Quotulatiousness

October 3, 2023

“Just play safe” is difficult when the definition of “safe” is uncertain

Filed under: Food, Health — Tags: , , , — Nicholas @ 04:00

David Friedman on the difficulty of “playing safe”:

It’s a no brainer. Just play safe

It is a common argument in many different contexts. In its strongest form, the claim is that the choice being argued for is unambiguously right, eliminates the possibility of a bad outcome at no cost. More plausibly, the claim is that one can trade the risk of something very bad for a certainty of something only a little bad. By agreeing to pay the insurance company a hundred dollars a year now you can make sure that if your house burns down you will have the money to replace it.

Doing that is sometimes is possible but, in an uncertain world, often not; you do not, cannot, know all the consequences of what you are doing. You may be exchanging the known risk of one bad outcome for the unknown risk of another.

Some examples:

Erythritol

Erythritol was the best of the sugar alcohols, substitutes tolerably well for sugar in cooking, has almost zero calories or glycemic load. For anyone worried about diabetes or obesity, using it instead of sugar is an obvious win. Diabetes and obesity are dangerous, sometimes life threatening.

Just play safe.

I did. Until an research came out offering evidence that it was not the best sugar alcohol but the worst:

    People with the highest erythritol levels (top 25%) were about twice as likely to have cardiovascular events over three years of follow-up as those with the lowest (bottom 25%). (Erythritol and cardiovascular events, NIH)

A single article might turn out to be wrong, of course; to be confident that erythritol is dangerous requires more research. But a single article was enough to tell me that using erythritol was not playing safe. I threw out the erythritol I had, then discovered that all the brands of “keto ice cream” — I was on a low glycemic diet and foods low in carbohydrates are also low in glycemic load — used erythritol as their sugar substitute.

Frozen bananas, put through a food processor or super blender along with a couple of ice cubes and some milk, cream, or yogurt, make a pretty good ice cream substitute.1 Or eat ice cream and keep down your weight or glycemic load by eating less of something else.

It’s safer.

Lethal Caution: The Butter/Margarine Story

For quite a long time the standard nutritional advice was to replace butter with margarine, eliminating the saturated fat that caused high cholesterol and hence heart attacks. It turned out to be very bad advice. Saturated fats may be bad for you — the jury is still out on that, with one recent survey of the evidence concluding that they have no effect on overall mortality — but transfats are much worse. The margarine we were told to switch to was largely transfats.2

“Consumption of trans unsaturated fatty acids, however, was associated with a 34% increase in all cause mortality”3

If that figure is correct, the nutritional advice we were given for decades killed several million people.

    1. Bananas get sweeter as they get riper so for either a keto or low glycemic diet, freeze them before they get too ripe.

    2. Some more recent margarines contain neither saturated fats nor transfats.

    3. “Intake of saturated and trans unsaturated fatty acids and risk of all cause mortality, cardiovascular disease, and type 2 diabetes: systematic review and meta-analysis of observational studies”, BMJ 2015; 351 doi: https://doi.org/10.1136/bmj.h3978 (Published 12 August 2015)

February 15, 2023

Refuting The End of History and the Last Man

Filed under: Books, Economics, History — Tags: , , , , — Nicholas @ 03:00

Freddie deBoer responds to a recent commentary defending the thesis of Francis Fukuyama’s The End of History and the Last Man:

… Ned Resnikoff critiques a recent podcast by Hobbes and defends Francis Fukuyama’s concept of “the end of history”. In another case of strange bedfellows, the liberal Resnikoff echoes conservative Richard Hanania in his defense of Fukuyama — echoes not merely in the fact that he defends Fukuyama too, but in many of the specific terms and arguments of Hanania’s defense. And both make the same essential mistake, failing to understand the merciless advance of history and how it ceaselessly grinds up humanity’s feeble attempts at macrohistoric understanding. And, yes, to answer Resnikoff’s complaint, I’ve read the book, though it’s been a long time.

The big problem with The End of History and the Last Man is that history is long, and changes to the human condition are so extreme that the terms we come up with to define that condition are inevitably too contextual and limited to survive the passage of time. We’re forever foolishly deciding that our current condition is the way things will always be. For 300,000 years human beings existed as hunter-gatherers, a vastly longer period of time than we’ve had agriculture and civilization. Indeed, if aliens were to take stock of the basic truth of the human condition, they would likely define us as much by that hunter-gatherer past as our technological present; after all, that was our reality for far longer. Either way – those hunter-gatherers would have assumed that their system wasn’t going to change, couldn’t comprehend it changing, didn’t see it as a system at all, and for 3000 centuries, they would have been right. But things changed.

And for thousands of years, people living at the height of human civilization thought that there was no such thing as an economy without slavery; it’s not just that they had a moral defense of slavery, it’s that they literally could not conceive of the daily functioning of society without slavery. But things changed. For most humans for most of modern history, the idea of dynastic rule and hereditary aristocracy was so intrinsic and universal that few could imagine an alternative. But things changed. And for hundreds of years, people living under feudalism could not conceive of an economy that was not fundamentally based on the division between lord and serf, and in fact typically talked about that arrangement as being literally ordained by God. But things changed. For most of human history, almost no one questioned the inherent and unalterable second-class status of women. Civilization is maybe 12,000 years old; while there’s proto-feminist ideas to be found throughout history, the first wave of organized feminism is generally defined as only a couple hundred years old. It took so long because most saw the subordination of women as a reflection of inherent biological reality. But women lead countries now. You see, things change.

