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What Tetlock Has Learned About Forecasting, Foxes, and Hedgehogs
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Philip Tetlock is a veteran American academic with a specialty in studying forecasting accuracy regarding affairs of state: e.g., what will China do this calendar year regarding its disputed territorial claim to the Spratly Islands in the South China Sea? He gets funding from the American intelligence community to run an impressive annual forecasting tournament, and now he’s given a class on what he’s learned from the first four years of the tournament.

He says in The Edge:

The second story is the parable of Tom Friedman and Bill Flack. It’s a tale of two forecasters. Everybody around this table knows who Tom Friedman is. He’s this world famous New York Times columnist, award-winning columnist, and award-winning writer. … Then there’s this guy, Bill Flack. Bill Flack is a retired irrigation specialist, who worked for the U.S. Department of Agriculture in Nebraska. He has no track record of writing on world politics. He’s never been invited to sit on a panel with Tom Friedman or, for that matter, anybody else. The question is, who is likely to be a better forecaster? …

It turns out though, and we know this from the IARPA tournament that Barb and I worked on for a number of years now, we also knew this from my earlier forecasting work as well, that the correlation between your ability to tell a good explanatory story and your forecasting accuracy is rather weak. It’s not as strong an argument as you might think. Even if it is positive, it’s not all that strong. There’s a very powerful countervailing reason for believing that Bill Flack is a better forecaster, and that is because Bill Flack is a scientifically-documented, officially-certified IARPA tournament superforecaster. He did a great job assigning probability estimates to hundreds of questions posed over four years in the IARPA forecasting tournament, a superb performance. This is with neutral umpires, no room for fudging, this is objective scoring.

It’s quite possible that Bill Flack is a better forecaster. I guess it brings us to what I see as a core paradox and that is, why is it that we know so much about Bill Flack’s forecasting record and so little about Tom Friedman’s? Why is it that most of the time we don’t even know that we don’t know that, and we don’t even seem to care? Is that a satisfactory intellectual state of affairs? Is that a good way to be conducting high stakes policy debates, by relying on proxies like social status, the ability to tell a good story in determining who has the most impact on the policy debates?

Here’s a useful observation by Tetlock on the incentives facing America’s intelligence agencies:

One of the things about learning in Washington, D.C. and the intelligence community is if you’re going to make a mistake, make sure you don’t make the last mistake.

Tetlock’s superforecasters spend a lot of time updating their probabilities by small amounts:

Among the best forecasters in the IARPA tournament believe change tends to be quite granular. They think that Hillary Clinton has a 60 percent chance of being the next President of the United States today, and then some information comes out from the State Department Inspector General about Hillary’s emails and her possible culpability for her email policy: “Okay, I think I’m going to move it down to .58 now.” That’s the sort of thing superforecasters do, and the cumulative result is that their probability scores, as defined in these handouts here and in the book, are much better. The gaps between their probability judgments and reality are smaller where your dummy code reality is 0 or 1, depending on whether the event didn’t occur or did occur.

Personally, I haven’t spent more than 10 minutes over the months following the Hillary email thingie. I probably wouldn’t have much to contribute on the subject that meet my criteria of being true, new, important, and funny. Closely monitoring Hillary’s chances sounds dreadfully boring but, apparently, some people like to do it. And good for them.

Earlier, Tetlock did work showing that, to use Isaiah Berlin’s terminology, foxes who know many small things tend to make better forecasters than hedgehogs who know one big thing. Hedgehogs achieve success by identifying Factor X in Situation A. They then get nice jobs speaking at conferences and on television where they try to use Factor X to explain Situations B and C. And they are often reluctant to admit that now that they’ve made the Factor X -> Situation A correlation famous, maybe decisionmakers are adjusting for it and it’s becoming less powerful.

It’s starting to occur to Tetlock that his tournament’s medium-short time frame has some fundamental problems.

A particularly interesting example of this was in my 2005 book, which a CIA analyst was reading and wrote to me last year saying, “Professor Tetlock, does this make you change your mind about hedgehogs?”

Foxes know many things but a hedgehog knows one big thing. The hedgehogs come in many flavors in expert political judgment. There are free market hedgehogs, there are socialist hedgehogs, there are boomster hedgehogs, there are doomster hedgehogs. They come in a variety of ideological complexions. This particular hedgehog was an ethnonationalist hedgehog.

What do I mean by that? In the Daniel Patrick Moynihan sense, he thinks that the world is seething with these primordial ethnic national identifications and existing nation-states are going to be rupturing all over the place in the next 50, 60 years (he wrote it in 1980). Then things like Yugoslavia and Soviet Union and so forth happened, and the Moynihan view started to look quite prescient. This ethnonationalist hedgehog writing, offering some forecasts in 1992, anticipates that by 1997 there is going to be a war between Russia and the Ukraine. The Russians are particularly obsessed with Crimea, but they’re also going to see some eastern provinces of the Ukraine where there is a somewhat pro-Russian population, and they’re going to use oil and gas as a weapon, and they’re going to do things to the Ukrainians that more or less happened in 2014.

We’re seventeen years off. The hedgehog gets a terrible accuracy score in the five-year time frame between 1992 and 1997. What do you think of that? That is an interesting complication. That is something we can’t sweep under the rug. We need to think more systematically about how short-term and long-term foresight are related to each other, and that is one of the major focuses of what I thought would be the second session where we would talk about the importance of the questions we ask.

Similarly,

I would say that Greece has lasted longer in the Eurozone than many economists thought it should or would, and if you want to go hedgehog-y, go to Martin Feldstein in 1990 or so when he said, “This is really stupid; you’re going to have a common currency for these countries at these very different levels of economic development? Sounds like the United States and Mexico going in for a currency union. You guys have got to be kidding.”

Then, a few years later the Euro is at $1.50 to the dollar, and the Euro looks really strong and people are saying, “Well, so much for Feldstein.” Again, this is like the ethnonationalist hedgehog on the Ukraine or the Feldstein hedgehog on the Euro or Friedrich von Hayek in the 1930s thought that the Soviet Union was finished. The Soviet Union couldn’t even exist, for that matter, because central planning was such an abominably bad idea. But the Soviet Union managed to limp along until 1991.

Linking short-term foresight and long-term foresight in tournaments is one of the great intellectual challenges here.

Timing is a general aspect of the problem of forecasting that even if you do an outstanding job of identifying a factor in the present that correlates with a future outcome, you don’t necessarily know how all the many factors work, or how they will interact.

For example, weather forecasters are increasingly optimistic that the California drought will end this winter due to heavy El Nino rains. El Nino years are correlated with warm Pacific water (and sure enough, when I was at San Onofre beach last Saturday the ocean was much less chilly than is common).

All else being equal, warm ocean water increases the chance of El Nino rains. That’s a very important thing to know.

On the other hand, an El Nino winter in California is kind of a Rube Goldberg contraption dependent upon multiple factors besides warm water. If the winds blow in the wrong direction, for instance, it doesn’t happen.

Similarly, ethnonationalism is definitely a thing, but there are a lot of things in the human world.

Tetlock: My thinking has evolved since 2005; that’s certainly true. I like to think of forecasting tournaments as intellectual ecosystems that require different types of creatures existing and reciprocal patterns of interdependence. The foxes need hedgehogs. The hedgehogs are very useful sources of information and insights. The foxes are almost parasitic in some ways on hedgehogs; they use hedgehog ideas and they’re eclectic and they often combine, “Yes, I’ll take this from this hedgehog, and that from this one.” Just as there is a complementarity between Tom and Bill, and question generation and answer generation, forecasting tournaments, there’s a complementarity between hedgehog and fox forecasters. The foxes are the ones looking for the deep parsimonious covering laws that capture the underlying drivers of history. The foxes wonder whether history has any underlying drivers. It may just be, as one famous historian said, “History is just one damn thing after another.” There’s a tension there between those two views of history, and it’s a productive dialectical tension. I would not wish it away. …

For example, I know a few big things. In fact, I specialize in focusing upon some things that are so obviously big (e.g., race differences, IQ, crime rates, sex differences, correlates of sexual orientation, etc.) that most pundits won’t publicly mention them because they are so obvious, so stereotypical, that you aren’t allowed to publicly think about them.

So I’m kind of a multi-fox. (Or is that multi-hog? Hedgefox? Foxhog?)

That means I tend to be not too far off on some big issues year after year after year. When George W. Bush and Ted Kennedy passed the No Child Left Behind act requiring every public school student if America to be “proficient” in reading and math by 2014, I didn’t expect that to happen. Similarly, I’ve long argued that if you open up the borders, it’s not going to turn out as well as you dream; if you make some fashionable change in schooling, it won’t make much difference in outcomes; black youths get in more trouble with the cops than, say, Asian girls less because of racism than because they are male and black, etc etc…

On the other hand, I’m not terribly interested in the Tetlock forecasting tournament’s typical foreign affairs questions with a one year time horizon: in the Spratly Islands territorial dispute between China and the Philippines, will Beijing do Y by December 31 if Manila first does X?

These are, no doubt, important questions. Tetlock’s discovery in his tournament that there are amateur Moneyballers, foreign affairs junkies with an outstanding track record over four annual tournaments of being right more than chance would predict is an important one.

On the other hand, there is very little in our society telling you can’t speak honestly about the Spratley Islands, while there are many social penalties for speaking honestly about housing, educational, criminal justice, and other policies in which our culture is actively hostile and punitive toward the use of Occam’s Razor in understanding how things work.

In other parts of the discussion on The Edge, Robert Axelrod, a game theorist who worked with William D. Hamilton, reminds us of something we really ought to memorize:

Axelrod: People in positions of power on average have been luckier than average. They’ve made a lot of choices like, along the way to becoming President, some of which were disputed by their best advisors, and they were right and their advisors were wrong. Their known batting average has a substantial regression to the mean, which they tend not to account for, so they think that they’re better judges. And they have good evidence for it because they have been better judges.

Hitler, for example, had a long winning streak up through the Fall of France in 1940 — where he overruled his senior generals and went with a junior officer’s brilliant plan — and beyond; it subsequently made him assume he was a military genius, a self-estimate which the events of December 6, 1941-May 9, 1945 did not bear out.

One plausible way to improve forecasting is to be frank about the biases that caused past mistaken judgments. For example, consider the 1990s Russian catastrophe facilitated by American economists like Jeffrey Sachs, Larry Summers, Andrei Shleifer, and Stanley Fischer.

Tetlock: Let me offer you an example of one of the ways in which tournaments might create better hedgehogs. In a forecasting tournament, you don’t have the luxury that you have in academia of saying, “That’s not in my field.” When Jeffrey Sachs was arguing for shock therapy and rapid privatization in the early post-Soviet economies of the early ’90s, he had a lot of critics saying he’s going too fast. Later on, he said, “Well, I was right about the economics of rapid privatization, but there needed to be a legal system.” He needed more institutions.

But it was said almost as an afterthought as a way of saying, “I’m trying to look at economics. My economic analysis was sound, but I missed these other factors that are in another field: the law, institutions, corruption, culture. I missed that.”

Yale Law School professor Amy Chua pointed out in her 2003 book “World on Fire” that most of the American economists instructing the Russian government on what policies to follow and most of the billionaire oligarchs who were the big winners from those policies happened to share the same ethnicity (the ethnicity of Professor Chua’s husband, so she felt brave enough to point this out).

In a world in which making better forecasts and policies for the future is a high priority, Chua’s finding should have been cause for self-reflection and public discussion. Maybe there has been a tiny amount of the former, but in the 12 years since Chua’s book came out, there has been virtually none of the latter. For example, when ex-Bank of Israel governor Stanley Fischer was nominated to be the #2 at America’s Federal Reserve, as far as I can recall, I was the only one looking up Fischer’s catastrophic forecasts and advice for Russia in 1991-1998.

So my advice for better forecasting is to give up enforcing sacred cows: stop making people choose between career marginalization and not mentioning massively important factors.

 
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  1. I once wrote a post about whether I was a fox or a hedgehog. It perplexes me, since I think of myself as a hedgehog. But any reasonable scrutiny of my resume says fox, fox, fox.

    Tis a puzzlement. I am, I think, more Tom Friedman than Bill Flack. Much more interested in posing the issues than in predicting the answers.

    I agree that the forecasting questions were boring.

  2. “Migrants” streaming into Macedonia from Greece. News cameras on the side, shots fired in the air. Yet they come.

    Literally, this is from Camp of the Saints.

    • Agree: Romanian
  3. This sounds too complicated and hard for the lowest common denominator person to understand. I think you should start doing more social media stuff and appeal to the now generation man!

    Have you given any thought to my idea of being a rap critic?

    Math is 4 nerds. Nerd drool. Jocks rule. Etc etc.

  4. So my advice for better forecasting is to give up on current sacred cows: stop making people choose between career marginalization and not mentioning massively important factors.

    Is this before or after we allow leprechauns to ride unicorns on Sunday?

    In all seriousness, the whole point of power in a society is to force everyone else to not talk about the thinks you don’t like.

    • Replies: @Anonymous
    "In all seriousness, the whole point of power in a society is to force everyone else to not talk about the thinks you don’t like."

    This idea of power confuses me. I thought the point was to try to create a society where everyone could flourish.
    , @Anonymous
    Sailer's suggestion is rhetorical since few in society share his (vaguely aspie) obsession with deriving a mathematical rule for Good Government. In fact most don't care when a policy not only fails but seems to achieve the opposite of its stated goal (see: Veterans Affairs; FDA; EPA; etc. etc.), they only dig in more on their proclivities. In an idiocratized nation the "sacred cows" don't need special protection, since they are dearly prized in the status hierarchy for their usefulness against having to face reality.

    Regardless of what this Doktor Falkenstein has to say (from his castle keep?) the Axelrod blockquote is straight-up Taleb. In "Fooled By Randomness" he showed the simple arithmetic for Wall Street fortuneteller distribution: Given a large pool of active money managers all doing just enough trading to look busy, a certain quantum will be "right" 3, 4, 5 years in a row on the basis of dumb luck. The thoroughgoing refusal to recognize happenstance for what it is means they will probably be accorded the genius tag when this outcome inevitably transpires (and what reason would the investment kings themselves have to dispute this sacred public seal of approval?)
    , @SFG
    Pretty much. I mean, every bunch of powerful people protects their interests. The powerless try to also, but they're powerless. Back in medieval Europe you couldn't talk about the king's retarded son without being killed.

    It's all Who-Whom--that's been the big thing I've learned from Sailer's blog. Even policies that look neutral are usually slanted to favor one group over another.
  5. I returned, and saw under the sun, that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor yet favour to men of skill; but time and chance happeneth to them all.

