Will > Books: economics‎ (43)

Identifying the questions you must ask and the data or evidence you will need is the first step in decision-making, and you can do that more effect

Identifying the questions you must ask and the data or evidence you will need is the first step in decision-making, and you can do that more effectively once you’re aware of the pitfalls posed by the cognitive biases and illusions I’ve cited in this book.

We are prone to blame decision makers for good decisions that worked out badly and to give them too little credit for successful moves that appear obvious only after the fact.

Why do we cling to truths long after they’ve been disproven or lost their usefulness? Is it really just a matter of hearing something preached as true so frequently that our minds accept them not just as fact, but as the default perspective that must be actively dislodged by the jaws of life? Yes, as it turns out.

When a specific fact or example comes to mind more readily, we tend to overemphasize that fact or example—maybe we ascribe too much importance to it, or perhaps we extrapolate and assume that that example is representative of the whole. This phenomenon is called availability bias, and I think it’s one of the easiest biases to understand but one of the hardest to catch in yourself, because it’s not just natural, but easy. Your brain is just doing what you asked, right? You thought about some question, and your brain went right to the hard drive and pulled out something relevant. Your brain didn’t go to the archives, although, and it probably just gave you one thing when you actually needed the whole set.

With Trump in the White House there would presumably be extensive digging into every deal he’d ever done, every partner he’d ever worked with, ever

With Trump in the White House there would presumably be extensive digging into every deal he’d ever done, every partner he’d ever worked with, every loan he’d ever received—many of which involved Deutsche. And the facts that Trump’s election was under a cloud because of Russia’s efforts to sway the vote and that his leading lender had for years been engaged in money-laundering activity in Russia—well, it didn’t take a genius to realize that real or imagined dots would soon be connected linking Deutsche to Russia to Donald Trump. This was especially true since the bank a decade earlier had connected Trump with wealthy Russians as he prepared to build resorts in Hawaii and Mexico.

In the final months of the Obama administration, all signs had pointed to charges soon being filed against bank employees and probably the bank itself. At the very least, a multibillion-dollar financial penalty looked all but certain.Something curious, however, had happened as soon as Trump took the oath of office. The investigation had gone silent. Week after week, Deutsch’s lawyers and executives wondered when they would get an update. At first, they worried that the delay spelled trouble. Perhaps, after campaigning as a populist, after vowing that he was “not going to let Wall Street get away with murder,” Trump planned an aggressive crackdown on banking malfeasance. Perhaps, after having his election victory tarnished by Russian interference, Trump would try to dispel those suspicions with a high-profile assault on Russian money laundering. But as the months passed, and nothing happened, executives’ fears faded. One source of relief was the realization that two of the Justice Department’s most powerful prosecutors, Geoffrey Berman and Robert Khuzami, both had previously represented Deutsche…Bank executives soon concluded that Russia was off-limits, too hot to handle, for the Trump administration. So, it seemed, was Deutsche.

I like driving a pickup and heating my house as much as the next person, and the through line between energy and economic growth and development is

I like driving a pickup and heating my house as much as the next person, and the through line between energy and economic growth and development is as clear to me as an electric streetlight piercing the black night. But the political impact of the industry that brings us those things is also worth recognizing as a key ingredient in the global chaos and democratic downturn we’re now living through.

Rachel Maddow didn't set out to write a book. But a nagging question led her there: Why did Russia interfere in America's 2016 presidential election, and why attack the United States in such a cunning way? Although the MSNBC host regularly devotes ample airtime to the topic of Russia on The Rachel Maddow Show, her digging led her to a thesis she thought was too long for TV.
- from the NPR interview

Russia's shaky economy, hampered by a reliance on oil and gas, helps explain the country's weakness, and "some of Russia's weakness explains why they attacked us in the way they did," Maddow argues. She says Vladimir Putin exploited Russia's lucrative oil industry to support his vision of making Russia a superpower again. "When you've got one resource that's pulling in such a big revenue stream, you tend to end up with very rich elites who will do anything to hold onto power who stopped doing the other things that governments should otherwise be doing to serve the needs of the people," she said in an interview with All Things Considered. - from NPR

…the only thing we have to fear is fear itself - Franklin Delano Roosevelt Inaugural address – March 4, 1933

Real power is—I don’t even want to use the

…the only thing we have to fear is fear itself - Franklin Delano Roosevelt Inaugural address – March 4, 1933

Real power is—I don’t even want to use the word—fear. - Presidential candidate Donald J. Trump in an interview with Bob Woodward and Robert Costa on March 31, 2016

It was no less than an administrative coup d’état, an undermining of the will of the president of the United States and his constitutional authority.

