YOLOing, Holes, and Facebook

martin_shkreli

Millennials Just Want to YOLO

It is a month old but still one of the most amazing articles on millennials. Ok fine, to be fair, it is a particular group of millennials who bet all their money in the stock market and discuss their trades on Reddit and revere Martin Shkreli. I will just link to the article here [via MarketWatch] and copy in some of its glorious quotes:

“Y-O-F**KING-LO,” the teen wrote, flashing his trading statement. “900 to 55K in 12 days!”

On Reddit, he’s known as “World Chaos,” a Florida high schooler who earlier this year multiplied his money by betting against the S&P 500. His real name is Jeffrey Rozanski, and the 18-year-old’s appetite for risk would make many seasoned market players facepalm.

And:

That was peak “WallStreetBets,” the Reddit forum where “YOLO” is the war cry, Martin Shkreli is a role model, and irreverent traders trawl for tickets to quick wealth. It has become what one member calls “the beating heart of millennial day traders.”

And:

The latest obsession on WallStreetBets is UWTI an exchange-traded note that has become a favorite of younger investors — thanks, in part, to the Reddit forum. It is a near-perfect embodiment of the YOLO spirit: Highly volatile, it uses a combination of derivatives and debt to amplify bets on oil, creating opportunities for quick profits.

And:

“This subreddit, they love Martin Shkreli,” said Asad Butt [hahahaha], a 25-year-old Pennsylvania trader who posts frequently to WallStreetBets. “He is living their dream. He got rich. He might have lied and cheated along the way, but [on the forum] that’s encouraged.”

“People want yachts,” Butt said. “They want to be rich. The joke is we are all aspiring millionaires. Shkreli actually did it. He’s a hero.”

Are you not entertained? At this point, you might as well just read the article since you’re reading half of it anyway, but I’ll throw in some more quotes:

Talk of “YOLOing” — going all in on a huge bet — is frequent, if not constant.

And:

“If you find anything volatile and high risk, that’s where you’ll see people flocking,” Rogozinski said. “Are we encouraging risky behavior? Yes.”

And:

“UWTI for LIFE baby!!” a subscriber named DrFreshh wrote in December. “History tells you all the patterns. It’s a big time win! Been researching for 20 hours straight (except for the occasional cigarettes). This is it boys and girls! Life savings on the line, we have hit the gold mine. Ask me anything and I can tell you why its bullish like none other, or the yacht is on me.”

When asked how many shares he intended to trade, DrFreshh responded, “100,000. 200,000. that’s pennies. This is an opportunity of a lifetime! I’m gonna invest like its get rich or die tryin.”

And:

Teen trader Rozanski, meanwhile, admitted that his big win was “pretty much dumb luck.” He thought about buying a Ford Mustang with his haul, he said, but decided to keep the money to fund future investments, celebrating modestly: His mom took him out to see “The Big Short,” and he bought a new computer with two monitors.

“So I can trade better,” he explained.

I think people should be free to do what they want with their money, but at the same time, YOLOing all your money seems like a bad idea. Having a yacht is nice, but so is having more than zero dollars.

Usually I would make the standard boring disclaimer that nothing on this blog is ever financial advice, etc., but here is some actual financial advice—do not be like the people mentioned in that article.

Crawlspace for Sensitive Dragons

Occasionally I read Quora for amusement. This answer by Antonio Kowatsch seemed pretty usual for a Quora answer, until I got to the comments. First, here is the question and answer:

What are some examples of bad design?

I really don’t know if this has been mentioned already but in Hong Kong there are many Skyscrapers with holes. Quite literally holes. There is a reason for the unusual design: These holes are supposed to provide a safe passage for Dragons. (This is not a joke) Since they don’t really serve an actual purpose they are literally a waste of space, which happens to be an already scarce resource in Hong Kong. This definitely classifies as a design flaw.

