is that sometimes I go overboard and a simple blog post becomes a book, which is way too cumbersome and demanding on my part. I'll keep it short and sweet from now on.

Just so that I don't keep it that short, I might as well say something about something. So, here goes.

The guy who has influenced my thinking more than anybody else within the past couple of years would definitely be Chris Sims. The sad part is that I didn't know him at all before he won his Nobel. He's more of a monetary macroeconomist, which is nowhere near where I am (his empirical methods much closer). Still, after checking into his work I picked up a couple gems regarding economics, science, methodology, and so on.

Here's him at a conference:





"At central bank conferences I often play the role of DSGE iconoclast...however, in this conference criticizing DSGEs is a cheap audience pleaser. Not an iconoclasm. And, my instincts are iconoclastic, so what I'm going to do now is defend DSGEs."

Have to like this guy. Anyways, I'll make sure to comment on some points he brings up here, as well as my general opinions regarding modelling and empirical evidence. In the meantime, homework.


Thursday, January 31, 2013

If you read this post, then you will understand basic logic.



I want to talk about a strange math related topic.

The moment anyone starts seriously studying mathematics they immediately come across a few terms (all related to logic) that are very related. I specifically picked them because they are very applicable in even every day logic. They are:

1) Sufficiency and necessity.
2) logical implications (i.e. ⇒, ⇔, iff, etc.)

I'll start with the first.

Now, the first time someone studying mathematics comes across this is probably in mathematical optimization (necessary and sufficient conditions for maximization and minimization). Yet, it springs up constantly from there on. What does it mean?

Well, I'll start with an example.

Let's say that I want to prove that I'm a human being. Showing that I have blood is necessary, since human beings have blood, but not sufficient. Many different creatures have blood. Likewise, let's say that I want to prove I'm a male. Since my name is Brandon, that's sufficient, but not necessary in order to prove it. Certainly, there are many men who aren't named Brandon, but if you're named Brandon you're most certainly a male.

The distinction is very important. In these examples something that is necessary is exactly that, necessary, but that doesn't mean it completes the proof. Sufficiency, on the other hand, can prove it, but that doesn't mean it's necessary, since there may be examples where it's true that aren't related to it.

However, they can be taken together, and that's when it's the strongest. Let's say all males were named Brandon, and only males were named Brandon (no dogs, creatures, women, etc.). Well, showing that my name is Brandon is both necessary AND sufficient since it's sufficient to prove I'm a male, but at the same time for me to prove it it's necessary that my name is Brandon.

 This leads right to logical implication which is directly tied to this (and makes it much more intuitive). The first time you come across these would be in mathematical logic, which may be in early calculus, or as late as real analysis.

Here are the implication arrows. They are:

P⇒Q
Q⇒P
P⇔Q
 
Although the first two seem redundant, I'll use them with my previous examples. Let's say the statement P is "My name is Brandon" and Q is "I'm a male". The first says, essentially, "If my name is Brandon, then I'm a male." Which means the fact that my name is Brandon implies I'm a male. Let's switch the world around a bit, and say that all males are named Brandon, but so are some females. Then, the reverse statement would be true. "If I'm a male, then my name is Brandon", but then the previous statement would no longer be true since some females would be named Brandon. So now being named Brandon isn't enough to prove I'm male.

Notice how this works. With the first two implication arrows, you can take the previous statement and imply the latter, but you can't go back. My name is Brandon, therefore I'm a  male. However, if I'm a male that doesn't mean you can show my name is Brandon, since it's certainly not always true.

The last example follows necessity and sufficiency. I'll just restate my example of both necessity and sufficiency (the world where all men are named Brandon, and everyone named Brandon is a male), which is "If my name is Brandon, then I'm a male", and "If I'm a male, then my name is Brandon." In other words, I could take either fact and it would lead me to the other.

This is very simple, but incredibly powerful with logic. My name is Brandon⇒I'm a male. I'm a human being⇒I have blood. I'm from planet Earth⇔I'm from the third planet from the sun.

