The Martian Perspective

One of the useful big picture ideas I remember picking up from Moldbug is that one should strive to understand the present in the way that a historian of the future would understand our time. That is, suppose you were living on Mars in 200 years time, so not only would the events not affect you, but all the players are dead and gone, as are the countries and institutions they represent.  Maybe even 500 years. The ideal is to imagine a space sufficiently distant that you don't even feel you have an intellectual dog in the fight, rather like an atheist trying to understand the 30 Years War between Catholics and Protestants. You just want to understand the truth, having gotten to the point where none care whether it prevail or not. 

This is always an aspirational ideal, of course. You never really know what the future historian will think (in part because they have seen the end of the story, and you haven't), but also because intellectually it's very hard to fully escape the present tense. For one thing, you can never have our hypothetical atheist's indifference when you're actually on the receiving end of things (put an atheist back in time to the middle of the 30 years war, and suddenly they will have to care about religion, or at least act like they do). But there's also a sheer difficulty in perspective. It may be that nothing in the past five years even makes their list of stuff to bother about. It may be that nothing in your whole lifetime does! (You should be so lucky). 

So while this perspective is hard, if you at least aim at this, you are likely to get a better sense of the actual importance of events than if the idea never even occurs to you. And the sense of what might seem important on a 200 year time line may be vastly different to what the newspapers are covering today. It might be something the average person isn't paying any attention to at all (like developments in AI, for instance). But it also might be events from the present that take on a bigger significance than people at the time realize.

For instance, by now, most of you have probably watched the famous video of Hu Jintao being gently but firmly escorted out of the Chinese Communist Party Congress

When Americans watch this video, they have a clarity of vision as to what is going on. A former president is frogmarched out of the room, publicly, by the current president, to God knows what fate. While it may be overblown, the cynical presumption is that he'll end up like Tank Man, never seen again.

It's worth noting that there's an alternative reading of all this, that Hu Jintao is kind of senile and either was, or was threatening to, wander awkwardly off script. And, hence, that escorting him out was actually an embarrassing loss of face to everyone involved, rather than a deliberate political flex. 

But one thing is for certain. Supposing he in fact gets charged and convicted of corruption, for taking bribes back in 2005. The average American will view this as almost entirely incidental to the important facts in the video above. Did he take some kind of bribe during his presidency? Almost certainly. Is that what this is actually about? Not on your life. If he gets charged instead with tax evasion, or murder, or covid violations, would that change anyone's perspective on the matter? Not at all. What he gets charged with is irrelevant. Whether he even broke the law is basically irrelevant. They certainly will not spend much time digging into the details of the allegations. This is a naked power consolidation. This was also considered in America to be big news for what it revealed about China, and how power works there.

So far so good. 

So what does the average American make of this:

FBI searches Trump's Florida home as part of presidential records probe

PALM BEACH, Fla., Aug 8 (Reuters) - Former President Donald Trump said FBI agents raided his Mar-a-Lago estate on Monday and broke into his safe in what his son acknowledged was part of an investigation into Trump's removal of official presidential records from the White House to his Florida resort.

The unprecedented search of a former president's home would mark a significant escalation into the records investigation, which is one of several probes Trump is facing from his time in office and in private business.

Is this the same thing as what happened to Hu Jintao? Is it a related thing? Is it a totally unrelated thing?

You'll have to decide for yourself. 

And the answer that lots of Americans come to is that, well, you see, this is actually about the crucial issue of violations of the Presidential Records Act, something that they had literally not heard about until August, but now think is an essential lynch-pin of our whole form of government. It's actually part of a large legal campaign against the former president on all sorts of fronts. 

Which is to say, they look at this and see only the things he's been charged with, from which we need to have a serious debate about whether he did or did not breach said Act. They don't at all see any bigger picture here. The Hu Jintao perspective, for want of a better term, is completely and utterly absent. 

(It is worth pondering whether the average person in China, to the extent that they know about the Hu Jintao story, view it as the mirror image of the Trump story - he obviously broke some important law that the papers will no doubt tell us about soon.)

But for the Trump story, if the average American does chance to see a bigger point, such as if they're a Fox News Republican, they'll probably just see one more example of the outrages of the Democratic Party, and are apt to list the above event alongside every other regular complaint about how the country is run, from illegal immigration, to woke trans activism in schools, to black lives matter leading to defunding of the police. Or, if they're on the left, one more aspect of the corrupt contempt for the democratic process by the Republicans, like Voter ID laws and the January 6th protests. 

What might the historian of 200 years' time make of this story? Well, here's one perspective. 

The single biggest fact in favor of American democracy, and democracy in general, is not that it selects wise leaders, or leaders who are legitimate in the eyes of the public, or anything like that. The primary thing in its favor is that it allows, nominally, for smooth transitions of power. Within the current sclerotic regime, of course, which outlaws all kinds of views and actions. And if you push it too far, like the South found out in 1865, you'll be crushed militarily. But within the operating envelope that the system is meant to work in, nobody has to be playing for keeps. Because while your guy may be in today, their guy may be in tomorrow, and you're stuck in a repeated game. So you have strong incentives to play nice.

Which is to say, for 230 years, America has had an unwritten gentlemen's agreement that former presidents are allowed to live out their lives in peace. It didn't matter if they were magnanimous and disappeared from public life, like George H. W. Bush. It didn't matter if they decided to run leftist alternative foreign policy missions, like Jimmy Carter. It didn't even matter if they were impeached for potential crimes, like both Richard Nixon and Andrew Johnson. Nixon is the classic here. Sure, Gerald Ford pardoned him for Watergate. But what's the chances that this was the only law he broke during his presidency? That an aggressive Carter White House couldn't have found something else to charge him with, after enough digging? No, that just wasn't how things were done. Former presidents get to live their lives in peace. Even Jefferson Davis was held only for two years, never ultimately charged, and allowed to live out the remainder of his days as a free citizen.  

That agreement is now gone. 

To which the dumb but common answer is that Trump's actions are so flagrant that they breached the agreement first. 

The nature of gentlemen's agreements is that the finer details aren't always written down, so this is hard to say for sure. But to judge this, you need an estimate of what the baseline level of past violations of the same kind might be. And there's decently strong evidence that this kind of thing is pretty common. What Trump did looks, to me, not nearly as bad as what Hillary Clinton did with her janky private email server while Secretary of State. Or, to take another example, we know that Sandy Berger, a Clinton advisor, was convicted of stealing documents from the National Archives after Clinton's term was over. What do you think the probability is that he was the only member of the Clinton White House to have breached some kind of records law, if the FBI were sent around to raid everyone else's house too?

In other words, to me, this looks more akin to Putin's charges against Boris Berezovsky  In that case at least, was he guilty of the illegal things they said he did? Absolutely. Did this distinguish him from any other oligarch? Not at all. The real crime, which everyone knows, was challenging Putin's power.

In the case of Trump, I really don't know what the sacred text of the Presidential Records Act requires, and whether Trump's actions may be in violation of it. For the purposes of the argument, I am entirely willing to believe he is in breach of it. He does not strike me as a stickler for detailed record-keeping, nor a scrupulous adherent to all kinds of process laws (he's a former New York real estate developer, for crying out loud. If you think there's a single one of them who's never broken any fiddly laws that they thought were getting in their way, buddy, I don't know what to tell you).

But my strong sense is that this is about as relevant as the question of what exactly Hu Jintao is charged with. Former presidents are simply not raided and arrested like they're some run of the mill citizen who fell afoul of a slightly too aggressive Assistant DA. Charging them is everywhere and always an explicitly political act. Especially in this case - can you imagine the Martian historian in 2222 opining about the crucial question of records storage? I can't. I think they'll say that this was part of an obvious longstanding campaign against Trump by whatever term they'll give to what we unsatisfactorily refer to as "the Deep State".

Why do I say this?

Because the FBI already was illegally wiretapping the Trump campaign during the 2016 election, before Trump was even elected! They procured the ridiculous Christopher Steele dossier, presented it to a FISA court, lied about where it came from, and used it to wiretap Trump advisor Carter Page. Nobody went to jail over that, of course. 

Is this the same thing? Is it a related thing? Is it a totally unrelated thing?

I think the argument for "totally unrelated" is absurd. So we're only left with the question of how related they are. And even if one forms the view that this time, Trump's actions really were terrible and illegal, we see the same ferocious politically targeted persecution even when there was no crime. Even when he was still just a private citizen.

This is not a "Can you believe the injustice?" post. Politics is usually ugly, nasty and stupid, and people at high levels play it seriously indeed. This is certainly not a "those disgraceful Democrats!" post. As MiddleEarthMixr savagely put it: "And how’s that working out for ya, imagining if the roles were reversed?"

Fifteen years ago, maybe even ten, I probably would have written something along these lines. But I am long past such perspectives, and no longer find them remotely useful. They are the furthest extreme from the Martian historian's creed.

Rather, this is merely to note that whether you are a fan of democracy, or whether you view it as absurd and past its use-by date, there is a serious reading that the whole campaign against Trump is a dangerous escalation and breach of prior norms, from which further counter-escalations seem likely. 

One of the advantages of living in 200 years time is that events that might be half a lifetime apart are easy to draw threads between, in a way that isn't quite as apparent at the time. It is altogether too easy to imagine future wikipedia articles that read something like this:

The Great Unravelling: 1970 - 2035

The term "the Great Unravelling" was first used by historian Michael Wallesteimer in the early 22nd century to describe the series of sequential breaches of previous unwritten political norms, in a cycle of escalation and counter-escalation that lead to an increasing distrust between the Democrats and the Republicans, and eventually the Great Breach of 2032 (Main Article). Wallesteimer defined the key events as not just those which were political advances by one party, but specifically changes that would subsequently be re-used by opponents afterwards.  Subsequent historians have disputed the original Wallesteimer list, both in terms of charting an original first course, and which events justify inclusion. But the general pattern is now broadly agreed to represent the increasingly fractious civic breakdown. The original Wallesteimer list is:

-The Supreme Court decision in Roe v Wade. This not only set off a large component of the culture war, but set a new standard in deliberate misreading of constitutional texts for political aims. Robert Axelford disputed the inclusion of this, noting that the court cannot be said to be explicitly part of the political apparatus at this time. But it paved the way for the increasingly Republican Court to overturn both all racial preferences in Wichita State University v Connors, and substantive portions of the administrative state in Rothstein v Gibbons, which even if more textually defensible, were viewed by the left as extreme judicial activism. 

