Charles Dickens and Modern Political Sensibilities

In each period, different combinations of political beliefs tend to go together. These days, for instance, a belief in the importance of generous social welfare programs tends to be correlated with a suspicion of private enterprise, a belief that crime is largely a product of circumstance rather than character, an opposition to the death penalty, and a suspicion of religion.

But it's worth remembering that there's no particular reason that all of these should go together. And once upon a time, they didn't.

I just finished reading 'Oliver Twist'. And if you had to try to pigeonhole Dickens' sympathies in the book as 'conservative', 'liberal' or even 'libertarian' by modern standards, you'd struggle.

Dickens is very sympathetic to the plight of the poor. Large chunks of the first part of the book are scathing satire of the brutal conditions in London's workhouses and orphanages, and the smug self-satisfaction of religious authorities who run them, juxtaposed with their indifference to the misery around them.

So by that measure, he'd be pretty liberal in today's terms.

But in terms of the question of the causes of crime, Dickens is quite emphatic that certain people are drawn to it because they're irredeemably greedy and wicked. To be sure, there are some characters that are drawn in by circumstance and lack of opportunity, and for those he writes with obvious sympathy. But the overall picture of crime is a long way from the 'root causes' crowd of today.

In addition, Dickens has a fairly neutral attitude towards the death penalty. In the book it's directly described as applying for being an accessory to murder, but it's implied that people get it for robbery as well. And while this fact isn't cheered, it seems to be just part of the landscape - rob houses, and you're going to hang. It's fair to say that even the most strident law-and-order conservatives of today might shy away a little from this viewpoint.

And while Dickens is quite suspicious of the Church as it operated in terms of poverty relief, he seems quite supportive of Christianity in general:

I have said that they were truly happy; and without strong affection and humanity of heart, and gratitude to that being whose code is Mercy, and whose attribute is Benevolence to all things that breathe, happiness can never be attained.

The reality is that this portfolio of views has no obvious analog today. But that's often how it is. If you don't believe me, have a read about the Whig Party and try to make sense of it. They were the antecedents of the modern Liberal Democrats. Except they were firmly in support of free trade. And really didn't want a Catholic as King. But liked Parliament over the King. And were in favour of abolishing slavery and extending the franchise to women. But they also passed the Poor Law Amendment Act of 1834, which caused so much of the misery for the destitute that Dickens rails against in the first part of the book.

Just think, your political views might seem equally confusing to a child born in 200 years time.

Free Business Plan of the Day

McDonalds is an astonishingly successful franchise. If you need to get a clear example of this in practice, just look at the distribution of customers across restaurants in the average airport.

Every time I go past one, the McDonalds is easily the most packed place there. For some reason, the appeal of cheap and tasty comfort-food hamburgers is especially large for tired travelers whose self-control is depleted. The queues in front of the place are typically at least twice as large as those at the next most crowded place.

Let us make the rather heroic assumption that the profit per customer is similar between McDonalds and other comparable fast food restaurants at the airport. By this measure, being the most packed place is a pretty good proxy for being the most profitable. I can’t back this up with any hard numbers, but I’d be willing to wager a decent amount of money to this effect at 2:1 odds.

But here’s where things start getting weird. My guess is that not only is McDonalds the most profitable store at the airport, but I’d wager that the difference is so big that the second-most profitable restaurant you could open at the airport would be another McDonalds in the same terminal, right next door to the first if needs be. Even though you’ll clearly be competing with (and cannibalizing) the first one.

Now, this obviously doesn’t appear to happen. I’m not sure if the McDonalds franchising arrangement prohibits McDonalds granting another franchise license within a certain distance (it probably does). And I’m not sure the airport would grant another McDonalds tenancy right next door (they may not, based on a nebulous idea of serving different customer needs, although my guess is that they should, if they’re profit-maximising). 

But it’s just possible that nobody has thought of an idea so absurd as opening up a second McDonalds right next door. My guess is that it would make quite a bit of money. If you decide to avail yourself of this awesome free business plan, make sure to let the manager of your store know that you owe a guy called Shylock a free Big Mac Meal. I'll plan to collect when I run into two McDonalds stores at an airport within 15m of each other.

Why does the Post Office always lose money?

This hilarious story from the Consumerist provides a clue:

The Styrofoam cube enclosed in this envelope is being included by the sender to meet a United States Postal Service regulation. This regulation requires a first class letter or flat using the Delivery or Signature Confirmation service to become a parcel and that it "is in a box or, if not in a box, is more than 3/4 of an inch thick at its thickest point." The cube has no other purpose and may be disposed of upon opening this correspondence.

Alec Baldwin: They're just sitting out there, waiting to give you their money! Are you gonna take it? Are you man enough to take it?

United States Post Office Worker: No! Not unless their money is in an envelope at least 3/4 of an inch thick!

Alec Baldwin: *picks up set of steak knives, proceeds to stab Post Office worker in rage*

A late-night email exchange

The Greek: 

[Subject: 'The Glory of Australia'] It's stunning to me that you consider yourselves an independent country. At least our prime minister doesn't have to curtsy to a FOREIGNER.

Shylock:  

If you read even the headline, you'd see that the whole point was that the Prime Minister didn't curtsy to anyone.

But you miss the larger point. Queen Elizabeth the Second is not just the Queen of Great Britain and Northern Ireland, but also the Queen of Australia. This is an official title.

Besides, better to curtsy to the Brits than bend over for the Germans.

Miscellaneous Winners

-What would the world look like as you approached the speed of light? Apparently, it would look like this.

-Gary Brecher continues to provide interesting descriptions of military history that you won't find anywhere else on the web. Here is a piece on Ben Grierson, a Civil War hero (no mean praise from Brecher). Here is his take on the wars between the Mayans and the Spanish in Mexico.

-Futility Closet describes a weird maths problem that I still don't quite understand the answer to. More details here.

LOLs of the day

The police medic:



Comedy gold!

And if you're in the mood for a gratuitously harsh but hilarious heckle by Ace of Spades, this was pretty funny too.

Great Moments in Computer Security and Public Relations

First State Superannuation is a company in Australia that provides superannuation funds (the equivalent of America's 401K-type plans for retirement accounts).

First State Super, it seems are complete imbeciles when it comes to their members' security. Let Techdirt tell the story:

[A]security professional found a big and ridiculously obvious bug in the website of an Australian investment fund, First State Superannuation. Apparently you could see other people's accounts by merely changing the account numbers in the URL. Increase the number by one, and see the next user in line. This is the kind of extraordinarily basic mistake that I thought had been eradicated a decade ago. Apparently not.

That's right, just change the account number in the URL and you get to see someone else's details. Okay, but presumably it's just some random person - who could be bothered?

Patrick Webster found he was able to access electronic superannuation notices of any customer by changing numerical values in URLs used to issue statements to clients.
Webster, a customer of First State Superannuation and consultant at OSI Security, increased the URL number value by one and was granted access to a former colleagues' super statement.

 Hmm, that's awkward. How much detail could he see?

He was shown information such as name, address, date of birth, next of kin and superannuation payments.

Oooh. That's worse.

Apparently their website was designed by someone drunk or still in high school. Or both.

This is strike one.

So Patrick Webster, model citizen, reported this gaping flaw to First State Superannuation. How did they respond? I like to imagine the following conversation took place

Underling: Some IT guy reported that it's simplicity itself to hack our website and our users' details are at risk. In fact, the method was so basic that it doesn't even really qualify as 'hacking' - he just typed in a different URL.

CEO: Holy Smoke! How do I choose between the following important priorities:

1. Fix the website to make sure this doesn't happen again
2. Work out how to explain this breach to our members and the press
3. Send a thank you card to the guy who reported the breach
4. Call the cops on the guy who reported the breach.

 Ha ha! #4 is surely a joke, right?

No. No it isn't.

I would love to know how that phone call went.

CEO: Hello, is this the Police? I need to report a potential crime: our website is completely insecure, and I need the guy who told us this to be arrested immediately!

Operator: No really, who is this?

Kidding! The cops of course turned up at the guy's house.

That's strike two.

Okay, so maybe this was just a rush of blood to the head when they didn't know what was happening. Surely after a few days, they came to their senses?

Bwa ha ha! Of course not. They threatened to sue the guy.