In addition to coordinating policy decisions and schedules and running the paperwork for the president, Porter told an associate, “A third of my job was trying to react to some of the really dangerous ideas that he had and try to give him reasons to believe that maybe they weren’t such good ideas.”
Another strategy was to delay, procrastinate, cite legal restrictions, Lawyer Porter said, “But slow-walking things or not taking things up to him, or telling him—rightly, not just as an excuse—but this needs to be vetted, or we need to do more process on this, or we don’t have legal counsel clearance—that happened 10 times more frequently than taking papers from his desk. It felt like we were walking along the edge of the cliff perpetually.

…the United States in 2017 was tethered to the words and actions of an emotionally overwrought, mercurial and unpredictable leader. Members of his staff had joined to purposefully block some of what they believed were the president’s most dangerous impulses. It was a nervous breakdown of the executive power of the most powerful country in the world.

We must especially beware of that small group of selfish men who would clip the wings of the American Eagle in order to feather their own nests.
FRANKLIN D. ROOSEVELT, State of the Union Address, Jan. 9, 1941

If among you, one of your brothers should become poor, in any of your towns within your land that the Lord your God is giving you, you shall not harde

If among you, one of your brothers should become poor, in any of your towns within your land that the Lord your God is giving you, you shall not harden your heart or shut your hand against your poor brother, but you shall open your hand to him and lend him sufficient for his need, whatever it may be … For the poor you will always have with you in the land. Therefore I command you, ‘You shall open wide your hand to your brother, to the needy and to the poor, in your land.’ - (Deuteronomy 15:7-11)

The law, it its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread. -- Anatole France

America’s poor and working-class people have long been subject to invasive surveillance, midnight raids, and punitive public policy that increase the stigma and hardship of poverty. During the nineteenth century, they were quarantined in county poorhouses. During the twentieth century they were investigated by caseworkers, treated like criminals on trial. Today we have forged a digital poorhouse from databases, matched algorithms and statistical risk models. It promises to eclipse the reach and repercussions of everything that came before.

For all their high-tech polish, our modern systems of poverty management—automated decision-making, data mining, and predictive analytics—retain a remarkable kinship with the poorhouses of the past. Our new digital tools spring from punitive, moralistic views of poverty and create a system of high-tech containment and investigation that I call the digital poorhouse. The digital poorhouse deters the poor from accessing public resources; polices their labor, spending, sexuality, and parenting; tries to predict their future behavior; and punishes and criminalizes those who do not comply with its dictates. In the process, it creates ever-finer moral distinctions between the “deserving” and “undeserving” poor, categorizations that rationalize our national failure to care for one another.

As Mary Richmond wrote in Social Diagnosis, her 1917 textbook on casework procedures, “the reliability of the evidence on which [caseworkers] base their decisions should be no less rigidly scrutinized than is that of legal evidence by opposing counsel.” Scientific charity treated the poor as criminal defendants by default.

poverty is not an island; it is a borderland. There’s quite a lot of movement in the economic fringes, especially across the fuzzy boundary between the poor and the working class. Those who live in the economic borderlands are pitted against one another by policy that squeezes every possible dime from the wallets of the working class at the same time that it cuts social programs for the poor and absolves the professional middle class and wealthy of their social obligations. - [see recent tax cuts for the 1%]

…systems designed for the poor will eventually be used on everyone.

