Conversational Dynamics

One of the things about being an introvert (The Couch*: You're an introvert? And you write a blog? Unheard of!) is that conversation with strangers is not something that comes naturally. Like athletic ability, musical ability, or mathematical ability, conversational ability is a skill that you acquire either through being born with an innate aptitude, or something you need to work to acquire. Or both, in reality.

The difference between conversational ability and the other three is that there is very little formal training for how to make small talk, versus tons of training available for the others.

I tend to describe myself as a 'reformed introvert'. The ability to make small talk is not a natural skill of mine, but one I've worked to improve. It's still not great, but the measure of success is that people are sometimes surprised when I self-identify as an introvert.

But being an analytical type and an introvert (The Couch: Wait, you're socially inept and a wannabe intellectual, and yet you write a blog? No seriously, call the newspapers!), the question of exactly how to make conversation better is something I've had cause to think about. The guys that do it naturally don't need to think about it - it's only the guys who need to learn it who have to back out what exactly the naturals are doing.

As far as I can tell, the central challenge of conversation is how to find a topic that you both (or the group) have interesting things to say about, and then maintain that interesting thread. And when that thread ends, you then need to be able to transition to a new interesting thread.

Now, if you think about all the stuff that you know about, there's surely something  that you and the stranger could have an interesting discussion about - football, politics, military history, food, hip hop, whatever. When conversations fail, it's usually because you weren't able to find that joint interest.

The place where conversations seem to break down the most is at the transition between topics. This includes the opening, which is just the extreme form of the transition, from nothing to the first interesting area.

The people that are good at making conversation are almost always good on the transition part. This involves a number of related skills:
1. Being able to detect when a conversation idea is coming to a natural conclusion, and steering things towards something new before the awkward silence sets in.
2. Being good at identifying a new topic of likely interest, and
3. Being bold and good at changing the topic to unrelated areas without it sounding forced.

Out of the three, I think the last one is probably actually the most underappreciated. If there's one skill that can improve conversation the most, I think it's the ability to be confident to replace a silence with a segue to a new subject smoothly. And usually this is just about the transition, and the willingness to do it.

On a slightly different topic, I was reading this article the other day where...

Random question, what are your favourite restaurants in this town? I always end up going to the same places, and I'm trying to expand my list... 

So the other day, I was at the supermarket line when this guy...

The reason that conversation changes are important is that natural transitions only work well when the original topic was itself interesting. Sometimes you can get stuck on sort-of-boring topics, but the only natural conversational progressions are to other boring topics. A good conversationalist is able to figure out when things need a subject change, and move the topic along without it sounding jarring.

The final skill is having an appreciation of what might make an interesting topic, and boldly searching it out. This sometimes needs changes of course - you think something is interesting, but the audience doesn't. Reacting to these kinds of subtle cues is what stops you becoming a bore.

It sounds strange to break down conversations in this way, and almost painfully obvious. But as far as I can tell, the people who aren't good at making conversation rarely seem to think about it as something they need to explicitly work on. Which is why they don't get much better at it. It's only the weirdos like me who make attempts to actually improve the quality of the conversations they have with strangers, aiming to make them successively longer and more interesting.

If you start out as an introvert, it seems like your choices are to feel like an idiot trying to explicitly learn how to make small talk, or get left behind in a world that values social skills.

Sign me up with the first group.

*I stole the 'The Couch' gag from Jonah Goldberg.

Miscellaneous Joy

-Headline of the Day, from Maetenloch at Ace of Spades:

"Island Scandis So Inbred They Need a Website to Avoid Incest"

Ha!

-Statements that it's hard to disagree with:

"To put it politely, Nigeria is a failed nation. To put it bluntly, Nigeria is f***ed."

-Economist Valentines Day Jokes (via the CM)


-In America, the furthest you can get from a McDonalds is 145 miles by car. Thank God for that - USA! USA! USA!

"Austerity Measures"

So Greece has been rioting again, as the parliament passed a set of "austerity measures" designed to combat their rampant budget deficit.

This headline from The Daily Beast is instructive, and typical of the way it gets written up:

Greece Riots: Have Greeks Had Enough of Austerity?

This is why it has been such a marketing disaster to call these rounds of budget cuts "austerity measures".

Austerity implies that the relevant aspect of these cuts is a kind of severity, a harshness of measures designed to achieve a strong outcome. More tellingly, it implies a choice. Austerity describes an action you take to limit your intake of something to more humble, and less pleasant, levels.

And who wants that?! Nobody. I've had enough of this austerity! Let's go back to the days of plenty.

The message that needs to be gotten into the heads of the marginal Greek voter is the following: riot all you want, but those days ain't coming back. Not if Greece defaults. Not if Greece raises taxes. Not if Greece prints money.

If it were me, I'd call these 'The New Normal Cuts'. That ought to indicate the correct mindset. Get used to it, because this is how it's going to be. I'd also settle for the "There's No More Money, Because It's All Been Spent Cuts". It's been spent, and borrowed, and spent again. And now there's nothing left, and no private investor with two braincells to rub together is going to lend the Greek government money again any time soon.

Because this is the problem - you can default on the debt, but it doesn't make the deficit go away. And once you default, you've got very little chance of being able to finance that deficit with borrowing at any reasonable rate. So sooner or later, the pensions and the government wages will get cut, by hook or by crook. The only other option is printing money to close the budget deficit, which is the triumph of imbeciles who think that money illusion is a fast track to prosperity. Sadly, it doesn't take much experience of hyperinflation to realise that this isn't actually the case. Ask Zimbabwe how it's working out.

These aren't the austerity cuts. These are the reality cuts. Which is why the headline is so inane:

Greece Riots: Have Greeks Had Enough of Reality?

You bet they have. Unfortunately, to paraphrase Tolstoy, you may not be interested in fiscal reality, but fiscal reality is interested in you.

Market Mispricing, Female Nudity Edition

Marginal Revolution linked to this interesting piece in the Sacramento Bee on how the Burning Man Festival has run into lots of problems because it replaced its first come first serve online ticket system with a lottery. This led to a lot of the regular people not getting tickets, which is a particular problem since it's the regular people who designed the structures and cool stuff which made the event fun.

But what was most prophetic to me was one of the closing sentences:

Jones said there is legitimate concern that this might be the "jump the shark" year for Burning Man, when the artists are overpowered by those merely hoping to see topless women

Is there anyone who seriously doubts that the potential size of the latter category vastly exceeds the number of people in the former category?

The former is made up of a few idealistic hippies. The latter is made up of the half of the population known as 'men'.

It thus seems inevitable that sooner or later the perverts will price out the artists. When this happens, of course, that will be the end of the festival. Who wants to stand around in the desert with nobody but a group of seedy men? Nobody. In addition, you can expect the supply of topless women to dry up pretty fast too. Without the artsy atmosphere, how are you going to get the naked hippy girls to show up?

In other words, even if this isn't the end of burning man, I'd expect it to end this way eventually. A reputation for having naked young women walking around in public is too much of an arbitrage to not be eliminated by throngs of leering, gawking men.

"Please Place Towels On The Floor If You Want Them Cleaned"

Man, do hotels love trying to get you to reduce the amount of laundry you do. It's always couched in the language of saving the environment. Think of all the towels in the world being laundered after only one use! All the water! All the detergent! All the energy!

First of all, I'm not asking for all the world's towels and sheets to be cleaned, just mine. And they ain't much. I know, because I do it myself. Or, you know, pay someone, which is basically the same thing.

You know what? Now that you mention the Hindenberg-scale disaster of all those laundered towels, I'm thinking about it, and it doesn't seem like much. Not because it's not a big amount - it is. But simply because the percent of the world's energy use that goes to the unnecessary laundering of towels is basically zero. If you did nothing but devote your life to washing towels over and over at the laundromat, your actions are going to be rounding error compared with the amount of energy the aluminium smelter down the road uses on a given days.

And even when the total amount still seems like a large number, that's mainly because if you take absolutely anything and aggregate it over the whole planet, it becomes huge. Think how many miles of cotton are wasted every day by people pulling on loose threads on their shirts, jackets and pants. It would be enough to stretch to Pluto! It would be enough to manufacture garments for all of the starving children of Guinea Bissau! It would be enough to let 300 tired garment workers take a whole extra year of vacation! etc. etc. etc.