Whilst you have indicated that your actions were motivated by an attempt to show that it is possible for a wrongdoer to obtain unauthorised access to Pillar's systems, you actions may themselves be considered a breach of section 308H of the Crimes Act 1900 (NSW) and section 478.1 of the Criminal Code Act 1995 (Cth). You should be aware that due to the serious nature of your actions, this matter has been reported to the NSW Police.

Further, as a member of the Fund, your online access is subject to the terms and conditions of use which are outlined on the Fund's website. Your unauthorised access also constitutes a breach of those terms and has caused the Trustee to expend member funds in dealing with this matter. Please note the Trustee has the right to seek recovery from you for the costs incurred in accordance with those terms. 

This was their considered response. That's strike three.

Minter Ellison, the lawyers who wrote this embarrassing letter, have covered themselves in shame.

So here is my question:

Why on earth would any right-thinking person leave a red cent of their retirement savings with these ungrateful buffoons? Why would you leave your hard-earned cash in the hands of people that cannot design an even minimally secure website, and think that the appropriate response to people trying to help them fix this is to call the cops and threaten lawsuits?

Personally, I would sooner set my money on fire than give it First State Superannuation.

I would, however, gladly hire OSI Security and Patrick Webster to help diagnose security flaws in my website.

Semi-Conscious Thoughts and Free Parking

I don't know about you, but my brain has a category of thoughts that I describe as 'semi-conscious'. These are the cases where you see something that's slightly anomalous or unusual. The event is weird enough that you vaguely remember it, but not so weird that you immediately stop and wonder why it might be there (unlike, say, seeing  a clown on a unicycle riding down the road).  But it's only later on when you see something else that explains it do you remember that you sort-of noted how the underlying thing was unusual.

Today, for instance, I was looking for parking near a coffee shop, and was slightly distracted. The side of the road I was on looked pretty full, but I noticed that the opposite side of the street had a number of spots. I wheeled around, pulled up outside the coffee shop, and didn't think about it. I came back out 5 minutes later, and had gotten a ticket. I looked around - there was no requirement for paid parking, and I wasn't in a no-parking zone. The ticket revealed the answer, of course - I had been there for the two hours of the week where that particular side of the street had street cleaning.

And suddenly it all makes sense! Having one side of the street be totally full and the other side be mostly empty is unlikely if cars are all parking at random. In my case, if one side of the street were completely deserted, this might raise the thought to conscious questioning ('why is nobody parked here? is there something funny going on?) but semi-empty wasn't enough.

The other category of 'semi-conscious thoughts' I notice are cases where people are acting slightly oddly relative to what you'd expect. In other words, there's some small action they do that seems at odds with your general model of their personality. Girlfriend or husband acting slightly odd? Yeah, you may want to at least think about why that could be, with particular emphasis on models of behaviour that you don't normally contemplate. Maybe they had something crap happen at work that they didn't want to tell you about. Maybe they're cheating on you. Maybe it's a surprise party they're planning for you. In any case, it's probably worth at least thinking about, because the actions that would raise it to the level of conscious thought may be less pleasant than you'd like.

In my experience, these odd anomalies are often very good signs that your model of the world is somewhat wrong. Of course, if you chased every slightly odd-looking thing, you'd probably get a large majority of dead-ends and wasted time. Still, if there's a moral here (and there probably isn't), it would be to pay more attention to vaguely odd things.

Quote of the Day

In reference to the 'Occupy Brisbane' protests, smurray38 had this zinger:

I think even Lenin would be hard pressed to find anything ‘useful’ about these idiots.

Ha ha! Comedy gold!

Via Tim Blair, who has a full length smackdown on how lame the Occupy Sydney protests are.

Save Water, Comrade! The Glorious People's Republic of Australia Demands Your Sacrifice!

Politicians are, for the most part, suspicious of decentralised controls of any sort. Instinctively they tend to reach for technocratic solutions to problems, where a bunch of smart people can come up with clever solutions to problems and then boss around the reluctant citizenry, for their own good of course.

One example that always amused me was the absurd way that Australian governments approached questions of water shortages. If you believe what the government tells you, Australia is permanently short of water.

Part of this shortage is due to deliberate government mismanagement of supply. Namely, they refuse to increase it by adding more dams. As Andrew Bolt has pointed out:

No, the real cause of our shortage has been as I’ve warned since 2001 - that Melbourne has added a million more people since we built our last big dam, the Thomson, and never bothered to find more water for the newcomers’ extra showers, toilets, washing and gardens.

So there's a lot of environmental hysteria that effectively makes it impossible to build another dam, the one technocratic solution that might actually solve the problem.

But let's forget about that, and just take the supply as being fixed. People keep using a lot of water, and the dam levels are getting low. How can we solve the problem?

If you're from an Australian state government, the answer is clear - we need a public advertising campaign hassling people to use less water. "Target Every Drop", we'll call it! Are you taking a 10 minute shower? Shame on you! You should feel guilty for enjoying that water for more than 4 minutes at a time! We'll guilt the plebs into better behaviour!

That's Plan A. To the astonishment of absolutely nobody, this plan seems to work as well as the laughable 'Whip Inflation Now' campaign of the seventies (memorably described by Alan Greenspan as 'unbelievably stupid').

Okay, so what's Plan B?

Forced water restrictions! Firstly you can only water two days a week in the early morning or late evening, and we'll encourage your neighbours to dob you in if you exceed this. Failing that, we'll restrict you to only using a hand-held hose! "Deadweight loss", you say? Never heard of it! It'll be good for the proles to get the exercise of walking back and forth. And if that doesn't work, we'll restrict them to using buckets!

I haven't seen the next step of restricting the public to water their gardens only using teaspoons, but surely it can't be far away.

As this happens, millions of dollars in property damage pile up as lawns and gardens turn brown and die. Never mind! We all must sacrifice!

Wait a second - here comes the pesky Australian Bureau of Statistics to point out that in New South Wales, agriculture comprises 46% of water use, while all households combined only account for 12%. Hmmm, so we could eliminate the households altogether and it might not save that much water?

Here's what's staggering about all this: at absolutely no point does it seem to occur to do the one thing that would really stop the problem of excess water use - raise the bloody price of water! They're growing rice in New South Wales, for crying out loud! Do you think this kind of economic activity makes the slightest bit of sense in a semi-arid climate with a market-clearing price for water? Of course not.

If there's one thing markets are really, really good at, it's solving shortages. If you just raise the price, people will save water all by themselves. You won't need to hector them. You won't need to make them waste hours watering their lawns with a thimble. You won't need to spend millions of dollars on advertising campaigns in order to not reduce water consumption.

And even better, they'll reduce consumption without you having to do anything or spend any money. They'll put in more water efficient plants. They'll take shorter showers. They'll replant their rice fields with wheat or something better suited to the climate. And a thousand other things that the bureaucrats never thought of.

And the ones that don't? Well, that's their way of telling you that they value the water at the market-clearing price. They really, truly are getting a lot of utility out of that 10 minute shower.

So here's the bottom line. I refuse to feel the slightest bit guilty about taking long showers as long as the water department are blowing taxpayer dollars on ridiculous ads. If you want people to use less water, raise the damn price.

Generosity on the Cheap

People worry about all sorts of ridiculous small probabilities. Small probability events tend to loom large in their minds, making them worry about rare disasters (planes crashing, being eaten by sharks) and placing their hopes in things that are extremely unlikely to happen (winning the lottery, cheap online viagra actually working).

But you can use this to your advantage and help out your friends at the same time.

First, find some medium size loss that the friend is unusually worried about. For instance, a few months ago a friend and I were driving around looking for a parking spot. We saw a place that we thought might be connected with the restaurant that we were going to, but we weren't sure.

My friend seemed worried that this might cause him to get a parking ticket. I judged this pretty unlikely - I was maybe 80% sure that the parking lot was for the restaurant, and that even if it weren't, we had at most a 10% chance of getting a ticket over lunch.

So, I made the following offer. "Tell you what", I said, "I'll indemnify you against the cost of the parking ticket, should we actually get one. I'll pay the whole lot."

And people love this kind of offer. If they are a worrier, you've given them peace of mind, and you make yourself look cool as the man who is willing to (in the immortal words of Warren Buffet) "retain [his] risks, and depend on nobody."

And the best part? It costs you next to nothing, at least in expectation. My expected chance of getting caught is 2% - if the ticket is $50, each guarantee only costs me a dollar. But to your friend, the salient comparison is the offer to pay $50 and their peace of mind.

B-b-b-b-bargain.

Behavioural Economics and micro-insurance, man. It's what the cool kids are doing.