The first leads me to the second in all of those, but only in the last one can I go both directions.


Strange topic. Feels weird. I'll try something different next time.

I feel your pain, Appleby.



Taken (stolen?) from "Catch-22"

"Appleby was as good at shooting crap as he was at playing Ping-Pong, and he was as good at playing Ping-Pong as he was at everything else. Everything Appleby did, he did well. Appleby was a fair-haired boy from Iowa who believed in God, Motherhood, and the American Way of Life, without ever thinking about any of them, and everybody who knew him liked him.

'I hate that son of a bitch,' Yossarian growled."


I feel an urge to read that book again. Why does he bring up ping-pong? Who cares.

Update: I think it's a state law in Iowa now that you need to post this video every time you mention Iowa.



Wednesday, January 30, 2013

They run these advertisements all the time in the United States..



Here's some ideas to get the ball rolling in Britain. With slogans like "We hate ourselves-we'll probably hate you too", "Grey Britain", and "Go to Australia instead", how can they lose?

Thank God these aren't actual, prospective, advertisements. Just jokes. The idea isn't a joke, though.






I make Kleptomania look good.

One person gets this joke.


Alright, stealing one more from Beth, but it'll be quick.

 Unlike her usual self, she's brought up two stealworthy posts in a row. This time, She's brought up charity as a topic, and mentions some facts regarding popular charities. She brings up a great point:

 "With so many charities out there, if you're thinking of making a donation, it's important to know how to choose the right one."

I couldn't agree more with this. This is nearly the most important factor of picking charities, and most blatantly ignore it. In the United States it's very popular to text in a donation that bills your phone company. There's literally no information on how it'll be spent, where exactly, or how efficient it is. This is exactly what she's talking about.

However, I do disagree with one point she brings up later:

"For a charity to be considered as one that spends it's money well, two thirds, or 66.6% of donations should go directly towards programmes supporting the charities aims."

It's a very good indicator, but to bring up an analogy where it might not always work would be  educational spending. Many sources claim increases in educational spending as something desirable in and of themselves, but as professor Heckman would put it, spending is an input, not an output. So, I agree absolutely that we need to spend time and choose, but now it has become considerably more complex on how we choose.

If two charities, A and B, make $100,000 each, but A spends 10% on administration costs, and firm B spends 30%, then, superficially, it appears that firm A has more "bang for the buck". After all, 90,000 goes to the stated cause for A, but only 70,000 for B.

However, let's say B is more efficient than A. Let's say that, out of the money that goes, 1/4th of A's is spent efficiently, but firm B spends 3/4ths of it's money efficiently. Some examples would be that A spends more money on things that aren't used, or perhaps it spends it on projects that are relatively less helpful than B.

Well, now multiplying the money they have to the percentage of it that's used effectively, we get A has $22,500 going to the charity, and firm B has $52,500. The roles have reversed.

How do we know which charities are efficient? Well, I've heard of some estimates that mix Beth's definition with other efficiency measures, like this. If you want more rigorous studies I've heard of a whole slew of research coming from John List over at Chicago. Since I haven't gone over that, I'll cover one paper of his that I have, which is this. One part of the Abstract runs:

"We design a door-to-door fund-raiser
in which some households are informed about the exact time of solicitation with a
flyer on their doorknobs. Thus, they can seek or avoid the fund-raiser. We find
that the flyer reduces the share of households opening the door by 9% to 25%
and, if the flyer allows checking a Do Not Disturb box, reduces giving by 28%
to 42%. The latter decrease is concentrated among donations smaller than $10.
These findings suggest that social pressure is an important determinant of door-to-
door giving."

So, apparently part of the reason we give is social pressure. Could be pressured into doing worse things, I suppose.


Now I'll stop stealing for a while and be original.

Approaching light speed.


Over a hundred views? 3 different countries? 2 of which aren't my own? I'm worldwide mother fuckers.


Time to celebrate:



Enjoy the storm.