The reality is that the hotel cares about the environment only to the extent that it cares about its profits. Which is fine - that's how capitalism generally works.

But you'll forgive me for not getting all misty-eyed about how I need to sacrifice so that the hotel makes twelve cents more profit.

Screw that. You know the Holmes motto? No Linen Too Fresh! It's my contribution to the Keynesian stimulus that I'm reliably told the economy desperately needs.

It would be funny if I thought it were intended as a joke

Never let it be said that Britons don't appreciate irony.

Miscellaneous Joy

-MIT at its best: students were sent their early admission letters in steel tubes, and told to 'hack' the tubes somehow. One girl decided that the best thing to do is to send it into space. Nice!

-A hilarious review of the book 'Rich Dad, Poor Dad', which slays it mercilessly. Oooh, the burn...

-Steve Sailer documents a particularly self-parodying David Brooks column. This reminded me of his other great quip about Brooks, which is so good I'm going to quote it again:

The public doesn't want new ideas, they just want to be told that their old ideas are new ideas that have been discovered by brain scans.

-The toughest guy to hold a PhD? (via Kottke)

-Gabriel Malor on the State Department in Iraq:

The State Department is cutting and running from its Iraq mega-embassy. It seems the salad bar ran out and there's no Splenda for coffee. Really. Those are their actual, ISYN, complaints. Oh, and they're limited to only six wings each on chicken wing night. Poor babies.

Yes, really.

On Police Brutality

A long-ish quote, but I thought this summary of the broad issues of police brutality from Taki's Magazine was interesting:

Dark decades of direct experience with human beings have given us reason to operate from an ecumenical distrust of human nature. ...

Since there’s literally no “government” beyond the humans authorized to run it, our distrust of human nature leads us to a special wariness of those who possess the legally sanctioned power to harm and extort others. Without ways to keep government power in check, the whole world would devolve into the Stanford Prison Experiment within a week. Then again, since the “governed” are also human beings, we also greet their every word and deed with suspicion—if not outright disdain.

So when someone complains about police brutality, our default presumption is that both sides are at least guilty of something and that we’d need clear evidence of innocence to exonerate anyone. Yes, sure, some police officers are sadistic rageballs who take out their castration fears on the skulls of hapless citizens they’d stopped for minor moving violations. But flipping the flapjack over, many citizens are irredeemably unhinged drunken lunatics who endanger everything in their path and aren’t above lying to score a huge civil-rights judgment that the taxpayers, not the “state,” are obliged to pay. Faced with such a dismal choice, why should we even pick sides?

Sadly, not everyone is so evenhanded. Opinions about police mostly fall into two rigid camps: “Shoot the scum pigs” or “Shoot the scum criminals.

It's a good point - it's rare to find any kind of nuance in reporting about allegations of police brutality.

Then again, I'm not sure that this leads to an equal presumption against both parties. The level of relative disdain will vary a lot with the facts of the case, something which the Taki editorial recognises. My general feeling is not that police are insufficiently punished for incorrect judgment calls, but more that they're insufficiently punished for egregious bad behaviour, when it's clear they're in the wrong. The city gets a civil lawsuit, the cop gets a slap on the wrist.

Sometimes you are faced with cases where things do seem strongly leaning one way rather than the other. Radley Balko describes how the NYPD recently shot dead an unarmed man who was in the process of trying to flush marijuana down the toilet.

The question is, of course, how reasonable were the police actions ex-ante, rather than ex-post? How often do suspected armed drug dealers have guns? How often do they shoot at police? How frequently do the cops get this wrong, and what are the consequences? You can't know the answers to all these things just by looking at the cases where they get it wrong.

Balko's remarks I think focus correctly on what's worst about this whole event, and they are searingly bitter:

But let’s not lose sight of what’s important, here. Thanks to the good work of these undercover narcotics cops, the pot Ramarley Graham allegedly flushed down the toilet just before he was killed is no longer on the streets of New York. No children will get high on that pot. And that’s really all that matters.

The whole damn raid shouldn't have happened in the first place. If the cops had been assigned to some task that was actually improving welfare ex-ante, we'd be much more willing to tolerate mistakes in judgment.

Brutal actions in furtherance of astonishingly bad policy - that's what really stings.

Take That, Catholic Church!

The Obama Administration has decided to mandate that all employers have to provide birth control, including abortion-inducing drugs. This mandate now covers the Catholic Church. Which, understandably, they are not jolly pleased about.

“This is going to be fought out with lawsuits, with court decisions, and, dare I say it, maybe even in the streets,” [Catholic League head Bill ] Donohue said.

You don't say.

This law seems to be on dubious grounds to start with - the constitution protects freedom of religion, but the constitutional basis for healthcare mandates is unclear (and still awaiting a Supreme Court decision). This is only a concern for reactionaries like me that don't read the Commerce Clause as being the 'Do Absolutely Anything Clause'. But frankly that ship sailed many years ago. On the other hand, how this plays in with the First Amendment is not at all obvious.

The question is why the Obama administration would be so hell-bent on making the Catholic Church provide birth control to its employees. This would cover Catholic schools, hospitals and charities. But honestly, how many employees does this really affect in the overall economy? It seems more likely that this is the administration's decision to give the finger to the church in order to curry favour with women's groups. I presume their logic is that not many Catholics vote Democratic anyway, so screw 'em.

As a basic matter of liberty, if the Catholic Church doesn't want to provide birth control, then it's no business of the government to make them. Then again, if you take this kind of radical thinking too far, you might wonder why the government has any business demanding that other employees provide birth control, or why the government has any business mandating health insurance provision at all. This thinking would clearly make you as the worst kind of dangerous libertarian loonie.

You can rely on the National Abortion Rights Action League to dissemble and mislead on this kind of thing:

“The Catholic hierarchy seems to be playing a cynical game of chicken and they don’t seem to care that the health and well being of millions of American woman are what’s at stake here,”National Abortion Rights Action League President Andrea Miller said.

Ah yes, the old canard of deliberately obscuring the relationship between health insurance and health care. The people involved are already employed (or they wouldn't be affected by the bill). If contraception is really important to you, then either don't sign up to work for the Catholic Church, or pay for it yourself. In equilibrium, if the average person has a demand for birth control, then the Catholic Church will have to pay higher wages to compensate for the healthcare that they aren't providing. Use the higher wages to buy the pill on your own - you don't need the Catholic Church to hold your hand. It's not like this is a one-off $100K cancer treatment expense, where if it's not done through insurance you can't afford it. The pill is pretty cheap, and it's a regular ongoing expense, so budget for it yourself. It doesn't make the slightest bit of difference if my employer gives me a $40 pill, or the $40 in cash to buy it myself.

For obvious moral reasons, it does make a big difference to the Catholic Church. And for utterly opaque and wrong-headed reasons, it apparently makes a big difference to the government and the National Abortion Rights Action League, who think that buying the pill on your own would constitute a horrible travesty. So much so, that they're willing to risk a brawl with America's Catholics.

Way to contribute to the Republican Get Out the Vote effort, guys!

Separated At Birth

Cee-Lo Green from the Superbowl Half Time Show:



'Future Dudes', from Bill and Ted's Excellent Adventure.



The other Cee-Lo description on Reddit was 'a Gay Sith Lord', which I can't find much fault with either.

Raise Those Prices, Jean-Pierre - The French Government Demands It

The French are determined to continue their unofficial national motto of 'Le Ass, Le Gas or Le Grass - Nobody Can Provide Stuff For Free'.

Check out this classic decision - Google Maps was fined for providing maps for free to businesses.

In a ruling Tuesday, the Paris court upheld an unfair competition complaint lodged by Bottin Cartographes against Google France and its parent company Google Inc. for providing free web mapping services to some businesses....

The French company provides the same services for a fee and claimed the Google strategy was aimed at undercutting competitors by temporarily swallowing the full cost until it gains control of the market.

Trying to provide maps for free, eh? That'll cost you 500,000 euros!

It's true that Google has begun charging for corporations that make large use of their mapping service.

So what can developers do against this vicious, anti-competitive behaviour?

One option is to switch to free, open-source mapping services. Which some companies have indeed started doing.