Here are a couple of these so called Dragon gates/holes:

holes_in_buildings

And then bam, people in the comments start defending the superstition that is feng shui and accusing Kowatsch of cultural disrespect. I want to give a little bit of a preface first before showing the comments:

  • I wouldn’t bother criticizing the comments section of a YouTube video or CNN article or Facebook post, but for some reason I have higher standards for Quora comments. Maybe the mistake is just that, and I should be ignoring these comments.
  • To the extent that “political correctness” is a real issue, I think these comments help demonstrate it. I’ve posted before about why some people are overly sensitive, and I can relate to the frustration that Kowatsch feels in his addendum. The process now is basically, someone gets offended (or tries to speak up for someone else theoretically getting offended), and instead of engaging in a rational debate, they say they are offended, shutting down any further discussion.
  • Oversensitivity is at least laudable in spirit when trying to defend a group of people. But in this case, the original poster pointed out a particular the way buildings were built that was based on superstition. Criticizing ideas, especially superstition, does not equal criticizing people.
  • Besides the accusations of cultural insensitivity, there are also people who say things like the holes are good because they allow wind through. But when it comes to physics, you need to actually do the physics, not just invent stories. The classic example is that in projectile motion, even Aristotle wrote that an object would keep moving in the launch direction until it ran out of impetus and then drop straight down. Makes sense. Except things actually move in parabolic arcs.

Here is the addendum, still by Kowatsch:

EDIT: OK, I didn’t think that so many people would argue that those “holes” are actually practical. But here I am. Exorcising this mental colic once and for all. People have left all kinds of baloney comments saying that they were “practical” because the wind could pass through them. Long story short; it’s bollocks and it does make me somewhat furious, I admit it. You may not know it but I studied physics and those holes don’t stabilize the buildings, but rather destabilize them. You know what would happen if really strong winds would act on those buildings? They would fold in half (horizontally) . Everyone who knows a little bit about statics & building physics would know that the load transfer in those buildings is suboptimal to say the least.

So here you go with some comments:

So you don´t like Feng Shui and the part about the dragon, too bad. But please understand: this is just your opinion, at the best an argument to building efficiently, but does not take into account the customs and traditions of the people living there. On the other side: there is a reason why those wholes [sic] are in those buildings: developers sell these flats like sliced bread. So a lot of HK people seem to have a different opinion from yours.

And:

Now, lets ignore all these engineering issues. Those holes make those buildings ‘special’ and ‘interesting’. It has cultural values and gives a uniqueness which other cities don’t usually have.

It is not a bad design according to me.

And:

According to this logic, anything that’s not a perfect rectangle box is a bad design.

What if they’re not trying to optimize for living space but to create a coherent skyline with cultural flair? Dragon legends are cultural – just because you don’t understand it doesn’t make it bad design. Unless you think HK people actually believe in dragons.

And:

This concept is very much similar to Indian Vastu. First let me talk about the science. When you are designing a tall building (I am an Architect myself), wind load becomes a crucial element in structural loading. So these holes or punctures in the surface let wind flow through them easily. Hence better stability.

And:

The holes are an adaptation of the skyscraper to the culture of Hong Kong, making the buildings acceptable to the people of the island.  To mock them as a design flaw as you do shows a lack of cultural sensitivity and tolerance.

And:

Ask the residents of the buildings how well the Feng Shui is working for them, then one can say if the holes are bad designs or not.

And:

Your answer is culturally biased. Xenophobic even.

Yep. When you disagree, call the other person culturally biased.

This section might just be overreacting to idiots in a comment section, but I see this same sentiment in many other places.

Now economically, in terms of whether real estate companies should construct buildings like this, that is completely up to them. If there is demand for buildings with holes in them, then by all means, make some supply. And if they are so aesthetically intriguing that they generate a lot of tourism, then sure, I’m in full support of holes. However, when someone talks about the relation of these holes to mythical dragons and feng shui, that is not xenophobia—that is stating a fact.

In related news, here is yet another “Why Free Speech Matters on Campus” article, by Bloomberg and Koch via the WSJ.

Facebook Bias, cont’d

Last time I talked about the Gizmodo story on Facebook employees allegedly manipulating the “trending” stories section to suppress conservative viewpoints. Since then, many more articles have popped up about it, and it seems like people really care about this topic. So let’s double down with another section.

I made the following points in the previous post:

  1. Facebook is a company, not a government organization. It does not have an obligation to be politically balanced.
  2. As a company, Facebook’s main goal is to generate profits, and if it does so better by instilling a liberal bias, then so what? In the scale of moral quandaries, this is pretty benign compared to what other companies do.
  3. Facebook is a social media site, not a news agency. And neither has an obligation to be politically balanced.
  4. There is some argument that the news media already has a liberal bias. If so, how is Facebook’s liberal bias different from that of other forms of media?
  5. Liberals tend to post more political things on Facebook than conservatives. So even if nobody working at Facebook is tweaking knobs, you should see more liberal posts than conservative ones, and liberal posts should trend more often.