  6. I’d love to see someone (someone more determined, organized and interested than I am) run a blog devoted to tracking pundits and their predictions. Who’s been wildly wrong? Who has tended to be right?

    Why is no one keeping a running scorecard on these clowns? Or is someone, and I’m just not aware of it?

    • Replies: @Sailer has an interesting life
    Steve does a great job poking holes in Mister Gladwell. But no one seems to notice or care. The problem arises when you realize that geopolitics doesn't have a set method of scoring. Thomas Friedman was soundly mocked IIRC for his blather that the Friedman Unit was named after him.

    But as a rule there isn't anyone who wants to say that the king has no clothes. The problem comes up when you realize that a lot of these dudes get popular by schmoozing and not by the dint of their predictive power.

    Nate Silver mentioned this in his book _The Signal and the Noise_

    Friedman Unit for anyone who doesn't know.
    https://en.wikipedia.org/wiki/Friedman_Unit
    , @Anonymous
    Why is no one keeping a running scorecard on these clowns?

    Tetlock makes it very clear why: they use vague language and almost never specify time frame. "Likely" ranges from 5% to 49% - keeping a meaningful scorecard on such estimate is not possible.
  7. When truth and reality are forbidden in polite discussion, they will eventually burst forth in not so polite a fashion.

    Comes a Trumpening.
    Walls and Balls. Backbone and Truth.

    Frog not boiled yet. Quick, run out the clock!
    No. Comes a Trumpening.
    A Nation awakens.

  8. @Paleo Retiree
    I'd love to see someone (someone more determined, organized and interested than I am) run a blog devoted to tracking pundits and their predictions. Who's been wildly wrong? Who has tended to be right?

    Why is no one keeping a running scorecard on these clowns? Or is someone, and I'm just not aware of it?

    Steve does a great job poking holes in Mister Gladwell. But no one seems to notice or care. The problem arises when you realize that geopolitics doesn’t have a set method of scoring. Thomas Friedman was soundly mocked IIRC for his blather that the Friedman Unit was named after him.

    But as a rule there isn’t anyone who wants to say that the king has no clothes. The problem comes up when you realize that a lot of these dudes get popular by schmoozing and not by the dint of their predictive power.

    Nate Silver mentioned this in his book _The Signal and the Noise_

    Friedman Unit for anyone who doesn’t know.
    https://en.wikipedia.org/wiki/Friedman_Unit

    • Replies: @NOTA
    Just keep in mind that a substantial number of the world's decisionmakers seem to think Friedman and Gladwell are deep thinkers.
  9. anonymous • Disclaimer says:

    “…American economists instructing the Russian government on what policies to follow… most of the billionaire oligarchs who were the big winners from those policies happened to share the same ethnicity…”

    A friend who is of this ethnicity has a surprising animosity toward the Russians. Everything they do is wrong, they are about to collapse, all their policies are retrograde, they can’t be trusted, we should annihilate them once and for all to eliminate the threat. It doesn’t seem very coherent. As far as I know he has no particular connection to Russia. It’s as if I’m missing something.

    Related, Henry Kissinger recently made the following point (“Henry Kissinger warns West to not alienate Russia”, Jared M. Feldschreiber, UPI, Aug. 21, 2015):

    “…the 92-year-old former statesman said “breaking Russia has become an objective [for US officials]. … what happens in Ukraine cannot be put into a simple formula of applying principles that worked in Western Europe.”…”

    Ideology or visceral almost religious belief do provide a rationale to think that simple formulas can predict the future. But if we’ve learned anything about prediction it’s that there are bounds to our ability to predict beyond which we will likely never be able to pass, even in principle. No matter how much Big Data we collect.

  10. Here is a paste of the section I mean.

    ******
    “What are the incentives for a public intellectual?” Tetlock asked me. “There are some academics who are quite content to be relatively anonymous. But there are other people who aspire to be public intellectuals, to be pretty bold and to attach nonnegligible probabilities to fairly dramatic change. That’s much more likely to bring you attention.”

    Big, bold, hedgehog-like predictions, in other words, are more likely to get you on television. Consider the case of Dick Morris, a former adviser to Bill Clinton who now serves as a commentator for Fox News. Morris is a classic hedgehog, and his strategy seems to be to make as dramatic a prediction as possible when given the chance. In 2005, Morris proclaimed that George W. Bush’s handling of Hurricane Katrina would help Bush to regain his standing with the public.16 On the eve of the 2008 elections, he predicted that Barack Obama would win Tennessee and Arkansas.17 In 2010, Morris predicted that the Republicans could easily win one hundred seats in the U.S. House of Representatives.18 In 2011, he said that Donald Trump would run for the Republican nomination—and had a “damn good” chance of winning it.19

    All those predictions turned out to be horribly wrong. Katrina was the beginning of the end for Bush—not the start of a rebound. Obama lost Tennessee and Arkansas badly—in fact, they were among the only states in which he performed worse than John Kerry had four years earlier. Republicans had a good night in November 2010, but they gained sixty-three seats, not one hundred. Trump officially declined to run for president just two weeks after Morris insisted he would do so.

    But Morris is quick on his feet, entertaining, and successful at marketing himself—he remains in the regular rotation at Fox News and has sold his books to hundreds of thousands of people.

    Foxes sometimes have more trouble fitting into type A cultures like television, business, and politics. Their belief that many problems are hard to forecast—and that we should be explicit about accounting for these uncertainties—may be mistaken for a lack of self-confidence. Their pluralistic approach may be mistaken for a lack of conviction; Harry Truman famously demanded a “one-handed economist,” frustrated that the foxes in his administration couldn’t give him an unqualified answer.

    But foxes happen to make much better predictions. They are quicker to recognize how noisy the data can be, and they are less inclined to chase false signals. They know more about what they don’t know.
    ******
    –Nate Silver, The Signal and The Noise

    Steve, I’m not sure large pastes are allowed, but I figure I’ll risk it anyway.

    • Replies: @Harry Baldwin
    Consider the case of Dick Morris, a former adviser to Bill Clinton who now serves as a commentator for Fox News.

    Of course, his Epic Fail at predicting tht 2012 election cost Morris his slot at Fox. I haven't seen him in years. Unfortunately, Karl Rove is still a regular.
  11. Then there’s this guy, Bill Flack. Bill Flack is a retired irrigation specialist, who worked for the U.S. Department of Agriculture in Nebraska. He has no track record of writing on world politics. He’s never been invited to sit on a panel with Tom Friedman or, for that matter, anybody else. The question is, who is likely to be a better forecaster? …

    It turns out though, and we know this from the IARPA tournament that Barb and I worked on for a number of years now, we also knew this from my earlier forecasting work as well, that the correlation between your ability to tell a good explanatory story and your forecasting accuracy is rather weak. It’s not as strong an argument as you might think. Even if it is positive, it’s not all that strong.

    1) Any random selected person is likely to be a better forecaster than Tom Friedman.

    2) This is despite the fact that Friedman is a terrible storyteller.

  12. Forecasting some things isn’t hard.

    For example anyone could have predicted the Dot Com bubble would blow up, same with the 2007 mortgage bubble imploding. Provided you weren’t invested in it. Same with the current down turn.

    Really look at the current valuations for Google and Facerape. These are bullshit companies that don’t make a darn thing, they sell ad space and datamine users. This is Tulipmania all over. Yet all the “wiser heads” say invest, invest!! in a topped out market.

    The wiser heads usually turn out to be crooks of some sort.

    Same for Russia. Anyone with a brain would know you don’t send a bunch of sleazy Jewish Wall Street investment banker types down there. All these bottom feeders know is loot and scoot. They destroy businesses they don’t build them.

    As for Friedman, he’s a neoliberal shill who made good by marrying into a billionaire family. His main routine is to promote globalism in some form usually for comfortably well off whites who don’t do much thinking. He lulls them into a smug complacency while their world and their kids future will be cut out from underneath by the globalists he pimps for. Think of him as a seller of flavored arsenic drinks. By the time you realize what happened, you’re finished.

    He’s a evil man.

    • Replies: @Bill Jones
    "As for Friedman, he’s a neoliberal shill who made good by marrying into a billionaire family."

    Are family still Billionaires after the Commercial RE collapse?
    , @Anonymous
    But, one would have thought, for historic reasons, if nothing else, Russians would would have had a certain 'scepticism' regarding the ethnicity you describe.
    Many who know Russians would venture that this 'scepticism' is perhaps the strongest emotion that they have.
    But, surprisingly, during the Gorbachev/Yeltsin years of madness, the Lord of Misrule well and truly ruled and missed.
    The moral is that sudden episodes of uncharacteristic madness - whether the fault be in the stars, with 'us' or with Gorbachev and The Economist magazine envelope entire nations, just as they overtake individual persons.
    Note Bene the 'migrant' madness overtaking the EU.
  13. Tetlock’s simply a charlatan. Nothing he documents is profound, and indeed one of his favorite forecasters is a charlatan as well, Nassim Taleb, who started a hedge fund in 1999 that by 2005 became a mere ‘hedge’ and thus its importance not relevant. Taleb’s fund generated lame performance over the 2001 crisis, but portrayed himself as a genius. Tetlock loves this guy, who has written best-selling books, and so basically highlights Taleb’s popularity, not truth, but then, that’s what he accuses his subjects of, which highlights that Freud is a gift that never stops giving…

    • Replies: @PapayaSF
    Eric, Taleb literally "wrote the book" about financial black swan events before the 2008 crash, made a big bet that way, and made a killing when it happened. That's pretty good evidence he's not a "charlatan."
    , @silviosilver
    Taleb has the worst signal:noise ratio of any intellectual celebrity I've read. His insights may be sound, but reading him is painful.
  14. Hitler’s choice of Von Manstein’s plan had more to do with his disappointment that the combined brain power and experience of the Great General Staff had produced a mechanized Schlieffen Plan. His predictive skill ended in 1939 with the declaration of war by Great Britain. Victory through bluff and intimidation only works when your opponents can choose between appeasement and war.
    Ironically, Britain’s guarantee to Poland was made on the assumption that Hitler’s next target was Bessarabia, according to Manchester.

    • Replies: @Romanian

    Ironically, Britain’s guarantee to Poland was made on the assumption that Hitler’s next target was Bessarabia, according to Manchester.
     
    I've never heard that. Why Bessarabia? At that point, it was still a region of Romania, and only became the Moldovan SSR and part of Ukraine SSR after the War. For resources, for easier land access to Russia? The Germans got the Romanian oil either way, because of the installation of a favorable regime in Romania, trying to play the game so the state would not lose territory.
  15. Yale Law School professor Amy Chua pointed out in her 2003 book “World on Fire” that most of the American economists instructing the Russian government on what policies to follow and most of the billionaire oligarchs who were the big winners from those policies happened to share the same ethnicity

    Hasn’t listening to the advice of Messrs. Sachs & Co., led to economic convulsions beyond the former Soviet Union –as in Africa and South America?

    Smart people are going to (rightfully) look for ulterior motives and insider connections in any high stakes deal. But while some egregious advice was given (and followed) in the wake of the Soviet Union’s collapse, that advice of rapid privatization and market liberalization was broadly similar to what the World Bank was, and to some extent still is, recommending to developing countries around the globe. The extent to which it was just naive, or depended on the naive is difficult to say. But it definitely wasn’t unique. Shared ethnicity probably offered a convenient touch point for people like Marc Rich; but again, the general advice was the same for other countries with different histories and demographics.

    Tom Friedman’s only good for advice on “tiny houses” and flat solar panels made in India.

  16. That CIA online prediction tournament is horribly designed. I quit because it was no fun to play. I did get my $150 for doing it for a year though.

    Was there some better advice gentile economists were trying to give Russia in the 90’s? The country was rotten from the inside out in 1990, just as the worst bear market in the price of its commodity exports from gold to oil to nickel was reaching multi decade real lows. The worst thing Jews did to Russia in the 1990s was leave en masse taking their considerable human capital with them.

    • Replies: @SFG
    Iffy. You've got two groups of Jews here:

    The economists at Harvard, who advocated for privatization that turned Russia into a mafia state. I've never seen any evidence they benefited personally, but these Ivy League types tend to be connected, so who knows?

    Russian Jews, who saw an out from Russia and took it.
    , @MC
    "That CIA online prediction tournament is horribly designed. I quit because it was no fun to play. I did get my $150 for doing it for a year though."

    I didn't even last that long; too much time commitment to have any kind of informed opinion on most questions. Maybe that's a feature rather than a bug; only foreign policy junkies would invest that much time in the game, and the rest of us are filtered out.
  17. OT: I enjoyed reading the accounts of the thwarted terrorist in France.

    Initially, I was surprised and impressed that a middle-aged British businessman joined the scrum, but then learned that he wasn’t a typical Brit.

    “The British man was born in Uganda and grew up in Swaziland, Botswana, Zimbabwe and South Africa. His job is to help African entrepreneurs to look for financing in Europe. He was on the train that day in Holland because he was looking for export credits for a client.”

  18. @eric
    Tetlock's simply a charlatan. Nothing he documents is profound, and indeed one of his favorite forecasters is a charlatan as well, Nassim Taleb, who started a hedge fund in 1999 that by 2005 became a mere 'hedge' and thus its importance not relevant. Taleb's fund generated lame performance over the 2001 crisis, but portrayed himself as a genius. Tetlock loves this guy, who has written best-selling books, and so basically highlights Taleb's popularity, not truth, but then, that's what he accuses his subjects of, which highlights that Freud is a gift that never stops giving...

    Eric, Taleb literally “wrote the book” about financial black swan events before the 2008 crash, made a big bet that way, and made a killing when it happened. That’s pretty good evidence he’s not a “charlatan.”

    • Replies: @Dave Pinsen
    Eric Falkenstein, who, IIRC, has commented here on occasion, is underwhelmed by Taleb: http://falkenblog.blogspot.com/2012/11/taleb-mishandles-fragility.html
  19. @So I’m kind of a multi-fox.

    foxy isteve. 21st century whitesplotation classic.

  20. Priss Factor [AKA "skiapolemistis"] says:

    A truly remarkable film.

    Christensen as actor, writer, director. How did he do it?

    All this stuff about TV is better than cinema is so much nonsense. 2013 was one of the best yrs for movies, and 2014 had some strong ones too.

    BEFORE I DISAPPEAR is worth more than 500 hrs of ‘intelligent’ TV.

    It got right what FEAR AND LOATHING IN LAS VEGAS got so wrong.
    Gilliam’s literal approach made the strange obvious and concrete.

    Christensen gets you with the shadows and rhythms. He slips in it into the drink.