-The Senate refusing Robert Bork's Supreme Court nomination. Up until this point, presidents had mostly gotten their Supreme Court nominations uncontested. This marked a discontinuous shift after which the vast majority of appointments became politically contentious, leading to the eventual packing of the court in 2026.

-The Kenneth Starr investigation. This set the precedent of open-ended Special Prosecutors targetting sitting presidents - "starting out investigating dodgy land deals in Arkansas, and ending up investigating blow jobs in the White House", in Anthony Reichenford's phrase. Special Prosecutors would be later used both against Scooter Libby, and by President DeSantis against speaker of the House Alexandria Occasio-Cortez.

 -The Clinton Impeachment. This set the precedent of impeaching presidents over pure process crimes, where there was no other underlying crime (in this case, perjury over testimony regarding sexual relations, when such sexual relations were not otherwise a crime). This was reciprocated when Donald Trump was charged and later convicted of violations of the Presidential Records act, something Trump described at trial as "chicken shit".

-The Trump Russiagate FBI wiretap. This set a precedent of explicit use of the permanent civil service and law enforcement to target a presidential campaign. This violation is considered more notable because of the lack of crimes uncovered by the campaign, which were significantly less than the wiretaps themselves. While the Republicans never succeeded in reciprocating via law enforcement, the subsequent politicization of the military by President Carren in 2031 is viewed as a counterescalation. 

-2020 Election Fraud. Wallesteimer described this as a "shadow breach", because its gravity was only fully appreciated after the fact during the audit of 2025. It is more viewed as part of a continuum of increasingly flagrant election fraud, eventually on both sides, that marked a further step in breakdown in belief in democracy. Relative to the other steps, this was considered more of a notional marker apparent in hindsight than a structural break, but was important additionally for its role in triggering the obvious breach of the January 6th protests. 

-The January 6th protests. While these are now viewed as chaotic and unstructured "acting out" without any serious risk against regime security, they established a precedent that the losing party in presidential elections would respond with mass protests, then with small scale violence, then ultimately with complete insurrection. 2016 is noted as the last of the "peaceful election transitions era". 

-The Arrest of Donald Trump. This ended the famous "gentlemen's agreement", as Wallesteimer described, that former opponents now out of power would be left alone. He viewed this as the most serious escalation, and an important step towards the arrest of President Carren and the Insurrection of 2034. 

You will need a little imagination to visualize what other future events might make the list. But the history of late Republican Rome offers some possible guidance. 

Or put it this way. Suppose that you were Ron DeSantis. How much would you have updated your belief that, if you got elected president, that you or your family would end up in jail if you lost power?

DeSantis is a smart guy. I'm not sure he would think the answer is yet "high". But it's certainly a fair bit higher than it was a year ago, and a lot higher than it was seven years ago.

Indeed, one might easily imagine the conclusion of the chapter above:

As Wallesteimer described the atmosphere in the mid to late 2020s, "From here on out, both parties' leaders began to suspect that if they lost power, they were liable to lose their freedom, if not their lives. After reaching this conclusion, they began to justify their own escalations as being a necessary precaution against the presumed intentions of their opponents. This in turn justified those opponents in their own beliefs, and their own escalations. Once such beliefs became widespread, democracy was not long for this world." 

Living History Forwards

I have recently been working my way through the excellent History of Rome podcast series. I had been meaning to do this for some time as my previous knowledge had been mostly from another excellent series, The Fall of Rome , which I've written some thoughts from before. I realized in hindsight that I was doing things in a mistaken order. Perhaps due to my own slightly pessimistic nature and preoccupation with the current political situation, the narrative of decline and why it happened was very appealing. But before you can delve into the big picture forces (which Wyman does well in the Fall of Rome), it's helpful to understand the basic sequence of what happened when. Not only that, but you can't really hope to understand the fall of Rome unless you also understand its rise, and all the times when it could have fallen, but didn't. Going through the story made me want to go back and read all sorts of things again with a better knowledge of the events, from the Asterix comics, to Horatius at the Bridge by Macauley, to The God Abandons Antony by Cavafy, to Blog.Jim's posts on normality bias.

One of the interesting challenges when listening to the narrative is to try to invert the ex post story back into the ex ante perspective at the time - what people would have or should have thought, knowing only what they knew at the time. History is told backwards, but must be lived forwards. The simplest version of history tells things as a story, describing the important events that happened. But quickly students of history want to move from what happened, to why it happened. In the language of statistics, this means fitting the right ex-post model to the data, so you can understand what variation drove what outcome. Even this is hard to do - you might overfit the model, or select the wrong variables (and you don't get to re-run things to find out if you're right.) The causes you identify are probably there, and perhaps even contributed, but are they actually the important ones? This is a lot of the challenge of historians. But from a statistical point of view, the next step is the ex-ante one. If you'd run this same model using only the data you'd observed up to that point, even if you'd thought of the same variables, what relationship would you have estimated? Price to dividend ratios predict market returns reasonably well at long horizons ex-post, if you believe Campbell and Shiller. If you run it out of sample, Goyal and Welch say they don't.

The statistician's version of this is quite easy - just run the same model on less data, and see what it produces. So why is it so hard as a historian to do the same? Because you're not really running models, you're evaluating things according to your own judgment. This isn't a knock on the field, per se. Some bits of history lend themselves to quantification, like Robert Fogel did, but others (including a number that you really care about) simply don't. When you form your own judgment of things, it's hard not to fall victim to the curse of knowledge. That is, when you know something, it is very difficult to credibly put yourself in the position of someone who doesn't know the thing. It will always seem like things that you know after the fact should have been easy to forecast at the time, but they often aren't. 

In history, we always know how the story ends, so identifying what counts as a major event, or a turning point, or a transition, is always made with the benefit of hindsight, so as to give the most informative narrative. This leads people to make a significant mistake when translating history into their own lives. They assume that when some major shift occurs, there will be lots of signs to indicate this fact. But there might not be. Maybe what's important won't be obvious until much later. Reading about the last days of the Roman republic, one of the interesting aspects is that what in hindsight seem like important turning points. When the Gracchi brothers started using mobs of plebians as threats to get their political will, it might not have seemed that shocking. But it draws a line to Marius becoming consul seven times and leading an army into Rome to institute a reign of terror, and then Sulla being declared dictator for life. Except Sulla stepped down, and attempted to restore the Republic. You can imagine that things might have seemed back to normal then. But instead, this is described as more steps towards empire. Even Caesar Augustus, who consolidated power single-handedly more than anyone since Tarquin, kept a lot of the forms of the Republic, and only changed his status quite gradually. There was still a senate, and consuls, and praetors. To someone wanting to convince themselves that things weren't actually that different, it was probably easier than you might think. Indeed, one narrative of Julius Caesar's downfall is that he attempted to shift power to himself too quickly, and got stabbed to death by the Senate for his troubles, even after all his triumphs. This seems to suggest that the prudent strategy is probably to maintain the old forms, and pretend like they're still in operation, even as they're gradually undermined.

Which perhaps should make you wonder - has this... happened in America? Almost certainly. As Moldbug describes, America has gone through at least four versions of the Republic since its founding. The main reason people don't notice this is that they all swear fealty to the same piece of paper. But look around! Does the paper actually describe the government? If it does, why is the government so radically different, even as the paper is the same? Try explaining the CIA to George Washington, or the modern interpretation of the Commerce Clause to Thomas Jefferson. (As a party joke, I enjoy asking law students to list as many hypothetical pieces of legislation as they can that they're sure would not be justified by the Commerce clause. There's, uh, gun-free school zones? And ... hmmm, did I already mention gun-free school zones?). 

Is FDR delivering his inaugural address, which basically demanded absolute authority from Congress under threat he'd just take it anyway, and threatening to pack the Supreme Court when he didn't get his desired judgments, and serving an unprecedented four consecutive terms, breaching the 150 year old norm of only two, basically equivalent to a less violent form of a Caesar? The case is at least arguable, but you can be damn sure that you won't read this argument in your high school civics class. Was Nixon a corrupt figure that was justly impeached, or was he stitched up in a deep state coup? Also at least arguable.   

Or, to take one that's not yet a fait accompli in where it will end. You can also observe a gradual breaking down of existing norms and compromises that served to keep the parties' relationships with each other civil. The Democrats breach the previous norm that presidents basically get their Supreme Court nominations, by filibustering the eminently qualified Robert Bork. Republicans targeted Clinton, first with special prosecutors empowered to go on endless fishing expeditions (like starting out looking into dodgy Arkansas land deals and ending up looking into semen-stained dresses), and impeachment over purely process crimes like perjury when the underlying events were not actually criminal. Or the FBI illegally wiretapping the Trump campaign and Carter Page. Or Trump calling mobs to the capital to protest what he (and I) saw as election fraud. I happened to think that the January 6th mob was obviously going to be useless for anything other than theater with no coherent plan. But still, it is a notable shift from previous norms. Just like the Gracchi brothers. Maybe this is one more step towards perdition. Maybe it's just rumblings that will eventually settle down, like the secession of the plebs.  

In other words, we expect changes of government to look like America and Russia turning up in Berlin in 1945 - the game is over, and everyone knows it. But even the collapse of the western Roman empire doesn't quite work like this. One might think that when Rome gets sacked, that's basically the end. But Rome got sacked by the Gauls in 390 BC and bounced back. It got sacked by the Visigoths in 410 AD which was bad, but things still limped along. It got sacked again by the Vandals in 455 AD, by which time things were looking pretty dire indeed, but Odoacer declaring himself King was still twenty years away.

The challenge, in other words, is to be able to estimate the versions of history that could have happened but didn't, and the probabilities one should have attached to them. 

And when people imagine the idealised version of what this could be like if done well, those with a sci-fi bent will immediately think of Isaac Asimov's psychohistory. Imagine a fully worked out statistical model of psychology, sociology, and economics. Asimov's idea was that the perfect version of the social sciences should operate akin to the gas laws. The behavior of any one person is random, just like the movement of any one gas molecule. But the behavior of quadrillions of gas molecules or people is highly regular, and thus can be predicted quite well.

I am a huge Asimov fan, and found his writing highly influential in my teenage years. But the more I've pondered it, the more I think the idea of psychohistory has a tendency to lead people badly astray as to what ought to be possible, even in theory.

The version of psychohistory in the first foundation novel starts out with a version that presents the science as statistical, in the sense of assigning probabilities. 

Gaal said, "Indeed? In that case, if Dr. Seldon can predict the history of Trantor three hundred years into the future -"

"He can predict it fifteen hundred years into the future."