One important thing I failed to mention was people perceived Facebook to be balanced (even though I claim it never was), and that this perception of balance is crucial. When people go to Fox News or The Huffington Post, they have expectations of political bias, but when they go to Facebook, they expect none (even though my points #4 and #5 argue you should). Thus, learning that Facebook is biased can be jarring.

As you can see, I am pretty calm about this, mainly because learning about this bias does not affect me. My Facebook circle is generally young, highly educated, and often academic, all three being strong indicators of being liberal. As a result, 95% of the posts I see are liberal anyway and I already don’t expect any semblance of political balance whatsoever when I login.

That said, I can see why some people would be taken aback. Facebook’s algorithms are still a complete mystery to me (probably rightfully so), and I feel there is not much transparency about what is going on behind the scenes. I don’t want to live in a house where I can see all the wires running through the walls, but understanding what happens when I plug something into an electric outlet provides some peace of mind.

Also, even if Facebook is right in claiming that no one is outright manipulating the trending section, it is almost certain that the reviewers are biasing the news subconsciously. Then again, what would that imply? Would you have to rely on algorithms to avoid this? But what if the algorithms too are biased? A NYT piece has more to say about Facebook and biased algorithms.

Here is Tom Stocky of Facebook, in a Facebook post:

My team is responsible for Trending Topics, and I want to address today’s reports alleging that Facebook contractors manipulated Trending Topics to suppress stories of interest to conservatives. We take these reports extremely seriously, and have found no evidence that the anonymous allegations are true.

Facebook is a platform for people and perspectives from across the political spectrum. There are rigorous guidelines in place for the review team to ensure consistency and neutrality. These guidelines do not permit the suppression of political perspectives. Nor do they permit the prioritization of one viewpoint over another or one news outlet over another. These guidelines do not prohibit any news outlet from appearing in Trending Topics.

The comments section of this post are so hilariously critical of Facebook, but as I said earlier in this blog post, “I wouldn’t bother criticizing the comments section of a YouTube video or CNN article or Facebook post.”

Facebook also released a 28-page document which is the detailed instructions manual to review trending topics. It is basically exactly what you would expect, though I do like the redacted lines.

Here is a Vox article that ties the bias to the echo chamber effect of social media, claiming “Facebook’s most biased curator is you.” The Atlantic opens with, “Facebook Doesn’t Have to Be Fair.” And here is Marginal Revolution on how the bias is probably demand driven.

I generally agree with these three articles. It is easy to call out “bias,” but what does that word mean in this situation? And even if it is biased, would it be wrong? I claim neither answer is obvious.

Misc

The New Yorker on the popularity of Donald Trump in China:

In many respects, ordinary people in China, or the “old hundred names,” as they are called—a colloquial catchall for those commoners who didn’t make it into the history books—are not unlike the largest segment of Trump supporters: of limited education, dispossessed, and frequently overlooked because of their distance from power. Abstract principles, which Hillary Clinton has been known to proclaim in China—of human rights and women’s rights—seem less relevant than the practical economic challenges facing the average citizen. “Trump is an exceedingly smart man who has had remarkable success in making hotels and towers and TV shows,” a Chinese blogger posted on a Web forum devoted to American politics. When someone else asked about Trump’s trade policies, many of which are hostile to China, the same blogger responded dismissively that Trump is “a businessman first and foremost” and “will do what is in both countries’ economic interest”—giving voice to the sentiment, perennially popular in China, that pragmatism inevitably reigns in the end.

The Washington Post on a debate by economists on the utility of Econ 101:

Even more problematic, some of the empirical research most celebrated by critics of economics 101 contradicts itself about the basic structure of the labor market. The famous “Mariel boatlift paper” finds that a large increase in immigrant workers doesn’t lower the wages of native workers. The famous “New Jersey-Pennsylvania minimum wage paper” finds that an increase in the minimum wage doesn’t reduce employment. If labor supply increases and wages stay constant — the Mariel paper — then the labor demand curve must be flat. But if the minimum wage increases and employment stays constant — New Jersey-Pennsylvania — then the labor demand curve must be vertical. Reconciling these studies is, again, way beyond the scope of an intro course.