    As astounding as TAXI DRIVER.

    Set-up is contrived and the first scene is cringe-worthy, but once you’re over that hurdle, you’re in a one-of-a-kind world with its private logic and personal codes.

    (C.O.G also started out as some dopey movie but kept on growing stronger and truer.)

  21. @PapayaSF
    Eric, Taleb literally "wrote the book" about financial black swan events before the 2008 crash, made a big bet that way, and made a killing when it happened. That's pretty good evidence he's not a "charlatan."

    Eric Falkenstein, who, IIRC, has commented here on occasion, is underwhelmed by Taleb: http://falkenblog.blogspot.com/2012/11/taleb-mishandles-fragility.html

  22. @Sailer

    I saw this tweet yesterday. It was from one of the prime alt-right “Shitposters” from twitter that is taking the fight straight at the Republican establishment writers. The guys can gang up on whoever wrote whatever piece that day and just beat the hell out of him intellectually and via that particular form of taunting. These young guys are doing incredible things and the stuff they produce is vulgar, yet if you are educated, you see the understated intellectualism that their stuff contains.

    The tweet said (and I paraphrase because I just cannot locate the actual tweet), “I wouldn’t go after these people so viciously if they hadn’t marginalized Steve Sailer.”

    At once, for these guys, their motives in saying something like this are “Payback” and “Justification”. They want to “get them” for you. And that they are intellectually justified in doing so because if these people did marginalize you, then in no way should these people be allowed to operate in a significant capacity in the public domain of discussion. They are either stupid or evil.

    The current front lines are full of people that think and say, “Remember Steve Sailer”.

    • Replies: @San Franciscan non-monk
    Really? That's great.
    , @Pat Casey
    Damn man despite my stupor reading that lit me up with adrenaline. I've never been on Twitter and didn't know "incredible things" could be done on Twitter. But now I want to TWEET. But tell me, was there a precipitating event or phase that I missed when Steve became more marginalized? Because, such as Rachel Dolezal hoax, he is definitely not being not read. Shortly ago he well summed up the nature of this place and why it won't be established in the mainstream but we're happy warriors etc... and now I'm thinking that had an impetus I missed. Ultimately though, for one, Steve is located Left Coast, which means he can't meet the people we would introduce him to here in DC, and two, I can't tell that he would want to go on Fox News. And three, his being marginalized is actually a law of nature: you don't engage the Alpha if you can't win.
  23. @The Z Blog

    So my advice for better forecasting is to give up on current sacred cows: stop making people choose between career marginalization and not mentioning massively important factors.
     
    Is this before or after we allow leprechauns to ride unicorns on Sunday?

    In all seriousness, the whole point of power in a society is to force everyone else to not talk about the thinks you don't like.

    “In all seriousness, the whole point of power in a society is to force everyone else to not talk about the thinks you don’t like.”

    This idea of power confuses me. I thought the point was to try to create a society where everyone could flourish.

    • Replies: @bomag
    I thought the point was to try to create a society where everyone could flourish.

    You should check out the careers of Stalin, Mao, Hitler, Pol Pot, the average African dictator, and a European Union bureaucrat.

    Some people like the sound of breaking glass.
    , @meh

    “In all seriousness, the whole point of power in a society is to force everyone else to not talk about the thinks you don’t like.”

    This idea of power confuses me. I thought the point was to try to create a society where everyone could flourish.
     
    https://www.youtube.com/watch?v=_n5E7feJHw0
  24. Great post, I think tops in a while.

    Forecast as a Fox: Bush will be on the ticket, vp if not prez. Because…his name is Bush. I say that as a fox.

    Maybe something fluky will happen, like his dad dies at a great time for his campaign to effectively get free sympathetic air time for a week, and people go oh what a great family, a great son, or something. Or Trump gets assassinated. I’ll come back to that.

    Maybe the little thing about Bush 41 that never didn’t help to get him ahead was his ceaseless habit of writing little thank you notes to everyone who ever did him anything and sometimes didn’t know they’d done anything. People who worked for him and never talked to him got them, several of them. That’s a guy who knows he’s no good on the stump and needs institutional loyalty to attain power. And what luck the guy had. There was a video camera, in the 40s, on the boat he swam to when his plain was shot down, filming him climb aboard. He founded an oil company then immediately ran for the House. Two terms there, three sweet institutional appointments, and then he’s made Director of the CIA. (Which he claimed at his confirmation he had never worked for before, but we know from an office memo that the CIA did send a guy up from Texas to DC to handle fallout right after JFK was assassinated named George Bush.) Just one year there (tho they named the headquarter after him) and then he’s running for President and becomes VP.

    Then Reagan gets shot by the incredibly insane son of his friends. Only assassination attempt that I know of when the guy was just flat out nuts, unless you count sirhan sirhan’s blackout. Now, readers around here should know that the CIA does know how to make you insane with a motivation to murder a specific person. Yes they do, but you shouldn’t look it up, lest they flag you for it. Had Reagan died, nothing could have been more convenient for suspicion’s sake than that Bush was friends of the assassin’s family. That’s obvious, and a CIA guy would think just like that.

    Then he was President and he started a war. Then his son was president, and he started a war.

    I wouldn’t want him to publicly admit it and I don’t think he ever would, but I do hope Steve knows that the first three steel buildings in history to collapse from fire didn’t collapse on 9/11 because of damn fire. I know: yeah yeah the Bushes are evil join the chorus. But They Are. They’re a crime family. Prescott had designs to overthrow Roosevelt and establish a dictatorship. Bush 41 is basically a guy great at being old fashioned which really just means acting like you’re above everyone around you in a way that makes them love you. And I remember David Frum actually looking chastened when he said the big misperception about Bush 43 is that he’s a nice guy cause he is not. He’s a psychopath by plenty of measures I’m sure.

    I hope Jeb is really a Catholic. But Trump should watch his back extra well.

  25. Priss Factor [AKA "skiapolemistis"] says:

  26. @Paleo Retiree
    I'd love to see someone (someone more determined, organized and interested than I am) run a blog devoted to tracking pundits and their predictions. Who's been wildly wrong? Who has tended to be right?

    Why is no one keeping a running scorecard on these clowns? Or is someone, and I'm just not aware of it?

    Why is no one keeping a running scorecard on these clowns?

    Tetlock makes it very clear why: they use vague language and almost never specify time frame. “Likely” ranges from 5% to 49% – keeping a meaningful scorecard on such estimate is not possible.

    • Replies: @silviosilver
    I don't see how you could score it even if they gave very precise percentage estimates, as in "I predict there is a 47.5% chance of X." That means the odds of X occurring are less than one in two, but if X fails to occur what difference does it make whether their prediction was 5% or 25% or 47.5%? Do you give them extra points for assigning extra-low odds to the event?

    The only way you could really rate them is on a right/wrong basis, but for that to be meaningful they would have to be presented with events for which the "true" odds are exactly 50% - like a fair coin about to be tossed - and then a long-term better-than-average right/wrong record would tell you something meaningful about their forecasting abilities. But how could anyone determine whether the true odds of an event are 50/50 or not? Or maybe Tetlock already covers this and it's my fault for being too lazy to look it up.
  27. WGG [AKA "World\'s Greatest Grandson"] says:

    Hillary at 60%? Hardly. The only way Hillary wins is if the delegates at the Republican convention knife Trump in the back like Julius Caesar and deliberately choose to ignore the Republican voters. So let’s say Repub delegates nominate Jeb who would be polling at a hearty 28%, trailing by half Trump at 59% and leave some room for the also-rans. Two possibilities open up:

    1- Trump doesn’t run third party. Jeb runs as the repub, but most of the right stays home in protest- Hillary wins.

    2- Trump runs third party and takes 2/3 of Republican voters with him. Hillary wins with a dismal 43% plurality of popular vote but takes the electoral college. Even though this scenario ends with Beelzebub in the White House, it creates a huge opportunity to finally dump the Republican party once and for all, as Trump’s coalition will have enough heft to stick around after the election.

    If there are no shenanigans at the Repub convention i.e. the nominee has the backing of the popular Republican vote, I don’t think Hillary has a chance in Hades to win. She is too unlikable. Emails, shmemails- who would ever want to “have a beer” with icy granny the nagging, finger-wagging, entitled, old, fat, sardonic witch? She is the anti-matter of charm, grace, wit, humor and good tidings.

    In sum, I give Hillary 35% chance of winning. How much does the consultant class hate the voters? That’s what it hangs on. If they are willing to snuff the GOP over it, then the lady wins it all.

    • Replies: @Anonymous
    Hillary at 60%? Hardly.

    This was a pure hypothetical. IARPA tournament did not include any questions that deal with domestic issues, so no forecasts about Hillary's chances were generated. This will probably change soon because Tetlock & Co appear to want to keep going on their own with these tournaments and here is your chance to sign up and see how good you are: http://www.goodjudgment.com/reg.php

    Hillary at 0.3 sounds about right to me.
    , @wren
    The only way Hillary wins is if the delegates at the Republican convention knife Trump in the back like Julius Caesar and deliberately choose to ignore the Republican voters.

    That seems to be an establishment GOP plan.

    http://www.breitbart.com/big-government/2015/08/22/gop-consultant-lays-out-new-genius-plan-to-take-down-trump-how-brutus-killed-caesar-get-close-then-shiv-him-in-the-ribs/
    , @Harry Baldwin
    who would ever want to “have a beer” with icy granny the nagging, finger-wagging, entitled, old, fat, sardonic witch?

    I take a back seat to no one in my disdain for Hillary, but by American standards she is not what we would call fat. BTW, as soon as I took exception to that I recalled the following exchange between Porky Pig and Daffy Duck:

    Porky Pig: T-T-That does it! You web-footed, n-n-no good, two-timing, d-d-double-crossing, d-d-double-dealing, unsanitary old snake in the grass!

    Daffy Duck: Unsanitary?!

     

  28. @Mark Minter
    @Sailer

    I saw this tweet yesterday. It was from one of the prime alt-right "Shitposters" from twitter that is taking the fight straight at the Republican establishment writers. The guys can gang up on whoever wrote whatever piece that day and just beat the hell out of him intellectually and via that particular form of taunting. These young guys are doing incredible things and the stuff they produce is vulgar, yet if you are educated, you see the understated intellectualism that their stuff contains.

    The tweet said (and I paraphrase because I just cannot locate the actual tweet), "I wouldn't go after these people so viciously if they hadn't marginalized Steve Sailer."

    At once, for these guys, their motives in saying something like this are "Payback" and "Justification". They want to "get them" for you. And that they are intellectually justified in doing so because if these people did marginalize you, then in no way should these people be allowed to operate in a significant capacity in the public domain of discussion. They are either stupid or evil.

    The current front lines are full of people that think and say, "Remember Steve Sailer".

    Really? That’s great.

  29. Anonymous • Disclaimer says:

    Steve,
    My personal take is that any ‘forecast’ made by an economist is absolutely and totally worthless – you would get a better result simply by tossing a coin in the air.
    Be particularly wary of those ‘made for the media’ type quotes in which it is confidently asserted that ‘the WTO, NAFTA, TTIP, EU’ , or what have you, will ‘add X number of dollars to the national economy’ if adopted. Every now and then some shithead ventures to say the same thing about uncontrolled immigration.
    In absolutely every case, those claims turn out not just to be untrue but turn out to be damnable filthy lies.
    I will remember the introduction of the euro currency back in the early 90s. Going with their typical herd instinct virtually every bigfoot economist you could name expounded the virtues of the euro, because it was the ‘trendy’ thing to do, expounded the supposed ‘benefits’ of surrendering fiscal autonomy and screamed loudly that the euro was the best thing since sliced bread. Of course, dumb bastard politicians eager to be thought of as ‘smart’ by bigfoot economists did everything in their power to get Britain in. Only a handful of right-wing Tory MPs and Britain’s right-wing press stopped it.

    Now you hear economists all over the shop saying that they were against the euro all the time and that the euro is a ‘crazy idea’. Bullshit. I remember well. They never said that.
    What’s Kennedy’s line about ‘failure being an orphan’ again?
    What you find, if you observe, is that these people, generally, are full of shit, jump from one trendy cause to another, quickly, quietly and sneakily shamelessly deny – like flatulence – their past failed positions, and are generally worthless.
    The only gold thing is they often embarrass politicians – tossers whom I hold in even higher contempt – when they leave the vain, shallow and dumb politician holding *their* tar-baby, which they will deny and deny and deny ownership.

  30. Anonymous • Disclaimer says:
    @WGG
    Hillary at 60%? Hardly. The only way Hillary wins is if the delegates at the Republican convention knife Trump in the back like Julius Caesar and deliberately choose to ignore the Republican voters. So let's say Repub delegates nominate Jeb who would be polling at a hearty 28%, trailing by half Trump at 59% and leave some room for the also-rans. Two possibilities open up:

    1- Trump doesn't run third party. Jeb runs as the repub, but most of the right stays home in protest- Hillary wins.

    2- Trump runs third party and takes 2/3 of Republican voters with him. Hillary wins with a dismal 43% plurality of popular vote but takes the electoral college. Even though this scenario ends with Beelzebub in the White House, it creates a huge opportunity to finally dump the Republican party once and for all, as Trump's coalition will have enough heft to stick around after the election.

    If there are no shenanigans at the Repub convention i.e. the nominee has the backing of the popular Republican vote, I don't think Hillary has a chance in Hades to win. She is too unlikable. Emails, shmemails- who would ever want to "have a beer" with icy granny the nagging, finger-wagging, entitled, old, fat, sardonic witch? She is the anti-matter of charm, grace, wit, humor and good tidings.

    In sum, I give Hillary 35% chance of winning. How much does the consultant class hate the voters? That's what it hangs on. If they are willing to snuff the GOP over it, then the lady wins it all.

    Hillary at 60%? Hardly.

    This was a pure hypothetical. IARPA tournament did not include any questions that deal with domestic issues, so no forecasts about Hillary’s chances were generated. This will probably change soon because Tetlock & Co appear to want to keep going on their own with these tournaments and here is your chance to sign up and see how good you are: http://www.goodjudgment.com/reg.php

    Hillary at 0.3 sounds about right to me.

  31. @WGG
    Hillary at 60%? Hardly. The only way Hillary wins is if the delegates at the Republican convention knife Trump in the back like Julius Caesar and deliberately choose to ignore the Republican voters. So let's say Repub delegates nominate Jeb who would be polling at a hearty 28%, trailing by half Trump at 59% and leave some room for the also-rans. Two possibilities open up:

    1- Trump doesn't run third party. Jeb runs as the repub, but most of the right stays home in protest- Hillary wins.