Eating Humble Pie

This was the prediction, regarding the leaked nude photos of Scarlett Johansson:

I'm going to go out on a limb here, and make a wild prediction - no 'hacker' will be found.

The prediction, it turns out, was completely wrong.

The benefit of running regressions is similar to the benefit of publicly committing your predictions to writing - you get to find out just how often your intuitions about the world are incorrect.

Moneyball Part 2

Steve Sailer's take. I really liked this anecdote:

When my son was ten, his baseball coach—inspired by Michael Lewis’s bestseller Moneyball: The Art of Winning an Unfair Game—came up with a statistically brilliant team strategy: Don’t swing. Ever.

Because few ten-year-olds can throw more strikes than balls, his team won the pennant by letting the little boy on the mound walk them around the bases until he dissolved into tears and had to be replaced by another doomed lad.

 Ha! That's fantastic.

The next spring, the parents got together and decided not to let that coach return.

Boo-urns.

Better Dead Than Rude

Suppose it's late at night, and you're walking along a street alone. You see up ahead of you a group of three rough-looking male youths walking towards you, wearing hoodies and street clothes. They're about 30m away, and with both of you going at average walking speed of about 5km/h, that will give you around  10.8 seconds until they're right in front of you. You're a young male yourself and decently athletic, but in a fight you'd have a hard time against three of them, especially if they're carrying a knife or a gun.

Your instinct says that these guys look like trouble. But they haven't done anything specific that you can point to. So what do you do?

As far as I can guess, the following two options cover about a hell of a lot of human responses:

a) If you're a polite SWPL type who's been dutifully trained to ignore all your evil and wicked prejudices, you'll just keep walking, and hope that they're not up to anything. If you cross the street, you'll contribute to the isolation alienation these kids must already feel from society. And honestly, how likely is it that anything will really happen?

b) If you're more prudent and you're worried about your safety, or a SWPL type without the courage of your see-no-evil-hear-no-evil convictions, you'll walk across the street to try to avoid them. They'll know that you crossed the street to avoid them, and that you thought they were thugs, but you might have needed to go that way anyway, so you've got some deniability. In any case, you can then see if they cross as well, and decide what to do.

So here's my question:

If you think there's a couple of percent chance that these guys might try to rob you or beat you up, why on earth don't you just turn around and start sprinting away from them as soon as you get that feeling?

Seriously, think about it. Option a) is disastrous. Once they're in front of you, you're screwed - if they pull a knife or a gun, your chances of being able to escape are really low, particularly if they surround you. And once they're at close range, it's a lot easier for them to grab you or threaten you in other ways. If you need to get away, you've got zero head start, so you've got to be a significantly faster sprinter than them. All three of them.

Option b) is a little better, but not much. If they follow you across, a lot of people will just keep walking anyway, or maybe try the truly devious strategy of walking a little faster! Yeah, muggers never thought of that tactic or how they might circumvent it. The best that can be said is that you're now approaching each other at a slightly slower rate. Perplexingly, even the people who cross the street still often won't start sprinting when the other guys cross as well. They're essentially option a) people in disguise.

If you run away as soon as you see danger, you've now got a 30m head start, which will make up for a reasonable deficit in running ability. They're only going to chase after you if they were already intending you harm, at which point you'll be damn glad to have a lead on them. And the reality is that most weapons they could be carrying aren't really effective at 30m. Even if they have a handgun and fire it at you, they're going to be firing at a moving target, in a poorly lit area, probably without any real weapons training, and likely while trying to chase after you. To put these factors in perspective, trained policemen in shooting confrontations have an average accuracy of about 30%. And this is for shots that are fired at a distance of 7 to 10 feet on average! (Randall Collins makes the same point). Bottom line? You'd have to be very unlucky to get hit at 30m with a hundgun fired by a gangbanger as you were running away.

And all this is totally obvious. Which is where the 'better dead than rude' concept (which John Derbyshire uses) comes in. A lot of people are made seriously awkward by the prospect that a bunch of random teenagers at night might laugh them or that some anonymous stranger will be offended that you ran away. But so what? You're never going to see them again. Does their opinion of you or their likely offense really matter for anything?

Apparently, by revealed preference, it does. And this is kind of astounding. Put it this way - you wouldn't have to explain why you should run away to a rabbit or a squirrel. As soon as they think you're a threat, they're outta here. Which makes complete sense.

If you're with other people, obviously this becomes a lot harder. Especially if you're a guy who's with a girl - even if you both run at the same time, if you're a faster runner then you're leaving the girl behind to the hoods. Not a great plan.

But if it's just me on my own? I'm getting the hell out of there as soon as I feel uncomfortable. I can't fight off three guys, but at my peak I could run 400m in 56-odd seconds. With a 30m head start, I like my odds that they're going to find it easier to mug someone else than to catch me. Let the hoods think what they want - better rude than dead.

The Mentality of Psychopaths

I've never met anyone I actually was sure was a psychopath. I've known people that I suspected of it, but perhaps in its milder forms. That is, they seemed unusually calculating and careful in how they presented themselves, and demonstrated a level of of empathy for other people that was stunted, although still perceptible.

I came across this very interesting letter from a reformed psychopath, talking about the mentality of what it's like. The whole thing is fascinating. Some excerpts:

We are neither the cartoon evil serial killers, nor the 'its your boss' CEO's always chasing profit at the expense of everyone else. While we are both of those things, it is a sad caricature of itself.

...

You are right to say that psychopaths hate weakness, they will attempt to conceal anything that might present as a vulnerability.

...

We are good at identifying, very rapidly, extreme traits of those around us which allows us to discern vulnerabilities, frailties, and mental conditions. It also makes psychopaths supreme manipulators, for they can mimick human emotions they do not feel, play on these emotions and extract concessions.

Huh. Read the whole thing.

I think I would actually enjoy a conversation with a reformed psychopath, in part to find out what they perceived as my psychological weaknesses to exploit. As long as, you know, they weren't able to stab me with a kitchen knife at the time.

Date and Time Parochialism

A day is the length of time it takes a planet to rotate once on its axis.

A year is the length of time it takes a planet to orbit a star.

On Earth, we're so used to the fact that a year is a lot longer than a day here, we are apt to sometimes forget that there's no reason why this has to be the case.

On Mercury, a day is 176 Earth days long. Even more strangely, a Mercury day is 2 Mercury years. In other words, a year is longer than a day there. If you'd grown up on Mercury, your default concept of time ordering would be minute, hour, year, day.

Huh.

Via the always interesting Astronomy Picture of the Day.

Update: The Dogg makes the excellent point that the interaction of day and year would mean than sunset and sunrise would be a really weird combination of the day and year effects. As would the path of the sun in the sky, for that matter. I demand that NASA commission a simulation and post it in a youtube clip to satisfy my idle curiosity!

Mixed Strategies

John Nash would be proud.

Today is clearly a double-dose of Yank Sports + Economics.

In other news, penalties for 'excessive celebration' are seriously pissweak. When even curmudgeons like me who don't care at all about American football think the rule is just needlessly squashing the joy in sports, that's a pretty lame achievement.

Moneyball

Let me start with the punchline:

If you've ever run a regression in your life, you should definitely see the movie Moneyball.

This is a sufficient but not necessary condition for liking it - it's a very good movie anyway. The combination of Michael Lewis for the original book and Aaron Sorkin for part of the script is a pretty damn compelling one.

It's the story of the Oakland Athletics, and how the general manager (Billy Beane, played by Brad Pitt) got a great team on a tiny budget by following the advice of Peter Brand (played by Jonah Hill), who uses a data-driven approach to identify undervalued players and better strategies to winning games.

The whole movie is like catnip for econ nerds. The main guy who shakes things up is this fat, awkward young guy who studied economics at Yale. And even better, the obligatory montage for any movie seeking to convey computer programming (closeups of lots of numbers, statistical looking outputs) featured code running in Stata! I was at this point thinking Ha ha, I run those regressions too! I could be that fat econ nerd. No wait - I am that fat econ nerd!

But the phrase 'catnip' above is deliberately chosen, in the sense that non-statistical people are likely to see it differently. The key dynamic is that Brand/Hill has the underlying regression-based strategy for winning games, and Beane/Pitt is the general manager who sees the promise in the idea, and implements the it against the wishes of the establishment. So which of the two is more crucial to the process? Both are are necessary, but which part you emphasise depends on how you view the world.