Scientific American on why people edit Wikipedia articles for free:

Instead of public recognition, Gallus credits the success of this experiment primarily to the effect of identification with a community. That is, the symbolic recognition of receiving Edelweiss with Star made editors feel like they were part of an exclusive group. Although contributions that editors make to Wikipedia pages are public, no one gets direct credit for authorship. In the study, only about 6% of recipients publicly displayed their award on their user pages, so we can interpret this as an indication that Wikipedia editors responded well to private recognition rather than celebrity.

CNET Roadshow on the owner of a Tesla and Tesla blaming each other for crash:

While running errands, the owner claimed he parked his Model S behind a trailer. After a minute of standing near the car and talking to a fan of the brand, the owner went inside a nearby business. Five minutes later, he came out to a car with a crushed windshield and A-pillars.

After bringing the issue to Tesla’s attention, the automaker claimed it was not Tesla’s fault. Rather, the owner was “not being properly attentive” when using the car’s Summon feature, which can autonomously park the vehicle using its built-in sensors. The owner claimed he never engaged Summon.

Slate on the realism of virtual reality:

I couldn’t move. And I wasn’t laughing anymore.

Rationally, I knew that I was in a tiny, makeshift room in a convention center, surrounded by a crowd of onlookers watching me wobble and shake. I knew I was standing on a carpeted and fully corporeal floor, my arms held out for balance, and that I only had to walk about six feet in a straight line to finish. But it didn’t matter. The moment I moved to take my first step off the building and saw nothing but a wire separating me from a 1,300-foot fall to the ground below, some primal, reptilian part of my brain started screaming: YOU’RE GOING TO DIE.

The Guardian on a woman fired for not wearing heels:

Nicola Thorp, 27, from Hackney in east London, arrived on her first day at PwC in December in flat shoes but says she was told she had to wear shoes with a “2in to 4in heel”.

Thorp, who was employed as a temporary worker by PwC’s outsourced reception firm Portico, said she was laughed at when she said the demand was discriminatory and sent home without pay after refusing to go out and buy a pair of heels.

Facebook Bias, Bernie Sanders, and Ubers in Austin

Does Facebook Have a Liberal Bias?

I feel like this story is a lot less relevant than it sounds, but here is some background.

From CNN:

An anonymous former Facebook contractor says he witnessed colleagues suppress news about “popular conservative topics” from the website’s “trending” section.

Three former Facebook workers who spoke with CNNMoney echoed what some of Gizmodo’s other sources said — that personal biases might creep into the day-to-day “trending” work, but they never detected institutional bias for or against conservative information.

And here is the NYT:

Facebook denied the allegations after a backlash — from both conservative and liberal critics — erupted. “It is beyond disturbing to learn that this power is being used to silence viewpoints and stories that don’t fit someone else’s agenda,” read a statement from the Republican National Committee. “NOT LEANING IN… LEANING LEFT!” blared the top story on The Drudge Report, a widely read website.

The journalist Glenn Greenwald, hardly a conservative ally, weighed in on Twitter: “Aside from fueling right-wing persecution, this is a key reminder of dangers of Silicon Valley controlling content.” And Alexander Marlow, the editor in chief of Breitbart News, a conservative-leaning publication, said the report confirmed “what conservatives have long suspected.”

Intrigued yet? Here are some things to consider in defense of Facebook even if the allegations are true:

  1. Facebook is a company, not a government organization. It does not have an obligation to be politically balanced.
  2. As a company, Facebook’s main goal is to generate profits, and if it does so better by instilling a liberal bias, then so what? In the scale of moral quandaries, this is pretty benign compared to what other companies do.
  3. Facebook is a social media site, not a news agency. And neither has an obligation to be politically balanced.
  4. There is some argument that the news media already has a liberal bias. If so, how is Facebook’s liberal bias different from that of other forms of media?
  5. Liberals tend to post more political things on Facebook than conservatives. So even if nobody working at Facebook is tweaking knobs, you should see more liberal posts than conservative ones, and liberal posts should trend more often.

liberal-conservative-facebook

Facebook denies having any intentional bias. Here is the WSJ:

Facebook Inc. on Tuesday denied allegations from former workers who said the social media site suppressed news about conservative issues on its popular “trending” news feature.