    2- Trump runs third party and takes 2/3 of Republican voters with him. Hillary wins with a dismal 43% plurality of popular vote but takes the electoral college. Even though this scenario ends with Beelzebub in the White House, it creates a huge opportunity to finally dump the Republican party once and for all, as Trump's coalition will have enough heft to stick around after the election.

    If there are no shenanigans at the Repub convention i.e. the nominee has the backing of the popular Republican vote, I don't think Hillary has a chance in Hades to win. She is too unlikable. Emails, shmemails- who would ever want to "have a beer" with icy granny the nagging, finger-wagging, entitled, old, fat, sardonic witch? She is the anti-matter of charm, grace, wit, humor and good tidings.

    In sum, I give Hillary 35% chance of winning. How much does the consultant class hate the voters? That's what it hangs on. If they are willing to snuff the GOP over it, then the lady wins it all.

    The only way Hillary wins is if the delegates at the Republican convention knife Trump in the back like Julius Caesar and deliberately choose to ignore the Republican voters.

    That seems to be an establishment GOP plan.

    http://www.breitbart.com/big-government/2015/08/22/gop-consultant-lays-out-new-genius-plan-to-take-down-trump-how-brutus-killed-caesar-get-close-then-shiv-him-in-the-ribs/

    • Replies: @Anonymous
    In Caesar/Brutus analogies why is the former always taken to symbolize the more wronged party? (It seems to be the default analogy in cases where Jesus/Judas would be a bit much.) I think this says something about the common psyche and humanity's native capacity for representative democracy...
  32. @Mark Minter
    @Sailer

    I saw this tweet yesterday. It was from one of the prime alt-right "Shitposters" from twitter that is taking the fight straight at the Republican establishment writers. The guys can gang up on whoever wrote whatever piece that day and just beat the hell out of him intellectually and via that particular form of taunting. These young guys are doing incredible things and the stuff they produce is vulgar, yet if you are educated, you see the understated intellectualism that their stuff contains.

    The tweet said (and I paraphrase because I just cannot locate the actual tweet), "I wouldn't go after these people so viciously if they hadn't marginalized Steve Sailer."

    At once, for these guys, their motives in saying something like this are "Payback" and "Justification". They want to "get them" for you. And that they are intellectually justified in doing so because if these people did marginalize you, then in no way should these people be allowed to operate in a significant capacity in the public domain of discussion. They are either stupid or evil.

    The current front lines are full of people that think and say, "Remember Steve Sailer".

    Damn man despite my stupor reading that lit me up with adrenaline. I’ve never been on Twitter and didn’t know “incredible things” could be done on Twitter. But now I want to TWEET. But tell me, was there a precipitating event or phase that I missed when Steve became more marginalized? Because, such as Rachel Dolezal hoax, he is definitely not being not read. Shortly ago he well summed up the nature of this place and why it won’t be established in the mainstream but we’re happy warriors etc… and now I’m thinking that had an impetus I missed. Ultimately though, for one, Steve is located Left Coast, which means he can’t meet the people we would introduce him to here in DC, and two, I can’t tell that he would want to go on Fox News. And three, his being marginalized is actually a law of nature: you don’t engage the Alpha if you can’t win.

  33. This blog calls to mind something I had posted on The American Conservative a few years ago in response to a blog posted by Phil Giraldi of April 18, 2011. Ironically my comment involved something said by Philip Tetlock. I don’t know whether this anecdote makes Robert Gates a “fox” or a “hedgehog,” but either way he was certainly a blind fox or a blind hedgehog:

    “tbraton says:

    April 19, 2011 at 9:25 am

    “The utter wastefulness of this spending is really brought into focus when you consider the abysmal track record of the CIA. What are we getting for all this money–just more of the same failure!”

    When Bob Gates was at the CIA in the 1980’s, his area of specialty was the Soviet Union. Wikipedia has the following anecdote under the heading “Predictions of Soviet Collapse”:

    “Steward Brand said when introducing the work of Philip Tetlock that Brand’s partner had given a talk in the 1980s to top CIA people about the future of the Soviet Union. One scenario he raised was that the Soviet bloc might break up; a sign of this happening would be the rise of unknown Mikhail Gorbachev through the party ranks. A CIA analyst said that the presentation was fine, but there was no way the Soviet Union was going to break up in his lifetime or his children’s lifetime. The analyst’s name was Robert Gates.[36]” http://en.wikipedia.org/wiki/Predictions_of_Soviet_collapse#Robert_Gates

    I can remember reading a review of a book written by a female analyst at the Hoover Institution around 1983 to 1985 with the title “The Coming Economic Collapse of the Soviet Union” or something like that. I have been trying to track down the book but have been unsuccessful so far.”
    http://www.theamericanconservative.com/2011/04/18/spy-talk/comment-page-1/#comment-49832

    P.S.–Another commenter came up with the name I was looking for, Judy Shelton, and I was able to track down her book and posted the following comment:
    “tbraton says:

    April 19, 2011 at 11:57 am

    maxsnafu, the name of the book was “The Coming Soviet Crash,” and it was published in January 1989, several years later than I remember.

    http://www.amazon.com/Coming-Soviet-Crash-Gorbachevs-Desperate/dp/002928581X

    Btw, this is from one of the reviews on the Amazon link: “Shelton concludes by warning against making capital or resources available to the USSR since any improvement in Soviet economic performance will enhance its military capabilities.” I have always been puzzled by the fact that we followed two completely different policies with respect to the U.S.S.R. and the People’s Republic of China (after Nixon). I would merely note that the Soviet Union disappeared 20 years ago.

  34. Anonymous • Disclaimer says:
    @The Z Blog

    So my advice for better forecasting is to give up on current sacred cows: stop making people choose between career marginalization and not mentioning massively important factors.
     
    Is this before or after we allow leprechauns to ride unicorns on Sunday?

    In all seriousness, the whole point of power in a society is to force everyone else to not talk about the thinks you don't like.

    Sailer’s suggestion is rhetorical since few in society share his (vaguely aspie) obsession with deriving a mathematical rule for Good Government. In fact most don’t care when a policy not only fails but seems to achieve the opposite of its stated goal (see: Veterans Affairs; FDA; EPA; etc. etc.), they only dig in more on their proclivities. In an idiocratized nation the “sacred cows” don’t need special protection, since they are dearly prized in the status hierarchy for their usefulness against having to face reality.

    Regardless of what this Doktor Falkenstein has to say (from his castle keep?) the Axelrod blockquote is straight-up Taleb. In “Fooled By Randomness” he showed the simple arithmetic for Wall Street fortuneteller distribution: Given a large pool of active money managers all doing just enough trading to look busy, a certain quantum will be “right” 3, 4, 5 years in a row on the basis of dumb luck. The thoroughgoing refusal to recognize happenstance for what it is means they will probably be accorded the genius tag when this outcome inevitably transpires (and what reason would the investment kings themselves have to dispute this sacred public seal of approval?)

    • Replies: @The Z Blog
    I think it obvious that I was being snarky.

    Every society has taboos. They exist for a reason. Over time the reason becomes less obvious and sometimes goes away.

    With regards to fortune telling, it will always be faked as things with high value are always faked and faked a lot. Ask any collector. The most valuable thing to any man is to know his destiny. This has been true since the dawn of man. Today we call it big data. In another age it was soothsaying.
  35. @wren
    The only way Hillary wins is if the delegates at the Republican convention knife Trump in the back like Julius Caesar and deliberately choose to ignore the Republican voters.

    That seems to be an establishment GOP plan.

    http://www.breitbart.com/big-government/2015/08/22/gop-consultant-lays-out-new-genius-plan-to-take-down-trump-how-brutus-killed-caesar-get-close-then-shiv-him-in-the-ribs/

    In Caesar/Brutus analogies why is the former always taken to symbolize the more wronged party? (It seems to be the default analogy in cases where Jesus/Judas would be a bit much.) I think this says something about the common psyche and humanity’s native capacity for representative democracy…

    • Replies: @Romanian
    For a good many centuries after the fall of the Empire, it was Brutus who was held to be the hero, sticking it to the tyrant but failing to prevent tyranny from befalling the Republic. That changed in the Middle Ages, and the general view has been that Caesar is the wronged one and that the political assassination (and the way it was performed, bu ganging up on Caesar) make Brutus the bad guy. It just goes to show that, after you get rid of the objective facts (dates etc), our interpretation of history says more about ourselves than about history itself.
  36. “So I’m kind of a multi-fox.” You are a hedgefox, my dear sir.

  37. “We’re seventeen years off. … What do you think of that?”

    That the Ukrainian hedgehog finally landed a job with Ms. Nuland?

  38. Anonymous • Disclaimer says:

    If my dilettante viewing of CNBC is any indication people in finance get blasted all the time for their lousy short-term predictions. One such example comes to mind of Meredith Whitney auguring a cascade of muni & county bankruptcies on “60 Minutes” which, needless to say, was not soon realized, though it didn’t seem to hurt her TV personality career if it had any effect on her investment clients. Somehow one notable person will get slammed for a bad call even when multiple others were making variations thereof at the time. That “car czar” Ratner fellow was quite a punching bag back then too. Sports and movie box office are inherently unpredictable but one bad call in either field can dog you for ages.

    • Replies: @silviosilver

    If my dilettante viewing of CNBC is any indication people in finance get blasted all the time for their lousy short-term predictions.
     
    They definitely get blasted by specific portions of the public, but do they get blasted in the mass media in which they made their predictions? I remember a financial forum I used to hang out at when I first took an interest in stocks just after the dot com bust that "permabulls" like Henry Blodget and Joe Battipaglia got blasted a lot. I never saw anything remotely as critical on CNBC itself.
  39. Re: “For example, weather forecasters are increasingly optimistic that the California drought will end this winter due to heavy El Nino rains. El Nino years are correlated with warm Pacific water (and sure enough, when I was at San Onofre beach last Saturday the ocean was much less chilly than is common).

    El Nino is a tropical pacific heat anomaly that occurs cyclically. If the rest of the Pacific is normal, it will reliably cause a rainy California winter (snow in the mountains.)

    What you felt at the beach was something else: the Northern (extra-tropical) pacific heat anomaly that scientists call the “northern pacific blob.” (yes the Blob) This anomaly is new (not seen in decades) and is probably the main cause of the drought.

    In Summary:
    El Nino + normal pacific elsewhere = wet California.
    The Blob + normal tropical pacific = drought in California
    El Nino + the Blob = nobody knows, we are about to find out this winter.

    • Replies: @Steve Sailer
    I dunno. My impression is that El Nino's tend to follow summers of warm SoCal ocean water. For example, when I was on chemo in 1997, my wife and I went to Catalina and went snorkeling on the reef for several hours straight in the remarkably warm water. The following winter was a huge El Nino:

    http://www.latimes.com/local/california/la-me-0822-el-nino-1997-20150822-story.html

    Overall, cold oceans and hot lands are conducive to deserts. That's why L.A. has the sunny climate it has. The East Coast and Ireland have the warm Gulf Stream and are rainy.

    But I'm not a weather forecaster ...

  40. ‘Multi-fox’ ? – a veritable fox-earth treasure trove is to be had at iSteve.
    The ‘Richard Vixen’ of the internet.
    Not quite gone to ground yet, but double-backing on the trail.

  41. @penntothal
    Re: "For example, weather forecasters are increasingly optimistic that the California drought will end this winter due to heavy El Nino rains. El Nino years are correlated with warm Pacific water (and sure enough, when I was at San Onofre beach last Saturday the ocean was much less chilly than is common)."

    El Nino is a tropical pacific heat anomaly that occurs cyclically. If the rest of the Pacific is normal, it will reliably cause a rainy California winter (snow in the mountains.)

    What you felt at the beach was something else: the Northern (extra-tropical) pacific heat anomaly that scientists call the "northern pacific blob." (yes the Blob) This anomaly is new (not seen in decades) and is probably the main cause of the drought.

    In Summary:
    El Nino + normal pacific elsewhere = wet California.
    The Blob + normal tropical pacific = drought in California
    El Nino + the Blob = nobody knows, we are about to find out this winter.

    I dunno. My impression is that El Nino’s tend to follow summers of warm SoCal ocean water. For example, when I was on chemo in 1997, my wife and I went to Catalina and went snorkeling on the reef for several hours straight in the remarkably warm water. The following winter was a huge El Nino:

    http://www.latimes.com/local/california/la-me-0822-el-nino-1997-20150822-story.html

    Overall, cold oceans and hot lands are conducive to deserts. That’s why L.A. has the sunny climate it has. The East Coast and Ireland have the warm Gulf Stream and are rainy.

    But I’m not a weather forecaster …

    • Replies: @Reg Cæsar

    But I’m not a weather forecaster …

     

    We kinda figured that, as the other day you used the past tense "forecasted", which is not the way it's usually putted.
    , @manton
    I've never been in cold water in Catalina in an any summer month, El Nino or not. It's always well into the 70s and sometimes feels warmer than that. There is a major change in water temp south (and east) of Point Conception.

    However, I was in the water yesterday in Santa Cruz, and not just SC, but Aptos, which is past Pleasure Point, where the water is generally very cold unlike the city of SC (which is only ordinarily cold) because the city faces due south whereas Aptos is where the shore starts to curve back south and face the west. Typical water temps never crack 60. But it was way warmer than than yesterday and people here have been telling me it's been like this all summer. You even see some surfers without wetsuits, which I have not seen since the '80s.
  42. ok, Here are my predictions.

    1. Jeb will not be the Republican nominee. The Donald if nothing else, destroyed Jeb’s chances with the “low energy” mocking comment. It’s funny because it is true and the other candidates can obliquely references it if Jeb starts getting momentum. I much prefer Jeb to W. but it is over.
    2. Carly Fiorina will be the Republican nominee for Vice President. Vastly over rated as a candidate, she will still be in the front of the line of VP candidates for her tireless and tiresome attacks on Hillary!
    3. Jeb! will go down and the low point will occur when his ! abandons him and joins the Hillary! campaign.

    • Replies: @bomag
    The low point will be when iJeb! denounces attacks on Hillary and says that she is a fine candidate.
    , @Harry Baldwin
    Ha ha--love it, especially #3. Has anyone ever used a "!" in their campaign logo who hasn't desperately needed it? Wasn't the first one "Lamar!"? We know how much enthusiasm he generated. The idea of "Trump!" is incongruous, or perhaps redundant. Trump is his own exclamation point. In fact, The Donald could afford to go all lower case, he's that dominant.
    , @tbraton
    "3. Jeb! will go down and the low point will occur when his ! abandons him and joins the Hillary! campaign."