And what Fukuyama and Resnikoff and Hanania etc are telling you is that they’re so wise that they know that “but then things changed” can never happen again. Not at the level of the abstract social system. They have pierced the veil and see a real permanence where humans of the past only ever saw a false one. I find this … unlikely. Resnikoff writes “Maybe you think post-liberalism is coming; it just has yet to be born. I guess that’s possible.” Possible? The entire sweep of human experience tells us that change isn’t just possible, it’s inevitable; not just change at the level of details, but changes to the basic fabric of the system.

The fact of the matter is that, at some point in the future, human life will be so different from what it’s like now, terms like liberal democracy will have no meaning. In 200 years, human beings might be fitted with cybernetic implants in utero by robots and jacked into a virtual reality that we live in permanently, while artificial intelligence takes care of managing the material world. In that virtual reality we experience only a variety of pleasures that are produced through direct stimulation of the nervous system. There is no interaction with other human beings as traditionally conceived. What sense would the term “liberal democracy” even make under those conditions? There are scientifically-plausible futures that completely undermine our basic sense of what it means to operate as human beings. Is one of those worlds going to emerge? I don’t know! But then, Fukuyama doesn’t know either, and yet one of us is making claims of immense certainty about the future of humanity. And for the record, after the future that we can’t imagine comes an even more distant future we can’t conceive of.

People tend to say, but the future you describe is so fanciful, so far off. To which I say, first, human technological change over the last two hundred years dwarfs that of the previous two thousand, so maybe it’s not so far off, and second, this is what you invite when you discuss the teleological endpoint of human progress! You started the conversation! If you define your project as concerning the final evolution of human social systems, you necessarily include the far future and its immense possibilities. Resnikoff says, “the label ‘post-liberalism’ is something of an intellectual IOU” and offers similar complaints that no one’s yet defined what a post-liberal order would look like. But from the standpoint of history, this is a strange criticism. An 11th-century Andalusian shepherd had no conception of liberal democracy, and yet here we are in the 21st century, talking about liberal democracy as “the object of history”. How could his limited understanding of the future constrain the enormous breadth of human possibility? How could ours? To buy “the end of history”, you have to believe that we are now at a place where we can accurately predict the future where millennia of human thinkers could not. And it’s hard to see that as anything other than a kind of chauvinism, arrogance.

Fukuyama and “the end of history” are contingent products of a moment, blips in history, just like me. That’s all any of us gets to be, blips. The challenge is to have humility enough to recognize ourselves as blips. The alternative is acts of historical chauvinism like The End of History.

January 15, 2023

QotD: The uncertain “certainties” of war in space

Filed under: Books, Military, Quotations, Space — Tags: , , , , — Nicholas @ 01:00

The comments for that post were very active with suggestions for technological or strategic situations which would or would not make orbit-to-land operations (read: planetary invasions) unnecessary or obsolete, which were all quite interesting.

What I found most striking though was a relative confidence in how space battles would be waged in general, which I’ve seen both a little bit here in the comments and frequently more broadly in the hard-sci-fi community. The assumptions run very roughly that, without some form of magic-tech (like shields), space battles would be fought at extreme range, with devastating hyper-accurate weapons against which there could be no real defense, leading to relatively “thin-skinned” spacecraft. Evasion is typically dismissed as a possibility and with it smaller craft (like fighters) with potentially more favorable thrust-to-mass ratios. It’s actually handy for encapsulating this view of space combat that The Expanse essentially reproduces this model.

And, to be clear, I am not suggesting that this vision of future combat is wrong in any particular way. It may be right! But I find the relative confidence with which this model is often offered as more than a little bit misleading. The problem isn’t the model; it’s the false certainty with which it gets presented.

[…]

Coming back around to spaceships: if multiple national navies stocked with dozens of experts with decades of experience and training aren’t fully confident they know what a naval war in 2035 will look like, I find myself with sincere doubts that science fiction writers who are at best amateur engineers and military theorists have a good sense of what warfare in 2350 (much less the Grim Darkness of the Future Where There is Only War) will look like. This isn’t to trash on any given science fiction property mind you. At best, what someone right now can do is essentially game out, flow-chart style, probable fighting systems based on plausible technological systems, understanding that even small changes can radically change the picture. For just one example, consider the question “at what range can one space warship resolve an accurate target solution against another with the stealth systems and electronics warfare available?” Different answers to that question, predicated on different sensor, weapons and electronics warfare capabilities produce wildly different combat systems.

(As an aside: I am sure someone is already dashing down in the comments preparing to write “there is no stealth in space“. To a degree, that is true – the kind of Star Trek-esque cloaking device of complete invisibility is impossible in space, because a ship’s waste heat has to go somewhere and that is going to make the craft detectable. But detectable and detected are not the same: the sky is big, there are lots of sources of electromagnetic radiation in it. There are as yet undiscovered large asteroids in the solar-system; the idea of a ship designed to radiate waste heat away from enemies and pretend to be one more undocumented large rock (or escape notice entirely, since an enemy may not be able to track everything in the sky) long enough to escape detection or close to ideal range doesn’t seem outlandish to me. Likewise, once detected, the idea of a ship using something like chaff to introduce just enough noise into an opponent’s targeting system so that they can’t determine velocity and heading with enough precision to put a hit on target at 100,000 miles away doesn’t seem insane either. Or none of that might work, leading to extreme-range exchanges. Again, the question is all about the interaction of detection, targeting and counter-measure technology, which we can’t really predict at all.)