Tom Stocky, Facebook’s vice president for search and the person responsible for the trending feature, defended the company’s practices and said it found “no evidence that the anonymous allegations are true.”

I wouldn’t be surprised either way, if there was or was no manipulation of trending news. Not that I’d notice—my Facebook newsfeed is nearly all liberal posts.

Also, I did warn that this topic is less relevant than it sounds. The best thing to do is recognize that there might be some liberal bias and move on.

Bernie Sanders and Efficient Markets

The headline for this section is not a joke, haha.

Some primary ago, Bernie Sanders won a state but his chance to win the Democratic nomination went down as a result. And on my social media feeds, people (esp. supporters of Bernie Sanders) didn’t seem to understand how this could happen. I also often heard things like “Sanders is projected to win the next 5 states, but the media is saying Clinton has practically won the nomination, so therefore the media is biased against Sanders.” This is of course nonsense. So here is my PSA to explain how markets work.

Test your understanding of markets by figuring out which statement is correct:

  1. Sanders is 5% to be the Democratic candidate according to prediction markets, but polls show him far ahead of Clinton in the next 5 states. Therefore, the real chance he has to win overall is something higher than 5%, maybe more like 10% or 20%.
  2. Sanders is 5% to be the Democratic candidate according to prediction markets, but polls show him far ahead of Clinton in the next 5 states. These polls don’t matter, and his chance to win overall is still 5%.

Naively, the first statement sounds better. But anyone who has caught on to the concept I am getting at would know that the first statement is wrong and that the second statement is correct. Why? The prediction markets already take into account the results of the polls. That is, the knowledge gained from the polls is already incorporated into the levels of the market. (This is, of course, assuming Efficient Market Hypothesis.)

You can apply the same concept to stocks. Let’s say Apple is $90 a share on the market, but you think it has a 10% chance to be bankrupt and worth $0. Thus, Apple is 90% to be worth $90 and 10% to be worth $0, for a fair value of $81 per share. [90%*$90 + 10%*$0 = $81.]

So should you sell Apple at $90? No. In fact, the calculation to get $81 is wrong.

Assuming you obtained your information legally, other people in the market, including those who have presumably spent far more time than you have researching the fundamentals of Apple, also think that Apple is 10% likely to be bankrupt. So here is what’s actually going on in the market:

  • People think Apple is worth $100 per share if it is not bankrupt.
  • It has a 10% chance to be bankrupt, in which case it is worth $0.
  • Thus, the fair price is 90%*$100 + 10%*$0 = $90.
  • Thus, it is trading at $90 in the market.

An interesting thing to consider is, what if Apple comes out on the news and releases some sales numbers, and now everyone thinks there is 5% chance Apple is bankrupt? The price actually increases, to $95 [95%*$100 + 5%*$0 = $95].

So people thinking Apple has a chance to be bankrupt can increase the price of the stock. The key is that the chance it is bankrupt is less than what everyone expected before.

Similarly, if prediction markets are already expecting Bernie Sanders to win a state with 60% of the vote but he wins with only 55%, his chance to become the nominee goes down.

You can see what prediction markets are saying about the 2016 race here.

Uber and Lyft in Austin

As a fan of free markets and as someone who grew up in Austin, TX, I am kind of sad to see Uber and Lyft shutdown in Austin over regulation. Here is TechCrunch:

Today voters in Austin went to the polls to weigh in on Proposition 1, an attempt to overturn a bill requiring mandatory fingerprint-based criminal background checks for new Uber and Lyft drivers in the city.

The results are in, and with 56 percent of total voters voting against Prop 1, the proposition failed to pass. This means that the bill requiring fingerprint-based background checks will proceed, with new drivers needing to pass the check before being able to drive.

In response to the news, Uber and Lyft have announced that they will be shutting down operations in the city — at least temporarily.

One idea of markets is that you wouldn’t do a transaction if you thought it was bad for you. So the fact that many people were using Uber in Austin before this meant that even without fingerprint checks, people preferred Uber to older cab services. And who benefits from this regulation? Older cab companies.