Now, you may look at this as evidence that there's plenty of competition for Google's free service.

But that just shows that you don't understand French courts! No, instead it is the open source mapping service being equally, if not more, anti-competitive. Once their open source product has driven out the competition, think how much they'll be able to exploit consumers by jacking up their prices!

This is of course in line with the French government putting mandatory prices on books, both electronic and paper. That'll teach you to try to sell products more cheaply.

Never mind that the benefits of lower prices tend to flow the most to the poor.

The French Government - putting the liberté in liberté économique.

What to do if your fiancee rejects the ring you offer.

The Last Psychiatrist has an interesting pair of posts covering the question of what to do if your fiancee rejects the ring you offer as not being good enough. He writes it twice, once from the perspective of the man, once from the perspective of the woman.

The standard male answer (to the question as posed in the abstract) seems to be 'dump the gold-digging b*tch'. In terms of the conclusion, if not the implicit reasoning, breaking up does seem likely to be beneficial. Things probably won't work out. But as The Last Psychiatrist notes, there's a conditioning that's being ignored here - the woman didn't turn into a 'gold-digging b*tch' overnight. To the extent that her response comes as a surprise, it seems likely that you weren't paying enough attention before. Most the time, men's response to the question in the abstract is about signalling that they're the type of man that wouldn't put up with gold-digging, goddamit.

Which is fine, as far as in goes. But remember, in the hypothetical you've gotten to the point of actually proposing. The question only makes sense if you assume that you actually love the woman in question. Which is a fair assumption if you've gotten to the point of proposing.

In which case, you want to think of this as a giant $#!7-test, as Citizen Renegade likes to put it.

So how do you respond then?

Firstly, the bad options.

Number one is to lamely respond, 'Okay, I guess I'll I'll buy you a bigger one then.' You just failed the test. Be sure to retrieve your balls from her handbag in time for the divorce.

The problem with this response (in addition to its lack of spine) is that it misunderstands what this is likely all about. Maybe she really likes big, shiny objects. That's probably part of it. But is the likelihood higher that it's about the ring per se or the ring as a symbol of the size of your commitment to her, and your ability to understand that she really wanted a big ring, both of which she's doubting?

Bet on the latter. And that ship has sailed - buying a bigger ring won't fix it. If you just agree, you're likely making yourself look very beta, which will make her resent you more.

What about getting angry? Not great either. I'm betting someone with the nerve to reject a ring is likely to be a) quite stubborn and b) a total princess. I imagine that if you angrily refuse, you're just going to get into a huge brawl over it, and she'll likely convince herself that this is in fact a huge deal, and the straw that broke the camel's back etc. etc. Which, if you want to break up, is fine. If you don't, then it seems poorly thought out.

So what's left? My vote would be to grin and respond 'Well, stiff $#!7. This is the one on offer.'

The grin is important, because you don't want to appear butthurt. You're treating the request as ridiculous and a self-evidence joke, while still hoping is to still defuse the situation.

Her likely response would be something along the lines of 'No, I'm serious.'

To which I would reply, with a slight and fading smirk, and in a tone indicating that the matter seems at an end,  'So am I.'

If she continues to push, it seems strained to keep trying to brush it off. Eventually, if you needed to back it up with a serious reason, my guess would be the following:

'The ring is not important. Marriage is important. The ring is my promise and offer to marry you. If you don't want it *pause and shrug*, don't take it.'

This reframes the issue, and with an implicit firmness saying (correctly) that her rejecting it won't be treated as a small deal.

Personally, I wouldn't want to marry her anyway. Not necessarily because she's a gold-digger, although it's a bad sign about being selfish. The Last Psychiatrist is right that this is likely about the ring as a symbol of your commitment, more than her wanting your money itself. Real gold-diggers are usually far too mercenary to do something as stupid as rejecting a ring. This jeopardises the chances of you guys getting married, and once the marriage happens, she's got half your money anyway. Including the extra money that you didn't spend on the ring. No, rejecting a ring is the sign of a princess, and an insecure princess as well. It's also a sign that you didn't understand this part of her well enough to know that you had to buy an expensive ring. That's also a bad sign for the marriage.

The problem for me is that I can't imagine a marriage with me would work for someone who was so concerned about symbolism. The substance of the issue, to me, is the marriage, not the ring. It's the same as the problem with being too excited about the wedding versus the marriage. Even if the ring is too small, a willingness to jeoparise the marriage for the sake of the ring shows a set of priorities that seems unlikely to work with mine in the long run. And if I ever got that response, it would mean that I'd failed to understand this earlier, in which case so much the worse for me.

Thugs Unrepentant

Last Thursday was Australia Day. As is traditional on such days, various honours are given out - the Order of Australia (Australia's equivalent of the OBE, MBE, knighthoods etc. in Britain).

The Australian Prime Minister, Julia Gillard, and the Leader of the Opposition, Tony Abbott, were both in Canberra to present awards to members of the State Emergency Services.

Near to the awards ceremony there is the Aboriginal Tent Embassy. Wikipedia describes it thus.

The Aboriginal Tent Embassy is a controversial semi-permanent assemblage claiming to represent the political rights of Australian Aborigines. It is made of a group of activists, signs and tents that reside on the lawn of Old Parliament House in Canberra, the Australian capital. It is not considered an official embassy by the Australian Government.

Love the sotto voce in the last line. It's not a real embassy, huh? No kidding?

Essentially it's a hovel where a bunch of Aboriginal activists engage in a permanent protest against a range of causes relating to Aboriginal rights in one form or another. It's also been there since 1972.

No, really.

Now, dear reader, you may be forgiven for thinking that such an institution is likely to represent the worst excesses of a permanent grievance culture that views racial politics as a zero-sum game. You may think that a permanent slum encampment has no place on the lawn of Old Parliament House, if only as a matter of aesthetics. You may think that any protest movement that has been around for nearly 40 years has probably outlived its social usefulness.

And these would all be thoroughly defensible views.

One person who did not espouse those views, however, was Tony Abbott. Earlier in the week he had given a radio interview where he was asked about it. His thoroughly reasonable reply was as follows.

“Look, I can understand why the tent embassy was established all those years ago. I think a lot has changed for the better since then. We had the historic apology just a few years ago, one of the genuine achievements of Kevin Rudd as Prime Minister. We had the proposal, which is currently for national consideration, to recognise indigenous people in the constitution. I think the indigenous people of Australia can be very proud of the respect in which they are held by every Australian, and, yes, I think a lot’s changed since then and I think it probably is time to move on from that.”

The tent embassy was set up originally to protest the lack of land rights. Australia now has native title, and more's the pity, but it has it nonetheless.

Overall, his statement seems jolly reasonable.

So what happened next?

One of the four press secretaries for the Prime Minister, Tony Hodges, decided that this was an excellent opportunity to stir up some racially motivated bad press. He called UnionsACT secretary Kim Sattler, who circulated among the protesters at the tent embassy that Tony Abbott had called for the embassy to be torn down.

He hadn't, of course.

But so what did these fine examples of civic society do?

When the protesters interrupted a medal ceremony for courageous emergency services personnel involved in the Queensland floods and Victorian bushfires, their behaviour was vile.

“Who f ... ing cares? They’re not our heroes,” yelled one of the first tent embassy people to arrive.

Then, spotting the Opposition Leader, she screamed: “Tony Abbott, you f ... ing big-eared Dumbo c. .t”.

This was followed by more obscenities directed at Prime Minister Julia Gillard. Things went downhill from there.

Originally Gillard got some sympathy for the affair, before it became known that her own press secretary had organised the whole thing.

He's now her ex-press secretary.

Meanwhile, Kim Sattler decided that valor was the better part of discretion:

She also posted on her now-deleted Facebook page that “Tony Abbott is like your typical bar-room brawler who starts a fight and then disappears like a coward when it is in full swing.”

Then she went into hiding

This ingenious strategy was clearly taken directly from the pages of military genius Sun Tzu:

To begin by bluster, but afterwards to take fright at the enemy's numbers, shows a supreme lack of intelligence.

Indeed.

There's so much shame to go around in this sorry and sordid spectacle that it's hard to know where to start.