And that uncertainty attaches to almost every sort of technological interaction. Sensors and targeting against electronics warfare and stealth, but also missiles and projectiles against point-defense and CIWS, or any kind of weapon against armor (there is often an assumption, for instance, that armor is entirely useless against nuclear strikes, which is not the case) and on and on. Layered on top of that is what future technologies will even prove practical – if heat dissipation problems for lasers or capacitor limitations on railguns be solved problems, for instance. If we can’t quite be sure how known technologies will interact in an environment (our own planet’s seas) that we are intimately familiar with, we should be careful expressing confidence about how future technology will work in space. Consequently, while a science fiction setting can certainly generate a plausible model of future space combat, I think the certainty with which those models and their assumptions are sometimes presented is misplaced.

Bret Devereaux, “Fireside Friday: August 14th, 2020”, A Collection of Unmitigated Pedantry, 2020-08-14.

January 14, 2023

QotD: What would it be like to always believe you’re right?

Filed under: Health, Politics, Quotations, USA — Tags: , , , , — Nicholas @ 01:00

I think I’m starting to see it now. The weird disconnect between [progressives’] personal behavior and their collective behavior has always baffled me. We all had great fun with that journalist who called Barack Obama “sort of God”, but it was so funny, in part, because all Leftists present themselves as “sort of God” — I have never been so certain in my judgment, so secure in my righteousness, about anything as the typical Leftist is about everything. I’m pretty comfortable saying “I don’t know” when I really don’t know …

This is not because I’m such a humble guy. If anything, it’s the reverse — it’s because “being right” is such an important part of my self-concept that if I’m going to put my reputation on the line, I need to really BE right. And as we all know, 99% of being right comes from acknowledging all the times you were wrong. Admitting I don’t know when I really don’t know is painless. Admitting I was wrong when I thought I was right stings, but it doesn’t hurt nearly as bad as my own inner self-knowledge of being wrong. That really stings, and so I’d rather take the pain of admitting I was wrong any number of times to the much greater pain of actually being wrong on something fundamental.

To the Leftist, none of that computes. They’re always right. About everything. They literally can’t be wrong. And if what they were right about yesterday is 180 degrees from what they’re right about today, well, that’s just Reality reconfiguring itself. The Earth is stable; it’s the sun and stars that are moving around it. And if that leaves you with deferents and epicycles and retrograde motion and all that, well, so be it. See above, re: the physical impossibility of them being wrong …

… at least as individuals. But get them in a group, and all of a sudden a whole roomful of sort-of-Gods turns into a persecuted minority, even when everyone in the group agrees with everyone else. Even when the group, collectively, controls everything. If you think it’s bad in politics, y’all, go to a faculty meeting at the nearest college. To hear them tell it, the wolf is always at the door. Donald Trump and his jackbooted stormtroopers really are lurking behind every bush, waiting to jump out and pour bleach on them while yelling “This is MAGA country, bitch!” They’re afraid of their own students, because they just know those kids are out there thinking Unapproved Thoughts, and somehow those Unapproved Thoughts can physically harm them … even though they control the grade book, and can — and of course do — punish Unapproved Thought with extreme prejudice.

[…]

If I’m reading Zorost correctly, the answer might be as simple as: They can’t abstract, so they’re literally physically incapable of Reality-testing their heuristics. The Experts have given them the TORAH (that’s The One Right Answer, H8rz!), and since they can only evaluate individual cases as they come into view — they can only micro-focus on each parked car in the lot, to return to the earlier metaphor — they can’t draw the really-obvious-to-non-autists conclusion that they are not a persecuted minority, but in fact control everything.

Severian, “Why Are They Always Underdogs?”, Founding Questions, 2022-09-07.

August 2, 2022

“Is this ok? And this?” – The pitfalls of the “affirmative consent” model

Filed under: Health, USA — Tags: , , , , , — Nicholas @ 03:00

Blake Smith recounts how the affirmative consent model — so beloved of the always-online contingent of GenZ — attempts to codify and regulate the sexual dance:

“Is it okay if I touch you?” Half an hour after I’d started chatting with this guy on Grindr he was in my bedroom, beginning a series of questions meant to lead from touching to any number of other acts. I suppose he expected, or hoped for, an enthusiastic “yes!”, signalling what the orientation-day workshops on college campuses call “affirmative consent”. But it didn’t occur to me to answer with the eagerness of a child agreeing to dessert. Instead I tried, with a soft laugh and what I hoped was a seductive “ok”, to seem as if I needed my reticence knocked out of me.

What I got were more questions. “Is this ok? And this?” Soon I began to wonder: “Is it ok?” I’d thought it was when I’d told him to come over. But it’s one thing to want someone in an unspecified way, quite another to start itemising what it is you actually want from them. With my own desire in doubt, I started to feel the very thing this line of interrogation had been meant to avoid. Instead of making consent as simple as saying “yes”, these questions had plunged me into a deeply unsexy uncertainty.

In reading me his sexual questionnaire, my partner was showing me that he’d internalised the ethic of “consent”, which over the past decade has emerged as the dominant liberal framework for distinguishing between moral and immoral sex. At the core of this ethic is explicitness. The purpose is to make sex — and all of its constituent acts — something one can and should directly say “yes” or “no” to, a contract negotiated between individuals.