Of course, safety is good, but it seems ironic that a city that prides itself on being kept weird and being the new Silicon Valley, the tech capital of the south, is the one to introduce this kind of regulation that will just slow down tech development. The WSJ reports, “Austin is now the largest U.S. city where Uber isn’t currently available.”

It also seems like this is a weird political issue in that people who use Uber are generally young people, and young people are generally more liberal, but in this case they are more anti-regulation.

Here is Kristen S. Anderson, in one of the best passages from The Selfie Vote (Ch. 4):

Suffice to say, cabs hate Uber, as well as Lyft and other “ride-sharing” companies, as they came to be known. Ride-sharing companies are absolutely eating the cab industry’s lunch. Almost nothing about the existing taxicab system in most major cities resembles a free market, and the results are exactly what you’d expect. In a properly regulated free market, customers can make informed decisions about whether or not to engage someone in services for hire. They can vote with their wallets, choosing between a variety of competitors to patronize only quality vendors with good pricing, and those who offer poor service wind up failing.

The cab market in most cities is the opposite of this in nearly every way. When I’m standing on a street corner in a city, trying to hail a cab, I’m not choosing between quality drivers; I’m hopping in whatever cab pulls up and hoping for the best. I’ll pay the same rate whether the driver is kind  and funny and highly competent (as many drivers are!) or reeks of cigarette smoke and blasts the heat in July and drives like they’re running away from the cops. There’s no choice or competition, on price or quality. The lack of market forces makes the taxicab industry in many cities function like something out of the Soviet era: inadequate supply and mediocre quality.

Ride-sharing companies add competition, and there’s nothing an existing cartel hates quite like competition. In cities across the U.S., ride-sharing companies entered into battle with local regulators and taxicab unions, with the regulators and unions trying to keep the newcomers out of the market. In DC, for instance, cab protests have involved drivers swarming particular major thoroughfares and loudly honking their horns to draw attention to their plight (likely perturbing their intended audience in the process). But it wasn’t just free-market types and libertarians championing the cause of ride-sharing companies: I remember being amused at the many left-of-center writers I saw dropping their pro-union and pro-regulation posture when the unions and regulations were going to keep them from being able to get a cheap, quality ride home from work or happy hour (or perhaps Whole Foods!). The ride-sharing battle in many cities pitted entrenched interests against an upstart. Overwhelmingly, the young—moving to denser areas, eschewing cars when they can—were on the side of the upstart. And the battle over ride-sharing companies and regulations created a near picture-perfect example of the power of the oft-maligned free market to do great things, to encourage innovation, and to improve people’s quality of life.

Misc

MarketWatch on “Hillary Clinton reaping donations from Wall Street“:

The Democratic front-runner has raised $4.2 million in total from Wall Street, $344,000 of which was contributed in March alone. According to a Wall Street Journal analysis of fundraising data provided by the nonpartisan Center for Responsive Politics, the former secretary of state received 53% of the donations from Wall Street in March, up from 32% last year and 33% in January through February, as the nominating contests began.

Trump, by contrast, hasn’t garnered more than 1% of Wall Street contributions in any month through March.

The Atlantic on why empathy is bad:

Paul Bloom, psychologist and Yale professor, argues that empathy is a bad thing—that it makes the world worse. While we’ve been taught that putting yourself in another’s shoes cultivates compassion, it actually blinds you to the long-term consequences of your actions.

The Washington Post on being interrogated for doing math on a plane:

The curly-haired man laughed.

He laughed because those scribbles weren’t Arabic, or another foreign language, or even some special secret terrorist code. They were math.

Disclosure: I have done math on a plane before.

Tweets, Personalities, and Startups

Twitter

I started using Twitter again (maybe the 4th time), and I am finally starting to get its appeal. In this election year, I can now witness firsthand Donald Trump eating taco bowls and calling Senator Elizabeth Warren “goofy”:

And the replies:

Yep, that happened. Twitter has always felt like a children’s playground to me, and it’s hilarious to see two serious adults fighting on it.

I’ll need to order more popcorn, but in all seriousness, Hillary Clinton better win this election.

Also, if you want to follow me, the Twitter handle is @nargaque  (what else could it be?). My most retweeted post is a postmodernist joke that was copied from some academic site.