Here's how IMDB describes the movie:

The story of Oakland A's general manager Billy Beane's successful attempt to put together a baseball club on a budget by employing computer-generated analysis to draft his players.

In other words, to the non-statistical public, the role of Brand/Hill is limited to 'computer-generated analysis' -  this is a story about the general manager with the vision. The statistical guy is the wonk who runs the numbers in the background. Same as in finance: you need the quants to do the analysis, but you need the visionary portfolio manager to know when to implement it.

The stat nerd views it as follows: 'Screw that! If I could only pick one of them, the data guy knows the strategy to run, and without him the vision guy is toast. Ulysses Grant won the Civil War for the North, not Abraham Lincoln'.

The CEO type rejoins: 'Lots of people have visions for how to run baseball, and a large part of being a general manager is knowing who to listen to. If you can't get yourself into a position of authority to actually make the decisions, your strategy is useless. Lincoln had to go through seven generals before he found Grant.'

(In an ironic twist for the nerds, in real life Paul Podesta was the assistant GM, but he didn't want his name used, in part because he objected to being portrayed as a pure stats nerd. So he became 'Peter Brand'.)

And in fairness to Beane/Pitt's character, he does come to understand and embrace the strategy, and we're also shown that he understands the general problem even before coming across Brand/Hill. Specifically, how can teams with small resources and budgets hope to compete with the far better funded Yankees?

The answer is screamingly obvious to econ types - stop trying to buy the assets that everyone agrees are the best, for which you'll almost certainly overpay, and start buying the most underpriced assets that get you the same output. I've written about this before in the context of stocks:

In the language of the common man, you're better off buying a crappy but underpriced company than a solid but overpriced company.

As it turns out, this is as true in baseball as in any other business.

The tragedy for Oakland, of course, is that any strategy that exploits mispricing will be most effective when few other people are doing it. The best chance for this actually getting them a World Series was the first year it was tried. The more people think the strategy is successful, the more it gets copied, and the less of an advantage it brings you. True to form, the Oakland Athletics have still not won a World Series since the strategy was started..

Update: The one scene that the movie didn't show is the one where the strategy initially isn't working, and Brand/Hill is seen furiously re-checking his analyses late at night and muttering to himself, 'Oh $#**, I really hope I didn't make a coding error or run a badly mis-specified regression.' Because I guarantee you that that happened at some point.

Miscellaneous Joy, Fools of the World Edition

-Some Chinese restaurant in Beijing decides to market itself as Obama Fried Chicken, complete with a mockup version of Obama as Colonel Sanders. Somewhat poor taste, but honestly, who gives a damn? Where do you think this was reported? Engish Funny, perhaps? Nope, guess again - the New York Post and the Daily Mail (UK)! As far as I can tell, this whole story seems to be based around nothing more than a photo of an odd sign that somebody took while in Beijing. Lucky there was nothing else more important to report on that day. Eager to put it into geopolitical perspective, the Daily Mail helpfully offered this context:

The Obama Fried Chicken could be a response to the U.S. filing a complaint with the World Trade Organization about Chinese tariffs on American chicken exports.

Yes, I suppose it could be! Care to bet a fiver as to whether that would be what the proprietors of the store would say if we asked them?

As if this weren't bad enough, who do you think the New York Post trotted out for a comment? That's right, the old racist tax-avoiding imbecile himself, the "Reverend" Al Sharpton! Showing absolutely no apparent perspective that he was lecturing a small-time chicken shop in Beijing that probably didn't speak English and certainly didn't give a rat's ass, Sharpton thundered that "It’s insulting, offensive and plays to racial stereotypes.". Al Sharpton, you are a pompous buffoon.

-Showing that drug policy lunacy can be a thoroughly bipartisan affair, the Obama Administration is currently in the process of cracking down on California Medicinal Marijuana dispensaries. Take that, cancer patients! You'll think twice before trying to combat your chemotherapy-induced vomiting and nausea.

And to leaven off the snark, two winners from Reddit recently:

-Graffiti as Artwork

-Abstinence Cartoons

On the Imperfectability of Human Relationships

Are there any serious doubt that Theodore Dalrymple is the most interesting writer alive today? Here is his latest offering in the New English Review, discussing the problems of modern relationships. A sample of some of the wisdom contained within :

The problem with meritocracy, however, even in its purest imaginable form, is that few people are of exceptional merit. The realisation that the fault lies in us, not in our stars, that we are underlings, is a painful one; and in the nature of things, there are more underlings than what I am tempted to call overlings. A meritocracy is therefore fertile ground for mass resentment.
...
At the root of the problem is our belief in the perfectibility of life, that it is possible in principle for all desiderata to be satisfied without remainder, and that anything less than perfection, including in relationships, not only is, but ought to be, rejected by us. We cannot accept that we might at some point have to forego the delirium of passion for the consolation of companionship, that Romeo and Juliet is fine as catharsis but not very realistic as a guide to married life at the age of 56. We cannot have it all.

Read the whole thing.

Sad But Timely

Thinking about Steve Jobs reminded me of this XKCD comic describing how cancer survival rates actually work.

This is why you can be cured of your pancreatic cancer, and still die a few years later.

The picture at the bottom is sobering - give it enough time and all the paths go off to the right, into that night which shall be yours, anon.

Steve Jobs, of course, was well aware of what this all meant:

When I was 17, I read a quote that went something like: "If you live each day as if it was your last, someday you'll most certainly be right." It made an impression on me, and since then, for the past 33 years, I have looked in the mirror every morning and asked myself: "If today were the last day of my life, would I want to do what I am about to do today?" And whenever the answer has been "No" for too many days in a row, I know I need to change something.

Remembering that I'll be dead soon is the most important tool I've ever encountered to help me make the big choices in life. Because almost everything — all external expectations, all pride, all fear of embarrassment or failure - these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.

...

No one wants to die. Even people who want to go to heaven don't want to die to get there. And yet death is the destination we all share. No one has ever escaped it. And that is as it should be, because Death is very likely the single best invention of Life. It is Life's change agent. It clears out the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away. Sorry to be so dramatic, but it is quite true.

Your time is limited, so don't waste it living someone else's life. Don't be trapped by dogma — which is living with the results of other people's thinking. Don't let the noise of others' opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.

In Memoriam: Steve Jobs

Apple is reporting that Steve Jobs has died. A sad day indeed.

Much will be written about him in the next few days, no doubt. The world does not often celebrate businessmen. Steve Jobs was one of the exceptions to this, because his products held such immense appeal to so many people that even those with an instinctive anti-business bent had to admit they were cool. But rather than praise his design skill, or his determination to come back from being exiled from Apple or his many other achievements, I'd like to celebrate something more basic.

Steve Jobs created a truly stupendous amount of value for the world. The $345 billion I was talking about yesterday is only the starting point. The consumer surplus to these products must be many times more than that, as evidenced by the devotion of Apple customers to their products.

It is ridiculously hard to create $345 billion worth of value. This is merely another way of saying that it's incredibly hard to become rich.

And he did it without rent-seeking, without big negative externalities, without lobbying for legally privileged positions, or anything else. He did it the old-fashioned way - creating truly excellent products that people voluntarily wanted to buy, and sold them cheap enough that they treasured the surplus they got. In the end, he seemed at times a victim of his own success, as yesterday's announcement indicated - when expectations become high enough, great products still create market disappointment. Which is why market cap can drop by $8.7 billion, and people will still be lining up around the block to buy the new phone. Which they will be, you can depend on it.

Human nature being what it is, however good the product or service you provide is, people will end up taking it for granted and complaining that they wanted more. Which, I blush to add, I have been guilty of. The point is not that such criticisms are unwarranted, but that I was only motivated to write a post complaining about Apple, and never one praising it. People in this category must be feeling pretty small and mean today, when they finally reflect on what an immensely difficult achievement it is to create such products from scratch.

Society tends to heap the most praise on those whose inventions tend to extend life, but human welfare takes on many different forms. Steve Jobs created gobs and gobs of it, and the world is immeasurably better off because he was born into it. And that is tribute indeed.

Steve Jobs, I hereby induct you posthumously into the Shylock Holmes Order of Guys Who Kick Some Serious Ass.

Ave Atque Vale, Mr Jobs.

How Good is the Apple iPhone 4GS?

Apple unveiled the new iPhone 4GS today. Rather than pore through smoothly presented video presentations, let's answer the question with boring financial data!