    LOL. That just goes to show you that there is no loyalty whatsoever when it comes to politics. I have to question the intelligence of "!" however, since it has shown no judgment whatsoever in joining first one failed campaign and then jumping ship to join what looks to be another failed campaign. I think "!" may possibly be the George Will of the punctuation set.

    Actually, Carl Hiaasen has a column in today's Miami Herald urging Bush to change his campaign. This is the first item on his list of suggestions:

    "A plan to energize Jeb Bush’s presidential campaign:

    1. Add another exclamation mark to your posters and bumper stickers, so that they look like this: “Jeb!!”

    This will put you ahead on the charisma meter, because most other candidates don’t even use one exclamation point on their campaign signs!"
    Read more here: http://www.miamiherald.com/opinion/op-ed/article31827456.html#storylink=cpy
    , @AnAnon
    Fiorina is toxic and basically hands the presidency to the democrats.
  43. @WGG
    Hillary at 60%? Hardly. The only way Hillary wins is if the delegates at the Republican convention knife Trump in the back like Julius Caesar and deliberately choose to ignore the Republican voters. So let's say Repub delegates nominate Jeb who would be polling at a hearty 28%, trailing by half Trump at 59% and leave some room for the also-rans. Two possibilities open up:

    1- Trump doesn't run third party. Jeb runs as the repub, but most of the right stays home in protest- Hillary wins.

    2- Trump runs third party and takes 2/3 of Republican voters with him. Hillary wins with a dismal 43% plurality of popular vote but takes the electoral college. Even though this scenario ends with Beelzebub in the White House, it creates a huge opportunity to finally dump the Republican party once and for all, as Trump's coalition will have enough heft to stick around after the election.

    If there are no shenanigans at the Repub convention i.e. the nominee has the backing of the popular Republican vote, I don't think Hillary has a chance in Hades to win. She is too unlikable. Emails, shmemails- who would ever want to "have a beer" with icy granny the nagging, finger-wagging, entitled, old, fat, sardonic witch? She is the anti-matter of charm, grace, wit, humor and good tidings.

    In sum, I give Hillary 35% chance of winning. How much does the consultant class hate the voters? That's what it hangs on. If they are willing to snuff the GOP over it, then the lady wins it all.

    who would ever want to “have a beer” with icy granny the nagging, finger-wagging, entitled, old, fat, sardonic witch?

    I take a back seat to no one in my disdain for Hillary, but by American standards she is not what we would call fat. BTW, as soon as I took exception to that I recalled the following exchange between Porky Pig and Daffy Duck:

    Porky Pig: T-T-That does it! You web-footed, n-n-no good, two-timing, d-d-double-crossing, d-d-double-dealing, unsanitary old snake in the grass!

    Daffy Duck: Unsanitary?!

  44. I think this is more a difference between talkers/writers versus doers.

  45. @Anonymous
    "In all seriousness, the whole point of power in a society is to force everyone else to not talk about the thinks you don’t like."

    This idea of power confuses me. I thought the point was to try to create a society where everyone could flourish.

    I thought the point was to try to create a society where everyone could flourish.

    You should check out the careers of Stalin, Mao, Hitler, Pol Pot, the average African dictator, and a European Union bureaucrat.

    Some people like the sound of breaking glass.

  46. @Anonymous
    Sailer's suggestion is rhetorical since few in society share his (vaguely aspie) obsession with deriving a mathematical rule for Good Government. In fact most don't care when a policy not only fails but seems to achieve the opposite of its stated goal (see: Veterans Affairs; FDA; EPA; etc. etc.), they only dig in more on their proclivities. In an idiocratized nation the "sacred cows" don't need special protection, since they are dearly prized in the status hierarchy for their usefulness against having to face reality.

    Regardless of what this Doktor Falkenstein has to say (from his castle keep?) the Axelrod blockquote is straight-up Taleb. In "Fooled By Randomness" he showed the simple arithmetic for Wall Street fortuneteller distribution: Given a large pool of active money managers all doing just enough trading to look busy, a certain quantum will be "right" 3, 4, 5 years in a row on the basis of dumb luck. The thoroughgoing refusal to recognize happenstance for what it is means they will probably be accorded the genius tag when this outcome inevitably transpires (and what reason would the investment kings themselves have to dispute this sacred public seal of approval?)

    I think it obvious that I was being snarky.

    Every society has taboos. They exist for a reason. Over time the reason becomes less obvious and sometimes goes away.

    With regards to fortune telling, it will always be faked as things with high value are always faked and faked a lot. Ask any collector. The most valuable thing to any man is to know his destiny. This has been true since the dawn of man. Today we call it big data. In another age it was soothsaying.

  47. @Steve Sailer
    I dunno. My impression is that El Nino's tend to follow summers of warm SoCal ocean water. For example, when I was on chemo in 1997, my wife and I went to Catalina and went snorkeling on the reef for several hours straight in the remarkably warm water. The following winter was a huge El Nino:

    http://www.latimes.com/local/california/la-me-0822-el-nino-1997-20150822-story.html

    Overall, cold oceans and hot lands are conducive to deserts. That's why L.A. has the sunny climate it has. The East Coast and Ireland have the warm Gulf Stream and are rainy.

    But I'm not a weather forecaster ...

    But I’m not a weather forecaster …

    We kinda figured that, as the other day you used the past tense “forecasted”, which is not the way it’s usually putted.

  48. @midwestmark
    ok, Here are my predictions.

    1. Jeb will not be the Republican nominee. The Donald if nothing else, destroyed Jeb's chances with the "low energy" mocking comment. It's funny because it is true and the other candidates can obliquely references it if Jeb starts getting momentum. I much prefer Jeb to W. but it is over.
    2. Carly Fiorina will be the Republican nominee for Vice President. Vastly over rated as a candidate, she will still be in the front of the line of VP candidates for her tireless and tiresome attacks on Hillary!
    3. Jeb! will go down and the low point will occur when his ! abandons him and joins the Hillary! campaign.

    The low point will be when iJeb! denounces attacks on Hillary and says that she is a fine candidate.

  49. @The Z Blog

    So my advice for better forecasting is to give up on current sacred cows: stop making people choose between career marginalization and not mentioning massively important factors.
     
    Is this before or after we allow leprechauns to ride unicorns on Sunday?

    In all seriousness, the whole point of power in a society is to force everyone else to not talk about the thinks you don't like.

    Pretty much. I mean, every bunch of powerful people protects their interests. The powerless try to also, but they’re powerless. Back in medieval Europe you couldn’t talk about the king’s retarded son without being killed.

    It’s all Who-Whom–that’s been the big thing I’ve learned from Sailer’s blog. Even policies that look neutral are usually slanted to favor one group over another.

  50. @Anonymous
    "In all seriousness, the whole point of power in a society is to force everyone else to not talk about the thinks you don’t like."

    This idea of power confuses me. I thought the point was to try to create a society where everyone could flourish.

    “In all seriousness, the whole point of power in a society is to force everyone else to not talk about the thinks you don’t like.”

    This idea of power confuses me. I thought the point was to try to create a society where everyone could flourish.

    https://www.youtube.com/watch?v=_n5E7feJHw0

  51. @Lot
    That CIA online prediction tournament is horribly designed. I quit because it was no fun to play. I did get my $150 for doing it for a year though.

    Was there some better advice gentile economists were trying to give Russia in the 90's? The country was rotten from the inside out in 1990, just as the worst bear market in the price of its commodity exports from gold to oil to nickel was reaching multi decade real lows. The worst thing Jews did to Russia in the 1990s was leave en masse taking their considerable human capital with them.

    Iffy. You’ve got two groups of Jews here:

    The economists at Harvard, who advocated for privatization that turned Russia into a mafia state. I’ve never seen any evidence they benefited personally, but these Ivy League types tend to be connected, so who knows?

    Russian Jews, who saw an out from Russia and took it.

    • Replies: @Bill Jones
    There was an excellent piece in The Nation in 1998 called
    "The Harvard Boys do Russia"
    http://www.thenation.com/article/harvard-boys-do-russia/

    - they are now, of course, doing the USA.
    , @Lot
    I agree they are different groups. My point is that if you want to look at Russia's economy and Jews in the 90's, mass emigration is a lot more significant than American Jewish economic advisers.

    Steve seems to think that American economists, mostly Jews, played some possibly significant part in Russia's economic basketcase status in the 90's. My point is this is wrong for many reasons:

    1. There was no competing group of economists, Jewish or otherwise, who were like "No, keep your industries state-owned, communism really isn't so bad!" In retrospect, privatization was a disaster, but I think keeping nearly all of Russia's economy state-owned would have been a disaster too. The ideal scenario, a non-corrupt privatization, is not something the fundamentally corrupt Russia could have pulled off.

    2. There is no reason to think the fact that Russia hired a few American economists had anything to do with its actual policies. These are the people who just a decade before were arrogant enough to try to export communism violently throughout the world. And now they want advice from Americans, which they will follow? More likely they wanted some Harvard guys to window-dress the policies they had selected on their own.

    3. The actual cause of Russia's economic performance in the 90's was the fact the country was hollowed out by decades of communism and supporting a massive defense budget, followed by a collapse in natural resource prices that were by that time the only competitive sector Russia had on the world market. The other other thing Russia of 1990 was good at was making weapons, and there was also a demand collapse in the 90's for these because of the end of the Cold War, as well as a supply surge as former communist states flooded the world market with their stockpiles.

    Steve writes: "Chua’s finding should have been cause for self-reflection and public discussion." I am fine with that. As a semi-Jew, I have reflected on this issue, and my report is that "Bad Jewish-American Economic Advice" had nothing to do with Russia's poor economic performance in the 1990's.

    You want to know why Russia is a craphole? Read this article about the state of the road between Moscow and St. Petersberg. http://www.nytimes.com/newsgraphics/2013/10/13/russia/

    This is between largest and second-largest cities, not to mention the road between the capital and most important port. In a civilized country this 440 mile, mostly flat route would take 6 to 8 hours by car or truck, in Russia it takes 12 to 24 hours. Was it American Jewish economists telling Putin to instead focus, like a strutting African dictator would do, on a super-fabulous Olympic games while leaving the basic infrastructure to decay?


    The M10 highway looks normal enough at the southern limits of St. Petersburg, but then, with a jolt, it begins to atrophy. For the next 430 miles the surface of the highway, while paved, varies from corduroy to jaw-rattling patchwork. Sometimes it has four lanes, sometimes two, with few medians and frequently no lane markings at all.

    Traffic creeps forward behind a procession of 18-wheelers hauling goods from the port of St. Petersburg, passing villages with names like Cockroachville, Teacupville and Chessville. It is the most heavily traveled cargo route in Russia, and yet for truck drivers complying with safety regulations, it takes 24 hours to travel between the two cities, said Viktor Dosenko, vice president of the International Transport Academy. On a good road, he said, the trip should take 10 hours.

    From time to time, the dismal condition of the highway has made national news. After a snowstorm in November, about 10,000 vehicles got stuck in a traffic jam that extended more than 70 miles, trapping some drivers for three days in subzero temperatures. Valery Voitko, who heads a trade union of long-haul truck drivers, described his drivers that week as “not even angry any more, but in a state of dumb despair, that year in and year out the same thing happens.”

    It is not that the Russian Federation cannot manage public works projects — next year’s Olympic Games are expected to cost $50 billion, about three and a half times the cost of last year’s Summer Games in London.
     

  52. @Sailer has an interesting life
    Here is a paste of the section I mean.

    ******
    “What are the incentives for a public intellectual?” Tetlock asked me. “There are some academics who are quite content to be relatively anonymous. But there are other people who aspire to be public intellectuals, to be pretty bold and to attach nonnegligible probabilities to fairly dramatic change. That’s much more likely to bring you attention.”

    Big, bold, hedgehog-like predictions, in other words, are more likely to get you on television. Consider the case of Dick Morris, a former adviser to Bill Clinton who now serves as a commentator for Fox News. Morris is a classic hedgehog, and his strategy seems to be to make as dramatic a prediction as possible when given the chance. In 2005, Morris proclaimed that George W. Bush’s handling of Hurricane Katrina would help Bush to regain his standing with the public.16 On the eve of the 2008 elections, he predicted that Barack Obama would win Tennessee and Arkansas.17 In 2010, Morris predicted that the Republicans could easily win one hundred seats in the U.S. House of Representatives.18 In 2011, he said that Donald Trump would run for the Republican nomination—and had a “damn good” chance of winning it.19

    All those predictions turned out to be horribly wrong. Katrina was the beginning of the end for Bush—not the start of a rebound. Obama lost Tennessee and Arkansas badly—in fact, they were among the only states in which he performed worse than John Kerry had four years earlier. Republicans had a good night in November 2010, but they gained sixty-three seats, not one hundred. Trump officially declined to run for president just two weeks after Morris insisted he would do so.

    But Morris is quick on his feet, entertaining, and successful at marketing himself—he remains in the regular rotation at Fox News and has sold his books to hundreds of thousands of people.

    Foxes sometimes have more trouble fitting into type A cultures like television, business, and politics. Their belief that many problems are hard to forecast—and that we should be explicit about accounting for these uncertainties—may be mistaken for a lack of self-confidence. Their pluralistic approach may be mistaken for a lack of conviction; Harry Truman famously demanded a “one-handed economist,” frustrated that the foxes in his administration couldn’t give him an unqualified answer.

    But foxes happen to make much better predictions. They are quicker to recognize how noisy the data can be, and they are less inclined to chase false signals. They know more about what they don’t know.
    ******
    --Nate Silver, The Signal and The Noise

    ---


    Steve, I'm not sure large pastes are allowed, but I figure I'll risk it anyway.

    Consider the case of Dick Morris, a former adviser to Bill Clinton who now serves as a commentator for Fox News.

    Of course, his Epic Fail at predicting tht 2012 election cost Morris his slot at Fox. I haven’t seen him in years. Unfortunately, Karl Rove is still a regular.

  53. So my advice for better forecasting is to give up enforcing sacred cows: stop making people choose between career marginalization and not mentioning massively important factors.

    For that crowd, I think the sacred cows are more important than better forecasting results.

  54. @midwestmark
    ok, Here are my predictions.

    1. Jeb will not be the Republican nominee. The Donald if nothing else, destroyed Jeb's chances with the "low energy" mocking comment. It's funny because it is true and the other candidates can obliquely references it if Jeb starts getting momentum. I much prefer Jeb to W. but it is over.
    2. Carly Fiorina will be the Republican nominee for Vice President. Vastly over rated as a candidate, she will still be in the front of the line of VP candidates for her tireless and tiresome attacks on Hillary!
    3. Jeb! will go down and the low point will occur when his ! abandons him and joins the Hillary! campaign.