What frightened me? Certainly the prediction by Bill Gates and his team that an epidemic like the 1918 influenza pandemic that killed 50 million p

What frightened me? Certainly the prediction by Bill Gates and his team that an epidemic like the 1918 influenza pandemic that killed 50 million people could happen again today—and that in the first 200 days it could kill 33 million people. That’s almost as many people as AIDS has killed over four decades. Even scarier was the Bank of America/Merrill Lynch assessment that the threat of a global pandemic could claim more than 300 million lives and cost the global economy as much as US$3.5 trillion.

The Spanish influenza pandemic of 1918 may have killed as much as 5% of the world population. Some outbreaks since then infected over a third of the world’s population (e.g., pandemic influenza), whereas others killed over half of people infected (e.g., Ebola or SARS). If a disease were to emerge that was as transmissible as the flu and as lethal as Ebola, the results could be catastrophic. Fortunately, this rarely transpires, but it is possible that it could, for example with the H5N1 influenza virus. - from the Global Catastrophic Risks report

Once the world woke up to the crisis, there was a generous outpouring of assistance. As the response peaked, I was consumed by nagging questions: Where will we be four or five years from now? Will the world have gone back to sleep? What’s needed to protect the world from future outbreaks? To find the answers, I explored the lessons from epidemics over the last century – smallpox, AIDS, SARS, avian flu, swine flu, Ebola, Zika – and I drew on some of the best minds, experienced professionals and committed citizen activists in global health, infectious disease, and pandemic preparedness. - from the MSH site

As with war, where common illness can take more lives than war injuries, epidemics sometimes take more lives from disruption of primary healthcare than from the epidemic itself. Because health workers are diverted to emergency response centers and health facilities are sometimes closed, epidemics can also disrupt routine public health care needs such as immunization, treatment of acute illness, and facility-based births.

in some places — including Southern California, Pennsylvania and central Texas — some hospitals have seen so many flu patients that they had to set up triage tents or turn other patients away. Local shortages of antiviral medications and flu vaccines have been reported, and the C.D.C. said patients may have to call several pharmacies to find shots or to fulfill prescriptions.

… what Hakluyt foresaw in a colonized America was one giant workhouse. This cannot be emphasized enough. As the “waste firm of America" was settled, it would become a place where the surplus poor, the waste people of England, could be converted into economic assets. The land and the poor could be harvested together, to add to—rather than continue to subtract from—the nation’s wealth. Among the first waves of workers were the convicts, who would be employed at heavy labor, felling trees and burning them for pitch, tar and soap ash; others would dig in the mines for gold, silver, iron, and copper. The convicts were not paid wages. As debt slaves, they were obliged to repay the English commonwealth for their crimes by producing commodities for export. In return they would be kept from a life of crime, avoiding, in Hakluyt’s words, being “miserably hanged,” or packed into prisons to “pitifully pine away” and die.

During the colonial period, the right to vote for the lower house of colonial legislatures had been defined in traditional British terms: Only people who had freehold landed property sufficient to ensure that they were personally independent and had a vested interest in the welfare of their communities could vote. - from The Right to Vote and the Rise of Democracy, 1787–1828 by Donald Ratcliffe

Franklin understood that maintaining class differences had its own appeal. In the Pennsylvania Gazette, the newspaper he edited, an article was published in 1741 that exposed why people preferred having a class hierarchy to having none. Hierarchy was easily maintained when the majority felt there was someone below them. “How many,” the author asked, “even of the better sort,” would choose to be “Slaves to those above them, provided they might exercise an arbitrary and Tyrannical Rule over all below them?” There was something desirable, perhaps even pleasurable, to use Franklin’s utilitarian axiom, in the feeling of lording over subordinate classes.

A prison official said it all: “One dies, get another.” Poor whites were inexpensive and expendable and found their lot comparable to suffering African Americans when it came to the justice system. Nothing proves the point better than the fact that both black and white convicts were referred to as "niggers."

...the newcomers did not care to understand the strange new country beyond taking whatever turned a profit. They knew only what they knew. The fore

...the newcomers did not care to understand the strange new country beyond taking whatever turned a profit. They knew only what they knew. The forest was there for them.