This model of consent has been roundly criticised for deflating erotic tension, leading to sometimes-cringeworthy campaigns to insist that “consent is sexy” (“If asking for consent ruins sex you’re what? A rapist who sucks at talking dirty?’, reads one viral Tumblr post). But the deeper problem with this model is that it produces, or rather reveals, exactly what it is meant to avoid, which is the ineradicable ambivalence at the heart of sex. In other words, while we can and should maintain a distinction between consensual and non-consensual acts, there is an important sense in which we are never able to say “yes” to sex. Indeed, enjoying sex seems to involve a certain suspension of our usual relationship to ourselves, one in which we are overtaken not so much by the other person as by sex itself.

The original sexual relation — prior to the one we have with any particular person — is our relation to sex itself. This relation is not consensual but something we experience as a given. We are born, we mature, and at some point in this process we discover that we our prisoners of our sexuality. Sex, after all, makes us uncomfortable. It can conjure feelings of disgust and embarrassment. It can be a distraction, an excruciating deprivation, even a source of catastrophic humiliation. We notice how attractive the “wrong” person is — a boyfriend’s brother, an ex, a colleague, a student — and feel violated by our own urges. Sex with a partner works, when and to the extent that it does, in part by letting us suspend our inhibitions and want things without having to admit to ourselves that we want them.

November 26, 2021

The modern carrier debate

Filed under: China, History, Military, Technology, USA, Weapons — Tags: , , , , — Nicholas @ 05:00

I recently started reading A Collection of Unmitigated Pedantry, a fascinating historical blog run by Dr. Bret Devereaux. You can expect to see plenty of QotD entries from his blog in future months, as I’ve been delighted to find that he not only has deep knowledge of several historical areas I find interesting, but that he also writes well and clearly. This post from last year is a bit outside his normal bailliwick, being modern and somewhat speculative rather than dealing with the ancient world, classic-era Greece, Republican and Imperial Rome, or the Middle Ages in Europe and the Mediterranean basin:

The Nimitz-class aircraft carrier USS Theodore Roosevelt (CVN 71) underway in the Persian Gulf, 3 December 2005.
U.S. Navy photo by Photographer’s Mate 2nd Class Matthew Bash via Wikimedia Commons.

Let’s talk about aircraft carriers for a moment […] There is currently a long-raging debate about the future of the aircraft carrier as a platform, particularly for the US Navy (by far the largest operator of aircraft carriers in the world), to the point that I suspect most national security publications could open companion websites exclusively for the endless whinging on aircraft carriers and their supposed obsolescence or non-obsolescence. And yet, new aircraft carriers continue to be built.

As an aside, this is one of those debates that has been going on so long and so continuously that it becomes misleading for regular people. Most writing on the topic, since the battle lines in the debate are so well-drawn, consists of all-or-nothing arguments made in the strongest terms in part because everyone assumes that everyone else has already read the other side; there’s no point in excessively caveating your War on the Rocks aircraft carrier article, because anyone who reads WotR has read twenty already and so knows all of those caveats already. Except, of course, the new reader does not and is going to read that article and assume it represents the current state of the debate and wonder why, if the evidence is so strong, the debate is not resolved. This isn’t exclusive to aircraft carriers, mind you – the various hoplite debates (date of origin, othismos, uniformity of the phalanx) have reached this point as well; a reader of any number of “heterodox” works on the topic (a position most closely associated with Hans van Wees) could well be excused for assuming they were the last word, when it still seems to me that they represent a significant but probably still minority position in the field (though perhaps quite close to parity now). This is a common phenomenon for longstanding specialist debates and thus something to be wary of when moving into a new field; when in doubt, buy a specialist a drink and ask about the “state of the debate” (not “who is right” but “who argues what”; be aware that it is generally the heterodox position in these debates that is loudest, even as the minority).

Very briefly, the argument about carriers revolves around their cost, vulnerability and utility. Carrier skeptics point out that carriers are massive, expensive platforms that are increasingly vulnerable to anti-ship missiles and that the steadily growing range of those missiles would force carriers to operate further and further from their objectives, potentially forcing them to choose between exposing themselves or being pushed out of the battlespace altogether (this, as an aside, is what is meant by A2/AD – “Anti-Access/Area-Denial” – weapons). The fear advanced is of swarms of hypersonic long-range anti-ship missiles defeating or overwhelming the point-defense capability of a carrier strike group and striking or even sinking the prize asset aircraft carrier – an asset too expensive to lose.

Carrier advocates will then point out all of the missions for which carriers are still necessary: power projection, ground action support, sea control, humanitarian operations and so on. They argue that no platform other than an aircraft carrier appears able to do these missions, that these missions remain essential and that smaller aircraft carriers appear to be substantially less effective at these missions, which limits the value of dispersing assets among a greater number of less expensive platforms. They also dispute the degree to which current or future weapon-systems endanger the carrier platform.

I am not here to resolve the carrier debate, of course. The people writing these articles know a lot more about modern naval strategy and carrier operations than I do.