A lot of the blame has deservedly focused on Tony Hodges, the genius mastermind behind the plan to incite the tent embassy protesters by misrepresenting Abbott's words. There's a lot of questioning, as in all these cases, whether he acted alone, or whether other Labor Party figures were involved. Andrew Bolt has a number of questions for the PM, none of which I ( or likely he) expects to get an answer to.

Tim Blair nails the media, for repeating the false accusation that Tony Abbott had called for the embassy to be shut down, without bothering to even check the transcript of what he'd actually said. He focuses a lot on the fact that the protesters went off their trolley over statements that hadn't even been said, without bothering to investigate them first.

And while the actions of the Prime Minister's office are clearly despicable in terms of trying to ineptly foster racial antagonism in a weak attempt to embarrass the opposition, a subtler point seems to have gone less remarked on.  

A lot of people are focusing on the role of the Prime Minister in duping the tent embassy folks:

Territory Indigenous Affairs Minister Malarndirri McCarthy wants Prime Minister Julia Gillard to apologise for the Aboriginal tent embassy clashes in Canberra.

The former ABC journalist and newsreader says Julia Gillard should apologise to the nation, Federal Opposition Leader Tony Abbott and the tent embassy organisers.

Let's suppose that Abbott had actually called for the tent embassy to be shut down. I would still be equally outraged that this bunch of rabble thought that this was cause to violently mob the Prime Minister such that she needed to be evacuated by the police.

Let's replay the tape once more:

“Who f ... ing cares? They’re not our heroes,” yelled one of the first tent embassy people to arrive.

Then, spotting the Opposition Leader, she screamed: “Tony Abbott, you f ... ing big-eared Dumbo c. .t”.

The whole assumption is that the tent embassy folks were so incensed by the alleged statements that they had no option but to act like a mob of violent scumbags, abusing heroic emergency services workers and physically attacking Australia's elected leaders.

The tent embassy folks aren't children. They aren't psychopaths on hair trigger alert. They're adults, and they're completely responsible for their disgusting actions. They aren't in a position to demand apologies from anyone. Their repulsive behavior is the absolute best evidence that the tent embassy should  be shut down, because it appears to be populated by dangerous and violent buffoons who think this kind of response is acceptable in a democracy.

Do you think the tent embassy folks appear to have realised the folly of their ways? Let's ask tent embassy founder Michael Anderson

Mr Anderson said he believed the protest incident outside the restaurant on Thursday was a set-up.

''Someone set us up. They set the prime minister up. They set Abbott up,'' he said.

''And they knew that feelings and emotions were running high here and I think they knew that reaction would occur.''

Mr Anderson said that person would face retribution under Aboriginal law.

''And whoever it was that really promoted that confrontation, we need to take them through the cleaners.

''And I'd like them to hand them back when they finish under White Man law, give him under our law so we can put him under our law as well.''

The 'someone set me up' line has been famously tried before as a defense for being a giant @$$hole, and it didn't work then either.  

Listen to this self-pitying fool. It's all a huge injustice against him and the rest of the tent embassy folks. Note the ridiculously self-serving obscuring of subject and object:

'And they knew that feelings and emotions were running high here and I think they knew that reaction would occur.

'That reaction would occur'. Not 'we acted like cretins and hooligans', but 'reactions would occur'. Another example of what Theodore Dalrymple aptly characterised as 'The Knife Went In'.

And whoever it was that really promoted that confrontation, we need to take them through the cleaners.

''And I'd like them to hand them back when they finish under White Man law, give him under our law so we can put him under our law as well.'

Screw off, Michael Anderson, you dishonest hack. The folks at the tent embassy are the ones that 'really promoted that confrontation'. I believe the words you're looking for are 'Tony Abbott, we're really sorry that we attacked you for no good reason.' Anything else you have to say without uttering that phrase is merely adding insult to injury.

If the only person who faces police scrutiny out of this whole mess is Tony Hodges, it will be a gross injustice. There was a whole media crew there. There's footage available. The laws for disorderly conduct are clear. Charge the lot of them.

Facts...

...which I can report to you with a fair degree of confidence.

1. Indo Mie brand Mi Goreng are the best instant noodles in the whole world, and totally delicious at an absolute level (in case you thought the first clause corresponded to something like 'the fastest lawnmower' or 'the most fiscally responsible member of the Greens Party'). If you're eating any other type of Ramen (or Maggi Noodles, for the Aussies), you've got rocks in your head. Find an Asian Supermarket and buy them.

2. Mi Goreng noodles that claim to expire on August 28th, 2008 can be eaten well into 2010 without too much deterioration in taste, and no adverse health consequences.

3. An outstanding commitment to scientific inquiry led to to establish empirically that  Mi Goreng noodles that claim to expire on August 28th 2008 can still be eaten in a pinch around about, ooh, say, January 30th 2012. They do however lose a certain je ne sais quoi, in part driven by the fact that flavouring powder has turned into bricks that have to be discarded. You may not actually want to get through them.

4. George Orwell was really on to something when he observed:

It is a feeling of relief, almost of pleasure, at knowing yourself at last genuinely down and out. You have talked so often of going to the dogs — and well, here are the dogs, and you have reached them, and you can stand it. It takes off a lot of anxiety.

Rock bottom - it makes a comfortable place to rest one's body!

Orwell had the excuse that he was talking about extremes of poverty, as opposed to just, say, being an immense slob. Ah well, close enough.

The Value of Society

Take an average day in a first world city.

You go for a walk down to a coffee shop, or to the mall, or wherever your travels take you. In that time, you'll pass by hundreds of people. If you're like me, chances are that the vast majority of them are complete strangers - you don't know them, and you'll never see them again.

Think back to the people you passed today. How many of them can you remember? How many of them did you notice at the time, even fleetingly? Probably very few. Even the ones you interacted with, at the checkout line or in the lift, you probably did so without really thinking much about it.

Now imagine you're out on the savanna, or in some post-apocalyptic wilderness. You come across another person in the distance. What are you going to be thinking?

Probably some combination of: are they friendly? Are they going to try to rob me? Would I be able to defend myself in a fight if they try something? Is this a trap where they have other people ready to jump me?

I'm going to go out on a limb and predict that running into other people that you don't know would probably be pretty damn stressful. It wouldn't be the kind of thing you'd do lightly.

Small early societies got around this through tribalism. You knew the people in your clan, and repeated interactions with them ensured that people treated each other reasonably. But interactions with other tribes were likely to be somewhat fraught, especially tribes you didn't know. Then you were back to the mutual suspicion and fear.

Now think back to modern society. It's remarkable how well norms of behaviour are not only common and widely accepted, but known be everyone to be common and widely accepted. In a modern city, I can interact with literally millions of strangers and have strong expectations about how they're going to behave. The norms of trust and respect have become strong enough that we don't need repeated interactions at the individual level to maintain them. People internalise the trust of strangers, and as long as most people reciprocate, it's a mutually beneficial trend. I can now engage in commerce and trade with millions of people, instead of just the small number in my own village. This allows institutions to develop that rely on crazy levels of trust for strangers, such as valet parking.

In America, you can travel thousands of miles and interact with complete strangers in such an innocuous fashion that most people don't pause to reflect on how remarkable that would seem to somebody born a few thousand years ago.

Giving the Customers What They Want

I have been told by not one, but two regular readers that they don't really like my posts about music.

Well, stiff $#!7. Here's the great Tom Petty, playing a totally awesome live acoustic version of 'Learning to Fly'.

To paraphrase  Will Ferrell in the parody of 'Inside the Actors Studio' from the extra scene in 'Old School': If you haven't listened to this, get it, listen to it, put it in a lock box for one year, then listen to it again. It will change your life.

Okay, not really, but it's pretty damn good.

Miscellaneous Joy, Hidden Costs Edition

-Why NASA needs to place an explicit value on the life of astronauts.

-Why academic publishing is a scam. I agree, and I don't use the word 'scam' lightly.

-Why antitrust action against Bill Gates in the 90s probably killed thousands of people. (via Marginal Revolution)

Insight of the Day That I Was Most Pleased With

I was listening to a talk by this Greek girl today.

I was speaking to The Greek afterwards, and asked him the following: "Hey, does the Greek language have any works that end in either 't' or 'p' "?

Sure enough, it doesn't. Which I knew it wouldn't.

How did I know this?