"Let it be fifteen thousand. Why couldn’t he yesterday have predicted the events of this morning and warned me. -No, I’m sorry." Gaal sat down and rested his head in one sweating palm, "I quite understand that psychohistory is a statistical science and cannot predict the future of a single man with any accuracy. You’ll understand that I’m upset."

"But you are wrong. Dr. Seldon was of the opinion that you would be arrested this morning."

"What!"

"It is unfortunate, but true. The Commission has been more and more hostile to his activities. New members joining the group have been interfered with to an increasing extent. The graphs showed that for our purposes, matters might best be brought to a climax now. The Commission of itself was moving somewhat slowly so Dr. Seldon visited you yesterday for the purpose of forcing their hand. No other reason."

Gaal caught his breath, "I resent -"

"Please. It was necessary. You were not picked for any personal reasons. You must realize that Dr. Seldon’s plans, which are laid out with the developed mathematics of over eighteen years include all eventualities with significant probabilities. This is one of them. I’ve been sent here for no other purpose than to assure you that you need not fear. It will end well; almost certainly so for the project; and with reasonable probability for you."

"What are the figures?" demanded Gaal.

"For the project, over 99.9%."

"And for myself?"

"I am instructed that this probability is 77.2%."

In other words, psychohistory predicts a range of outcomes, and their associated probabilities. This sounds like something I can imagine in the hyper-competent social sciences. But you can already see the tension in the paragraph - how is it that the death of a major figure has a 77.2% probability (three significant figures!), but the model also predicts events in 1500 years without the error bars blowing up to infinity? Admittedly, the project itself was predicted to succeed with 99.9% probability, and that was (in the book) the more important driver, so maybe it's not totally inconsistent, but still.

As the books go on, the mention of probabilities barely rates a mention again. Instead, the recurring narrative of the book is how Hari Seldon, the father of psychohistory, has recorded hologram messages for people hundreds of years into the future, explaining to them that the dramatic events that just happened were all foreseen and were part of the plan. The initial tension between probability and horizon gets resolved into the more satisfying plot device of the perfect forecast.

Asimov understands the idea of model risk. In one of the plot twists (I won't give much in the way of spoilers), eventually there appears the character of the Mule - a random structural break that couldn't have possibly been foreseen. But the general pattern is that the model works almost perfectly well in forecasting at very long horizons, right up to the point that the world has a dramatic and one-off shift.

Asimov later said that he should have actually called his science "psychosociology", not "psychohistory". I actually think this is a very revealing admission, and gets to the heart of the matter. History, in the popular version, is about predicting the ex-post path of exactly what happened. When you conceive of the task as being to predict history, it suggests knowing the precise series of events that the historian could narrate. Sociology, even when it works at all, is much more uncertain in its predictions - the 77.2% chance of death version, not the precise predictions in 500 years time version. The wrong choice of name was not innocuous - it showed an ambivalence, if not confusion, about the scope of the task.

Because Asimov's version of psychohistory is fatally flawed for two reasons. One of them he should have known at the time, the other one he probably couldn't have. 

Where Asimov should have known better is that he reveals himself to be a great storyteller, and an excellent scientist, but a poor statistician. In his conception of the gas laws, he emphasized the importance of there being millions of planets in the galaxy, in order to get a sufficiently large number of humans that he felt his statistical concept would work. But he also saw that democracy simply won't scale at that level, so he imagined the existence of an emperor.

The problem is that Asimov misunderstood the statistics behind the gas laws. The crucial factor that enables prediction is not that you have Avogadro's number of molecules. Rather, the crucial thing is that the molecules are essentially independent. This, not sheer number, is the crucial thing that makes the individual noise cancel out. If things aren't independent, you can keep adding more and more observations, and it won't help you. If one molecule is the emperor, it doesn't matter how many subjects you add.

And human beings simply aren't independent. Indeed, his own conception reveals this. If the Emperor has any actual power at all, then they're susceptible to being laid low by a bacterial infection, or killed from falling down stairs, or having a bad night's sleep due to some weird dream on a crucial day, or a thousand other random and idiosyncratic events that no model of psychohistory will ever be able to capture. The only way it can work is if the emperor is in fact not an emperor at all, and 100% of his choices, literally every single thing that matters, are already pre-determined by impersonal forces. If he dies, he will be replaced by someone else who will then do the same.

As long as the great man theory of history has even a kernel of truth, which it surely does, your chances of making eerily accurate hologram images for 500 years' time goes roughly to zero. You knowledge will only ever be probabilistic, and its accuracy will decline with time, like almost every statistical model. In many ways, this is the big danger of inferring things from fictional evidence - if your premises are subtly incorrect, you'll still write the whole story as if they were right. 

All of which might make you wonder - why wasn't this mistake obvious to Asimov at the time? 

I think this gets to the second part, which Asimov probably couldn't have known. Specifically, he was writing in the 1940s and 50s, before the age of cheap computing power and large, easily available datasets. That is to say, Asimov almost certainly had no experience actually constructing and testing statistical models. He couldn't have! Unless he was inverting the matrixes for the OLS estimator by hand. 

And as a result, he missed out on the single most important lesson you get from actually testing quantitative models. Namely, you find out how often your intuition about the world is just completely wrong. Or the effects are kinda-sorta there but much weaker than you thought. Or you start to worry about which of the many variations on some predictor variable you should be coding up, or whether there might be data errors, or whether linear models really are the right choice here, or whether there's reverse causality going on, and a thousand other things. You learn, in other words, that predicting almost anything you actually care about is surprisingly hard. And the work of doing so doesn't look at all like psychohistory, where one mathematical genius comes along, and suddenly you've got perfect predictions. Rather, it's about the slow grind of finding one new variable to improve the R-squared, or some new estimation technique to get the mean-squared error down. Sometimes a new discovery improves things a fair bit. But you never have a sense that you'll get the R-Squared to one, until your number of predictors equals the number of observations, at which point you've played yourself, as the Beastie Boys put it. Indeed, you quickly hit the law of diminishing returns on this type of thing. Initially, you add the large, big picture effects that have the most predictive power. But then what's left over is increasingly random and noise-driven, coming from outside forces and quirks mostly orthogonal to what you're interested in studying. Like Zeno's paradox, you might get closer and closer, but there's no hope of getting to the final goal. 

Even this is in the idealized version! Often you come away just convinced of your own deep epistemic uncertainty about the universe. You'll never really even perfectly explain what happened in a dataset, let alone forecast out of sample, because the world is just a shockingly complicated place. And all the bits you leave out end up in your residual term.

Nobody who has ever run a regression could really believe in psychohistory, if they thought about it hard. But many, (like me until very recently), suspended their disbelief in the face of the wonderful story, and just didn't think about it. But when you do, you realize it's just not how prediction works. Not in practice, and without independence, not even in theory. Models don't fail just because the Mule comes along. They fail because the task itself can only be statistical and uncertain. 

But if you never actually run these tests, you'll evaluate your theories of history on a heuristic basis, and make all sorts of kludges and exceptions, and be surprised when the world doesn't work out with as much certainty as a history book. 

What does genuine, significant, high stakes predictions actually look like, in the heat of the moment? Before you actually know how it's going to go down? 

When Russia first invaded Ukraine I spent an inordinate amount of time trying to figure out what the probability was that this would turn into a nuclear exchange. Because if the probability were non-trivial, it was time to get out of America, for at least weeks, to see how it was going to pan out. The important question is not "was it going to happen". Rather, the better question was, and is, "what would be the trigger events that I could observe at the time that would indicate a significant increase in the probability of dramatic escalation?" 

My guess was that the highest probability path to large scale war between Russia and America (and thus potentially going nuclear) was the US imposing a no-fly zone. Which is to say, shooting down Russian jets. The chances that this might spiral out of control, and quite fast, seems decent. Large overt NATO troop present in Ukraine would also be in the category. Other wild-card events like Poland unilaterally sending troops might also could, but it's harder to know where that goes. 

As it turns out, thankfully none of this seems likely any more. Whether it was ever likely is a separate question, but the identification of trigger events doesn't hinge on this question hugely, except for the question of whether the mental exercise is worth your time. Fortunately, the Biden administration repeatedly said early on that it wasn't interested in a no-fly zone, something we can all be very grateful for. But even if he had declared one, I suspect you probably would have had time to get on a plane out of America within 24 hours if you acted immediately, as things probably don't go nuclear at the first downed plane. On the other hand, it seems highly likely to me that most people wouldn't act, and would just sit there. Which is lucky really - the plane capacity to leave America each day is only a tiny, tiny fraction of the population. The plan only works if nobody else acts. But this in turn means that you need to act, and quickly, exactly at the point when everyone else thinks you're weird and paranoid. How else could it work? If you wait until the air raid alerts are being sent out, you will probably just die getting incinerated in your car, stuck in the biggest traffic jam in the soon-to-be-concluded history of the city. 

This is why forecasting things usefully ex-ante is hard. People expect there to be a big glaring sign that everyone will see. But there probably won't, at least until the historians write about you in 200 years' time. 

The Biggest Obstacle to Texan Independence

Suppose you were a patriotic Texan, planning on how to make your state independent. As Tinkzorg likes to put it, in politics (not just in war), the professionals think mostly about logistics. This comprises two parts. First, the grassroots aspect of how do you build up enough internal support to make independence a concrete aim of a sufficient number of Texans. On this aspect, the people you want are (in Henry Sumner Maine’s phrase) “the wire-pullers”, the successful manipulators of public opinion, and the people capable of building organizations to expand out such messages and grow power. I have no skill nor inclination in that regard.

But there is a second aspect that’s more interesting to me. How do you plan in advance for likely hostile responses from USG? If such responses don’t happen once your Texan mob/democratic expression of sovereignty arises, happy days! In that case, the first step of building support is the only one that matters. But since you probably won’t have too many cracks at this, one needs to plan for how to overcome Yankee resistance.

I suspect that said resistance initially won’t be military. It may not be military at all. The reason this whole thing is interesting is that the level of committed energy seems so low on both sides. This is true across most of the western world. The number of people in Texas willing to die to ensure their state’s freedom is likely very low. But so is the number of New Yorkers or Californians willing to die to keep Texans in the union. So inertia rules the day at the moment. It’s like a market that’s very illiquid in both buyers and sellers. Small changes in demand or supply can result in large price swings in either direction, which is what makes it a live issue. Sure, the Californians hate the Texans. But this version of “Fuck you, Dad!” could just as easily manifest as “Fuck you, I won’t [let you] do what you tell me”, or “Fuck you, you’re not invited to family thanksgiving anymore”.