Instead I bring up the carrier debate to note one facet of it […]: the carrier debate operates under conditions of fearsome technological uncertainty. This is one of those things that – as I mentioned above – can be missed by just reading a little of the debate. Almost none of the weapon systems involved here have seen extensive combat usage in a ship-to-ship or land-to-ship context. Naval thinkers are trying to puzzle out what will happen when carriers with untested stealth technology, defended by untested anti-missile defenses are engaged by untested high-speed anti-ship missiles which are guided by untested satellite systems which are under attack by untested anti-satellite systems in a conflict where even the humans in at least one of these fighting forces are also untested in combat (I should note I mean “untested” here not in the sense that these systems haven’t been through test runs, but in the sense that they haven’t ever been used in anger in this kind of near-peer conflict environment; they have all been shown to work under test conditions). Oh, and the interlinked computer systems that all of these components require will likely be under unprecedented levels of cyber-attack.

No one is actually certain how these technologies will interact under battlefield conditions. No one can be really sure if these technologies will even work as advertised under battlefield conditions; ask the designers of the M16 – works in a lab and works in the field are not always the same thing. You can see this in a lot of the bet-hedging that’s currently happening: the People’s Republic of China has famously bet big on A2/AD and prohibiting (American) carriers from operating near China, but now has also initiated an ambitious aircraft carrier building program, apparently investing in the technology they spent so much time and energy rendering – if one believes the carrier skeptics – “obsolete”. Meanwhile, the United States Navy – the largest operator of aircraft carriers in the world – is pushing development on multiple anti-ship missiles of the very sort that supposedly render the Navy’s own fleet “obsolete”, while also moving forward building the newest model of super-carrier. If either side was confident in the obsolescence (or non-obsolescence) of the aircraft carrier in the face of A2/AD weapons, they’d focus on one or the other; the bet hedging is a product of uncertainty – or perhaps more correctly a product of the calculation that uncertainty and less-than-perfect performance will create a space for both sets of weapon-systems to coexist in the battlespace as neither quite lives up to its best billing.

(I should note that for this brief summary, I am treating everyone’s development and ship procurement systems as rational and strategic. Which, to be clear, they are not – personalities, institutional culture and objectives, politics all play a huge role. But for now this is a useful simplifying assumption – for the most part, the people procuring these weapons do imagine that they are still useful.)

In many ways, the current aircraft carrier debate resembles a fast moving version of the naval developments of the late 1800s and early 1900s. Naval designers of the period were faced with fearsome unknowns – would battleships function alone or in groups? Would they be screened against fast moving torpedo boats or forced to defend themselves? How lethal might a torpedo attack be and how could it be defended against? Would they be exposed to short-range direct heavy gunfire or long-range plunging gunfire (which radically changes how you arm and armor these ships)? With technologies evolving in parallel in the absence of battlefield tests, these remained unknowns. The eventual “correct solution” emerged in 1903 with the suggestion of the all-big-gun battleship, but the first of these (HMS Dreadnought), while begun in 1904 was finished only after the Battle of Tsushima (May 27-8, 1905) had provided apparently startling clarity on the question.

January 30, 2021

“The only thing ‘dangerous’ about a gang of Reddit investors blowing up hedge funds is that some of us reading about it might die of laughter”

Filed under: Business, Economics, Government, USA — Tags: , , , , , , — Nicholas @ 03:00

Matt Taibbi says “Suck it, Wall Street!”

Meme stolen from Ace of Spades H.Q.

The press conveyed panic and moral disgust. “I didn’t realize it was this cultlike,” said short-seller Andrew Left of Citron Research, without irony denouncing the campaign against firms like his as “just a get rich quick scheme.” Massachusetts Secretary of State Bill Galvin said the Redditor campaign had “no basis in reality,” while Dr. Michael Burry, the hedge funder whose bets against subprime mortgages were lionized in The Big Short, called the amateur squeeze “unnatural, insane, and dangerous.”

The episode prompted calls to regulate Reddit and, finally, halt action on the disputed stocks. As I write this, word has come out that platforms like Robinhood and TD Ameritrade are curbing trading in GameStop and several other companies, including Nokia and AMC Entertainment holdings.

Meaning: just like 2008, trading was shut down to save the hides of erstwhile high priests of “creative destruction.” Also just like 2008, there are calls for the government to investigate the people deemed responsible for unapproved market losses.

The acting head of the SEC said the agency was “monitoring” the situation, while the former head of its office of Internet enforcement, John Stark, said, “I can’t imagine there isn’t an open investigation and probably a formal order to find out who’s on these message boards.” Georgetown finance professor James Angel lamented, “it’s going to be hard for the SEC to find blatant manipulation,” but they “owe it to look.” The Washington Post elaborated:

    To establish manipulation that runs afoul of securities laws, Angel said regulators would need to prove traders engaged in “an intentional act to push a price away from its fundamental value to seek a profit.” In market parlance, this is typically known as a pump-and-dump scheme …

Even Nancy Pelosi, when asked about “manipulation” and “what’s going on on Wall Street right now,” said “we’ll all be reviewing it,” as if it were the business of congress to worry about a bunch of day traders cashing in for once.

The only thing “dangerous” about a gang of Reddit investors blowing up hedge funds is that some of us reading about it might die of laughter. That bit about investigating this as a “pump and dump scheme” to push prices away from their “fundamental value” is particularly hilarious. What does the Washington Post think the entire stock market is, in the bailout age?

H/T to Larry Correia for the link.