Zooming in on the return today only:

Return on Apple Stock today: -0.56%
Return on the S&P 500 today:  2.25%
Beta of Apple: 0.87

Abnormal Return of Apple Stock today = -0.56 -2.25*0.87 = -2.52%
(taking the S&P 500 as my lazy man's market proxy)

i.e. It's disappointing. Given Apple's market cap of $345 billion, it's actually about $8.7 billion worth of disappointing.

You'd think that this kind of basic information would be easy to discern, but it took much more hassling around to find out a simple market-adjusted return than you might think.

Instead, the financial press reports useless and insipid descriptions like the following:

Investors were disappointed, too. Apple's stock fell more than 5 percent before getting a late bump.

That 'late bump' was entirely driven by the market movement, and tells you virtually nothing about Apple. Yeesh. No wonder people end up believing ridiculous folk tales like 'the market fell today as investors began to take profits from last week's rise'.

Feynman on Beauty in the Natural World

Richard Feynman discusses how science illuminates beauty in the natural world. There are additional videos where he discusses curiosity and honours.

It reminds me of Eliezer Yudkowsky's post on taking joy in the merely real - that there is more excitement in understanding how something works than in not understanding it.

As Eliezer wrote in a similar context:

I was pondering the philosophy of fantasy stories, and it occurred to me that if there were actually dragons in our world - if you could go down to the zoo, or even to a distant mountain, and meet a fire-breathing dragon - while nobody had ever actually seen a zebra, then our fantasy stories would contain zebras aplenty, while dragons would be unexciting.

Just so. The world is a fascinating place alright.

(via Jason Kottke)

The Strip Club Litmus Test of Alpha Cred

Here's something I was thinking about recently.

A good rough measure of how alpha a given guy is is how comfortable he is around strippers. Not whether he seeks out strip clubs, but should he find himself in one for whatever reason (e.g. a bachelor party) how he comports himself while there.

Strippers are experts - nay, professionals - at using men's own sexual desire against them to extract money. Moreover, the measure of their expertise is that (most of the time) they get paid despite not actually providing what the man really wants - namely, to have sex with the stripper.

From conversations with various guys, I have come to the conclusion that the proportion of males who are made distinctly uncomfortable by strippers and strip clubs is far higher than is commonly acknowledged. And there are very good reasons for this. The normal dynamics of male/female interactions are completely reversed, and a good number of these changes seem to me to turn the power advantage towards the stripper.

A lot of this comes from the fact that the social norms of what is acceptable behaviour are drastically reversed. In polite society, it's rude to stare in general, it's ruder to stare at a woman's breasts, and if someone happens to be naked in front of you for whatever reason, you should look away (or at best steal a furtive glance).

The challenge at strip clubs is not so much that that these social norms are reversed (which is odd enough in itself), but moreover the ambiguity in how much they're reversed. Looking in general is clearly okay, but it's still surprisingly challenging to maintain composure in a conversation while staring directly at someone's crotch. If you don't believe me, try it some time. But if the man looks away, it's an implicit acknowledgement that he wanted to look, but chickened out.

Moreover, the question of what exactly is allowed is left deliberately unclear. Obviously he'd like to touch her, but the bouncer might beat him up. Okay, so now he's getting a lap dance. Surely now it's okay to touch, right? Wait, you're still not meant to. Maybe just once?

Reader, this feeling is not accidental - it is exactly the response that strippers are aiming to generate. When someone feels unsure of what to do, they are more likely to pay money just to be on the safe side of what's expected and allowed in the situation. Imagine a used car salesman skilled in the most powerful pressure selling techniques, in a market where they know everything about what the price is and what you're buying, and you know nothing, and they're using that against you to their fullest advantage.

Can you see why a good number of men may not actually enjoy this, female nudity notwithstanding?

This is also why the response of men in these circumstances says a surprising amount about them.

Betas are likely to constantly second-guess themselves about what they can do, worried about what the girl will think. They're more likely to actually avoid the whole situation, and either just pay a ton of money quickly, or try to hide in corners or make themselves inconspicuous, which of course is completely ineffectual. Strippers know that trick too. What they'd actually like is to just get out of there, but usually the male peer pressure that brought them there makes this difficult.

The natural alphas I have known have all maintained an easy, somewhat cocky rapport around strippers. They're comfortable with staring, but do so with a smirk. The reality is that they don't really care what the stripper thinks, and are just enjoying themselves. And this kind of aloof, amused indifference in the face of female sexuality is a character trait that in other contexts is likely to be attractive.

The reality is that there are more betas in the world than alphas. I would wager that far more bachelors than you think would be quite relieved to dispense entirely with the tradition of strippers at bachelor parties.

Wall Street Occupied, Brain Cavities Vacant

In Manhattan, the 'Occupy Wall Street' protests continue to protest against whatever the hell it is that they're protesting against - capitalism, bailouts, Wall Street, 'corporate greed', et cetera.

The Last Psychiatrist is on fire on this one, nailing the motivation of a lot of the protesters:

Though narcissism demands the right to self-identify, narcissists are often unable to do so because they don't know what it is they want to be. Who am I? What are the rules of my identity? So people look for shortcuts, like modeling oneself after another existing character. But the considerably more regressive maneuver is to define yourself in opposition to things. "I can't tell you what I want for dinner," says the toddler, "but I am certain I don't want that. Or that. Or that. And if you put that slop in front of me I swear to God you will wear it." 

What do the protestors want? Can they articulate it meaningfully, not in platitudes or "people over profits" or "more fair income redistribution" soundbites? They can't tell you because they don't know. They can, however, yell at you what they don't like, and the louder they yell it the more they hear it themselves.

Exactly. These protests are all about righteous indignation by young people. I'd wager that if you asked the people there 'What, specifically, do you actually want to happen?', they wouldn't actually know. So you want to shut down Wall Street, huh? Okay, so do you want to prohibit all equity financing of companies? So how do people raise finance for large enterprises when they don't have pledgeable assets - wouldn't that make it really hard to create Google? Or do you just want to prohibit the trading of shares in secondary markets? In that case, won't entrepreneurs be reluctant to start businesses, knowing that they have to run them forever and their holdings in the company will be completely illiquid? And if you shut down markets, how will people share risk - how should wheat farmers hedge their exposure to wheat prices when the futures markets close? What's that, you say? You have absolutely no God damn idea?

To make the protests even stupider, when a bunch of people want to protest with sensible complaints (no more bailouts of major banks), they attract the usual rabble of professional protesters with moronic complaints (end capitalism!), thereby ensuring that the overall message of the protest will be
a) vague and unfocused, and
b) at least half comprised of stupidity.

So Joe Public turns on the TV, and just sees the usual rabble of stupid signs and unwashed hippies that turn up at WTO meetings and the G20 summits, and dismisses them as a bunch of punk kids.

This is all so incredibly predictable that you have to assume these people haven't really thought this through, or just aren't interested in enacting any change. I'm betting on the latter - they are simply in love with their own sense of self-righteousness, and the protests are merely a prop for this.

The Last Psychiatrist continues here:

But when the oppressive entity is so poorly defined (e.g. Wall Street, “the banks”, corruption) these protests always and without fail turn into protests against the police. Idiotically, in the minds of the protestors, the police are standing in for the banks. So all their antagonism and vitriol is turned against police officers who would probably rather be doing anything than babysitting the hipsters attending their social media drum circle.

This became more apparent when one of the protesters got maced, apparently without any provocation, and it was captured on YouTube.



As a matter of practicality, having a bunch of unarmed girls get maced on camera has been immensely valuable to the protests. It inevitably generates a good deal of middle class sympathy for them, which (because of the vagaries of human psychology) tends to spill over into support for their cause. Watching the video above reminded me of a post by the War Nerd on the value of martyrs in guerrilla warfare:

The value of a dead body only came along with modern guerrilla warfare and the notion of martyrs, because guerrilla wars tend to start off with some kind of suicidal attack like the ones the Muslims staged in Southern Thailand a few years back. They stood around waving machetes outside fortified police barracks and got mowed down. What you do then is take the bodies home, make a big fuss over them, stage giant funerals—funerals are very, very important in guerrilla culture—and generally talk them up. Since most of these guys are barely trained or untrained, they’re not worth much alive—like those KLA men who were totally uselsss as live fighters—but they can be valuable as Hell once they’re dead. It’s just a much easier job, lying still in a coffin. Not nearly as easy to mess up as your basic L-shaped ambush, which is a very tricky thing. Hell, the average recruit can learn to be a good corpse in a tenth the time it takes to make a decent live guerrilla fighter.