The default Yankee instinct, however, is probably power and control. It is impossible to have a federal, live-and-let-live model of each state making up their own mind on gay rights, or abortion, or most politically charged issues (including, once upon a time, slavery). And while not every issue resolves itself at the level of the Supreme Court, progressive soft power is directed at solving the monstrous corollary to MLK. That is, if injustice anywhere is a threat to justice everywhere, then only total global domination of the levers of power is sufficient to ensure my security in the Upper East Side, or Georgetown, or Malibu. It’s for my own safety, and the cause of justice, you see, that I must rule you.

If you add this up, the likely USG response is probably to apply unpleasant non-military pressure, and try to make life maximally unpleasant for Texans in a way likely to cause them to either relent, or just blame matters on the independence supporters.

So what are those ways, and how might you circumvent them?

One guide is to look at what they do to foreign states they don’t like, and want to apply pressure to. Of the toolkit they like the most, it’s sanctions, and especially financial sanctions. In the recent case of Russia, USG threatened to cut off their banks from the SWIFT system. This would leave them isolated from US financial institutions, and force other countries’ banks to effectively decide (presumably on threat of the punishment being extended to them too) whether they’d rather do business with US banks or Russian ones. Whatever you think about the long-term consequences of the Fed’s print-a-palooza, right now, that’s not a difficult decision for a Swiss Bank.

(As an aside, if I were the Chinese, I would think about making an explicit threat that if the US cut off Russia, Chinese banks would only do business with Russian banks and not US ones. Let the US find out if it’s actually cutting off Russia from America, or cutting off America from the rest of the world).

But assuming the Chinese gambit doesn’t happen, for Russian banks, being cut off from SWIFT would be seriously inconvenient, but probably wouldn’t precipitate a domestic banking collapse. Inside Russia, their customers can still withdraw their rubles just fine. In the Republic of Texas, cutting off all Texas banks would potentially precipitate a bank run / panic, if people worry that their US dollars are about to be replaced with some new currency that’s worth less. Though if withdrawals are simply frozen or drastically limited (as Greece did briefly in 2012 in the run-up to their vote on whether to leave the Euro), things would probably be okay in the short run.

Weirdly, things would get funky based on the fact that the concept of “Russian banks” is much more coherent than “Texan banks”. Mostly what you have is Texan branches of national or regional banks. The big question is who controls the computer systems. If you’re, say, Bank of America in North Carolina, and the federal men with guns (or just a furious Fed banking regulator) call up and demand that you turn off all the computers of all branches in Texas, you’ll probably comply (unless the systems don’t make that straightforward to do, which is quite possible). Of course, Texas has USAA and Comerica and the rest of the banks headquartered there, which also operate regionally or nationally. Presumably men with guns will be doing the same thing there, dictating what those banks have to do.

The standard way to solve this problem of bank runs in the past was to print up a new currency quickly, and order the banks to start paying deposits only in the new currency, which we’ll call Texars. There is some difficulty in printing sufficient volume of not-easily-forgeable currency in a raging hurry, but presumably you can make do in a pinch. Effectively you confiscate local dollar deposits and forcibly convert them to Texars. People will be pissed, but eventually they’ll adjust.

But I think that it’s a mistake to focus on bank runs and bank stability as the main obstacles in the modern era. These are problems, but they’re manageable problems. Rather, what’s harder to actually solve is payment rails. Most money is already electronic, primarily through credit and debit cards. And for anything online, this is the only game in town. A currency is both a store of value and a medium of exchange, but between the two aspects, the latter is a much more acute problem if it starts to fail. Hurt the banks, the banking industry suffers, and people worry about their savings. But if you cut off payment mechanisms, pretty much all business grinds to a halt. People don’t need to access all their savings immediately, but they do need to be able to fill up their car at the gas station. If they can’t do that, this probably guarantees either capitulation, or military escalation. If you’re Free Texas, you don’t want either. You want to be able to maintain business as usual, and dare USG to go kinetic first, hoping that they don’t have the stones. And every day they wait, you can solidify your local control.

The single biggest obstacle to Free Texas right now is the hegemony of Visa and Mastercard. The extent of the power that these firms have over everyday commerce is colossal and not widely appreciated. They run your credit cards and debit cards, which have moved from being ways to extend credit to ways to pay for anything, anywhere. Not only that, but the US has past form on successfully pressuring these companies to cut off foreign businesses they don’t like (Pokerstars, Tradesports, etc.). They would absolutely do this with Free Texas, probably as their opening salvo.

The challenge is that any electronic payment system needs both a digital currency in question, a mechanism for transferring that currency between buyer and seller, and the technology in each store and consumer’s wallet to make such transfers. When you spell it out this way, you can see why this is incredibly difficult to conjure up in a hurry. Much, much harder than printing up new banknotes and forcing everyone to take them. This also poses a problem even to people who want to use things like Bitcoin. Even if you did everything on the lighting network so there were very low fees and short confirmation times, how long is it going to take for every gas station or website in Texas to be set up to accept this kind of payment? How long is it going to take to get every boomer or retirement home resident to get a wallet capable of spending it at said gas station? How long is it going to take them to get the actual bitcoin to spend? What happens if you're the last grandma in line to convert their dollars over to bitcoin, and the price of bitcoin has gone up 50% from the massive influx of demand?

In some sense, you need the incredibly hard ask of a payment system that can be turned on at the drop of a hat once you declare independence. The crude version is just reverting to cash under newly printed Texars. This will probably work for an initial period of emergency, but you need some way of rolling things out, and it’s not clear that the task gets obviously easier after a few weeks. Not only that, ideally the system can be developed with plausible deniability for its true purpose.

I have only vague ideas about how to do this, and I don’t know which one is best. But I am strongly convinced that this honestly may be the single most important problem to figure out a solution to.  A significant part of the challenge is that many of the initial steps look like a huge needless expansion in wasteful reporting and intrusive data collection.

One such component is that you probably need to set up daily reporting requirements for all bank branches in Texas to a parallel system. You could maybe do this through some local institution you had control over (the Dallas Fed, maybe? Probably too converged), or some new regulatory agency. Every day, banks must report their closing balances for all customers to the State of Texas. This ensures that when you declare independence, you at least have a snapshot of what amount to credit everyone’s account with in Texars. You would probably want to also measure people’s equity holdings too – it’s doubtful you can stop USG expropriating these, but at least if you have records, you can figure out some kind of compensation scheme. Most likely, I would reassign expropriated Yankee-owned shares in every publicly traded Texan firm to Texas residents that had lost equity holdings from the Yankee confiscation. People might not be thrilled that their shares in Microsoft have been converted to shares in Texas Instruments or whatever, but it’s sure better than nothing.

From there, you’ll need to decide what the payment system is. This is where I’m less sure. There are various options, with their own levels of difficulty.

You could try to repurpose the existing Visa and Mastercard networks. The advantage here is that the tech is already out there, both in terms of cards and payment machines. Existing bank relationships with national banks (both cardholder and merchant) could be set up with existing Texas banks. The problem is the Visa and Mastercard networks, which is how the banks communicate with each other. You could create your own one of these and somehow repurpose the machines to transmit through it. Maybe I’m wrong here, but I suspect that reverse engineering this stuff as the State of Texas may be harder than reinventing things from square one.

My guess is that the easier setup (though still extremely hard!) is to actually just set up a central bank digital currency from scratch. In other words, the Texas Central Bank keeps a central database of all dollar amounts that people have in bank deposits (which, remember, it has records of already). A “central bank digital currency” in its most minimal form is just a computer at the Texas Central Bank (TCB hereafter) that anyone can open up an account with. If the Fed let you and I open up the same kinds of Fed accounts with it that Citibank has, America would already have a central bank digital currency.

In other words, we currently have an extraordinarily cumbersome payments processing system because we launder the entire thing between thousands of banks that all need to communicate with each other, verify balances, etc. But if you were redesigning the system from scratch, and especially if you need a system that you can get up and running quickly, you don’t want to duplicate all this stuff. Just let the TCB store all the accounts. Then payment processing is just transferring trivially from one register in a database to another register in the same database.

In this framework, the process is at least simplified – instead of trying to run things through the combination of every bank’s existing legacy IT infrastructure, you just need a way for each consumer and merchant to communicate with the TCB. The simplest way to do this is with an app. Download it, and use the camera to take photos of your Texas drivers license, plus your face next to your ID, plus whatever sequence of random requirements are selected (e.g. take a photo with your ID where you close your left eye, put your right index finger on your nose etc.). Then you’ve got access to your existing bank balance.

Want to pay for a purchase? The vendor generates a QR code that contains the amount of the purchase, and the account to have it credited to. You use your phone on the app to take a photo of the QR code. An alert comes up – do you wish to send $12.95 to “McDonalds Plano, TX”? Click yes, take a photo of your face to confirm your identity, and the purchase is complete.

In this version, the role of banks is significantly scaled back. You go to a bank if you actually want to deposit your money into a savings product with a higher rate of interest, with the money being lent out to borrowers. If you want an actual credit card, you have some arrangement with the bank where they pay for your stuff at the TCB using their own funds, and you pay them back on whatever arrangement you negotiate with the bank. I suspect the demand for this service specifically is actually quite low, and a lot of current credit card demand is really just demand for easy electronic payments. Sure, there are airline miles and other reward programs, but this is just a roundabout way to maintain the duopoly of Visa and Mastercard by effectively fleecing cash-paying customers by a small amount. If all this nonsense disappeared, the system would probably be better off. 

In the medium term, you're going to have the problem that taking all this money out of the banking system will likely increase interest rates, by reducing the amount of funds banks hold at any time that they can loan out. That's a problem (unless you're an Austrian economist, in which case it's a feature), but it's not an immediate problem, and can be mitigated down the line with TCB monetary policy or direct lending to banks. There’s nothing to stop consumers keeping more money in an actual bank earning interest by making risky loans. But if you just want to make and receive payments, you can now do it without a bank. There’s also a longer run risk of centralisation of all money in the hands of the new Texas government. I suspect this already exists with current banks, but people just don't think about it much (ask Conrad Black, when they froze all his assets before his trial which made it difficult to mount an expensive legal defense).

At first, there will be a challenge figuring out the various anti-fraud measures, dispute resolution stuff that banks have worked out for ages. Even getting the whole thing into the hands of consumers is hard, and making sure it scales But it’s at least feasible. The challenges are basically:

-Design an app

-Design a database that stores all the balances.