January 28, 2021

GameStop in a very different kind of game

Filed under: Business, Gaming, USA — Tags: , , , , , — Nicholas @ 05:00

In the NP Platformed newsletter, Colby Cosh looks at the fascinating gyrations of GameStop’s share price in the grip of an unexpected group of players in the market:

“GameStop” by JeepersMedia is licensed under CC BY 2.0

GameStop has long been seen by institutional investors as following down the road of Blockbuster Video: it’s a bricks-and-mortar retailer whose main product is downloadable from your sofa. For that reason, it is heavily shorted by professional funds who normally eschew short-selling, which does have the risky feature of potentially infinite negative downside.

Enter Reddit, the website for special-interest user forums of all kinds. A Reddit “Wall Street bets” board uncovered evidence in regulatory filings that some hedge funds had legitimately dangerous large short positions representing bets against GameStop’s flaccid share price. A few hobby investors began to buy GameStop out of a sense of adventure and perhaps nostalgic loyalty. More importantly, they began to preach the gospel to others.

This is explicit “market manipulation,” but done in the open; it is surely as legal as any other conversation. GameStop’s price (NYSE symbol: GME) surged upward as word spread amongst day traders and other amateur investors. And as the random-looking rise in price got noticed, the whole scheme, itself rather reminiscent of a video game, went viral.

As of Jan. 12, GME was below $20, which is about where most analysts thought it belonged on merit, or lack thereof. The price as I type this particular sentence is $328.81. The backs of some funds with heavy short positions have been broken.

High finance seems somewhat terrified, as amateur investing websites — ones pioneered by the financial industry itself — begin to throw roadblocks in front of late-arriving GME buyers. For itself, Wall Street will invest billions replacing copper wire with fiber optics to gain microsecond arbitrage advantages in the market; for you and I, the good old portfolio can get conveniently 404ed for an afternoon.

This suggests that Wall Street may not have reckoned with the full possibilities of a world of proletarian shareholders. The stock market has proverbially been a playground of “animal spirits” since long before John Maynard Keynes used that phrase in 1936. What happens to an ecosystem when new animals show up? One can surely count on at least a minimum of chaos; maybe the surprise is that it took so long to take this game-like, combative form.

August 10, 2020

FDR’s “New Deal” and the Great Depression

Filed under: Economics, Government, History, USA — Tags: , , , , , , , — Nicholas @ 03:00

The Great Depression began with the collapse of the stock market in 1929 and was made worse by the frantic attempts of President Hoover to fix the problem. Despite the commonly asserted gibe that Hoover tried laissez faire methods to address the economic crisis, he was a dyed-in-the-wool progressive and a life-long control freak (the Smoot-Hawley Tariff Act which devasted world trade was passed in 1930). Franklin D. Roosevelt won the 1932 election by promising to undo Hoover’s economic interventions, yet once in office he turned out to be even more of a control freak than Hoover. His economic and political plans made Hoover’s efforts seem merely a pale shadow.

For newcomers to this issue, “New Deal” is the term used to describe the various policies to expand the size and scope of the federal government adopted by President Franklin Delano Roosevelt (a.k.a., FDR) during the 1930s.

And I’ve previously cited many experts to show that his policies undermined prosperity. Indeed, one of my main complaints is that he doubled down on many of the bad policies adopted by his predecessor, Herbert Hoover.

Let’s revisit the issue today by seeing what some other scholars have written about the New Deal. Let’s start with some analysis from Robert Higgs, a highly regarded economic historian.

    … as many observers claimed at the time, the New Deal did prolong the depression. … FDR and Congress, especially during the congressional sessions of 1933 and 1935, embraced interventionist policies on a wide front. With its bewildering, incoherent mass of new expenditures, taxes, subsidies, regulations, and direct government participation in productive activities, the New Deal created so much confusion, fear, uncertainty, and hostility among businessmen and investors that private investment, and hence overall private economic activity, never recovered enough to restore the high levels of production and employment enjoyed in the 1920s. … the American economy between 1930 and 1940 failed to add anything to its capital stock: net private investment for that eleven-year period totaled minus $3.1 billion. Without capital accumulation, no economy can grow. … If demagoguery were a powerful means of creating prosperity, then FDR might have lifted the country out of the depression in short order. But in 1939, ten years after its onset and six years after the commencement of the New Deal, 9.5 million persons, or 17.2 percent of the labor force, remained officially unemployed.

Writing for the American Institute for Economic Research, Professor Vincent Geloso also finds that FDR’s New Deal hurt rather than helped.

    … let us state clearly what is at stake: did the New Deal halt the slump or did it prolong the Great Depression? … The issue that macroeconomists tend to consider is whether the rebound was fast enough to return to the trendline. … The … figure below shows the observed GDP per capita between 1929 and 1939 expressed as the ratio of what GDP per capita would have been like had it continued at the trend of growth between 1865 and 1929. On that graph, a ratio of 1 implies that actual GDP is equal to what the trend line predicts. … As can be seen, by 1939, the United States was nowhere near the trendline. … Most of the economic historians who have written on the topic agree that the recovery was weak by all standards and paled in comparison with what was observed elsewhere. … there is also a wide level of agreement that other policies lengthened the depression. The one to receive the most flak from economic historians is the National Industrial Recovery Act (NIRA). … In essence, it constituted a piece of legislation that encouraged cartelization. By definition, this would reduce output and increase prices. As such, it is often accused of having delayed recovery. … other sets of policies (such as the Agricultural Adjustment Act, the National Labor Relations Act and the National Industrial Recovery Act) … were very probably counterproductive.