    Ha ha–love it, especially #3. Has anyone ever used a “!” in their campaign logo who hasn’t desperately needed it? Wasn’t the first one “Lamar!”? We know how much enthusiasm he generated. The idea of “Trump!” is incongruous, or perhaps redundant. Trump is his own exclamation point. In fact, The Donald could afford to go all lower case, he’s that dominant.

    • Replies: @Anonymous
    'Trump' is Yorkshire-English slang for flatulence.
  55. @rod1963
    Forecasting some things isn't hard.

    For example anyone could have predicted the Dot Com bubble would blow up, same with the 2007 mortgage bubble imploding. Provided you weren't invested in it. Same with the current down turn.

    Really look at the current valuations for Google and Facerape. These are bullshit companies that don't make a darn thing, they sell ad space and datamine users. This is Tulipmania all over. Yet all the "wiser heads" say invest, invest!! in a topped out market.

    The wiser heads usually turn out to be crooks of some sort.

    Same for Russia. Anyone with a brain would know you don't send a bunch of sleazy Jewish Wall Street investment banker types down there. All these bottom feeders know is loot and scoot. They destroy businesses they don't build them.

    As for Friedman, he's a neoliberal shill who made good by marrying into a billionaire family. His main routine is to promote globalism in some form usually for comfortably well off whites who don't do much thinking. He lulls them into a smug complacency while their world and their kids future will be cut out from underneath by the globalists he pimps for. Think of him as a seller of flavored arsenic drinks. By the time you realize what happened, you're finished.

    He's a evil man.

    “As for Friedman, he’s a neoliberal shill who made good by marrying into a billionaire family.”

    Are family still Billionaires after the Commercial RE collapse?

  56. @SFG
    Iffy. You've got two groups of Jews here:

    The economists at Harvard, who advocated for privatization that turned Russia into a mafia state. I've never seen any evidence they benefited personally, but these Ivy League types tend to be connected, so who knows?

    Russian Jews, who saw an out from Russia and took it.

    There was an excellent piece in The Nation in 1998 called
    “The Harvard Boys do Russia”
    http://www.thenation.com/article/harvard-boys-do-russia/

    – they are now, of course, doing the USA.

  57. An almost universal failure…

    Ms. Yellen told the Financial Crisis Inquiry Commission in 2010:
    “For my own part,” Ms. Yellen said, “I did not see and did not appreciate what the risks were with securitization, the credit ratings agencies, the shadow banking system, the S.I.V.’s — I didn’t see any of that coming until it happened.”

    And back in 2007…
    “One reason that risk premiums may be low is precisely because the environment is less risky… The Fed has long focused on ensuring that banks hold adequate capital and that they carefully monitor and manage risks. As a consequence, banks are well-positioned to weather the financial turmoil.”
    – Janet Yellen, July-September 2007

    “On July 8, 2009, Christopher Westley blogged a paper titled The Financial Crisis and the Systemic Failure of the Economics Profession published in Critical Review, by Colander, Goldberg, Haas, Juselius, Kirman, Lux, and Sloth with the following abstract:

    “Economists not only failed to anticipate the financial crisis; they may have contributed to it–with risk and derivatives models that, through spurious precision and untested theoretical assumptions, encouraged policy makers and market participants to see more stability and risk sharing than was actually present. Moreover, once the crisis occurred, it was met with incomprehension by most economists because of models that, on the one hand, downplay the possibility that economic actors may exhibit highly interactive behavior; and, on the other, assume that any homogeneity will involve economic actors sharing the economist’s own putatively correct model of the economy, so that error can stem only from an exogenous shock.”

    http://www.economicpredictions.org/why-economists-failed-to-predict-the-financial-crisis.htm

  58. @midwestmark
    ok, Here are my predictions.

    1. Jeb will not be the Republican nominee. The Donald if nothing else, destroyed Jeb's chances with the "low energy" mocking comment. It's funny because it is true and the other candidates can obliquely references it if Jeb starts getting momentum. I much prefer Jeb to W. but it is over.
    2. Carly Fiorina will be the Republican nominee for Vice President. Vastly over rated as a candidate, she will still be in the front of the line of VP candidates for her tireless and tiresome attacks on Hillary!
    3. Jeb! will go down and the low point will occur when his ! abandons him and joins the Hillary! campaign.

    “3. Jeb! will go down and the low point will occur when his ! abandons him and joins the Hillary! campaign.”

    LOL. That just goes to show you that there is no loyalty whatsoever when it comes to politics. I have to question the intelligence of “!” however, since it has shown no judgment whatsoever in joining first one failed campaign and then jumping ship to join what looks to be another failed campaign. I think “!” may possibly be the George Will of the punctuation set.

    Actually, Carl Hiaasen has a column in today’s Miami Herald urging Bush to change his campaign. This is the first item on his list of suggestions:

    “A plan to energize Jeb Bush’s presidential campaign:

    1. Add another exclamation mark to your posters and bumper stickers, so that they look like this: “Jeb!!”

    This will put you ahead on the charisma meter, because most other candidates don’t even use one exclamation point on their campaign signs!”
    Read more here: http://www.miamiherald.com/opinion/op-ed/article31827456.html#storylink=cpy

  59. @Busby
    Hitler's choice of Von Manstein's plan had more to do with his disappointment that the combined brain power and experience of the Great General Staff had produced a mechanized Schlieffen Plan. His predictive skill ended in 1939 with the declaration of war by Great Britain. Victory through bluff and intimidation only works when your opponents can choose between appeasement and war.
    Ironically, Britain's guarantee to Poland was made on the assumption that Hitler's next target was Bessarabia, according to Manchester.

    Ironically, Britain’s guarantee to Poland was made on the assumption that Hitler’s next target was Bessarabia, according to Manchester.

    I’ve never heard that. Why Bessarabia? At that point, it was still a region of Romania, and only became the Moldovan SSR and part of Ukraine SSR after the War. For resources, for easier land access to Russia? The Germans got the Romanian oil either way, because of the installation of a favorable regime in Romania, trying to play the game so the state would not lose territory.

    • Replies: @Anonymous
    For a Romanian, you sound strange. FYI: Bessarabia was occupied and incorporated into USSR in 1940.
  60. Anonymous • Disclaimer says:
    @rod1963
    Forecasting some things isn't hard.

    For example anyone could have predicted the Dot Com bubble would blow up, same with the 2007 mortgage bubble imploding. Provided you weren't invested in it. Same with the current down turn.

    Really look at the current valuations for Google and Facerape. These are bullshit companies that don't make a darn thing, they sell ad space and datamine users. This is Tulipmania all over. Yet all the "wiser heads" say invest, invest!! in a topped out market.

    The wiser heads usually turn out to be crooks of some sort.

    Same for Russia. Anyone with a brain would know you don't send a bunch of sleazy Jewish Wall Street investment banker types down there. All these bottom feeders know is loot and scoot. They destroy businesses they don't build them.

    As for Friedman, he's a neoliberal shill who made good by marrying into a billionaire family. His main routine is to promote globalism in some form usually for comfortably well off whites who don't do much thinking. He lulls them into a smug complacency while their world and their kids future will be cut out from underneath by the globalists he pimps for. Think of him as a seller of flavored arsenic drinks. By the time you realize what happened, you're finished.

    He's a evil man.

    But, one would have thought, for historic reasons, if nothing else, Russians would would have had a certain ‘scepticism’ regarding the ethnicity you describe.
    Many who know Russians would venture that this ‘scepticism’ is perhaps the strongest emotion that they have.
    But, surprisingly, during the Gorbachev/Yeltsin years of madness, the Lord of Misrule well and truly ruled and missed.
    The moral is that sudden episodes of uncharacteristic madness – whether the fault be in the stars, with ‘us’ or with Gorbachev and The Economist magazine envelope entire nations, just as they overtake individual persons.
    Note Bene the ‘migrant’ madness overtaking the EU.

  61. @Harry Baldwin
    Ha ha--love it, especially #3. Has anyone ever used a "!" in their campaign logo who hasn't desperately needed it? Wasn't the first one "Lamar!"? We know how much enthusiasm he generated. The idea of "Trump!" is incongruous, or perhaps redundant. Trump is his own exclamation point. In fact, The Donald could afford to go all lower case, he's that dominant.

    ‘Trump’ is Yorkshire-English slang for flatulence.

  62. @SFG
    Iffy. You've got two groups of Jews here:

    The economists at Harvard, who advocated for privatization that turned Russia into a mafia state. I've never seen any evidence they benefited personally, but these Ivy League types tend to be connected, so who knows?

    Russian Jews, who saw an out from Russia and took it.

    I agree they are different groups. My point is that if you want to look at Russia’s economy and Jews in the 90’s, mass emigration is a lot more significant than American Jewish economic advisers.

    Steve seems to think that American economists, mostly Jews, played some possibly significant part in Russia’s economic basketcase status in the 90’s. My point is this is wrong for many reasons:

    1. There was no competing group of economists, Jewish or otherwise, who were like “No, keep your industries state-owned, communism really isn’t so bad!” In retrospect, privatization was a disaster, but I think keeping nearly all of Russia’s economy state-owned would have been a disaster too. The ideal scenario, a non-corrupt privatization, is not something the fundamentally corrupt Russia could have pulled off.

    2. There is no reason to think the fact that Russia hired a few American economists had anything to do with its actual policies. These are the people who just a decade before were arrogant enough to try to export communism violently throughout the world. And now they want advice from Americans, which they will follow? More likely they wanted some Harvard guys to window-dress the policies they had selected on their own.

    3. The actual cause of Russia’s economic performance in the 90’s was the fact the country was hollowed out by decades of communism and supporting a massive defense budget, followed by a collapse in natural resource prices that were by that time the only competitive sector Russia had on the world market. The other other thing Russia of 1990 was good at was making weapons, and there was also a demand collapse in the 90’s for these because of the end of the Cold War, as well as a supply surge as former communist states flooded the world market with their stockpiles.

    Steve writes: “Chua’s finding should have been cause for self-reflection and public discussion.” I am fine with that. As a semi-Jew, I have reflected on this issue, and my report is that “Bad Jewish-American Economic Advice” had nothing to do with Russia’s poor economic performance in the 1990’s.

    You want to know why Russia is a craphole? Read this article about the state of the road between Moscow and St. Petersberg. http://www.nytimes.com/newsgraphics/2013/10/13/russia/

    This is between largest and second-largest cities, not to mention the road between the capital and most important port. In a civilized country this 440 mile, mostly flat route would take 6 to 8 hours by car or truck, in Russia it takes 12 to 24 hours. Was it American Jewish economists telling Putin to instead focus, like a strutting African dictator would do, on a super-fabulous Olympic games while leaving the basic infrastructure to decay?

    The M10 highway looks normal enough at the southern limits of St. Petersburg, but then, with a jolt, it begins to atrophy. For the next 430 miles the surface of the highway, while paved, varies from corduroy to jaw-rattling patchwork. Sometimes it has four lanes, sometimes two, with few medians and frequently no lane markings at all.

    Traffic creeps forward behind a procession of 18-wheelers hauling goods from the port of St. Petersburg, passing villages with names like Cockroachville, Teacupville and Chessville. It is the most heavily traveled cargo route in Russia, and yet for truck drivers complying with safety regulations, it takes 24 hours to travel between the two cities, said Viktor Dosenko, vice president of the International Transport Academy. On a good road, he said, the trip should take 10 hours.

    From time to time, the dismal condition of the highway has made national news. After a snowstorm in November, about 10,000 vehicles got stuck in a traffic jam that extended more than 70 miles, trapping some drivers for three days in subzero temperatures. Valery Voitko, who heads a trade union of long-haul truck drivers, described his drivers that week as “not even angry any more, but in a state of dumb despair, that year in and year out the same thing happens.”

    It is not that the Russian Federation cannot manage public works projects — next year’s Olympic Games are expected to cost $50 billion, about three and a half times the cost of last year’s Summer Games in London.

    • Replies: @5371
    If we're going to stop everything for an urgent dick-measuring contest about which country in the world has the newest and best-maintained infrastructure, the USA is going to be down in the micropenis class.
  63. @Anonymous
    In Caesar/Brutus analogies why is the former always taken to symbolize the more wronged party? (It seems to be the default analogy in cases where Jesus/Judas would be a bit much.) I think this says something about the common psyche and humanity's native capacity for representative democracy...

    For a good many centuries after the fall of the Empire, it was Brutus who was held to be the hero, sticking it to the tyrant but failing to prevent tyranny from befalling the Republic. That changed in the Middle Ages, and the general view has been that Caesar is the wronged one and that the political assassination (and the way it was performed, bu ganging up on Caesar) make Brutus the bad guy. It just goes to show that, after you get rid of the objective facts (dates etc), our interpretation of history says more about ourselves than about history itself.

    • Replies: @Lot
    Brutus's reputation was a lot bumpier than that, and he was popular in countries that overthrew monarchs, like France and the United States. Lots of random 18th and 19th century Americans have Brutus or Cassius as their first or middle names, or gave those names to their slaves.

    Most amusingly, this guy:

    https://en.wikipedia.org/wiki/Junius_Brutus_Booth
  64. @Steve Sailer
    I dunno. My impression is that El Nino's tend to follow summers of warm SoCal ocean water. For example, when I was on chemo in 1997, my wife and I went to Catalina and went snorkeling on the reef for several hours straight in the remarkably warm water. The following winter was a huge El Nino:

    http://www.latimes.com/local/california/la-me-0822-el-nino-1997-20150822-story.html

    Overall, cold oceans and hot lands are conducive to deserts. That's why L.A. has the sunny climate it has. The East Coast and Ireland have the warm Gulf Stream and are rainy.

    But I'm not a weather forecaster ...

    I’ve never been in cold water in Catalina in an any summer month, El Nino or not. It’s always well into the 70s and sometimes feels warmer than that. There is a major change in water temp south (and east) of Point Conception.

    However, I was in the water yesterday in Santa Cruz, and not just SC, but Aptos, which is past Pleasure Point, where the water is generally very cold unlike the city of SC (which is only ordinarily cold) because the city faces due south whereas Aptos is where the shore starts to curve back south and face the west. Typical water temps never crack 60. But it was way warmer than than yesterday and people here have been telling me it’s been like this all summer. You even see some surfers without wetsuits, which I have not seen since the ’80s.

  65. @Romanian

    Ironically, Britain’s guarantee to Poland was made on the assumption that Hitler’s next target was Bessarabia, according to Manchester.
     