Substitute 'dead bodies' for 'maced girls' and 'funerals' with 'protests about police brutality' about it's eerie how well that rings true.

Heckuva job, Deputy Inspector Anthony Bologna! You manage to be both needlessly brutal against peaceful protesters AND promote their stupid cause at the same time.

See Ya Later Free Speech, We Hardly Knew Ye

Australia continues its lamentable decline as yet another country where the delicate feelings of designated victim groups trump freedom of speech.

The estimable Andrew Bolt was held today to have breached the Racial Discimination Act. Let The Australian tell the story:

At issue was Bolt's assertion that the nine applicants had chosen to identify themselves as “Aboriginal” and consequently win grants, prizes and career advancement, despite their apparently fair skin and mixed heritage. 

[Justice Mordecai Bromberg] found that "fair-skinned Aboriginal people (or some of them) were reasonably likely, in all the circumstances, to have been offended, insulted, humiliated or intimidated by the imputations conveyed in the newspaper articles" published in the Herald Sun.

I personally couldn't give a fig about whether Pat Eatock chooses to self-identify as Aboriginal or not. I care very deeply about the fact that Pat Eatock, with the help of the courts, feels that her exquisitely precious hurt feelings entitle her to sue people who say things she doesn't like. I care that Australia has decided that rather than laugh these claims out of court, it would prefer to join the camps of censorious, cowardly nations that have gutted the concept of free speech of all its meaning, limiting it effectively to citizens' right to agree with politically correct platitudes.

Yes readers, the Commonwealth of Australia, in its infinite wisdom, has decided that nothing is more important than whether your words might subject Pat Eatock to "highly personal, highly derogatory and highly offensive attacks".

Here is the relevant section of the Racial Discrimination Act (1975) that Bolt was held to have breached:

SECT 18C Offensive behaviour because of race, colour or national or ethnic origin

(1) It is unlawful for a person to do an act, otherwise than in private, if:

(a) the act is reasonably likely, in all the circumstances, to offend, insult, humiliate or intimidate another person or a group of people; and

(b) the act is done because of the race, colour or national or ethnic origin of the other person or of some or all of the people in the group.

Following my own advice, you should read the original judgment here. I waded through it, and didn't find myself any less outraged.

Starting at paragraph 67, you can find nearly one hundred paragraphs as to just how terribly hurt and offended the plaintiffs were by the mean, nasty Andrew Bolt, wrapped in all the hackneyed, threadbare language of the professional grievance industry - "offended", "humiliated", "insulted", "disgusted", "angry", "upset".

My advice to the plaintiffs - grow a fucking spine.

You can also find wonderful nuggets testifying to the decayed state of free speech in Australia. At paragraph 350:

The right to freedom of expression is limited to its reasonable and good faith exercise having regard to the right of others to be free of offence. The requirement of proportionality does not involve the subjugation of one right over the other and is consistent with achieving a balanced compromise between the two.

How wonderful and balanced our free speech is to be, compared with this crucial and equally important right to be 'free from offence'.

Generally speaking, there are defences available for fair comment and public interest. But too bad, because according to Mordecai Bromberg they didn't apply! You can read all about it.

Perhaps the best thing about this is that the original articles are included at the bottom of the judgment. Read them for yourself and decide just how hurtful they are, and whether a free and just society ought to outlaw their publication.

So how does Pat Eatock justify this farce to herself?

After the decision, which was greeted by applause and cheers in the Federal Court, Pat Eatock said ``It's never been an issue of freedom of speech, it's been an issue of professionalism.''

Pat Eatock apparently is either too brainless or too disingenuous to countenance the possibility that the case might be both an issue of professionalism and freedom of speech, in the same way that September 11 was both an issue of architecture and terrorism, and the play Othello was both an issue of Venetian military structure and murder. I'm also look forward to Pat Eatock's fascinating exposition on what rational theory of government would require a role for the Australian Government as the regulator of media 'professionalism' in the first place.

I have long held proudly to the Australian cultural tradition of plain-spoken humour, robust public debate and a generally relaxed attitude to matters of race, gender and sexuality.

What a fucking joke. It's time to accept the fact that the Australia now has a plurality of nitwits who think that the appropriate response to nasty newspaper articles is to draft and pass laws making them illegal, and to drag the publishers of such articles into lawsuits costing hundreds of thousands of dollars.

What an embarrassing travesty for the country I love. What a humiliating debasement of freedom from a once free and proud people.

In the current context, it brings me no joy at all to type these words:

I'm glad I live in America.

My Worst Nightmare

Over at Reddit is this frightening post where this parent describes the problems he's having with his 17 year old child.

Our oldest has, in the last two years, done the following:
-set fires in the house
-attempted to strangle his mentally disabled brother
-stolen alcohol, hundreds of pills, and drunk bottles of vanilla extract in an attempt to get high
-carved cabinets with knives
-took knives to school and threatened classmates
-made threats to kill everyone in church and burn it down
-sneaks girls in the house, unprotected sex, sexting, etc.
-broken several pieces of electronic equipment by slamming it down in rage
-peed and pooped on a classmate's backpack for fun
-stolen money from both us and his siblings
-animal abuse, can't leave him with siblings
-lies constantly, manipulates everyone he comes in contact with
-sexual harassment of young girls ages 13 or younger
-consistently poor grades

Jesus. What do you do if you have a child like that? It seems apparent that the kid as some serious psychiatric problems. The parents sound both very patient and sincere, and it doesn't sound like they've refused to impose discipline. Although all the lack of discipline in the world doesn't make teenagers act this way. It's like you've got Kim Jong Il as your son, or Uday Hussein, or Charles Manson.

Your children have the ability to make your life into a complete miserable hell. And once you've had them, you're stuck. No matter how awful they are, you're legally obligated to keep looking after them until they're 18.

But that's not the full extent of the problem. Even once the kid is 18, suppose the parents kick him out of the house. It seems highly unlikely that this will actually be the end of the problem. If anything, you run the risk that he'll try to burn your house down or something - it seems more likely than him deciding to just peacefully leave you alone.

But even suppose you do manage to sever contact. What happens when your kid murders someone in 5 years time? No matter how much you try to detach yourself, you're going to go through incredible turmoil and sadness, and wonder if you might have been able to do something different.

And there's no good answer. There's not even an answer that qualifies as merely 'bad'. You'd try to get the kid committed, I suppose, but when that's the best option, you're in a lot of trouble.

Having children is a huge lottery, with a wide range of possible outcomes. I think that when potential parents visualise the kind of unlucky outcomes that might occur, they tend to think of things like having severely disabled children that will require lifelong care. But that's not the really worrying case - disabled children will be hard work, but probably will also be a source of a great deal of joy.

No, the much worse case is having children who are just incurably, irredeemably evil and nasty, no matter what you do.

l'enfer, c'est les autres, indeed.

Samuel Menashe on Mortality

Pity us
Beside the sea
On the sands
So briefly

According to the obituary for him in The Economist, he wrote this poem on the sands of an Irish beach, where the tide would wash it away.

Not a single word is wasted in this poem. The tribute due to such a work is quiet contemplation - one ought to always be hesitant to offer commentary longer than the poem itself.

Algorithms that need improving

There’s nothing worse than being at the mercy of a poorly designed algorithm. You’ll be sitting there, knowing that if you were just given half an hour with their source code and maybe a programmer of theirs to explain the basic design, you could improve it

One of the classic examples is the ‘estimated arrival time’ on my GPS. A well-calibrated estimate should be too fast about half the time, and too slow about half the time. In the GPS case, however, their estimate is an understatement of your true travel time in about 95% of cases. The only, only time you’ll get there earlier than the GPS estimate is if you’re speeding for a significant fraction of the journey.

As near as I can tell, their estimate of speed is to take the total distance travelled and divide by the speed limit for each of the roads you’re travelling on.

For a company that makes GPS devices for a living, this is shockingly lazy. The big problem is that it seems to make zero adjustment for stop signs and traffic lights, meaning that it always takes too long. Traffic is another one that would be useful, but that’s probably harder to do. Still, it wouldn’t be hard to get a rough estimate – find major arterial roads, and increase the estimate by 50% if it’s between 7:30 and 9:30 or 5 and 7 on a weekday. I am highly confident that even something this simple would reduce the mean squared error in estimated travel times. That’s even without taking historical traffic data.