-Design an API for stores to generate transactions  

-Get customers and businesses to download the app

Then every transaction just requires two people holding smartphones, which they already have. Figuring this out from the business end might be a little complicated, but the consumer end at least doesn’t require sending plastic cards to every person in Texas, or new payment machines to every business. The minimum viable product is that each restaurant has one guy holding a smartphone that implements all their transactions until they can redesign their IT systems to make it smoother.

I mean, this is a several year project! I don’t mean to minimize how hard it is. It's also a long way from the core competency of any government, let alone a future government. It seems likely that you'd need to develop it in secret with some rich, sympathetic Texan fintech CEO or something similar. But the hard work is all doable beforehand. Once it’s go time, you just need everybody to download the app (though you should assume that they’ll also prevent you pushing it to App Store or Google Play, and have plans in place for that).

This isn’t the only variant on the plan. I’m sure crypto boosters can imagine some kind of crypto version where you fork Bitcoin and airdrop tokens to all the existing bank account holders. I suspect the challenges of getting this up and running are quite a bit harder than my version, but who knows.

I am actually less wedded to the specific solution that I propose than I am sure that the problem is probably the most important problem to be solved. As far as I can tell, there hasn’t been a new breakaway country that set up in the age of digital finance against the wishes of USG. If you want to be the first, you would do well to ponder the paraphrased version of Jonathan Swift:

“They have his soul,
Who have his payment rails.”

Moving Porn

[Meta disclaimer: When I look back at some of the posts I've written that I think I got wrong, they're often in the category of what I'd call "therapy posts" - trying to universalise or rationalise some thought process of my own as a general life lesson, especially if I'm trying to convince myself that my actions make sense. I resolved at some point to try to stop writing those. I don't think this is one, but I'm not always a good judge of these matters, at least at the time.]

As Covid worries seem to fade into the rearview mirror, and life slowly gets back to normal, I find myself reflecting on the the strange way that being at home for a long period of time strongly exacerbated the idea of moving porn. Not as in emotionally touching depictions of sexual acts, but the fantasy, sometimes followed through on, that a better life awaits if only we move to somewhere else. 

This is always a hard one for me to think about. I don't want to say that everyone should just stay where they are. It is obviously, trivially false that every place is as good as every other place. So there really are changes in life happiness to be had for certain people in moving somewhere else. Indeed, I've had at least one myself, that I'm very glad about. 

In my case, after enough months of roaming around the same apartment, I had a strong desire to just get out. Maybe temporarily, but probably permanently. I started writing this post back when these feelings were still there fairly strongly, but already subsiding. From the number of stories about this, I don't think I was alone in this. Covid seemed to really send this urge into overdrive among a certain class of aspirational mobile white collar worker. 

There are two stories that can be written about this. The first, and most discussed, is the role of remote work. Covid made lots of educated people's jobs suddenly remote, so they could now move anywhere, at least temporarily. The big obstacle to moving is generally the coordination aspect - a city you want to live in, where you know people, where you can get a good job, where your husband or wife can also get a good job. Take away two of those conditional statements, and the choice set gets a lot bigger. 

But the second part is the one that I think is more interesting. The professional class were also, as a rule, more likely to comply with lockdowns and general social distancing. The net effect was a whole lot of people who hadn't actually spent any time in person with many (or any) of their friends or relatives, for maybe a year at a stretch. The effect of this was to enormously crank up the background sense of ennui and isolation that seems to be a large part of modernity. 

I remember this being one of the stranger aspects of educated Americans when I first moved here. If you grow up in Europe or South America or Asia, you are generally from somewhere. Your sense of place is typically a city. Whereas I'd meet quite a number of Americans whose story was something like "Well, I was born in Cleveland, and lived there for the first two years, then I was in Chicago until age 8, then we moved to Phoenix, then I went to college in Atlanta...". The typical educated American, by the time they reach graduate school, might be on their fourth set of friends, between high school, college, and first work stretch. Their parents may or may not still be living in the place where they were when they were born. 

In other words, the background feeling for a lot of people in the educated classes is already a vague sense of social isolation. Your friends, even your good friends, might pack up and move in a year or two's time. You have to keep investing in new friendships in order to maintain a steady state inventory. 

I can only guess, but I think this feeling is rather widespread, at least to a certain extent. But if it is, then moving cities to try to escape the sense of ennui you've developed is a very high risk strategy. You feel isolated and unhappy because you don't have enough close friends and family. It might indeed be hard to make friends where you are. But when you move to somewhere new, you go back to square one. Rather like changing lines in the customs queue at the airport, you'd better hope the new one is faster, because you start out at the back. 

I don't know how to balance out these two stories in terms of their prevalence. The first one is just a good news story - people can finally leave San Francisco (a city that is desperate to disprove the Lebowski dictum that the bums always lose) and go somewhere less shambolic, while still keeping their tech job. The latter is much less obvious. If your problem was that being rootless made you unhappy, digging up what shallow roots you currently have is not obviously going to help matters. Ironically, it resembles San Francisco's way of dealing with the homeless - the ameliorative steps to solve the current problem in fact just lead to the problem getting worse.  

In terms of telling these two versions apart, one aspect that is striking is the sense of where all these newly mobile people actually wanted to go. It tended to be the same places. Austin, Miami, or sometimes Nashville.

Don't get me wrong, I like all these cities! But still, it's striking that these form such a focal point for a large number of people who are all starting somewhere quite different. To hazard a guess, the main linking factor seems to be "better weather, some fun nightlife, increasingly trendy so my friends won't look at me too weirdly, but still cheaper than NY, SF, or Boston." They are always cities that are described as fun. Which seems to be a shorthand for sociable and full of interesting people to hang out with.

But if the problem you faced in Dallas or wherever is that you weren't able to meet people to hang out with, how exactly do you plan to find your fun circle of friends once you get to Austin? I'm not saying it's impossible. I'm just saying that most of the credible plans you would implement to solve this problem in Austin could also have been implemented to some extent in Dallas. 

The only exception to this rule is if the place you're moving to already has more old friends and relatives in it than the place you're at (and they're likely to stay there). To me, I think this is generally the only good reason to move to a place to escape ennui. 

The fact that all these people wanted to move to the same places tends to imply that this wasn't what was at stake. Maybe Austin helped a ton of people suddenly solve the coordination problem of where to live at the same time. But I don't think that's what's going on.  

If I'm right (and I'm not sure I am), I suspect a bunch of these people are going to wind up disappointed.

How can one tell if this seems like a credible description of one's mindset? I suspect that one telling aspect is the question of how specific and detailed are the ideas of what exactly you plan to do differently when you get to Austin. It's a Saturday. You're in your somewhat larger house, now that you don't live in the Mission any more. You've got the whole day ahead of you. What are you going to do that you can't do in San Francisco? Next day is Sunday. Same question. Then the weekend after. And so on.

I have a feeling that if you don't have a clear answer to that question, you are probably going to find that Austin does not make you as happy as you imagine. 

I would be delighted to be wrong. Austin, Miami and Nashville are all in fact cool cities. I hope everyone who moved there finds it awesome, and pities us saps that stayed put. But I can't help but wonder about the Last Psychiatrist's description of some of how change is often not really change at all: 

The unconscious doesn't care about happiness, or sadness, or gifts, or bullets.  It has one single goal, protect the ego, protect status quo.  Do not change and you will not die.  It will allow you to go to college across the country to escape your parents, but turn up the volume of their pre-recorded soundbites when you get there.  It will trick you into thinking you're making a huge life change, moving to this new city or marrying that great guy, even as everyone else around you can see what you can't, that Boulder is exactly like Oakland and he is just like the last guys.

Lest this all sound like meandering, there is a concrete prediction that can be made here. If I'm right, I expect the number of relocations to drop fairly quickly as life gets back to normal. If you haven't packed up and moved by now, I'll guess that you're not going to. Because as people actually start hanging out with their friends again, they'll slowly remember that the place they're in isn't actually as bad as it seemed in April 2020 when it felt like we were going to be locked up forever.

If you're still on the fence, take advantage of the warm weather to invite all your friends over for a party first. It did me a world of good. 

Tether - risky, but probably not for the reasons they keep telling you

I keep being forwarded this article that came out in Medium recently. It poses as a big expose of tether, the stablecoin that powers lots of cryptocurrency transactions. We learn that it's a scam and a fraud, and about to crash the price of bitcoin.

The very short tl;dr on tether is that it's a cryptocurrency whose value is kept at a stable $1 USD. Why would you want this? Well, lots of people want to transact electronically in something that's basically dollars, but without the insanely anachronistic mess that is the actual US banking system. But USG has aggressively gone after money laundering by controlling the interface of the banking system and crypto exchanges. In other words, control the fiat/crypto interface tightly, and the rest of legal compliance will follow (apparently). If you as a company anywhere in the world take money from the banking system, you get aggressive demands from USG officials that you comply with US "Know-Your-Customer" (KYC) anti-money-laundering legislation. 

So some exchanges like coinbase specialize in being places that comply openly with the law, where you can hold your crypto and feel like there's a lower chance that it will be stolen, because coinbase is possibly about to become publicly listed, a good hallmark of establishment reliability. And others specialize in the opposite of this - transact there while being less legible to US regulators, take on massive leverage on your trades, pay lower fees due to regulatory arbitrage of not complying with US financial laws. So far, they've been able to do this, barely, because they follow the golden rule of "never touching actual US dollars". Just exchange one digital asset (e.g. bitcoin) for another (e.g. tether), and you never directly interact with the standard financial system. So tether ends up being the numeraire good, the medium of exchange on lots of these platforms. Hence why there's so much demand for it.

It's important to note that the way tether is priced at a dollar is that tether, the company, will (so far!) redeem them for exactly a dollar. As long as this promise is viewed as credible, they'll trade at $1, and they roughly do. Tether rather speaks out of both sides of its mouth on this - in marketing materials they tend to emphasize that tethers can be redeemed for the same number of dollars, and in practice they pay out your redemptions, but in the fine print they say that this isn't necessarily, technically, something promised.

So far, so good.

Well, what's the claimed problem? Here's the article's summary:

Tether Ltd. also says one Tether is worth exactly one US dollar. Can they do that? Well they say they can, because they hold $1 worth of assets for each Tether. But are those assets actual dollars? No, they are not. So what if the assets go down in value? Don’t worry; they will not. Okay, but can we at least see the assets? No, you may not.