For me, the chief character in the long story was the forest, the great now-lost forest(s) of the world. The characters, as interesting as they were to develop, were there to carry the story of how we have cut and destroyed the wooden world. - from The New Yorker interview

She urged editors to praise the manliness and toughness of shanty men, inculcating axmen with the belief that they could take extreme risks and withstand the most desperate conditions because they were heroic rugged fellows; the same sauce served settlers into the third generation, who believed they were “pioneers” and could outlast perils and adversities. Loggers and frontier settlers, she thought, would live on pride and belief in their own invulnerability instead of money.

“How big is this forest?” asked Duquet in his whinging treble voice. He was scarcely bigger than a child.
“It is the forest of the world. It is infinite. It twists around as a snake swallows its own tail and has no end and no beginning. No one has ever seen its farthest dimension.”

Even if everyone knew it was too late, we’d still keep on. There seems to be something in the human psyche that is unable to stop and step back and repair and fix things. It’s not willing to. It’s like we can’t shift easily. There’s just something in people. It’s the fatal flaw in humanity, I think. Once we start doing something, we keep on. - from the Globe and Mail article

these things happened to people. ... I mean, if you've got to kill off a character, you might as well do it with a bit of panache. - from the NPR interview

…technology entrepreneurs are society’s chaos monkeys, pulling the plug on everything from taxi medallions (Uber) to traditional hotels (AirBnB) to

…technology entrepreneurs are society’s chaos monkeys, pulling the plug on everything from taxi medallions (Uber) to traditional hotels (AirBnB) to dating (Tinder). One industry after another is simply knocked out via venture-backed entrepreneurial daring and hastily shipped software. Silicon Valley is the zoo where the chaos monkeys are kept, and their numbers only grow in time. With the explosion of venture capital, there is no shortage of bananas to feed them. The question for society is whether it can survive these entrepreneurial chaos monkeys intact, and at what human cost.

mostly failed scientists like me who had sold out to the man and suddenly found themselves, after making it through years of advanced relativity and quantum mechanics, with a golf-club-wielding gorilla called a trader peering over their shoulder asking them where their risk report was. We were quantitative enablers, offering the new and shiny blessings of modern computation to the old business of buying and selling… quants were the eunuchs at the orgy. The fluffers on the porn set of high finance. We were the ever-present British guy in every Hollywood World War II film: there to add a touch of class and exotic sophistication, but not really consequential to the plot (except perhaps to conveniently take some bad guy’s bullet.)

anyone who claims the Valley is meritocratic is someone who has profited vastly from it via nonmeritocratic means like happenstance, membership in a privileged cohort, or some concealed act of skullduggery. Since fortune had never been on my side, and I had no privileged cohort to fall back on, skullduggery it would have to be.

There are worse ways of monetizing sociopathy than startups. If you know any better ways, I’m listening.

We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both. - Louis D. Brandeis

We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both. - Louis D. Brandeis

The party’s platform was an almost exact replica of the Freedom School’s radical curriculum. It called for the repeal of all campaign-finance laws and the abolition of the Federal Election Commission (FEC). It also favored the abolition of all government health-care programs, including Medicare and Medicaid. It attacked Social Security as “virtually bankrupt” and called for its abolition too. The Libertarians also opposed all income and corporate taxes, including capital gains taxes, and called for an end to the prosecution of tax evaders. The platform called for the abolition too of the Securities and Exchange Commission, the Environmental Protection Agency, the FBI, and the CIA, among other government agencies. It demanded the abolition of “any laws” impeding employment—by which it meant minimum wage and child labor laws. And it targeted public schools for abolition too, along with what it termed the “compulsory” education of children. The Libertarians wanted to get rid of the Food and Drug Administration, the Occupational Safety and Health Administration, seat belt laws, and all forms of welfare for the poor

[In the late 1980s, Richard Fink], after studying the Kochs’ political problems for six months, drew up a practical blueprint, ostensibly inspired by [right-wing icon, economist Friederich] Hayek’s model of production, that impressed Charles by going beyond where his own 1976 paper on the subject had left off. Called “The Structure of Social Change,” it approached the manufacture of political change like any other product. As Fink later described it in a talk, it laid out a three-phase takeover of American politics. The first phase required an “investment” in intellectuals whose ideas would serve as the “raw products.” The second required an investment in think tanks that would turn the ideas into marketable policies. And the third phase required the subsidization of “citizens” groups that would, along with “special interests” pressure elected officials to implement the policies. It was in essence a libertarian production line, waiting only to be bought, assembled and switched on.