    I've never heard that. Why Bessarabia? At that point, it was still a region of Romania, and only became the Moldovan SSR and part of Ukraine SSR after the War. For resources, for easier land access to Russia? The Germans got the Romanian oil either way, because of the installation of a favorable regime in Romania, trying to play the game so the state would not lose territory.

    For a Romanian, you sound strange. FYI: Bessarabia was occupied and incorporated into USSR in 1940.

    • Replies: @Romanian
    I was replying while on the move and distracted so I was a bit too brief. I'm assuming the guarantees to Poland happened before 1940? Of course Bessarabia had been taken by 1940 (though the valuable oil was in the Romanian South), then we took it back with the Germans one year later (and more than was lost, besides), then they took it back in 1944 and we switched sides against the Germans, and international recognition of its permanent loss came in 1947. To my mind, as a Romanian, its final loss came after the war, not when we were pressured into retreating from it. C'ést la guerre, non? You don't refer to occupied territory as already belonging to another country, do you, at least not until the fat lady sings?

    I'm strange in what way?
  66. EH says: • Website

    This was a thoughtful article on one of the most important topics, with ramifications in all areas. I think the central issue of forecasting is reasoning correctly about probability, which is largely a solved problem, yet very few forecasters really apply consistent reasoning.

    The essence of probability and decision theory can be stated in just a page, though there are many additional wrinkles. At the risk of being excessively long and nerdy, I think some people making very important decisions will find this useful:

    Synopsis of Ed Jaynes’ Probability Theory

    Probability notation
    AB = A and B
    A + B = A or B (and/or, not exclusive-or)
    a = not A, b = not B
    (A|B) = probability of A given B
    AA = A;
    A(B+C) = AB+AC;
    AB+a = ab + B;
    D = ab -> (implies) d = A+B

    Different chains of reasoning must not disagree; if they do then at least one chain of reasoning is invalid.

    The same state of knowledge in different problems must lead to assigning the same probabilities.

    Consequently:
    1.) (AB|C) = (A|BC)(B|C) = (B|AC)(A|C)
    2.) (A|B) + (a|B) = 1 , [ probability = 1 = true ]
    3.) (A+B|C) = (A|C) + (B|C) – (AB|C)
    4.) If {A_1…A_n} are mutually exclusive and exhaustive index of the possible outcomes, and information B is indifferent and uninformative to predicting the outcome, then:
    (A_i|B) = 1/n for i = 1 … n

    From rule 1., Bayes’ Theorem:
    (A|BC) = (A|C) (B|AC) / (B|C)

    From rule 3, if {A_1…A_n} are mutually exclusive :
    (A_1 + … +A_n | B) = SUM[ (A_i | B) ]

    If the A_i are also exhaustive, then the chain rule is implied:
    (B|C) = SUM[ (BA_i | C) ] = SUM[ (B | A_i C) (A_i C) ]

    Continuous distributions:
    If x is continuously variable, the probability given A, that x lies in the range (x,dx+x) is:
    (dx|A) = (x|A)dx
    Rule 1 and Bayes’ theorem remain the same, summations become integrations

    Prior probabilities:
    The initial information is X,
    (A|X) is the prior probability of A; use rule 4 when no information, MaxEnt otherwise

    Principle of maximum entropy (MaxEnt):
    choose the (A_i | X) so as to maximize entropy
    H = – SUM[p_i * log[p_i]] given the constraints of X.
    For continuous distributions:
    H= – ∫ p[x] * log[ p[x]/m[x] ] dx
    where the measure m is a weighting or normalizing function which does not change the probabilities given the prior information.

    Using new evidence E and Bayes’ theorem gives the posterior probability:
    (A|EX), often written (A|E);

    Odds O(A|EX) = (A|X)/(a|X) * (E|AX)/(E|aX)
    = O(A|X) * (E|AX)/(E|aX)

    Decision theory:
    Given possible decisions D_1…D_n , loss function L( D_i , θ_j ) which is the loss from choosing D_i when θ_j is the true state of nature; choose D_i that minimizes the expected loss &ltL&gt_i = SUM_j [ L(D_i , θ_j) * ( θ_j |EX) ] over the posterior distribution of θ_j .

    The above rules apply to inductive inference in general, whether or not a frequency in a random process is involved.

    General decision theory:
    1. Enumerate the states of nature θ_j, discrete or continuous
    2. Assign prior probabilities ( θ_j|X) which maximize the entropy subject to whatever information you have
    3. Digest any additional evidence E using Bayes’ theorem to obtain posterior probabilities
    (θ_j|EX)
    4. Enumerate the possible decisions D_i
    5. Specify the loss function L( D_j, θ_j) that tells you what you want to accomplish
    6. Make that decision D_j, which minimizes the expected loss
    &ltL_i &gt = Sum_j [ L( D_i , θ_j)( θ_j|EX) ]

    The Kelly Criterion generalizes decision theory to allocating money to maximize expected gains in betting and investment. For details, see Ed Thorp’s paper at the “Website” link above.

    None of this works unless you use it. A spreadsheet is the easiest way (label everything if you want to understand your calculations later).

  67. @midwestmark
    ok, Here are my predictions.

    1. Jeb will not be the Republican nominee. The Donald if nothing else, destroyed Jeb's chances with the "low energy" mocking comment. It's funny because it is true and the other candidates can obliquely references it if Jeb starts getting momentum. I much prefer Jeb to W. but it is over.
    2. Carly Fiorina will be the Republican nominee for Vice President. Vastly over rated as a candidate, she will still be in the front of the line of VP candidates for her tireless and tiresome attacks on Hillary!
    3. Jeb! will go down and the low point will occur when his ! abandons him and joins the Hillary! campaign.

    Fiorina is toxic and basically hands the presidency to the democrats.

    • Replies: @NOTA
    The people I know who worked at HP during Fiorina's tenure do not have a high opinion of her abilities.
  68. @Anonymous
    For a Romanian, you sound strange. FYI: Bessarabia was occupied and incorporated into USSR in 1940.

    I was replying while on the move and distracted so I was a bit too brief. I’m assuming the guarantees to Poland happened before 1940? Of course Bessarabia had been taken by 1940 (though the valuable oil was in the Romanian South), then we took it back with the Germans one year later (and more than was lost, besides), then they took it back in 1944 and we switched sides against the Germans, and international recognition of its permanent loss came in 1947. To my mind, as a Romanian, its final loss came after the war, not when we were pressured into retreating from it. C’ést la guerre, non? You don’t refer to occupied territory as already belonging to another country, do you, at least not until the fat lady sings?

    I’m strange in what way?

  69. @Lot
    I agree they are different groups. My point is that if you want to look at Russia's economy and Jews in the 90's, mass emigration is a lot more significant than American Jewish economic advisers.

    Steve seems to think that American economists, mostly Jews, played some possibly significant part in Russia's economic basketcase status in the 90's. My point is this is wrong for many reasons:

    1. There was no competing group of economists, Jewish or otherwise, who were like "No, keep your industries state-owned, communism really isn't so bad!" In retrospect, privatization was a disaster, but I think keeping nearly all of Russia's economy state-owned would have been a disaster too. The ideal scenario, a non-corrupt privatization, is not something the fundamentally corrupt Russia could have pulled off.

    2. There is no reason to think the fact that Russia hired a few American economists had anything to do with its actual policies. These are the people who just a decade before were arrogant enough to try to export communism violently throughout the world. And now they want advice from Americans, which they will follow? More likely they wanted some Harvard guys to window-dress the policies they had selected on their own.

    3. The actual cause of Russia's economic performance in the 90's was the fact the country was hollowed out by decades of communism and supporting a massive defense budget, followed by a collapse in natural resource prices that were by that time the only competitive sector Russia had on the world market. The other other thing Russia of 1990 was good at was making weapons, and there was also a demand collapse in the 90's for these because of the end of the Cold War, as well as a supply surge as former communist states flooded the world market with their stockpiles.

    Steve writes: "Chua’s finding should have been cause for self-reflection and public discussion." I am fine with that. As a semi-Jew, I have reflected on this issue, and my report is that "Bad Jewish-American Economic Advice" had nothing to do with Russia's poor economic performance in the 1990's.

    You want to know why Russia is a craphole? Read this article about the state of the road between Moscow and St. Petersberg. http://www.nytimes.com/newsgraphics/2013/10/13/russia/

    This is between largest and second-largest cities, not to mention the road between the capital and most important port. In a civilized country this 440 mile, mostly flat route would take 6 to 8 hours by car or truck, in Russia it takes 12 to 24 hours. Was it American Jewish economists telling Putin to instead focus, like a strutting African dictator would do, on a super-fabulous Olympic games while leaving the basic infrastructure to decay?


    The M10 highway looks normal enough at the southern limits of St. Petersburg, but then, with a jolt, it begins to atrophy. For the next 430 miles the surface of the highway, while paved, varies from corduroy to jaw-rattling patchwork. Sometimes it has four lanes, sometimes two, with few medians and frequently no lane markings at all.

    Traffic creeps forward behind a procession of 18-wheelers hauling goods from the port of St. Petersburg, passing villages with names like Cockroachville, Teacupville and Chessville. It is the most heavily traveled cargo route in Russia, and yet for truck drivers complying with safety regulations, it takes 24 hours to travel between the two cities, said Viktor Dosenko, vice president of the International Transport Academy. On a good road, he said, the trip should take 10 hours.

    From time to time, the dismal condition of the highway has made national news. After a snowstorm in November, about 10,000 vehicles got stuck in a traffic jam that extended more than 70 miles, trapping some drivers for three days in subzero temperatures. Valery Voitko, who heads a trade union of long-haul truck drivers, described his drivers that week as “not even angry any more, but in a state of dumb despair, that year in and year out the same thing happens.”

    It is not that the Russian Federation cannot manage public works projects — next year’s Olympic Games are expected to cost $50 billion, about three and a half times the cost of last year’s Summer Games in London.
     

    If we’re going to stop everything for an urgent dick-measuring contest about which country in the world has the newest and best-maintained infrastructure, the USA is going to be down in the micropenis class.

  70. @Sailer has an interesting life
    Steve does a great job poking holes in Mister Gladwell. But no one seems to notice or care. The problem arises when you realize that geopolitics doesn't have a set method of scoring. Thomas Friedman was soundly mocked IIRC for his blather that the Friedman Unit was named after him.

    But as a rule there isn't anyone who wants to say that the king has no clothes. The problem comes up when you realize that a lot of these dudes get popular by schmoozing and not by the dint of their predictive power.

    Nate Silver mentioned this in his book _The Signal and the Noise_

    Friedman Unit for anyone who doesn't know.
    https://en.wikipedia.org/wiki/Friedman_Unit

    Just keep in mind that a substantial number of the world’s decisionmakers seem to think Friedman and Gladwell are deep thinkers.

    • Replies: @The most deplorable one
    Well, a substantial proportion of the world seems to think that test anxiety is a thing as well.

    In a sense I do as well. When I don't know that I can't do the test prior to taking the it, I also have test anxiety.
  71. The most deplorable one [AKA "Fourth doorman of the apocalypse"] says:
    @NOTA
    Just keep in mind that a substantial number of the world's decisionmakers seem to think Friedman and Gladwell are deep thinkers.

    Well, a substantial proportion of the world seems to think that test anxiety is a thing as well.

    In a sense I do as well. When I don’t know that I can’t do the test prior to taking the it, I also have test anxiety.

  72. @Lot
    That CIA online prediction tournament is horribly designed. I quit because it was no fun to play. I did get my $150 for doing it for a year though.

    Was there some better advice gentile economists were trying to give Russia in the 90's? The country was rotten from the inside out in 1990, just as the worst bear market in the price of its commodity exports from gold to oil to nickel was reaching multi decade real lows. The worst thing Jews did to Russia in the 1990s was leave en masse taking their considerable human capital with them.

    “That CIA online prediction tournament is horribly designed. I quit because it was no fun to play. I did get my $150 for doing it for a year though.”

    I didn’t even last that long; too much time commitment to have any kind of informed opinion on most questions. Maybe that’s a feature rather than a bug; only foreign policy junkies would invest that much time in the game, and the rest of us are filtered out.

    • Replies: @Steve Sailer
    That's what a reader who made the ranks of superforecaster modestly told me: the tournament requires a huge amount of hard reading.
  73. @MC
    "That CIA online prediction tournament is horribly designed. I quit because it was no fun to play. I did get my $150 for doing it for a year though."

    I didn't even last that long; too much time commitment to have any kind of informed opinion on most questions. Maybe that's a feature rather than a bug; only foreign policy junkies would invest that much time in the game, and the rest of us are filtered out.

    That’s what a reader who made the ranks of superforecaster modestly told me: the tournament requires a huge amount of hard reading.

    • Replies: @Lot
    I'd say the problem is more the amount of mindless drudgery.

    A fun prediction game would say: Make predictions on these fifty topics by 9/1/15, and see gets the best score.

    Instead, they had a system without real deadlines that you could update at any time up until right before the event. So for the question "Which party will win the UK election?," the optimal strategy is to just check the polls the day before the election. Since the events were staggered, that in turn means either checking in every day, or else taking a lot of time to set up calendar alerts. I got the impression the winners were grad students with a ton of time on their hands and wikipedia power editor types.

    It is just a plain dumb design and a waste of public funds, though relatively small compared to most CIA boondoggles.

    I also noticed that most participants were like me and MC, with an initial burst of enthusiasm, then they largely lost interest when they realized the design was so bad and rewarded laboriously gaming the system rather than foresight on world events.

    Intrade was a much better prediction game since it involved real money and direct competition.

    Another good forecasting site is longbets.org, whose biggest bet has Warren Buffet taking one side (that hedge funds will underperform the S&P500, which he is nearly certain to win)

  74. @eric
    Tetlock's simply a charlatan. Nothing he documents is profound, and indeed one of his favorite forecasters is a charlatan as well, Nassim Taleb, who started a hedge fund in 1999 that by 2005 became a mere 'hedge' and thus its importance not relevant. Taleb's fund generated lame performance over the 2001 crisis, but portrayed himself as a genius. Tetlock loves this guy, who has written best-selling books, and so basically highlights Taleb's popularity, not truth, but then, that's what he accuses his subjects of, which highlights that Freud is a gift that never stops giving...

    Taleb has the worst signal:noise ratio of any intellectual celebrity I’ve read. His insights may be sound, but reading him is painful.

  75. @Anonymous
    Why is no one keeping a running scorecard on these clowns?

    Tetlock makes it very clear why: they use vague language and almost never specify time frame. "Likely" ranges from 5% to 49% - keeping a meaningful scorecard on such estimate is not possible.