Here’s one of the charts from his article, which shows that the economy never recovered lost output during the 1930s.

June 24, 2020

QotD: Youthful opinions

Filed under: Humour, Liberty, Quotations — Tags: , — Nicholas @ 01:00

It is very natural for young men to be vehement, acrimonious and severe. For as they seldom comprehend at once all the consequences of a position, or perceive the difficulties by which cooler and more experienced reasoners are restrained from confidence, they form their conclusions with great precipitance. Seeing nothing that can darken or embarrass the question, they expect to find their own opinion universally prevalent, and are inclined to impute uncertainty and hesitation to want of honesty, rather than of knowledge.

Samuel Johnson, The Rambler No. 121, 1751-05-14.

May 4, 2020

Government “problem solving” is an oxymoron

Filed under: Bureaucracy, Economics, Food, Government, USA — Tags: , , , , , , — Nicholas @ 05:00

Antony Davies and James R. Harrigan explain why you should back away quickly when you hear a variant of “We’re from the government and we’re here to help”:

A central theme of our recent book, Cooperation & Coercion, is that all governments are hamstrung when they attempt to fix problems. Policymakers suffer from the knowledge problem: they don’t know enough to foresee every eventuality that will follow from what they do. Politicians see a problem, speak in sweeping statements, then declare what will happen, assuming their edicts will settle matters. But that is always just the beginning. More often than not, all manner of unintended consequences emerge, often making things worse than they were before their policies went into effect.

Consider the United States’ three high-profile wars against common nouns over the past half-century. Lyndon Johnson declared a War on Poverty in the 1960s, Richard Nixon a War on Drugs in the 1970s, and George W. Bush declared a War on Terror in the early 2000s.

How are those wars working out? Because a back-of-the-envelope calculation indicates that we have spent somewhere in the neighborhood of $23 trillion in our attempt to eradicate poverty, drugs, and terror. Not only have we not won any of these wars, it is unclear that any of them can be won. These three so-called wars have managed to saddle future generations of taxpayers with unprecedented debt. And, as is the case with all coercive endeavors, policymakers ask us to imagine how bad things would have been had we not spent the trillions we did spend. And then they ask for even more money. So now we have unwinnable wars along with institutionalized boondoggles to support them.

We see the same sort of thing happening now in the face of the COVID-19 threat that has induced the largest panic attack in world history. In the name of safety, policymakers have shut down myriad productive endeavors. And there will be a raft of unintended consequences to follow. We are already seeing them manifest, and they portend potential disaster as supply chains fail.

The first cracks in US supply chains appeared in the meat industry. Smithfield Foods, reacting to a number of workers contracting the virus, shut down its Sioux Fall plant. Kenneth M. Sullivan, President and CEO, explained in a press release that, “the closure of this facility, combined with a growing list of other protein plants that have shuttered across our industry, is pushing our country perilously close to the edge in terms of our meat supply.” But it’s not just the meat plant that’s implicated. It’s everyone from the cattle farmer to the person who cooks dinner, and there are a number of people who have a place in that process who might first escape attention. The people who make packing materials needed to ship food, the maintenance workers who service machines up and down the supply chain, the truck drivers who move product from one place to another, the grocers who sell the product, the daycare workers who care for the grocers’ children so the grocers can work, and many, many more are all at risk.

[…]

In declaring some jobs “necessary” and others not, in focusing on one supply chain versus another, policymakers show how little they know about the nation’s economy. In their view, they can simply declare things they want to happen, and then those things will happen. But that is not how economies work. An economy is the sum total of everyone’s activities, and when the government declares that something must happen, all kinds of other things happen too.

Consider how all the “non-essential workers” have been sent home for the past two months. Who gets to declare which workers are non-essential to the economy, and by what standard? Most assumed that politicians had the correct answers to these questions. But, as we are discovering, there is no such thing as “non-essential” workers. All workers are essential. How do we know? Because their jobs existed. Profit-driven businesses do not create non-essential jobs. Those people’s jobs were essential to their employers. Further, those people’s jobs were incredibly essential to the people themselves. They need their wages to pay the rent, buy their food, make their car payments, and for everything else that makes their lives livable.

But policymakers simply declared them non-essential, as if there would be no fallout from that decision.

November 14, 2019

QotD: Memory

Filed under: Humour, Quotations — Tags: — Nicholas @ 01:00

We can remember minutely and precisely only the things which never really happened to us.

Eric Hoffer, “Thoughts of Eric Hoffer”, New York Times Magazine, 1971-04-25.

July 9, 2019

The main economic damage of Brexit is the extended period of uncertainty

Filed under: Britain, Economics, Europe, Government — Tags: , , , — Nicholas @ 03:00

At the Continental Telegraph, Tim Worstall interprets a recent Bank of England recommendation to really mean “do Brexit” and “get it over with”:

To pull that out of the jargon, when every bugger’s running around screaming because they don’t know what’s going to happen then things are dark for the long term future of the economy. Just because the screaming and the running around means no bugger is doing anything else.

And here’s the thing – that lookin’ dark bit gets worse the longer the uncertainty lasts. To the point that the effect just of the not knowing becomes greater than the possible effect of any particular event in that universe of possibilities. It really is true that continuing to delay Brexit will, at some point, become worse than any particular Brexit outcome.

Thus get on with it, get it done. And given that we’ll get something of a bloody revolution if the Remainers win – we Brits being really quite keen on this democracy idea, we get to choose not they – then the getting on with it will have to be to leave. Yesterday would have been good, tomorrow if that’s not possible.