Who in their right mind would use something like Tether? Well, the short answer is that many people use Tethers to buy Bitcoin and other cryptocurrencies. The long answer, though, is astounding — but more on that later.

Because Tether sounds exactly like a currency fraud, it may not surprise you to learn that Tether Ltd. is currently under investigation by the Office of the Attorney General for the Southern District of New York. That investigation was announced to the public on April 25th, 2019.

As an aside, the Office of the Attorney General for the Southern District of New York are a pack of assholes who feel justified in arresting anybody on the planet who so much as looks at a financial transaction in a way they don't like, on the highly compelling theory that a) Manhattan has a lot of banks, and b) Manhattan is the center of the universe. If you are not utterly cynical about their press releases by now, I don't know what to tell you. 

And from there follows a very breathless and interesting read of all the ways that tether has been printing tether coins, and this is pumping up the price of bitcoin, and it's all likely to collapse because it's a giant scam. 

 "Nonetheless, based on this evidence, I concluded my risk was now too great. I was long Bitcoin up to my eyeballs; Bitcoin was clearly correlated with Tether; Tether was clearly being issued at a frantic rate; and that issuance had a high probability of being backed by nothing at all."

Have a read. There are a lot of interesting facts in there. In fact, if you feel yourself well versed in finance, go away and read the article and try and find the big glaring conceptual error in it, then come back.  

I am in two minds about this article. 

On the one hand, the author is likely right that tether has a non-trivial chance of being shut down by USG, that it fuels a large amount of leveraged trades in crypto, and that the loss of tether would likely cause a big deleveraging that would probably be disastrous for bitcoin prices

On the other hand, the reasons he thinks this will happen are moronic, ludicrous and risible. They are a great example of a certain kind of stupidity that is annoying prevalent in crypto communities. 

What is the first order problem with the whole discussion?

The gigantic blind spot is that he, like lots of crypto people, seems to not notice the obvious fact that tether is simply a bank. The tether coin itself is a demand deposit, just transformed into cryptocurrency form. It's hard to think of a cleaner example of the hypothesis that money itself started as debt that began to circulate. The company keeps a certain amount in reserves to fund these possible redemptions, and then invests the rest. This is how basically every bank in the world works.

The reason that so few people spot this is that the world is roughly partitioned into 

-people who like cryptocurrencies and who think that all "fractional reserve banks" are scams, and

-people who like mainstream banking, and think that cryptocurrencies are scams.

So as a result, the number of people who are both knowledgeable and agnostic on both fractional reserve banking and crypto is surprisingly few. 

And when you see it this way, a huge amount of the apparent mysteries immediately get resolved. This comparison ought to be obvious, but it’s not, because guys like this tend to have completely moronic ideas about what a bank actually is, and simply think that all banks of any form are “scams”, regardless of how well capitalized they are. He has some huge hard-on of this idea of himself as the narrator in the Big Short, but somehow never learned how a bank actually works. 

Go back to the quote above. Banks are partitioned into two types. Those where every dollar of deposits is backed by 100% literal cash US dollars in a vault, and those where it is “backed by nothing at all.”

Like…did you consider any other possible bank balance sheets? Are these the only two possible cases? 

His idealized type of bank (assuming he even realizes that this is what he's describing, which I doubt) is called a narrow bank. In practice you should be able to set up a bank that just takes investors deposits, in turn deposits them at the Fed, and earns the interest the Fed pays on reserves. Why can't you do that? Well, the Fed has denied licenses to such banks, with largely spurious reasons given as to why, in ways that smell like corruption, even to very mainstream economists like John Cochrane.

So since we don't have that option, every bank is a fractional reserve bank. To a banking agnostic, the crucial question is not "is it a scam engaged in maturity transformation?". Rather, the question is "given how well capitalized the bank is, how likely is it that there will be a bank run that causes depositors to not get paid back in full?".

Suppose tethers are only backed 74 cents in the dollar by actual USD, a claim that’s floated around here. Here’s the question. They took in 100 cents in the dollar in cash. They now hold 74 cents. What does this guy think they did with the remaining 26 cents? Blew it all on coke?

No, what they very likely did is buy the exact cryptocurrencies that the guy laboriously shows that tethers are being used to purchase.

So at the time they bought it, their portfolio was most likely something like 74c cash, 26c BTC or whatever.

Now, a sensible risk weighting would assign a big haircut to these BTC assets, given how risky they are. Sure. But what this guy does, along with places who should know better like Bloomberg, is downweight every single asset that's not cash to a risk-weighted collateral value of zero. This is, to not put too fine a point on it, imbecilic. 

And the reason this is even more egregious is the following. Ex post, what happened to the price of that BTC? It went up like crazy. 

Assuming this much is roughly true, this would make tether among the best capitalized banks in the world. As a betting man, I’d wager pretty strongly that the value of their crypto is way higher than the missing 26c in the dollar or whatever of liabilities they owe, probably by a factor of 2-10.

Buddy, if you think tether is a scam, let me tell you about Citibank. 

So what do you do if you’re now a bank who's crazily over-capitalized, and holding a lot of crypto assets? Well, one option is to say “sod it, let’s print some more tether liabilities, and use those to buy more crypto”.

Absent government regulations, this is an entirely sensible thing to do. The timeline above explains every single “suspicious” fact that this guy points to.

The risk that tether, left to its own business operations, is about to go bust, seems quite low, as long as they’ve likely been using part of their cash to purchase crypto that’s since risen greatly in price. It's true, there hasn't been a proper audit, so we don't know for sure what they've been buying or holding. Maybe they really have just spent it all on hookers. But the strongest bet to me, for a variety of reasons (including those floated by tether skeptics) is that tether has been buying crypto assets. If they've bought some kind of diversified crypto portfolio before March 2020, happy days. Strongly well-capitalized banks do not tend to collapse in bank runs. I would wager quite heavily that, at current prices, they have way more crypto assets than they need to pay off every possible tether holder (even if, as is true, liquidating said assets all at once would cause a big price drop).

So what’s the actual problem with tether?

First, while they are a bank, they don’t say they’re a bank. They tend to imply, falsely, that they’re more like a money market fund, just holding cash and cash equivalents.

Second, if they are a bank, they run the risk of being regulated like a bank, and they sure as hell haven’t been complying with banking regulations, notwithstanding that they’re probably very well capitalized.

Third, their whole business model smells like know-your-customer violations.

All of this means that there’s a decent chance of them getting boned by some up-and-coming NY DA, running the same playbook as for Tradesports, and World Star Poker, and a bunch of others. Freeze assets. Destroy your business because you can't access any of your assets. You dip into some of the reserve cash to stay afloat. They declare you a ponzi scheme, improperly stealing customer funds, and say you collapsed for this reason. Whether you were or weren’t (and in the case of tether, there’s good reasons to think they have more assets than they need, not less), the proximate cause of the collapse is government.

Where this guy is right, is that tether fuels a lot of the levered bets people make on dodgy exchanges. Take away the tether that fuels these exchanges, and you probably get a massive deleveraging. I’d bet on this being a Mt Gox level event for BTC if it happens. If the only demand is now coming from unlevered, KYC compliant bets on Coinbase, that’s a big reduction in likely demand.

At the end, the big irony is that

a) he's right that you should be worried about tether, about the prospect of it being closed down, and the likely impact of this on BTC prices, but

b) the one thing tether gets the most flack for is the one bit that seems least likely to be true - being massively undercapitalized, and unable to pay back depositors. 

Last Thoughts on Voter Fraud

Winston Churchill once observed that a good definition of a fanatic was someone who can’t change his mind, and won’t change the subject.

On the subject of voter fraud, I like to think that I meet neither arm of the test.

On the first part, I feel like I’m definitely open to having my mind changed, but not many people engage with the better evidence on the subject, so I don’t often hear good arguments to the contrary. Then again, every fanatic on every topic feels the same way, so perhaps this doesn’t distinguish me very much.

But I can at least make sure I don’t fall foul of the second arm. Few things in this life, even if true, are worth driving away those near and dear to you, having friends of long standing view you as some crank and lost cause obsessive. My twitter feed the past month has been that of a single issue kook, which has gained me a lot of new followers, but I never really wrote to build a large audience, and definitely wrote for the sheer joy of being able to say whatever was on my mind, not for advancing a single cause.

To know if you’ve started to become viewed as a crank, you have to listen to the silences – the friends that don’t respond to your whatsapp messages when you send them something on the subject, the people on twitter who used to engage that you haven’t heard from for a while. You don’t have to change your beliefs about the election because others don’t agree with you, but you do need to value your audience, especially when they are friends and loved ones.

In finance, most trades are essentially neutral – if you buy a stock, and nothing happens, you stay flat. However, a famous trade in foreign exchange is the carry trade – borrow in low interest rate currencies, and invest in high interest rate currencies. There, if nothing happens to the exchange rate, you win (on the difference in interest rates). This term, “carry”, gets used broadly to describe any such trade with this property, where you win by things staying the same. An anti-carry trade is thus the opposite. If nothing happens, you lose.

Since the Wednesday morning after the election, it has been quite clear that Biden had a strong carry trade, and Trump had an anti-carry trade. Something fairly large had to happen to change the answer. The Supreme Court case with Texas was my last bet on what that something large might be. Related to my post earlier this year on how Republicans can’t get their appointed judges to stay conservative, the answer was depressing, if not surprising. The number of ways the outcome can change at this point is small, most of them would be highly alarming if they occurred, and not many of them seem to hinge upon a great new empirical analysis of voter fraud being written by me.

So having written much on the subject, this is my coda to the past month’s thinking, at least for the time being. Like the Dylan poem to which the title is an homage, it’s not that the issue is suddenly dead, it’s just a way of collecting one’s thoughts and drawing a line under a chapter that seems to be coming to a close. I will probably have more to say on the subject, like every addict, but the time for being a single issue author is passed. Please bear with me even if you feel heartily sick of the subject. I have spent an extraordinary amount of time thinking about these issues over the past month, and I feel confident I may yet be able to tell you something new, the things that at least I didn’t know before I started out. Without further ado, they are as follows.

The average American believes three things about voter fraud in his country.

First, he believes that there is very little of it, perhaps almost zero, and certainly not enough to swing an election.

Second, he believes that if there were a reasonable amount of it in general, he would have heard about it, from experts on the subject.

Third, he feels that if any single election had been fraudulent, said experts would be able to identify such fraud and bring it to light before it was able to decide the election outcome.