There is no law, only power.

There is no law, only power.

We’re creating a dystopia, where the mania of the state isn’t secrecy or censorship but unfairness. Obsessed with success and wealth and despising failure and poverty, our society is systematically dividing the population into winners and losers, using institutions like the courts to speed the process. Winners get rich and get off. Losers go broke and go to jail. It isn’t just that some clever crook on Wall Street can steal a billion dollars and never see the inside of a courtroom; it’s that plus the fact that some black teenager a few miles away can go to jail just for standing on a street corner, that makes the whole picture complete.

That’s what nobody gets, that the two approaches to justice may individually make a kind of sense, but side by side, they’re a dystopia, where common city courts become factories for turning poor people into prisoners, while federal prosecutors on the white-collar beat turn into overpriced garbage men, who behind closed doors quietly dispose of the sins of the rich for a fee.

Hollywood is like Harold Lloyd in Safety Last, hanging desperately to the hands of that old (silent) clock, which is moving inevitably toward future time.

I was only vaguely aware of the Beltway consensus that President Obama’s stimulus was an $800 billion joke. But because I write a lot about the environment, I was very aware that the stimulus included about $90 billion for clean energy, which was astonishing, because the feds were only spending a few billion dollars a year before. The stimulus was pouring unprecedented funding into wind, solar, and other renewables; energy efficiency in every form; advanced biofuels; electric vehicles; a smarter grid; cleaner coal; and factories to make all that green stuff in the U.S. It was clearly a huge deal. And it got me curious about what else was in the stimulus.

X-events of the human—rather than nature-caused—variety are the result of too little understanding chasing too much complexity in our human systems. The X-event, be it a political revolution, a crash of the Internet, or the collapse of a civilization, is human nature’s way of reducing a complexity overload that has become unsustainable.

Overpumping of underground water aquifers in many countries, including China, India, and the United States, had artificially inflated food production in the past few decades. For example, Saudi Arabia was self-sufficient in wheat harvesting for over twenty years. Now the wheat harvest there is likely to disappear entirely over the next couple of years due to a lack of underground water to irrigate crops

…had Obama allowed the Republicans to turn the national debate into nothing other than a debt seminar? “We can be faulted for this,” Axelrod said later. “Nobody anticipated the degree of Republican obstreperousness and implacability. We knew there would be strident voices, but the degree to which that tail would wag the dog—we didn’t assume.”

Axelrod subsequently explained. “The decision was made to go out and talk about jobs and the economy and allow the negotiations to proceed until the president needed to intervene.” And as Robert Gibbs put it, “It’s difficult to put out your right hand to shake their hands and then strike them with your left hand.“

certain specific, popular internet designs of the moment—not the internet as a whole—tend to pull us into life patterns that gradually degrade the ways in which each of us exists as individuals. These unfortunate designs are more oriented toward treating people as relays in a global brain.

the idea that information should be “free” sounds good at first. But the unintended result is that all the clout and money generated online has begun to accumulate around people close to only certain highly secretive computers, many of which are essentially spying operations designed to sell advertising and access or to pull money out of a marketplace as if by black magic. The motives of the people who comprise the online elites aren’t necessarily bad…but nevertheless the structure of the online economy as it has developed is hurting the middle class, and the viability of capitalism for everyone in the long term.

the notion that cheaper computers, smartphones, etc., will compensate for the growing economic gap is just not true. Ultimately mounting poverty will outpace cost savings and everyone will suffer. We can’t count on anything but a strong middle class to maintain many things dear to us: widespread self-determination and liberty, a dynamic commercial market filled with surprises, and a democracy that can’t be bought because ordinary people have enough clout to stand up for themselves. Some of the current popular online designs , as appealing as they might seem at first, are leading us away from these wonderful things.

what computerized analysis of all the country’s school tests has done to education is exactly what Facebook has done to friendships. In both cases, life is turned into a database