July 11, 2018

Environmentalists against science

Filed under: Environment, Government, Science, Technology — Tags: , , , , , — Nicholas @ 03:00

At Catallaxy Files, Jeff Stier looks at situations when activists who normally fetishize their devotion to science will go out of their way to fight against scientific findings that don’t co-incide with their preferences:

The debate over regulation often devolves into a debate about “too little” versus “too much” regulation, split along the ideological divide. Too little regulation, goes the argument, and we are exposed to too much risk. Too little, and we don’t advance.

This binary approach, however, represents the dark-ages of regulatory policy. It was more frequently relevant when our tools to measure risk were primitive, but today’s technology allows much more precise ways to evaluate real-world risks. With less uncertainty, there’s less of a need to cast a broad regulatory net.

Regulation not warranted by countervailing risk just doesn’t make sense. That’s why a pseudoscientific approach, dubbed the “precautionary principle,” behind much of today’s regulation is so pernicious. This dogma dictates that it’s always better to be safe than to ever be sorry. The approach is politically effective not only because it’s something your mother says, but because it’s easier to envision potential dangers, remote as they may be, than potential benefits. Uncertainty, it turns out, is a powerful tool for those who seek to live in a world without risk.

But what happens when regulators can get a reasonably good handle on benefits and risks? Some potential risks have been eliminated simply because the basis for the concern has proven to be unwarranted. For more than two decades, the artificial sweetener, saccharin, came with a cancer warning label in the U.S.But it turned out that the animal experiment which led to the warning was later found to be irrelevant to humans, and the warning was eventually removed.

Warning about a product when risks are not well-understood is prudent. But it would be absurd to continue to warn after the science tells us there’s nothing to worry about.

Today, an analogous situation is playing out in the EU, where activists are using outmoded tests not just to place warning labels on silicones, a building block of our technological world, but to ban them outright.

The playbook is predictable: as the scientific basis for a product’s safety grows, opponents go to increasingly great lengths to manufacture uncertainty, move the goalposts and capitalize on scientific illiteracy to gain the political upper-hand.

We’ve seen these tactics employed in opposition to everything from growing human tissue in a lab, to harm-reducing alternatives to smoking, such as e-cigarettes. Now, the effort to manufacture uncertainty is playing out in the debate over the environmental impact of silicones, which are used to in a wide range of consumer, medical, and industrial products.

Fortunately, in the case of silicones, regulators in a number of countries, including Australia, have put politics aside and adhere to appropriate scientific methods to inform their decision-making.

June 5, 2018

Down with the experts!

Filed under: Government, Politics — Tags: , , , , — Nicholas @ 05:00

In Quillette, Alex Smith explores the limits of expertise and why so many people today would eagerly agree with the sentiments in my headline:

“People are sick of experts.” These infamous and much-derided words uttered by UK Conservative parliamentarian Michael Gove express a sentiment with which we are now probably all familiar. It has come to represent a sign of the times — either an indictment or a celebration (depending on one’s political point of view) of our current age.

Certainly, the disdain for expertise and its promised consequences have been highly alarming for many people. They are woven through various controversial and destabilising phenomena from Trump, to Brexit, to fake news, to the generally ‘anti-elitist’ tone that characterises populist politics and much contemporary discourse. And this attitude stands in stark contrast to the unspoken but assumed Obama-era doctrine of “let the experts figure it out”; an idea that had a palpable End of History feeling about it, and that makes this abrupt reversion to ignorance all the more startling.

The majority of educated people are fairly unequivocal in their belief that this rebound is a bad thing, and as such many influential voices — Quillette‘s included — have been doing their best to restore the value of expertise to our society. The nobility of this ambition is quite obvious. Why on earth would we not want to take decisions informed by the most qualified opinions? However, it is within this obviousness that the danger lies.

I want to propose that high expertise, whilst generally beneficial, also has the capacity in certain circumstances to be pathological as well — and that if we don’t recognise this and correct for it, then we will continue down our current path of drowning its benefits with its problems. In short, if you want to profit from expertise, you must tame it first.

[…]

However, it is worth drawing a distinction between these two types of expertise — the kind people question, and the kind people don’t. In short, people value expertise in closed systems, but are distrustful of expertise in open systems. A typical example of a closed system would be a car engine or a knee joint. These are semi-complex systems with ‘walls’ — that is to say, they are self-contained and are relatively incubated from the chaos of the outside world. As such, human beings are generally capable of wrapping their heads around the possible variables within them, and can therefore control them to a largely predictable degree. Engineers, surgeons, pilots, all these kinds of ‘trusted’ experts operate in closed systems.

Open systems, on the other hand, are those that are ‘exposed to the elements,’ so to speak. They have no walls and are therefore essentially chaotic, with far more variables than any person could ever hope to grasp. The economy is an open system. So is climate. So are politics. No matter how much you know about these things, there is not only always more to know, but there is also an utterly unpredictable slide towards chaos as these things interact.

The erosion of trust in expertise has arisen exclusively from experts in open systems mistakenly believing that they know enough to either predict those systems or — worse — control them. This is an almost perfect definition of hubris, an idea as old as consciousness itself. Man cannot control nature, and open systems are by definition natural systems. No master of open systems has ever succeeded — they have only failed less catastrophically than their counterparts.

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