One that was even more infuriating was the one for the lifts in an old apartment of mine. The building was about 40 stories tall, and had about 4 elevators. During the interminable minutes spent waiting there every day, I deduced tha the algorithm would only send an elevator to the lobby if a) someone had pressed the down button, and b) the elevator in question was the lowest of the four. So what would happen is that you’d have elevators sitting there at floors 28, 35 and 39, and another one going up from floor 5. You’d sit there, watching the floor 5 elevator slowly make it’s way up each of its stops, and the other three would sit there doing nothing until the elevator that started at floor 5 reached floor 28. Only then would the floor 28 elevator start going down to the lobby.

This, as you can imagine, drove me absolutely batty. Talk about pure deadweight loss because some moron can’t add in a line saying:

‘If {No Elevator in Lobby} then send {lowest floor elevator with no buttons pressed} to lobby’.

Hundreds and hundreds of man hours were wasted in my building every year because the elevator company didn’t know what they were doing.

This is the kind of thing that almost nobody takes into account when choosing a building to live in – how quickly do the elevators seem to arrive? As my grandmother used to say, act in haste, repent at leisure. Or in this case, repent in slow minutes of agitation every day.

The End of the Movie

If I had to give an award for the most understated but profound song written in the last decade, it would be hard to beat ‘End of the Movie’, by Cake.

As a diversion, The Greek complains that he doesn’t like my music posts. To which I pre-empitively respond, ‘that’s because you don’t click on the video and listen to any of the songs I’m talking about, dumbass.’

The song begins by listing a litany of misery that will befall all of us, eventually

‘People you love
will turn their backs on you
You’ll lose your hair, your teeth
Your knife will fall out of its sheath’

The second verse provides the counterpoint from lost pleasures to enforced misery:

‘People you hate
Will get their hooks into you.
They’ll pull you down, you’ll frown
They’ll tar you and drag you through town.’

It’s true. Thus is the first Noble Truth, as the Great Sage put it.

But the chorus is the most interesting part:

‘But you still don’t like to leave
before the end of the movie.
No you still don’t like to leave
before the end of the show.’

What a wonderful, fascinating metaphor for the human condition. No matter how crap life gets, people tend to hang on. But I think the psychology is exactly right. Sometimes, people just want to stick around to see what happens next, even if they’re not really enjoying it – just like sitting through to the end of a bad movie.

This is something broader than the sunk cost fallacy, where people throw good money after bad (so to speak). The tendency to hang on until the end goes beyond whether things are good or bad, to just the core aspect that people will keep on living, because that's the only stable outcome in evolution.

It’s also quite understated too. It’s not about the dramatic instances of people making ferocious determined efforts against the odds to stay alive. Instead, most of the time people do it fairly unconsciously, just the same way they sit through the whole film – you want to see what happens next, and there’s a chance that it might get better. Beyond that, you don’t give it much thought.

This may be one of my favourite metaphors in modern music. If most songs have, at most, one really interesting line or idea that makes the whole song, this is a pretty damn excellent one.

Welcome to the Hotel USA

You can check out any time you like, but you can't leave until the IRS says so.

The Globe and Mail reports a story about the situation of many American citizens living abroad - they left the US years ago, didn't think twice about filing a tax return because they lived and worked overseas, and now are in the crosshairs of the IRS for potentially huge amounts of money.

The USA is almost unique among countries for the extent to which it pursues its citizens for tax payments after they emigrate. US citizens are required to file a tax return every year and report their worldwide income. Even if you haven't lived in the US for years. And if you've worked in a low-tax jurisdiction like Singapore, they'll demand the difference in tax between the Singapore tax rate and the US tax rate.

The only way you can get out of this is to renounce your citizenship. But in a delightful catch 22, they won't let you renounce your citizenship until... you guessed it... you file your back tax returns!

As a matter of practicality, if you've given the US the middle finger and don't plan to return, it's not really a problem - they're not going to travel to Kazakhstan to file suit against you. But if your elderly mother is in America and you might want to visit her at some point? Well, let's just say things get a bit complicated:

“It’s not the back taxes that will kill you,” Brian told me. “It’s the penalties.” It turns out the IRS can fine you for every unreported bank account, mutual fund and RRSP – at a rate of $10,000 per offence per year. It can also confiscate as much as 25 per cent of the maximum amount you’ve held in each account. This is so absurd it can’t possibly be true. But it is.

...
So I called our accountant. “Do I have to do it?” I wailed. “I can’t advise you,” he said. He told me that I might be able to get off the hook for only a few thousand dollars. “Can they come after me for more?” I asked. “Yes,” he said. “Nobody knows what they’ll do.”

Representative government at its best! Arbitrary penalties may be imposed upon you, and there's no way of finding out in advance how big they'll be.

Sadly, I see no chance of this changing. The federal government is desperate for money, and the cynical political calculus is that people who've lived overseas for years are unlikely to vote in elections, so f*** 'em.

I suspect that a lot of people will make the sad decision to just turn their back on the US for good than deal with the hassle of the IRS. I remember when London mayor Boris Johnson did the same in 2006, renouncing his US citizenship publicly in The Spectator. His reasons were even less - he fell victim of the fact that if you ever held a US passport, you can't travel into the US on anything other than a US passport. Yes, they're serious. Yes, they'll refuse you entry if you try. Yes, they won't even let you renounce your citizenship.

Last Sunday lunchtime we were boarding a flight to Mexico, via Houston, Texas, and we presented six valid British passports. As soon as the Continental Airlines security guy saw my passport, he shook his head. ‘Were you born in New York?’ he asked. ‘Have you ever carried an American passport?’

Yes, I said, but it had long since expired. ‘I am afraid we have a problem,’ he said. ‘The US Immigration say you have to travel on an American passport if you want to enter the United States.’ 

When the ranking officer arrived, the story was the same. ‘I’m sorry, sir,’ he said, ‘but you’ll have to go to the US Embassy tomorrow morning and get a new American passport.’ But I don’t want an American passport, I said, inspiration striking me. I tell you what: I renounce my American citizenship. I disclaim it. I discard it.

‘That’s not good enough, sir,’ he said. ‘I need some official document saying that you are no longer American,’ and that, of course, is the point of this piece.

... 

So I circumnavigated America. I flew via Madrid, managing to beat the rest of my family to Mexico by 45 minutes; and yet I still seethe. It’s not just the stupidity of the rule that gets me. It’s the arrogance. What other country insists that because you can be one of its nationals, then you must be one of its nationals?

... 

Well, I love America. But I don’t like being pushed around and kicked off flights to what, after all, they claim is my home country.

Can you blame him?

The IRS and US Immigration authorities have succeeded in the admirable task of driving away a good number of their most ambitious and adventurous citizens who spent years abroad, and might otherwise be at risk of travelling back the USA to work in productive jobs and contribute to the economy.

If you cannot leave your country, you are not a citizen but a slave. If you prevent someone from leaving without paying money in perpetuity, you are either a mob boss, someone who traffics in sex slaves, or the IRS. As they say in Russian - how can you not be ashamed?

Placebos

Wired magazine has a very interesting piece about how a larger number of modern FDA clinical trials of new drugs are failing against the placebo tests. If this is just because the drugs are rubbish, that would be one thing. But there's some evidence that the placebo effect seems to be getting stronger - old drugs that passed the placebo tests when they were approved now don't seem to show much of an effect.

This is not an ideal test, of course. It's also quite possible that this is simply reversion to the mean - the old drugs never really had an effect, passed the initial tests just by luck, and now are back to their normal level of ineffectiveness.

The article does describe the time-series changes in the placebo-only effect, though:

But if these same drugs were vetted now, the FDA might not approve some of them. Two comprehensive analyses of antidepressant trials have uncovered a dramatic increase in placebo response since the 1980s. One estimated that the so-called effect size (a measure of statistical significance) in placebo groups had nearly doubled over that time.

Let's assume for the purposes of argument that the placebo effect really has increased over time.

The reaction of the current FDA guidelines is to reject more drugs, as they don't seem to have any significant effect over sham medication. In terms of understanding the science behind the new medicine, this is a reasonable response - if you're not doing any better than sugar, your research isn't actually valuable.