Listening to the girl talk, there were certain words where she would add half an extra vowel at the end, particularly words that ended in 't' or 'p'. So the word 'treatment' became something almost like 'treatmenta' and 'group' became 'groupa'. Not with a strong emphasis on the 'a' at the end, but noticeable.

My hunch, which it seems was right, is that this came from the fact that she wasn't used to words ending in 't' and 'p' - she was used to a vowel at the end after these letters. And this was so subconscious that she was adding it in slightly in English, even though it wasn't there. This would only seem to work if words ending in these letters were completely absent.

Bam! It makes you look like Sherlock (not Shylock) Holmes when you can spot these kinds of obscure connections.

There's few things as satisfying as correctly identifying something random about the world based on correlations that most people aren't paying attention to.

Girl Eats McNuggets! British Plebs Outraged!

The Greek sent me this story from the UK Daily Mail about a girl who had to be transported to hospital after collapsing at a McDonalds. It turns out the girl (apparently) hasn't eaten anything except Chicken McNuggets and chips since age 2. She's now 17.

First off, this story has a decent chance of being a hoax, but let's get past that. The British tabloids understand keenly that nothing sells quite as well as feeding people's sense of righteous indignation, and this story has that in spades. So unhealthy! Where are the parents? We need to do something about this! etc. etc. etc.

But let's take the story as true for the time being, because everyone prefers their morality tales to be true.

There's two things that are remarkable about this story, and neither of them is the fact that there are parents in first world countries who will let their children eat nothing but Chicken McNuggets every day for 15 years.

Make sure you click on the story first to see if you can guess what I'm going to choose.

The first remarkable thing is this - why on earth would you agree to be interviewed and photographed for this story? Isn't it obvious that they're going to make you out to be some sort of repulsive monster, and an indication of everything that's wrong with society? I mean, even if you aren't actually sure of what you did that's so bad, here's a red hot tip. When you're Johnny Nobody and the tabloids want to interview you about anything other than saving a small child or scaring off a burglar, you should refuse. Really. You can thank me later.

There's either two possibilities here, none of them flattering. The first is that the girl was so desperate for her 15 minutes of fame that she didn't care that the paper would make her look like a weirdo. The second is that she was gullible enough to believe their silver-tongued promises that they'd write a really nice article about her, and honestly McDonalds was really to blame, and she'd be the innocent victim, etc. Uh huh.  Oh look, they've written about how I'm a hoarder of the thousands of toys I've collected, which for some reason I'm reluctant to throw away. Here's a photo of me looking creepy in front of an enormous collection of McDonalds junk kids toys.

Either way, it's not a good sign. Add this to the fact that you thought eating nothing but Chicken McNuggets for 15 years was a good idea and that's two pretty big strikes against your character.

The second remarkable thing is that given her diet over the past 15 years, how thin the girl is.  It's possible that she's an exercise freak on the side, but I'm going to go ahead and bet against that possibility, based if nothing else on her hilarious disregard for her health.I think everyone expected her to be some whale, but she's not. And when you look at the nutrition breakdown that the Daily Mail provides, you start to see why - three meals of six chicken McNuggets and small fries only clocks in at 1530 calories per day, relative to the recommended intake of 2000. They try to make a big scare out of it - 'Twice the recommended fat! Twice the recommended salt! A third of the recommended vitamin C!' - but it doesn't seem to work. Hilariously, it seems like a base of mostly chicken McNuggets and fries isn't actually that bad - her problem was not getting enough other things like calcium, iron and vitamins other than C.

Interestingly enough, this fits in with the point made by Robert Lustig that I talked about a few days ago. He goes through the McDonalds menu to find the 7 items that don't contain any fructose. Guess what three of them are? Chicken McNuggets, Fries, and Diet Coke. If you eat nothing but that, you end up sick. But apparently you don't end up especially fat.

If that isn't an advertisement for a low-sugar diet, I don't know what is.

Mankiw on SOPA

First off, I am working on fixing what I describe as the Steve Jobs problem - that you generally agree with a lot of what someone says (or does), but you're only motivated to write about the small amount you disagree with.

So, with that in mind N. Gregory Mankiw is a cool dude. I first became a fan of his when he was George W. Bush's Chairman of the Council of Economic Advisers. He distinguished himself by sticking to economic theory even when it was politically unpopular, in particular defending outsourcing as likely to be of economic benefit to America. Which it is, for much the same reason that trade is beneficial - if it's cheaper to build a car in Korea, build it in Korea. If it's cheaper to answer a phone call in India, answer it in India. And with the savings we get, export more in the areas that the US does particularly well. I remember cheering for this even before I knew anything else about him.

Also, in recent days he's done a great job of attacking the 'Warren Buffet pays less tax than his secretary' idea, noting (correctly) that he implicitly pays tax through the tax on corporate income. His blog is always a good read for interesting mainstream economic analysis

So I like a lot of what he writes. And he's impeccably polite in dealing with intellectual opponents, which is exceedingly rare.

But I did find myself a little ... underwhelmed... at his discussion last week of repugnant Stop Online Piracy Act, currently (thankfully) off the legislative agenda, at least in the short term. SOPA, and it's house equivalent, PIPA, sought to make content providers more liable for their user-submitted content, and liable to have their entire site (not just the offending material) taken down if copyright holders alleged any violation. It could also compel search engine sites not to include allegedly infringing sites, with the definition of infringing being shockingly vague. In short, these were terrible Bills, designed to try to pad recording company and movie profits, the viability of the internet be damned. If you want a great summary  of the problems of the bill, Sal Khan of the Khan Academy has a very good rundown.

But Mankiw was more ambivalent.

The anti-SOPA crowd argues that this is a matter of basic liberty. But it's not. In a free society, you don't have the freedom to steal your neighbor's property. And that should include intellectual property. Moreover, it is the function of the state to enforce those rights. We don't leave it up to civil litigation to protect property rights (although that is part of the solution). We give the state substantial powers to stop theft. Just as owners of tangible personal property have good cause to call for a police force and a system of criminal courts, owners of intellectual property have good cause to ask the state to stop those who would infringe on their rights.

I find the statements in bold to be particularly sloppy. And to explain why, let's revert to some terms I cribbed from Mankiw's own 'Principles of Macroeconomics', currently sitting on my bookshelf.

Why is it wrong to steal your neighbour's property? Generally speaking it is because most goods are rival. If I take my neighbour's Ferrari, he is deprived of the use of said Ferrari. Taking the good is thus a pure transfer - I take it, and he doesn't get it.

Now that's manifestly not true of nearly everything that SOPA is targeting. If I copy an MP3 or a movie, I make a replica of the original file. I have not deprived the original owner (that is, the person who had the mp3 on his computer) of anything. To a first order of magnitude, welfare has increased. Before, we only had one copy of the mp3 to be listened to, and now we have two.

What has been lost is the potential funds that might have been transferred to the copyright owner. But this is a nebulous concept - suppose I set the price of my CD at $10 million, and 100 people pirate a leaked demo from the studio. Have I been deprived of $1 billion? Of course not. None of these sales would have taken place absent the piracy. In addition, the world has gained utility ex post, because now 100 more people get the enjoyment of listening to the music.

And Mankiw doesn't just obliquely run into this error in logic - he rams into it head on :

If offshore websites find a way to distribute this intellectual property without paying for it, it is as if organized crime were stealing merchandise from a manufacturing firm at the loading dock. It is neither efficient nor equitable.

No! No it isn't! If I take merchandise from a dock, then the merchandise (which is rival) can't be consumed by anyone else. An mp3 can be consumed over and over. Ex-post, nothing is lost.

There is of course one good argument for these kinds of efforts - that without legally enforced grants of monopoly rents to owners, there won't be enough of these goods produced. This is saying that we need these protections ex ante, because otherwise society won't have a movie industry or a music industry. This is similar in logic to why we need patents - their non-rival nature makes them a public good, and the monopoly rents help them be produced more because the market will not provide enough otherwise.

But is that really true? Yes and no. Piracy represents an existential threat to the movie industry, if  it happens often enough. Nobody is going to spend $300-odd million making Avatar if they're not making a return on it. It's unclear that piracy will get that common, since there really is a benefit to seeing a movie on a huge screen versus on your computer. So there is some tradeoff here.