I am not going to have much to say about the first point, at least not directly. I suspect that by this juncture, the number of people who haven’t made up their mind about this is very small. My firm belief is that one’s priors on this should be quite wide, but that’s another subject.

Rather, I want to convince you that the second point, and especially the third point, are wrong.

While I don’t want to inflate my credentials here, I am one of those fortunate people (or unfortunate, depending on perspective) whose skills and training puts them in a good position to actually be able to empirically study the question of voter fraud. There are few academic papers on the subject that I would not back myself to be able to read and understand.

I have spent almost the entire past month digging into various ways of trying to find voter fraud. Much of that work has been out of the public eye, and not all of it was ever released officially to anyone. This is how data digging works – you do a lot of analysis for everything you actually write, in the “measure twice, cut once” manner.

And I can tell you, as someone who’s hunted very hard for it – voter fraud is extremely difficult to prove using only public data, whether it actually happens or not.

To which you might immediately think – that’s because there isn’t much voter fraud!

On the contrary. It is not at all difficult to find extremely alarming and weird anomalies in election data.

A good working definition of fraud is “wrong data entered for malicious reasons”. The big challenge is that a good working definition of data errors is “wrong data entered for innocent reasons”.

The extremely hard part is thus not finding anomalous and suspicious patterns in the data, but proving with certainty that these arise due to malicious intent. Moreover, one has to rule out every possible innocent reason these errors could arise, where the functional form of errors is allowed to be incredibly vague. Further still, the counties and election officials are given almost every single benefit of the doubt. Moldbug is right on this point. The sovereign is he who determines the null hypothesis.

One can very easily find loads of extremely suspicious things in the data.

One can find 169 updates in the New York Times county-level election update data where the vote count in one category (in-person or absentee) actually decreased in an update. Here is one of the most suspicious, in Montgomery County, PA which still hasn’t been well-explained. You have not even heard of the remaining 168. Here’s the count by state:


    state |      Freq.     Percent        Cum.
------------+-----------------------------------
         AL |          1        0.59        0.59
         AR |         12        7.10        7.69
         AZ |          5        2.96       10.65
         FL |          3        1.78       12.43
         GA |         24       14.20       26.63
         IA |         20       11.83       38.46
         ID |          1        0.59       39.05
         IN |          1        0.59       39.64
         KS |          2        1.18       40.83
         MA |          1        0.59       41.42
         MI |         21       12.43       53.85
         MS |          1        0.59       54.44
         NH |          1        0.59       55.03
         NJ |          4        2.37       57.40
         NM |          1        0.59       57.99
         NY |          3        1.78       59.76
         PA |          9        5.33       65.09
         SC |         30       17.75       82.84
         TX |         11        6.51       89.35
         UT |          1        0.59       89.94
         VA |         15        8.88       98.82
         WI |          1        0.59       99.41
         WV |          1        0.59      100.00
------------+-----------------------------------

Several of the disputed and contentious states are heavily represented – Georgia, Michigan, Pennsylvania. But so are places you haven’t heard of. Arkansas. Virginia. Iowa. South Carolina.

(By the by, through my various digging, Virginia is my bet for “state with the most election fraud in 2020 that you never read about”, and not just because of the metric above)

Look at how much work went into the analysis of Montgomery PA, which covered one of these data points, trying to rule out every possible innocent explanation, and showing additional evidence that points to fraud. Do you think anyone is digging that much into the remaining 168? The NYT data can be downloaded in a bunch of places, and it's not hard to find these updates. I've looked at them, about half of them are quite small, less than 100 votes. Some of the rest look like a single set of ballots being reclassified from one category to another. But even after taking out all of these, there's a large number of these where frankly I have no idea what's going on, and I doubt you would either.

One can find vote updates that look like colossal outliers in terms of the fairly intuitive rule that updates can be either large, or unrepresentative, but not generally both. Here’s a long analysis of this. The most suspicious, in Wisconsin, Michigan and Georgia (surely a coincidence with the states identified on the metric above!), also came in the middle of the night, and were large enough to swing the election. The defenders argue that this is all just normal absentee votes. At least for Milwaukee, one can also find corroborating evidence in suspicious patterns in down-ballot races too, that at least don’t fit simple stories about mail ballots.

But suppose you don’t believe the New York Times data. That could all just be errors! Indeed. Couldn’t it all.

One can find 58 Pennsylvania registered voters born in the year 1800, 11 born between 1801 and 1899, and 25 born in 1900. Admittedly, these particular cases are more likely just errors - if this is voter fraud, it’s the stupidest form ever, since it’s going to stick out like a sore thumb. But it proves beyond any doubt that errors in this data do not get checked or corrected anywhere. And indeed, these implausible years of birth are in fact the mere tip of the iceberg of suspicious patterns in birthdays, which follow much more notable patterns indicating fraud involving round numbered days of the month and months of the year, plus month distributions that are too smooth. These patterns consistent with fraud are related to counties voting for Biden, including at record levels.

Or suppose you don’t believe statistics at all. You insist on hard evidence! In Wayne County, MI, you can find totally normal scenes from election night, like them boarding up the windows in the vote counting center to stop observers even seeing in. In Fulton County, GA, you had the insane spectacle that on election night, election officials sent all the observers home, telling them that counting was over for the night. In the press, dubious accounts were circulated implying that a burst pipe was the cause, although it turns out that may have been from that morning, or may not have happened at all. In any case, an hour later, they started counting again, with no observers in the room, using ballots in suitcases under a desk that had been delivered at 8:30am that day. Oh, and all this was caught on video. As part of this, you can also watch the officials scan the same set of ballots multiple times.  As has been noted before – if this were happening in a third world country, the State Department would declare it presumptively fraudulent. This isn't an exhaustive list. This is the ones I managed to remember and write down, while working furiously on other things over the whole period, and where the main allegations were actually caught on video. If you go through everything alleged in affidavits in lawsuit, many are much more shocking, though also harder to verify.

My point is not that you should believe this absolutely nails down fraud, let along how widespread you should infer the fraud to be based on these incidents. My point is to emphasise how difficult the task is, even if there were actually fraud. Fraud would look exactly like this. People switching votes back and forth to swing a total, or deleting inconvenient votes from the count. Bringing fake and colossally unrepresentative ballot dumps in during the middle of the night. Registering tons of fake voters to flood in mail ballots. Counting happening in secret after observers are sent home under false pretenses. Reports coming in from whistleblowers in affidavits.

But how sure are you that these aren’t just data errors in very noisy data? That someone incorrectly entered a vote total in a database, and later corrected it? That patterns in absentee ballots, while highly weird, represent odd preferences of mail-in voters? That the ballots in Georgia were all scanned regularly, and that the machine will never count ballots twice if they’re scanned twice, and that there’s not some innocent mixup as to why everyone was sent home? That the witnesses in the lawsuits were confused about what they saw?

If every benefit of the doubt is given to the other side, what's the chances you can ever overcome them all?

Suppose, like a number of readers, you are in the category of someone who still isn’t convinced. There’s some weird stuff going on, sure, but it doesn’t rise to the level of “fraud may have decided the election result”.

Three good questions to ask are the following.

1.      What kind of voter fraud do you have in mind?

2.    What evidence would actually convince you that there might have been this kind of voter fraud?

3.     What data is actually available, and based on this, how likely is it that this evidence might ever conceivably be discovered?

The first question, as it turns out, is actually the most important. Because fraud comes in many different types, and the likelihood of catching them varies enormously.

The most egregious type is to make up election returns out of whole cloth. In this version, the vote totals are plucked from someone’s head, and don’t correspond to any actual ballots or button presses in the real world.

This type is actually the most likely to get caught. Totally fake numbers leave lots of traces that can be studied by things like digit analysis via Benford’s Law. Only the most basket case third world countries do this. I think one can say with high certainty that, at the conservative end, this does not occur very often in US elections, and I would wager strongly in America does not occur at all.

The next category of obvious fraud is when some dictator reports winning 99% of the vote. Like Theodore Dalrymple observed about propaganda in communist countries, this kind of election is not actually meant to convince anyone, but rather to humiliate them, to insist on obvious lies and dare them to say differently.

But even here, most of the argument about fraud is already at the level of a smell test. Suppose you had to prove statistically that it was impossible that these election results in Cuba or Syria were genuine. How exactly would you do it? I suspect you’ll find it’s a lot harder than you might think. Bear in mind, in 2020 the “Norristown 2-2” precinct in Montgomery County had reported mail-in votes up to November 10^th where Biden had won 98.7% of the two-party vote, across 150 votes. Please tell me how you plan to show that this number is genuine, yet Assad’s 88.7% of the vote is not. Not by digging up the raw ballots (though even here, if Assad can produce his fake ballots, you may still be out of luck). From your computer, which is what nearly all of us have had to do.

Or put it differently. Suppose that Assad in Syria decided to rig the elections, but instead of generating insane levels of support, he decided to replace all the genuine ballots with fake ones that showed him getting support levels between 60% and 71%, with turnout at 70% of the electorate. He has total control of the vote counting process.

You know this is bullshit. But that’s not the question. How would you go about proving it?

Almost anything below the first two cases – making up numbers whole, or 90% vote shares – is actually extremely difficult to prove, even if it’s occurring. I mean, he kicked out the observers, which is pretty bad. But so did Fulton County, GA, and kept on counting.

Let’s take some scenarios more likely to actually occur in the US.

You are an election official who is not being closely monitored. There is a list of eligible voters in your precinct. Suppose it is a normal year, with relatively few absentee/mail ballots. You have hidden a genuine ballot box of pre-filled in ballots, with genuine ballot papers, that you know contains 1000 votes total, of which 97% are for your candidate. All registered voters in your precinct are on a list, and get crossed off as they come in. You wait until polls close, and you can see the list of everyone who hasn’t voted. You cross 1000 names off the list, and bring in your pre-filled in box of ballots, mingling it with the main ones.

How do you propose to identify that in the data? If you had periodic updates, you can maybe find batches that look really anomalous, sure. That’s what this analysis did! And this one! The scenario wasn’t exactly the same, but it was similar. Did you find it sufficient proof?

In this particular variant, every voter is a genuine, registered voter. Every voter votes exactly once. Every ballot paper is a genuine ballot. Every vote corresponds to a ballot paper that can be counted and re-counted. No ballot gives any indication it was not cast by a genuine voter.

Let us agree on this much. Unless you catch the person in the act, this will be flat out impossible to detect just by looking at final election results. I actually don’t know how you’d prove it with any other data either. Don’t believe me? Propose a test. I’m all ears. I have heard stories from campaign operatives that this actually happens, I didn’t think up this idea myself.