    I don’t see how you could score it even if they gave very precise percentage estimates, as in “I predict there is a 47.5% chance of X.” That means the odds of X occurring are less than one in two, but if X fails to occur what difference does it make whether their prediction was 5% or 25% or 47.5%? Do you give them extra points for assigning extra-low odds to the event?

    The only way you could really rate them is on a right/wrong basis, but for that to be meaningful they would have to be presented with events for which the “true” odds are exactly 50% – like a fair coin about to be tossed – and then a long-term better-than-average right/wrong record would tell you something meaningful about their forecasting abilities. But how could anyone determine whether the true odds of an event are 50/50 or not? Or maybe Tetlock already covers this and it’s my fault for being too lazy to look it up.

    • Replies: @Lot
    If you say A is 60% likely and B is 40% likely, and B not A happens, you get .4 points. That element was OK at least.

    Intuitively we like to heavily reward people who get long-shot calls right, but aggregated predictions are closer to what the CIA was looking for than tournaments with disproportionate rewards for the top rankings (like NCAA office pools), which incentive long-shot calls over overall accuracy.
  76. @Anonymous
    If my dilettante viewing of CNBC is any indication people in finance get blasted all the time for their lousy short-term predictions. One such example comes to mind of Meredith Whitney auguring a cascade of muni & county bankruptcies on "60 Minutes" which, needless to say, was not soon realized, though it didn't seem to hurt her TV personality career if it had any effect on her investment clients. Somehow one notable person will get slammed for a bad call even when multiple others were making variations thereof at the time. That "car czar" Ratner fellow was quite a punching bag back then too. Sports and movie box office are inherently unpredictable but one bad call in either field can dog you for ages.

    If my dilettante viewing of CNBC is any indication people in finance get blasted all the time for their lousy short-term predictions.

    They definitely get blasted by specific portions of the public, but do they get blasted in the mass media in which they made their predictions? I remember a financial forum I used to hang out at when I first took an interest in stocks just after the dot com bust that “permabulls” like Henry Blodget and Joe Battipaglia got blasted a lot. I never saw anything remotely as critical on CNBC itself.

  77. @Steve Sailer
    That's what a reader who made the ranks of superforecaster modestly told me: the tournament requires a huge amount of hard reading.

    I’d say the problem is more the amount of mindless drudgery.

    A fun prediction game would say: Make predictions on these fifty topics by 9/1/15, and see gets the best score.

    Instead, they had a system without real deadlines that you could update at any time up until right before the event. So for the question “Which party will win the UK election?,” the optimal strategy is to just check the polls the day before the election. Since the events were staggered, that in turn means either checking in every day, or else taking a lot of time to set up calendar alerts. I got the impression the winners were grad students with a ton of time on their hands and wikipedia power editor types.

    It is just a plain dumb design and a waste of public funds, though relatively small compared to most CIA boondoggles.

    I also noticed that most participants were like me and MC, with an initial burst of enthusiasm, then they largely lost interest when they realized the design was so bad and rewarded laboriously gaming the system rather than foresight on world events.

    Intrade was a much better prediction game since it involved real money and direct competition.

    Another good forecasting site is longbets.org, whose biggest bet has Warren Buffet taking one side (that hedge funds will underperform the S&P500, which he is nearly certain to win)

  78. @silviosilver
    I don't see how you could score it even if they gave very precise percentage estimates, as in "I predict there is a 47.5% chance of X." That means the odds of X occurring are less than one in two, but if X fails to occur what difference does it make whether their prediction was 5% or 25% or 47.5%? Do you give them extra points for assigning extra-low odds to the event?

    The only way you could really rate them is on a right/wrong basis, but for that to be meaningful they would have to be presented with events for which the "true" odds are exactly 50% - like a fair coin about to be tossed - and then a long-term better-than-average right/wrong record would tell you something meaningful about their forecasting abilities. But how could anyone determine whether the true odds of an event are 50/50 or not? Or maybe Tetlock already covers this and it's my fault for being too lazy to look it up.

    If you say A is 60% likely and B is 40% likely, and B not A happens, you get .4 points. That element was OK at least.

    Intuitively we like to heavily reward people who get long-shot calls right, but aggregated predictions are closer to what the CIA was looking for than tournaments with disproportionate rewards for the top rankings (like NCAA office pools), which incentive long-shot calls over overall accuracy.

    • Replies: @silviosilver

    If you say A is 60% likely and B is 40% likely, and B not A happens, you get .4 points. That element was OK at least.
     
    Oh okay, that makes sense. But what if nothing you predict occurs, do you then lose points (and perhaps go into negative territory)? In real life there are costs for being wrong, so it seems to me you should. Do people come up with their own scenarios or are they provided by the organization and then people assign odds? (I know, I know, I should read up on it myself. But I'm feeling chatty.)
  79. @Romanian
    For a good many centuries after the fall of the Empire, it was Brutus who was held to be the hero, sticking it to the tyrant but failing to prevent tyranny from befalling the Republic. That changed in the Middle Ages, and the general view has been that Caesar is the wronged one and that the political assassination (and the way it was performed, bu ganging up on Caesar) make Brutus the bad guy. It just goes to show that, after you get rid of the objective facts (dates etc), our interpretation of history says more about ourselves than about history itself.

    Brutus’s reputation was a lot bumpier than that, and he was popular in countries that overthrew monarchs, like France and the United States. Lots of random 18th and 19th century Americans have Brutus or Cassius as their first or middle names, or gave those names to their slaves.

    Most amusingly, this guy:

    https://en.wikipedia.org/wiki/Junius_Brutus_Booth

  80. @Lot
    If you say A is 60% likely and B is 40% likely, and B not A happens, you get .4 points. That element was OK at least.

    Intuitively we like to heavily reward people who get long-shot calls right, but aggregated predictions are closer to what the CIA was looking for than tournaments with disproportionate rewards for the top rankings (like NCAA office pools), which incentive long-shot calls over overall accuracy.

    If you say A is 60% likely and B is 40% likely, and B not A happens, you get .4 points. That element was OK at least.

    Oh okay, that makes sense. But what if nothing you predict occurs, do you then lose points (and perhaps go into negative territory)? In real life there are costs for being wrong, so it seems to me you should. Do people come up with their own scenarios or are they provided by the organization and then people assign odds? (I know, I know, I should read up on it myself. But I’m feeling chatty.)

    • Replies: @Lot
    I don't think they penalized wrong answers at all compared with no answer. I like the SAT system where there is a small penalty to discourage blinding guessing but not educated guessing.
    , @Anonymous
    Please don't listen to Lot who clearly does not understand anything about the tournament he participated in!

    The scoring used "Brier score," which is something used a lot in forecasting (check Wikipedia). E.g., will A happen? Your forecast of 0.4 that it will and when it really does happen, your Brier score is 0.72 (you forecast 0.4 for A and you also implicitly forecast 0.6 for (not A), so it is (0.4-1)^2+(0.6-0)^2). A perfect Brier score is zero (=clairvoyance), Brier score for all 50/50 forecasts is 0.5, and the worst it can get is 2. The math is fundamentally the same if there are more than two possible outcomes - the only requirement is that they all sum up to unity. E.g., if Tetlock team were to forecast Steve Sailer's fundraising drive, it could go something like this:

    What will be the amount of donations raised by Steve Sailer between 15-08-2015 and 12-31-2015?
    A. Less than $100
    B. Between $100 and $1,000
    C. Between $1,000 and $10,000
    D. Between $10,000 and $100,000
    E. More than $100,000

    You then assign probabilities based on what you know. At any time before 12-31-2015 you can update your forecasts. E.g., if you have a friend of a friend of Steve's and you heard that Steve purchased new dishwasher and no longer drinks from red plastic cups, you might infer that the bin B is no longer likely and the bin A, as you suspected before, is near impossible. And so on. If enough people with reasonable cognitive skills participate, then, given the Kevin Bacon degrees of separation, the end result could be, Francis Galton-style (http://wisdomofcrowds.blogspot.com/2009/12/vox-populi-sir-francis-galton.html), a reasonable estimate of Steve's income from blogging. Tetlock's current claim is that some people are "superforecasters" who somehow assign these probabilities more accurately.

    Going back to pundits. If every time pundits say "I think it's very likely that A will happen soon," they were also required to put a numerical value and a time frame in the footnotes, then it would be pretty trivial to keep track of how good they are at prediction. Alas, Tetlock's original claim to fame was a finding that, on average, the experts and pundits are no better than a random guess (http://press.princeton.edu/titles/7959.html), so perhaps that is why we never see pundits using precise language.
  81. @silviosilver

    If you say A is 60% likely and B is 40% likely, and B not A happens, you get .4 points. That element was OK at least.
     
    Oh okay, that makes sense. But what if nothing you predict occurs, do you then lose points (and perhaps go into negative territory)? In real life there are costs for being wrong, so it seems to me you should. Do people come up with their own scenarios or are they provided by the organization and then people assign odds? (I know, I know, I should read up on it myself. But I'm feeling chatty.)

    I don’t think they penalized wrong answers at all compared with no answer. I like the SAT system where there is a small penalty to discourage blinding guessing but not educated guessing.

  82. Anonymous • Disclaimer says:
    @silviosilver

    If you say A is 60% likely and B is 40% likely, and B not A happens, you get .4 points. That element was OK at least.
     
    Oh okay, that makes sense. But what if nothing you predict occurs, do you then lose points (and perhaps go into negative territory)? In real life there are costs for being wrong, so it seems to me you should. Do people come up with their own scenarios or are they provided by the organization and then people assign odds? (I know, I know, I should read up on it myself. But I'm feeling chatty.)

    Please don’t listen to Lot who clearly does not understand anything about the tournament he participated in!

    The scoring used “Brier score,” which is something used a lot in forecasting (check Wikipedia). E.g., will A happen? Your forecast of 0.4 that it will and when it really does happen, your Brier score is 0.72 (you forecast 0.4 for A and you also implicitly forecast 0.6 for (not A), so it is (0.4-1)^2+(0.6-0)^2). A perfect Brier score is zero (=clairvoyance), Brier score for all 50/50 forecasts is 0.5, and the worst it can get is 2. The math is fundamentally the same if there are more than two possible outcomes – the only requirement is that they all sum up to unity. E.g., if Tetlock team were to forecast Steve Sailer’s fundraising drive, it could go something like this:

    What will be the amount of donations raised by Steve Sailer between 15-08-2015 and 12-31-2015?
    A. Less than $100
    B. Between $100 and $1,000
    C. Between $1,000 and $10,000
    D. Between $10,000 and $100,000
    E. More than $100,000

    You then assign probabilities based on what you know. At any time before 12-31-2015 you can update your forecasts. E.g., if you have a friend of a friend of Steve’s and you heard that Steve purchased new dishwasher and no longer drinks from red plastic cups, you might infer that the bin B is no longer likely and the bin A, as you suspected before, is near impossible. And so on. If enough people with reasonable cognitive skills participate, then, given the Kevin Bacon degrees of separation, the end result could be, Francis Galton-style (http://wisdomofcrowds.blogspot.com/2009/12/vox-populi-sir-francis-galton.html), a reasonable estimate of Steve’s income from blogging. Tetlock’s current claim is that some people are “superforecasters” who somehow assign these probabilities more accurately.

    Going back to pundits. If every time pundits say “I think it’s very likely that A will happen soon,” they were also required to put a numerical value and a time frame in the footnotes, then it would be pretty trivial to keep track of how good they are at prediction. Alas, Tetlock’s original claim to fame was a finding that, on average, the experts and pundits are no better than a random guess (http://press.princeton.edu/titles/7959.html), so perhaps that is why we never see pundits using precise language.

    • Replies: @Steve Sailer
    Some people like red plastic cups.
  83. @Anonymous
    Please don't listen to Lot who clearly does not understand anything about the tournament he participated in!

    The scoring used "Brier score," which is something used a lot in forecasting (check Wikipedia). E.g., will A happen? Your forecast of 0.4 that it will and when it really does happen, your Brier score is 0.72 (you forecast 0.4 for A and you also implicitly forecast 0.6 for (not A), so it is (0.4-1)^2+(0.6-0)^2). A perfect Brier score is zero (=clairvoyance), Brier score for all 50/50 forecasts is 0.5, and the worst it can get is 2. The math is fundamentally the same if there are more than two possible outcomes - the only requirement is that they all sum up to unity. E.g., if Tetlock team were to forecast Steve Sailer's fundraising drive, it could go something like this:

    What will be the amount of donations raised by Steve Sailer between 15-08-2015 and 12-31-2015?
    A. Less than $100
    B. Between $100 and $1,000
    C. Between $1,000 and $10,000
    D. Between $10,000 and $100,000
    E. More than $100,000

    You then assign probabilities based on what you know. At any time before 12-31-2015 you can update your forecasts. E.g., if you have a friend of a friend of Steve's and you heard that Steve purchased new dishwasher and no longer drinks from red plastic cups, you might infer that the bin B is no longer likely and the bin A, as you suspected before, is near impossible. And so on. If enough people with reasonable cognitive skills participate, then, given the Kevin Bacon degrees of separation, the end result could be, Francis Galton-style (http://wisdomofcrowds.blogspot.com/2009/12/vox-populi-sir-francis-galton.html), a reasonable estimate of Steve's income from blogging. Tetlock's current claim is that some people are "superforecasters" who somehow assign these probabilities more accurately.

    Going back to pundits. If every time pundits say "I think it's very likely that A will happen soon," they were also required to put a numerical value and a time frame in the footnotes, then it would be pretty trivial to keep track of how good they are at prediction. Alas, Tetlock's original claim to fame was a finding that, on average, the experts and pundits are no better than a random guess (http://press.princeton.edu/titles/7959.html), so perhaps that is why we never see pundits using precise language.

    Some people like red plastic cups.

    • Replies: @Anonymous
    I understand. Nobody's perfect.
  84. @Steve Sailer
    Some people like red plastic cups.

    I understand. Nobody’s perfect.

  85. @AnAnon
    Fiorina is toxic and basically hands the presidency to the democrats.

    The people I know who worked at HP during Fiorina’s tenure do not have a high opinion of her abilities.

    • Replies: @Boomstick
    The thing is, I suspect the abilities of even a sub-par Fortune 500 CEO are superior to those of most politicians.
  86. […] don’t know how to reblog properly and I refuse to learn because get off my lawn. Here is link. You kids can keep your fancy web 5.0, back in my day we typed out our links in text editors and […]

  87. @NOTA
    The people I know who worked at HP during Fiorina's tenure do not have a high opinion of her abilities.

    The thing is, I suspect the abilities of even a sub-par Fortune 500 CEO are superior to those of most politicians.

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