This seems way less persuasive for the music industry though. People have been making music for millennia, and will continue to do so. Even if piracy becomes complete, the industry will (and already is) evolving into being based off ticket sales for live shows, with free online clips being like promos for the show. This worked as a model for minstrel singers for centuries, and would work now.

And the argument that 'you have a moral obligation to not take anyone's intellectual contribution without paying for it' is ridiculous. Suppose I write a catchy pop song. Should Greg Mankiw have to send me a royalty cheque before he is allowed to play a cover version on the guitar in his own home? Should I need to send Black and Scholes a cheque before I can compute the Black Scholes formula? Of course not. So clearly there is a limit to how much this rule applies.

And this is all such a completely obvious argument that I'm really surprised that Mankiw doesn't make it. Instead he resorts to really weak reasons for defending it. Mankiw personally (as he acknowledges) stands to lose a lot from piracy, as he writes a best-selling economics textbook.

Frankly, if I stood to lose as much as he did, I'd be trying to make much better arguments for SOPA-like laws than the ones he is offering up.

Currently on the Holmes Playlist

The excellent 'Your ex-lover is dead', by 'Stars'

Lyrics here.

It's a wonderful song about two ex-lovers meeting each other by chance, and the awkwardness and regret and mixed feelings it inspired.

[Man]:
God, that was strange to see you again
Introduced by a friend of a friend
Smiled and said, "Yes, I think we've met before"
In that instant it started to pour

The man seems to view the reunion with a kind of distance. His demeanour suggests a brief affair which he discarded, an impression that gets reinforced later.

[Man]:
Captured a taxi despite all the rain
We drove in silence across Pont Champlain
And all of that time you thought I was sad
I was trying to remember your name.

Forgetting her name seems to make sense mainly as a metaphor, if they've been introduced. Which is a shame, because the scene becomes more poignant if he literally can't remember her name. Their tryst made such a small impression on the man. The 'I think we've met before' and the silence suggest an awkwardness on his part at the situation, and a certain desire to extricate himself from the situation, but piqued interest in seeing her again, and a brief reigniting of the initial spark (tempered with the strangeness of the situation).

At this point, we switch to the woman's perspective:

[Woman]:
This scar is a fleck on my porcelain skin
You tried to reach deep but you never got in
And now you're outside me, you see all the beauty
Repent all your sin.

Nothing but time and a face that you'll lose
I chose to feel it and you couldn't choose
I'll write you a postcard, I'll send you the news
From the house down the road from real love

Immediately, we can see that the man's insouciance is not at all shared by the woman. It's clear that the ending of their affair was painful for her in a lasting way. The implication of her tone (especially the 'repent all your sin' line) is that the man ended the affair, possibly in a somewhat indifferent or callous fashion. This captures the sadness of so many casual relationships - they are rarely actually casual for both parties, and if they last any length of time, it becomes increasingly likely that someone's feelings will be hurt. The woman strikes a somewhat defiant demeanour, insisting that she has moved on, and that the loss is his - the scar of her hurt is now only a fleck, after all.

But this speech is an internal monologue - they sit in silence, after all. This is the woman telling herself that she is better off.

In the next verse, we see past the initial posture - though she has moved on, the pain is not far beneath the surface, and she expresses it with a touching honesty:

[Woman]:
There's one thing I have to say so I'll be brave
You were what I wanted
I gave what I gave
I'm not sorry I met you
I'm not sorry it's over
I'm not sorry there's nothing to save
I'm not sorry there's nothing to save

I love these lines so much. They capture incredibly well the conflict in her feelings - the hurt, the rejection, and a determination to move past it. To own up to this is indeed brave. The easy thing would be to maintain the facade of pure indifference and disdain, but that would ring hollow and false.

Originally, I thought that the last lines above were 'I'm not sorry there's nothing to say'. I think this would work even better - despite the woman's claimed importance of what she has to say, it is ultimately cathartic. There is indeed nothing to say, only mixed emotions that die in the ashes of long burned out love affairs.

Ice Hockey

Comedy gold!

Damn Good Advice

on how (and why!) to negotiate a higher salary, from Kalzumeus.

This may be the most monetarily valuable thing you read this year. Read the whole thing.

How Password Reset Screens Should Work

There is a long literature on how the password requirements for most websites are ridiculous - they make life hard for users without actually making it that hard for people to crack. There was a great xkcd comic about this which covers the flavour of the problem.

In order to stop random cracking attempts, websites tend to make the following requirements

1. Lock out the user for [some period, e.g. 1 hour] after [N, usually 3] incorrect password attempts

2. Make a requirement about password length and certain characters.

So far, so annoying, but fairly manageable.

Let's assume that the website in question has a lockout attempt at 3 attempts. The problem arises because websites pick different versions of #2. I've come across:
-At least 6 letters
-At least 6 letters and at least one number
-At least 6 letters and at least two numbers
-At least 6 letters and one special character
-At least 8 letters and a number
-At least 8 letters and a special character
-Exactly 8 characters, including [some combination of the above]
-At least 6 letters, no special characters allowed.
etc.

One salient feature of the list - it's got more than three options.

Now, it seems that lots of people generate variants of the same password for each case, depending on the requirement. Give them the requirement, and they know what the password is.

But if you've got a slightly odd password requirement, the vast majority of my incorrect password attempts are me trying to remember what your damn password restriction is!

So what happens is that I'll try the most common case. Wrong. I'll think 'Hmm, does it need a special character' and try that. No luck. And now I can try a third time and risk having to wait an hour, or I can go through another pointless password reset. Sigh.

And there's absolutely no need to do this. It doesn't make life much easier for the hacker to know the requirements.

I'm pretty sure that Progressive Insurance has some bizarre requirement that I keep forgetting, because I think I need to reset my password just about every time I need to log in. Great customer experience, chaps!

So I really wish that more websites would follow Expedia's sterling example:

I dare the system admins to try this, and see how many fewer times the password reset function is used. If you've got a requirement of special characters or two numbers, I'm ballparking that the number of password resets will probably drop at least 80%.

Less Sugar, More Fibre

Via Mama Holmes, comes this very interesting lecture on how the over-consumption of fructose (and sucrose, which breaks down into fructose and glucose) appears to drive a large amount of the obesity-related health problems in the US. Robert Lustig makes the case that fructose ought to properly be considered a toxin. Big words, but he backs them up.

One of the motivating questions, which I think is a good one, is this:

What do the Atkins diet (all fat and protein, no carbohydrates) and the Japanese diet (all carbohydrates, no fat) have in common, other than that they're both reasonably effective?

They both eliminate fructose.

See for yourselves...




The measure of how much I liked this video is as follows - I couldn't conceive that I would watch a 90-minute youtube lecture when I first clicked on it, but I kept wanting to see more until I'd seen the whole thing. For a powerpoint presentation, that's pretty damn good.

Personally, I'm not in great need of dieting, but it's inspired me to try to nudge my sugar consumption away from the slow path towards type 2 diabetes, which is roughly where it is today.

"Do you want Thai, or Italian?"

One of my minor quests in life is to find ways around small inconveniences in life arising from  people asking (and answering) the wrong question. For instance, I've written before that when someone asks what you want to eat for dinner, the answer 'I'm easy' is often profoundly unhelpful.

But there's another case where people answer the wrong question - the 'Do you want Thai or Italian?'. The reason it gets tricky is that it's not clear whether the person is expected to balance the competing interests in their head before giving their estimate of the consensus best choice, or whether they're just meant to state their own preferences directly, with the consensus to be formed later.

In other words, suppose you weakly prefer Thai, but you suspect that your friend would prefer Italian. Do you just answer 'Thai'? Do you answer 'Italian', based on the assumption that you don't mind Italian and your friend wants it?

In my estimation, the most useful answer is to just state your own preferences - once we know how each other feels, it's easy to balance the competing interests. But the second one is fine too, as long as it's understood by both people what's going on. Things get frustrating when your friend doesn't know which answer you're actually giving - do you really want Italian, or do you just think he wants Italian? What if neither of you actually want Italian, but each thinks that the other one does?

Ironically, this problem gets worse when you have more regard for the other person's feelings. People are reluctant to just say the thing they want, because it might sound too demanding, or because it could be interpreted as a lack of concern for what the other person wants.