But I’m not here to convince you to believe those stories. Suppose one accepts, as indeed you’re told, that there is no evidence of this kind of voter fraud. It’s true. There broadly isn’t. Now, ask yourself, what’s the signal to noise ratio of this kind of lack of evidence? If there were no voter fraud of this kind, we’d expect to find no evidence. If there were voter fraud of this type, but we lacked any realistic ability to catch it, we would also expect to find no evidence. So the lack of evidence tells us almost precisely zero one way or the other.

Especially germane to the current election, there are many types of fraud involving mail ballots. It is much easier for a person to send in mail ballots for someone else, than to turn up at a polling station and claim to be five different people of different ages. This mail then gets handled by postal workers, with a crazily weak chain of custody, from the same people that lead to your Amazon packages being stolen with reasonable frequency. This leads to a number of stories you can find for the search string “ballots found in the trash”. Meanwhile, signature verification on potentially fraudulent ballots got greatly weakened in 2020 in many of the key states, just as the number of mail ballots increased massively, as described in the Texas lawsuit. A discussion I had with a campaign operative (which I haven’t been able to verify, so I’m just reporting the claim, not asserting it) said that in Arizona, once the signature was verified on the envelope, the envelope got thrown away, making it impossible for anyone to verify after the fact what it said.

Don’t think about “was there fraud”. I’m not interested in the question of haggling over the specific details here of what precisely happened in each place, and you can make up your own mind on that. Rather, I care much more about the question of “if there were fraud, would it have been caught?”

And here’s the crazy part, if you’re sure that election fraud in general would have been caught. 2020 is actually the single best year in history to catch election fraud. Because unlike in the past, we have periodic snapshots taken by internet amateurs of the update of counts scraped from the NYT website, rather than just the final tally. We can also download a ton of stuff from the internet.

For most past elections, we can get final vote counts at the precinct level if we’re lucky, or the county level more likely. Votes by candidate. That’s it. You want to go back and find out if the 2016 election was fraudulent, that’s basically the overwhelming extent of the data you’ve got to work with. Oh, and four years later, that data is still riddled with errors, because it has to get kludged together from 3300 odd counties, with vastly different reporting systems.

Tell me what kinds of fraud you are confident you can identify from those numbers. Not just you, but “the experts” who study this stuff.

I understand enough about this data to know that while there are clearly some tricks one can do if one is clever, there are large and fundamental limitations to how much fraud you can ever hope to identify from this kind of data.

And that’s it. That’s basically what you’ve got. Or you can hope that someone does something dumb and gets caught in the act. But is that the state of the art strategy? How many would slip through the net for each one that gets caught, like in Fulton County GA? Not that anything is going to happen to the people in Fulton County, which also is quite revealing. In a year, I predict fairly confidently it will be one more rumored and then forgotten local story, and the videos will eventually disappear. Along those lines, if more evidence does come to light, you certainly can't publish them on Youtube, no matter what you find from here on out, as they've said that their policy is to delete all such videos. Big tech has spoken! The matter is closed. There is no evidence of voter fraud, and also, you had a total of four weeks to come up with any of it, before the verdict is entered for all time. 

I think there is a strong case to be made that, for many types of fraud, catching them is extremely difficult.

And so almost the entire question comes down to one of priors. We have no reasonable hope of actually identifying it from the data. Most people are sure it is extremely rare. I am not. The evidence demanded to budge their priors is enormous. That evidence will never be found, whether there is fraud, or whether there is no fraud.

And so finally, we get to the last question. Even if fraud could be caught, eventually, somehow, with enough time and analysis and manpower, would it be caught in time?

Reader, prepare yourself, because the next sentence may be shocking to you. 

The Trump campaign, in many respects, was not very well organized.

But I have come to have enormous sympathy for the sheer scale and difficulty of the task in front of them, even if they were well organized.

A campaign is not a permanent organization, but a bunch of operatives coming together for a particular period and task. I suspect, and it accords with the few anecdotal discussions I’ve had with people who’ve worked on them, that most presidential campaigns are a shitshow at the best of times, but some candidate has to win, so we assume after the fact that their campaign internally must have been great, when it probably wasn’t.

So what happens after the dubious election returns start coming in in the dead of night on Wednesday after the election?

You have a small staff. Most of it is lawyers and political operatives, not statisticians and data scientists. Everyone is absolutely frazzled. You are trying to put out a thousand fires. You are trying to coordinate dozens of people and teams. Everyone is demoralised and worrying about their employment future, since most were working on an implicit promise of employment in the administration if they won, which is now looking unlikely. You are trying to keep track of ten thousand different leads and reports coming in from all over the country. Half of them will be straight up wrong, either bogus third hand accounts, or claims from someone genuinely concerned but insufficiently skeptical and not probing into alternatives. Avoiding this is actually quite hard, to be honest. When one really wants to find fraud (or indeed any empirical result) it is psychologically difficult to then switch gears to convincing oneself of all the ways the hypothesis could be false, and then trying to find evidence of that.

Of the other half of the leads, perhaps 80% will be plausible, but either inconclusive, or admitting of multiple interpretations. Of genuine ones, they may be contained in a two hour video that’s not very well explained, and you don’t have time to watch the whole thing. They may be written down in some long technical piece that you don’t have the training to follow entirely, or which doesn't explain clearly what its doing. Even if you think it seems legit and you understand what it’s doing, you have to take a gamble that it’s not a coding error or bad data cleaning or some other screwup. They may be some anonymous whistleblower that you have to spend resources to try to find out if they’re fake or well-intentioned, if they’re right or wrong, if their claims are provable or unprovable.

Now, you have to figure out, can I get this in an affidavit? Is this author willing to go public? Will this convince a judge? Can I get an expert witness to testify, assuming a judge is even interested in hearing evidence, which often they're not? As far as I can tell, the statistical analyses I liked the most were all written pseudonymously. It is not a surprise that they didn’t find their way into the major lawsuits. The Williams professor who did a god damn confidence interval for the Matt Braynard analysis got dragged in the papers by his utterly contemptible colleagues. The chances that they would do this if he’d computed a confidence interval for literally any other survey in history are zero. Are you surprised that more people aren't signing up to put their professional reputations on the line for what's almost certainly a Hail Mary, and which won't even benefit them personally?

But even if you can find an expert willing to go public, how long do they have to generate such a report? You need to scramble to scrape and download the data straight away from lots of sources, and start analyzing it. Find the weird anomalies, dig into them, try to figure out which ones might be errors. Think of different ways to test them. Think of different data you might get that would corroborate this. Manually do more gathering, and cleaning, and merging. Think of which things might rise above the metric of “dubious” to “very hard to explain with anything other than fraud”. Run the results. Double check the results. Triple check the results, because if you start making false claims, you’ve actively hurt the cause (and you’ll feel like a total fool and fraud). Start writing the results up. Refine the writeup to make it less jargon-y. Try to balance the tension between “easily accessible to public readers”, “understandable to smart but busy and innumerate lawyers” and “detailed enough to withstand public scrutiny by hostile experts or readers”. Also, there’s dozens of different investigative angles you can take. Each one takes a few days or a week to look into, let alone write up, let alone actually get published. You’re pulling 80 hour weeks, but even so, there’s not many weeks you have. How many such analyses can you write? Meanwhile, you're working against the clock without knowing quite what the deadline is for "too late to matter", but you know it can't be very long. 

Now, consider the media environment you are operating in, if you are the Trump team. The same media that in 2016 was willing to report uncritically every breathless allegation of Russian interference, that was willing to circulate as evidence a single anonymous dossier of allegations about Trump and treat it as a basis for campaign wiretaps and impeachment, now is loudly insisting that a) the race is over, and b) “experts assure us there is no voter fraud”. Meanwhile, on the rare occasions they do report on the matter, they only focus on the most ludicrous witness statements and the most easily debunked claims. These are sure to circulate widely, so that by the time previously open-minded readers get around to seeing actual good evidence, they’re largely exhausted and cynical, and often won't even read it.

Partly for the fun of trolling, and partly just as an experiment, I started asking the Montgomery County twitter account, and its commissioner in charge of the election, Ken Lawrence Jr, why it was that their county looked so crooked on multiple dimensions, both in terms of having the most suspicious vote update in America, and the third most suspicious set of voter birthdays among Pennsylvania counties. They never answered. I tried poking newspaper reporters from multiple papers. Most didn’t bite. Ross Douthat, to his credit, linked to the Montgomery piece, admittedly in a one-liner in his NYT article on how weird it is that these kooks believe in conspiracy theories. I asked him in multiple places – have you, or any other journalist, actually just asked these guys in Montgomery County what their explanation is for it? Even just to get a response on the record? No dice. Nobody was interested. Hell, I couldn't even get a response out of the Pennsylvania Republican Party twitter account!

I didn’t really expect anything different, so my demeanour was mostly one of trollish entertainment, rather than disappointment. But at the end, even I found myself more cynical than I expected.

If you are Republican, and alleging voter fraud by the Democrats, the media will be actively opposed to you at every single step. How could they not be? These are the same people that have been writing about how Trump was Hitler for the past four years. Does any reasonable person expect them to voluntarily start digging into stories that might make Trump actually get another four years, when they can just turn a blind eye and end it all? Besides, if they start being called a voter fraud truther, it will be disaster for their career.

There is one more piece of the puzzle worth noting.

How many people do you think there actually were working on this, total, over the past month? At least on the data side?

The average person probably assumes that there must have been thousands of highly paid professionals working on it.

I estimate that the number is perhaps 40 at the high end, and maybe as low as 20. (If the sides had been flipped, it would definitely be more, perhaps a lot more, but I don't know). I’d estimate that nearly all of them were volunteers juggling other full time jobs. I personally knew about ten of them working on analysis, and there were a number of other excellent people helping enormously with data gathering and processing. 

That's it. That's the full extent of resources around the world that have gone into investigating from a statistical point of view whether the 2020 election may have been decided by fraud. With the time and resources available, it's remarkable we found as much as we did.

At least personally, I never really expected to change the outcome. The task was basically impossible, but damn it, we worked until the end anyway.

This is all one can ever do. 

To live not by lies, as Mr Solzhenitsyn put it.

And to fill the unforgiving minute with sixty seconds worth of distance run, as Mr Kipling put it.

To the ten, and to all those I know who helped  in the effort – friends, it was a true honour and pleasure to work with you.