But here's an alternative response that would make scientists aghast, but seems reasonable in terms of standard public health - if placebos are getting stronger, why doesn't the FDA just approve more placebos? They're doing the same thing, but costing virtually nothing! Hell, it's not like we need to spend billions of dollars on fundamental research to produce milk-and-sugar pills, and if the milk-and-sugar combination seems to produce better mental health at a cost of 0.2 cents per pill, let's start cranking it out!

The placebo effect is a real effect, but one that modern medicine is largely reluctant to embrace, because it makes their whole industry look like a joke. It says that a lot of the time they aren't doing better than witch doctors, and moreover that said witch doctors were actually having a real effect, despite not understanding anything (usually lacking any other effect than placebos, most of the time). This of course is deeply wounding to the pride of medical researchers.

But sod the medical researchers! If you believe these studies, increasingly valuable treatments from placebos are being denied to people, even though they'd cost pennies to produce.

Obviously there's some problems trying to do this under the current regime. The FDA couldn't tell people which medicines were placebos, otherwise they presumably wouldn't work. But it couldn't lump them together with the medicines that actually beat the placebos, without unfairly (and counter-productively) switching people away from more effective to less effective medication. If they only approved some placebos, this would create huge rents for the companies that they approved, unless they approved everything.

The simplest solution to all of this would be to simply abolish the FDA. I'm on board with this, but most people aren't. A more moderate (and politically feasible) alternative would be to restrict the FDA's mandate to simply testing for drug safety, not drug efficacy. Then we'd be able to capture the placebo effect to the fullest.

Science's reach must exceed its grasp, or else what is basic research for.

Scorning the placebo effect says that we don't trust anything we don't already grasp.

I say that if you can be pretty sure that what you're reaching is safe, reach away.

What's Italian for 'Incentives'?

From Boston.com, comes this absurd story from Italy:

Seven scientists and other experts went on trial on manslaughter charges Tuesday for allegedly failing to sufficiently warn residents before a devastating earthquake that killed more than 300 people in central Italy in 2009.

Hindsight bias! Get yer hindsight bias, piping hot and fresh from Italia! Cheaper when purchased by the gallon!

Let's put aside for a minute any question of actual moral culpability, and whether it's fair to hold people criminally liable for scientific predictions. Instead, let's assume that we're just interested in saving as many lives as possible and increasing the accuracy of earthquake forecasts (although astute readers will note that even this phrasing involves tradeoffs between the two goals). Does arresting seismologists who fail to predict earthquakes sound like good policy?

The trouble with incentives is that you need to think very carefully about whether you're actually creating the incentives you think you're creating.

I imagine the Italian authorities have the following mental model:

1. Massively increase the penalties for wrong predictions
2. Lazy and corrupt seismologists put more effort into getting the right predictions
3. Save lives!

But this is assuming the continued existence of seismologists making predictions in the first place. If you don't do this, then you have the following:

1. Massively increase the penalties for wrong predictions, while not increasing the payoff from correct predictions
2. Result is massively reduced payoffs from making any seismological predictions at all.
3. Seismologists quit en masse, or refuse to provide any guidance.
4. No more predictions.
5. Earthquake deaths.

Not quite the same thing, is it?

Okay, let's put Mussolini in charge! He'll chain those lazy seismologists to their desks and force them to keep making forecasts! Surely we'll be okay then, right?

Or maybe you've then set up the following incentives:

1. Massively increase the penalties for type II errors (i.e. false negatives: saying there won't be an earthquake when there will be one), but not increasing the penalties for type I errors (i.e. false positives: saying there will be an earthquake when there won't be one).
2. Seismologists predict an earthquake every single day of the year
3. People quickly learn to ignore all the warnings
4. Signal to noise ratio in earthquake predictions goes to zero, meaning that there are effectively no more meaningful earthquake predictions
5. Earthquake deaths.

Bureaucrats seem to think that ramping up penalties will create scientific knowledge where there was none. But it won't. All it will do is shift around the incentives and behaviour of agents in ways that are completely predictable, even if they are almost certainly not predicted by the bureaucrats.

In the mean time, you can expect displays of righteous indignation by prosecutors, giddy with hindsight bias, exactly sure that they knew there was going to be an earthquake, so why didn't those lazy seismologists? What you won't be able to get from them is any useful guidance on when the next earthquake is actually going to happen, notwithstanding their amazing hindsight powers.

Before and After

Weight loss products are addicted to before-and-after testimonials. They show some fat, unhappy person, then, after only 8 weeks, miraculously they've lost over 15 kg, all thanks to the Holmes Ab-tastic DVD box set! Order yours today!

For some reason, the people in the photos never seem to be holding up, say, date-stamped copies of the Wall Street Journal in the before and after photos. Even assuming it's the same person, you have no way of knowing if they lost the weight over 2 weeks or 40 weeks. Which led me to thinking about how I'd set up a bogus weight loss program. I'd find women who were planning on getting pregnant, and pay them 100 bucks to take photos of them in workout gear and record their testimonials about the Holmes Ab-tastic system (TM). Then wait 10 months until they've given birth and still have the baby-weight, and get them to look sad for a photo. 30-something women just like you, able to get in incredible shape, all thanks to Shylock '8-Pack' Holmes! And all from 8 minutes of working out, twice a week for 3 weeks! The rubes would never know the difference.

Sometimes I think I missed my calling as a marketing con-man.

Almost Right

From the WSJ

"The Wealthiest 5% Grabbed Created Most of the [sic] America’s Gains"

There, fixed it for you.

Those Hackers!

(image credit)

So it turns out that Scarlett Johansson is the latest celebrity to have nude photos of her leaked onto the internet. (A little googling will easily turn them up, should you be interested, although I've got no idea why you would be).  Apparently the FBI is investigating whether this may have been the work of a hacker.

I'm going to go out on a limb here, and make a wild prediction - no 'hacker' will be found. Not because the FBI will be unable to track them down (although, should they exist, that may well be true as well), but because I'm skeptical that any such hacker exists.

The problem is that this whole thing fails Hanlon's razor : Never attribute to malice that which is adequately explained by stupidity.

What would need to happen for this to be the work of hackers?

Well, first they'd need to know Scarlett Johansson's phone number or IP address.

You may have noticed that these things aren't exactly floating around the internet.

Then you'd need some sort of way to hack into the device. This is possible, but requires a fairly large skillset in computers. A skillset that might be able to pull you down a six figure salary doing a real job, rather than spending months trying to hack celebrities' phones and computers.

Now, people like this do actually exist. But this kind of job requires a lot of work, and runs the risk of serious jail time. That's a lot of effort just to look at some breasts. And sure enough, in the previous cases where people have been caught doing this kind of thing, there have been very big conventional incentives to justify their behavior.

In the News of the World phone hacking scandal, the incentive was that the newspaper was able to get big scoops about celebrities and politicians, and thereby sell a ton more papers and make lots of money. So they paid big bucks for phone hacking.

Anthony Pellicano was paid a lot by Hollywood celebrities to eavesdrop on other Hollywood celebrities.

But what happened here? The photos were leaked on the internet, so nobody made any money out of them. So far, nobody has claimed credit either, so there's no public props for being the hacker in question.

The incentives just don't make sense. It all sounds a little far-fetched.

Now, to motivate an alternative hypothesis, let me begin with a question.

Who do you think is going to be more enamored of naked photos of Scarlett Johansson to the point of keeping them on their phone?

a) Scarlett Johansson herself, or

b) Some dude that Scarlett Johansson sent the photos to.

Call me crazy, but I'm going with option b).

So consider the following alternative scenario.

Scarlett Johansson sent the pictures to former husband Ryan Reynolds, or some boyfriend before/since.

Said male keeps pictures on phone, because it's cool to have naked photos of Scarlett Johansson. Phone is left accidentally in a bar one night / left unattended and gone through by a friend / insert mishap here, and the interloper sends the photo to themselves. They then show it to their friends, and someone posts it on the internet, and it goes public.

Or how about 'Scarlett Johansson accidentally sends the photos to the wrong number in her phone book, and to hide her shame, invents a story about her phone being hacked and wastes the FBI's time as a face-saving measure'.

It happened to both Anthony Weiner and Hayley Williams, who were using twitter to try to send naked photos to someone privately, and managed to send them out as public tweets instead. Both claimed they'd been hacked, even though amazingly there was no evidence of any hacking that investigators could uncover.

Now, dear reader, ask yourself this - does it really seem likely that the leaking of these photos involved any 'hacking' more complicated than just sending a normal text message?

Let's just put it this way - I'm not holding my breath waiting for any arrests.