Thankfully, this is a situation that can also be solved be answering both questions with the appropriate phrasing. These days, I'll go for something like the following:
'If it were just me eating, I'd lean weakly towards Thai. But if you feel more like Italian we should do that, because I'm happy with that too.'

Bam! Problem solved. They now know your true personal preferences, which is the actually useful part. But you've also given your estimation of the estimated compromise decision, without having it confused for your true preferences. Plus you've demonstrated ample concern for their feelings, which means that you don't look like a tool for stating what you personally want.

Let's just say... you're welcome.

Chateau Holmes - helping you navigate potential minor faux pas situations by spotting the potential confusion in the question.  

You Keep Using That Word. I Do Not Think It Means What You Think It Means

The probability of a letter from a company containing important information is significantly less when the front is marked 'Important Information Enclosed'.

I recently got one from US Bank that, as far as I can tell, was a letter to remind me that I had a credit card with the,. Thanks for the heads up!

Why I Don't Read the Financial Press Much

Pity low-level financial journalists.

The big names get to write important opinion pieces on the financial crisis and the banking system.

The low-level guys, on the other hand, every day they have to write garbage about financial markets. Prices went down today? Hmm, what could explain that? How about 'fears of a weakening economy'? Sure, that sounds plausible. Prices went up today? Investors were bargain hunting after yesterday's price decline. Etc.

Realistically, they should just be reporting 'today, the coin landed on heads!', because at a daily level, stock returns are pretty damn random. Over long horizons there's more predictability, but on a daily basis, it's just noise.

Making up this kind of junk tends to erode the intellect (and the spirit). And sometimes this spills over into further sloppy thinking.

The Greek passed on this gem from CNN Money:

At $400 billion, Apple is worth more than Greece

Apple's market cap is higher than the gross domestic product of Greece, Austria, Argentina, or South Africa.

Yeeeeaah...

So it's clear this guy doesn't understand the difference between a stock and a flow. Market Cap is a stock measure - not in terms of the 'stock' market, but meaning that it captures the total amount of something. GDP is a flow measure - it represents an amount that occurs each period.

In other words, GDP is analogous to your income for this year and market cap is analogous to your total net wealth. (It's an imprecise analogy, because net wealth represents income you've already earned, whereas market cap represents the estimate of the money you'll earn in the future).

But the point is that comparing these two numbers and saying that 'Apple is worth more than Greece' is absurd. It's like saying that the guy who works in a factory and owns a $600,000 house is richer than the guy who worked at an investment bank, because the investment banker's income this year was only $500,000. The comparison is meaningless.

Not only that, but the whole thing is a non-story.What even happened to justify writing this junk? Apple's market cap increased slightly? Quick, better write a puff piece of meaningless comparisons, because the rubes just love reading stories about Apple!

Remember kids - these are the people telling you why the market moved yesterday.

Pass the salt, please.

Outstanding Science!

Suppose it is 1983, and you are a doctor who has developed a drug that can produce an erection when injected into the penis. You need to provide evidence of this to an audience of other doctors at a conference.

How might you go about doing this?

Perhaps you'd produce pictures of erections that had been obtained by the injection of the drug. But how could you convince people that these pitctures hadn't been obtained by additional stimulation, or by watching erotic movies or magazines, or even just thinking erotic thoughts?

Science demands proof. And there is one sure way to provide this:

But the mere public showing of his erection from the podium was not sufficient. He paused, and seemed to ponder his next move. The sense of drama in the room was palpable. He then said, with gravity, ‘I’d like to give some of the audience the opportunity to confirm the degree of tumescence’. With his pants at his knees, he waddled down the stairs, approaching (to their horror) the urologists and their partners in the front row. As he approached them, erection waggling before him, four or five of the women in the front rows threw their arms up in the air, seemingly in unison, and screamed loudly. The scientific merits of the presentation had been overwhelmed, for them, by the novel and unusual mode of demonstrating the results.

Yes, really. This is peer-reviewed science, documented in the British Journal of Urology International.

Giles Brindley, for outstanding services to medicine, science, and hilarity, you are hereby inducted into the Shylock Holmes Order of Guys Who Kick Some Series Ass (Third Class).

(via jwz)

How To End Judicial Activism

If there's one thing that raises conservative ire, it's activist judges striking down [conservative] democratically elected laws based on expansive readings of constitutions. You thought you'd passed a law allowing the death penalty for the rape of a child under 12? Wrong, the Supreme Court says that's cruel and unusual!  Thought you'd passed a law to prohibit the abortion of  fetuses? Wrong, you hadn't counted on Justice Blackmun reading into the penumbras and emanations of the constitution a right to privacy, which somehow transformed into a right to abortion! Thought that you'd passed a law regulating political advertising in the leadup to an election in Australia? Wrong, you hadn't counted on the Australian High Court finding an "implied freedom of political speech" in the constitution. Etc etc etc.

Judicial conservatives tend to interpret the constitution narrowly, based on what the words meant at the time they were written. They also tend to be reluctant to overturn precedent, based on respect for the court's earlier opinions. Judicial activists tend to believe in the importance of modern social values in interpreting the constitution - in practice, they're happy to take very expansive interpretations of the words if it produces a social result they're happy with. They also don't tend to care as much about precedent, being willing to overturn settled doctrines if they don't like the result.

At the moment, political conservatives are screwed by judicial activism, because it acts as a ratchet towards ever more left-wing laws. The reason is as follows. Nearly all judicial activists tend to have left-wing political leanings. By that, I mean that the activist rulings they pass tend to be supportive of leftist political issues. Once an activist decision gets passed, judicial conservatives are split - some of them will want to overturn the earlier ruling because they think it misreads the constitution. Others will reluctantly let the ruling stand, because they also don't like overturning precedent. This means that the judicial conservatives will always be somewhat split in overturning these precedents, while judicial activists will be united in upholding them. Hence the bad judgments stand, and you end up with a ratchet.

There is, however, one possible way around this problem. Historically, political conservatives have tended to be judicial conservatives. A respect for political tradition tends to correlate with a respect for the vision of the founding fathers, and distrust of concentrating power in the hands of unelected judges.

But there's no reason this has to be the case. And I confidently predict the following - if you wanted to rapidly end liberals love affair with judicial activism, all you would need to do is appoint a bunch of politically conservative, judicially activist judges.

A rough model for this kind of thing would be the Institute for Legal Justice, which files lawsuits on behalf of private property rights, economic liberty, the first amendment, and other such matters. It's basically like the libertarian version of the ACLU.

And something similar could work in the courts too. For instance, suppose that a politically conservative activist court decided that government licensing of commercial transactions was illegal. There's lots of crap bases for doing this! It could be some oddball combination of freedom to assemble (under the first amendment), and something to do with monetary transactions being a form of speech. Sound ridiculous? It is, but an implied freedom of commerce is not really more ridiculous than an implied right to privacy.

This kind of ruling would drive liberals batty. Suddenly you'd have grounds to overturn all sorts of commerce-killing health, safety, and environmental regulations, all protected with the force of the constitution. And in no time flat, liberals would suddenly rediscover the joys of sticking to the original interpretations. How dare those judges start overturning the popular will with their social engineering! And the new judges would solemnly utter that the constitution was a living, breathing document, and the current political climate was increasingly intolerant of interference in commercial transactions. And liberals would be forced to reply "but... but... but..."

As well as being hilarious and full of schadenfreude, this would force liberals to ask themselves whether they really liked activist courts after all. The danger of expanding government power is that eventually it gets wielded by the party you don't like. If courts played by the same rules, we might ironically (at least in the long run) end up with less appetite for judicial activism. The cost is the politically conservative judges would have to prostitute their views on constitutional theory, which, for better or worse, they don't seem to want to do.

A pity, really. It would kill off judicial activism, or it would at least level the political playing field that activism takes place on. Frankly, either one would be an improvement on the status quo.

Hobbes was right

Apparently a fungus infects carpenter ants, feeding on them and turning them into zombies that walk around erratically. The fungus makes the ant walk towards the understory of the forest, where the fungus grows better, then finally spores grow out of the dead ant's head. (Via Radley Balko.)

