/via Whitney Tilson:
/via Whitney Tilson:
Normally I disagree with Paul Allen pretty much on principle, but I think he has the complexity break pretty much correct:
The foregoing points at a basic issue with how quickly a scientifically adequate account of human intelligence can be developed. We call this issue the complexity brake. As we go deeper and deeper in our understanding of natural systems, we typically find that we require more and more specialized knowledge to characterize them, and we are forced to continuously expand our scientific theories in more and more complex ways. Understanding the detailed mechanisms of human cognition is a task that is subject to this complexity brake. Just think about what is required to thoroughly understand the human brain at a micro level. The complexity of the brain is simply awesome. Every structure has been precisely shaped by millions of years of evolution to do a particular thing, whatever it might be. It is not like a computer, with billions of identical transistors in regular memory arrays that are controlled by a CPU with a few different elements. In the brain every individual structure and neural circuit has been individually refined by evolution and environmental factors. The closer we look at the brain, the greater the degree of neural variation we find. Understanding the neural structure of the human brain is getting harder as we learn more. Put another way, the more we learn, the more we realize there is to know, and the more we have to go back and revise our earlier understandings.
The reputation of economics and economists, never high, has been a victim of the crash of 2008. The Queen was hardly alone in asking why no one had predicted it. An even more serious criticism is that the economic policy debate that followed seems only to replay the similar debate after 1929. The issue is budgetary austerity versus fiscal stimulus, and the positions of the protagonists are entirely predictable from their previous political allegiances.
The doyen of modern macroeconomics, Robert Lucas, responded to the Queen’s question in a guest article in The Economist in August 2009. The crisis was not predicted, he explained, because economic theory predicts that such events cannot be predicted. Faced with such a response, a wise sovereign will seek counsel elsewhere.
But not from the principal associates of Lucas, who are even less apologetic. Edward Prescott, like Lucas, a Nobel Prize winner, began a recent address to a gathering of Laureates by announcing ‘this is a great time in aggregate economics’. Thomas Sargent, whose role in developing Lucas’s ideas has been decisive, is more robust still. Sargent observes that criticisms such as Her Majesty’s ‘reflect either woeful ignorance or intentional disregard of what modern macroeconomics is about’. ‘Off with his head’, perhaps. But before dismissing such responses as ridiculous, consider why these economists thought them appropriate.
I never knew reading could be so street/hip/menacing.
Unsurprising but interesting results from a Benford’s time-series analysis of U.S. public company financial accounting data. Things are, in short, getting worse.
So according to Benford’s law, accounting statements are getting less and less representative of whats really going on inside of companies. The major reform that was passed after Enron and other major accounting standards barely made a dent.
Next, I looked at Benfords law for three industries: finance, information technology, and manufacturing. The finance industry showed a huge surge in the deviation from Benfords from 1981-82, coincident with two major deregulatory acts that sparked the beginnings of that other big mortgage debacle, the Savings and Loan Crisis. The deviation from Benfords in the finance industry reached a peak in 1988 and then decreased starting in 1993 at the tail end of the S&L fraud wave, not matching its 1988 level until … 2008.
The time series for information technology is similarly tied to that industrys big debacle, the dotcom bubble. Neither manufacturing nor IT showed the huge increase and decline of the deviation from Benfords that finance experienced in the 1980s and early 1990s, further validating the measure since neither industry experienced major fraud scandals during that period. The deviation for IT streaked up between 1998-2002 exactly during the dotcom bubble, and manufacturing experienced a more muted increase during the same period.
Even after throwing away some 40 percent of its abundant food supply, the United States still has the industrialized world’s most overweight population. America similarly produces more energy per capita than any other major rich economy — so much so that if the United States were to consume that energy at a rate comparable to Germany or France, it would be a massive energy exporter. Instead, America imports more than 25 percent of its energy, paying more than $2 trillion for the privilege over the past decade — and still ends up with little to show for it. The United States now faces the choice of curbing its energy appetite with deliberation, commitment, and foresight, or waiting for the unraveling economy to put it on a painful crash diet.
On a scale of -10 to +10, how wrong do you think this private jet forecast is likely to be over the next decade?
Mountain biker in Africa gets taken out by red hartebeest (read: antelope). Absolutely nuts. Makes SoCal snakes seem tame.
Take it full screen and HD. Gorgeous. / via Barry