The universe is not your friend. All of us are mere grist to the mill of evolution - if there is a niche for some creature (virus/fungus/insect/tiger) to use you successfully as a food source, and they happen to be adapted enough for the purpose, they will do so. If you want to know why I celebrate the triumph of man's economic development and its ability to shape the natural environment, this is why. It's easy to think of nature as some gentle and cute-looking endangered species, like the Iberian Lynx. But you would do just as well to also think of the fungus in Thailand slowly devouring carpenter ants. This, my friends, is the world we live in.

The great Robert Frost observed all this a long time ago.

I found a dimpled spider, fat and white,
On a white heal-all, holding up a moth
Like a white piece of rigid satin cloth --
Assorted characters of death and blight
Mixed ready to begin the morning right,
Like the ingredients of a witches' broth --
A snow-drop spider, a flower like a froth,
And dead wings carried like a paper kite.  

What had that flower to do with being white,
The wayside blue and innocent heal-all?
What brought the kindred spider to that height,
Then steered the white moth thither in the night?
What but design of darkness to appall?--
If design govern in a thing so small. 

Or as Thomas Hobbes put it in Leviathan - the life of man in the natural state is "solitary, poor, nasty, brutish, and short."

Markets Will Clear...

...whether you like it or not.

Tickets to the Coachella music festival went on sale today at 10am. Last year, I figured I had a while to dither about the decision as to whether to go, and after a week, they were sold out. Bam! Your $300-odd ticket is now a $500-odd ticket.

Okay, so this year I'd learned my lesson - I was going to buy it straight away. They went on sale at 10, by 10:15 I was online trying to buy tickets to the first weekend.

Nope, couldn't get them. They were gone. Apparently friends who tried even earlier, even at a few minutes past ten, weren't able to get them. The website would still list them as being available, but you'd try to buy without success. There were some still available for the second weekend, but I couldn't make it then.

It makes you wonder why the promoters don't set the price higher. I have some sympathy - this year, they increased the length from one weekend to two weekends, thus doubling supply. Didn't help - at the face value of  $330 or whatever, there was still a shortage.

It's always surprising how promoters end up leaving money on the table for scalpers. If the market-clearing price is $400, you're just giving free money to scalpers by setting the price at less than this. Granted, firms only get a small number of guesses at the market-clearing price. But surely it wouldn't have been hard to look at the secondary market prices from last year, hire some whizz-bang economist specialising in estimating demand curves, and figure out the correct price.

Nope, that would be too hard.

I did however make one very stupid error, which I now regret.

Once I saw that weekend 1 was effectively sold out, my instinct was 'Oh well, guess I'm buying on the secondary market. Let's read some other websites'. What I should have been doing is trying like crazy to buy tickets to the second weekend. It's a pretty damn good bet that if the first weekend is sold out in 20 minutes, the second weekend will be sold out pretty quickly as well. What you've got is a very strong signal that the tickets are underpriced. As a result, you ought to be buying weekend 2 tickets with the plan of re-selling them, doing this as a hedge against the likely price you're going to have to pay in the secondary market for your weekend 1 tickets.

Sure enough, on Stub-Hub,  weekend 1 passes start at $550, and weekend 2 passes start at $500. It would have been a pretty good hedge indeed.

Which just goes to show - mispricing doesn't hang around long. It's not enough to recognise it, you have to recognise it quickly and act on it. The race goes not always to the swift, but the arbitrage usually does.

Eugene Fama - So Full of Win

Check out but a mere handful of Eugene Fama's quality quotes in his mini autobiography of his life in finance:

My grandparents emigrated to the U.S. from Sicily in the early 1900s, so I am a third generation Italian-American. I was the first in the lineage to go to university.

Fans of linear extrapolation confidently predict that his children and grandchildren will soon be solving friendly AI and proving the Reimann Hypothesis.

I went on to Tufts University in 1956, intending to become a high school teacher and sports coach.

Huh! Given the guy is likely to win a Nobel Prize in Economics, I would not have guessed that.

Vindicating Mandelbrot, my thesis (Fama 1965a) shows (in nauseating detail) that distributions of stock returns are fat-tailed: there are far more outliers than would be expected from normal distributions – a fact reconfirmed in subsequent market episodes, including the most recent. Given the accusations of ignorance on this score recently thrown our way in the popular media, it is worth emphasizing that academics in finance have been aware of the fat tails phenomenon in asset returns for about 50 years.

Two points:

1. Spot on with the last part. When people start telling you that all of finance is disproved because returns aren't in fact normally distributed, this should be taken as fairly strong evidence that they are a) a moron, or b) a crank.

2. I love the self-deprecation in the 'nauseating detail'. The unstated implication is 'I have so much kick-@$$ work that I can disparage half of it and nobody will think any less of me.' This assumption has the virtue of being both hilarious and completely true.

The simple idea about forecasting regressions in Fama (1975) has served me well, many times. (When I have an idea, I beat it to death.)...In a blatant example of intellectual arbitrage, I apply the technique to study forward foreign exchange rates as predictors of future spot rates, in a paper (Fama 1984a) highly cited in that literature.

Again, Eugene Fama can say this about Eugene Fama without detracting in any meaningful way from Eugene Fama.

In 1976 Michael Jensen and William Meckling published their groundbreaking paper on agency problems in investment and financing decisions (Jensen and Meckling 1976). According to Kim, Morse, and Zingales (2006), this is the second most highly cited theory paper in economics published in the 1970-2005 period. It fathered an enormous literature. When Mike came to present the paper at Chicago, he began by claiming it would destroy the corporate finance material in what he called the “white bible” (Fama and Miller, The Theory of Finance 1972). Mert and I replied that his analysis is deeper and more insightful, but in fact there is a discussion of stockholder-bondholder agency problems in chapter 4 of our book. Another example that new ideas are almost never completely new!

Translation - Michael Jensen's ideas are almost never completely new [you thieving @#$%].

Though not about risk and expected return, any history of the excitement in finance in the 1960s and 1970s must mention the options pricing work of Black and Scholes (1973) and Merton (1973b). These are the most successful papers in economics – ever – in terms of academic and applied impact. Every Ph.D. student in economics is exposed to this work, and the papers are the foundation of a massive industry in financial derivatives.

I guess some papers are completely new after all! Unlucky, Jensen. (Actually he's generous to Jensen later, but it's still funny.)

What are the state variables that drive the size and value premiums, and why do they lead to variation in expected returns missed by market β? There is a literature that proposes answers to this question, but in my view the evidence so far is unconvincing.

To what extent is the value premium in expected stock returns due to ICAPM state variable risks, investor overreaction, or tastes for assets as consumption goods? We may never know. Moreover, given the blatant empirical motivation of the three-factor model (and the fourfactor offspring of Carhart 1997), perhaps we should just view the model as an attempt to find a set of portfolios that span the mean-variance-efficient set and so can be used to describe expected returns on all assets and portfolios (Huberman and Kandel 1987).

Make sure you point out this passage next time you're forced to sit next to some boring mediocrity droning on about how everyone at Chicago naively and dogmatically assumes that markets are always efficient.

Gold, gold, gold.

(Via Marginal Revolution).

Walking Past Cemetries

One of the things I always enjoy in small towns (in Costa Rica, as elsewhere) is the presence of small town cemeteries. Cities for some reason always max out the economies of scale, and you end up with entire suburbs of massive grandiose graves that nobody but the mourners ever walk into, and few people walk past. But in small old towns, people tended to be buried near where they died. The cemeteries you see tend to be more modest, but more everyday. They're as likely to be in the middle of town, and you pass them by on any given day.

I think that there is a definite value in having people being exposed in a common, everyday fashion to the resting place of their ancestors. Reflecting on mortality tends to make people less petty, and focus more on what's important. Steve Jobs said as much. Mozart said that he thought about death every day, and it helped him write music.

But the average person in modern society is enormously insulated from death. A lot of adults have never seen a corpse. Two centuries ago, this would have been unthinkable - death was just part of the landscape. And if you think that a close-up acquaintance with a corpse is too grisly, graves represent a civilised middle ground - one can contemplate mortality at a more abstract level, and reflect on how one ought to live a life.

Let pride be taught by this rebuke,
How very mean a thing's a Duke;
From all his ill-got honours flung,
Turn'd to that dirt from whence he sprung.

-Jonathan Swift.