Internet Addiction

There is some irony in having a section on internet addiction following one on Twitter. But this is much more hardcore. Here is an article on an internet addiction bootcamp in China, via CNN:

“The main challenge was to keep my mind away from the repetition imposed by the school,” he said. “It was not easy to find the distance to set a point of view.”

The internees, as he called them, were boys and girls, men and women. They were as young as 8 and as old as 30. Most had been forced to enter the treatment center — sometimes kicking and screaming — by family members concerned about their physical and mental health.

At the center, they were subjected to “discipline and repetition,” which the center’s leaders said would cure their addiction. They might stay for a few weeks or many months, Maccotta said.

Their personalities are annihilated,” Maccotta said. They stay “behind a formal posture of silence and obedience. They don’t show any sadness, but I’m sure they miss families and friends.”

I’m not sure how big of an issue internet addiction is, but probably annihilating people’s personalities goes too far? Try to read this article without imagining every insane asylum you’ve seen. I wonder if the cure is worse than the disease.

The culture divide is vast. In the West we value individualism and thus see video gaming as personal expression rather than social blight. Here is one of the “Great American Stories” also via CNN:

Ask these gamers during breaks in play, and they tell tales of parents whose reactions have run the gamut from total support to utter confusion.

One mother can’t watch because the games make her dizzy; a second can’t keep the name straight and calls the game “League of Nations.” Another mom can hold her own in any competition, and a fourth carved out a weekend to play with her son so she could begin to understand. There are fathers who remain baffled, some who told their kids video games would never pay the bills and others who’ve admitted they’re downright jealous.

As for their offspring? They smile wide and can’t help but relish the turn of events, knowing they were onto something all along.

Startups

I feel like I hear more and more about startups these days. Or maybe we just label more things startups. Is Uber still a startup?

Anyway here is a cool article on the offices of NYC startups, via Mashable.

In Silicon Valley, many workers have been spoiled by sprawling campuses, free company buses, fun slides and scooters, in-house chefs and laundry services offered by prominent businesses like Google and Facebook. In New York, startup employees are accustomed to working more with less.

“Expectations, in some ways, are higher for the people in San Francisco,” McKelvey says. “In New York, you have thousands of buildings that have never been renovated, that have horrible designs, that are really cramped and terrible. Lots of people are coming out of those buildings and coming into our buildings and saying, ‘I’ve never seen anything like this before.’”

Sure enough, in tours of five prominent New York startup offices, that theme emerged again and again. Startups operating in the Big Apple don’t feel the need to dazzle staff quite as much — and particularly at a time when the startup market is more volatile — though they still go above and beyond the old-fashioned office.

San Francisco is a boring fucking city. In New York, you don’t have to entertain people because the city entertains people,” says Mario Schlosser, CEO of Oscar, a healthcare startup valued at nearly $3 billion and headquartered in the very entertaining SoHo neighborhood.

The pictures in the article are great. This stairwell setup is pretty much what you would expect of the 2010s startup, and you can just tell that each elevated level adds that much more productivity.

WeWork-office

The more different ground levels you have, the more you are a true startup.

Of course, they have the obligatory startup ping-pong table, which is even captioned, “The obligatory startup ping pong table, seen here at Poppin’s office.”

Poppin-ping-pong

It’s such a jovial picture, and what are those colored things on the shelves?

But not everyone is excited about ping-pong tables. A decline in sales of ping-pong tables could mean the tech bubble is popping, worries The Wall Street Journal:

wsj-ping-pong-table

Disclosure: The office I work in has a ping-pong table.

Palantir

I don’t usually link to Buzzfeed, but here are some interesting passages from “Inside Palantir, Silicon Valley’s Most Secretive Company“:

Over the last 13 months, at least three top-tier corporate clients have walked away, including Coca-Cola, American Express, and Nasdaq, according to internal documents. Palantir mines data to help companies make more money, but clients have balked at its high prices that can exceed $1 million per month, expressed doubts that its software can produce valuable insights over time, and even experienced difficult working relationships with Palantir’s young engineers. Palantir insiders have bemoaned the “low-vision” clients who decide to take their business elsewhere.

And:

On April 22, in an extraordinary move for a company that had prided itself on paying salaries below market rate, Palantir CEO Alex Karp announced a 20% pay raise for all employees who had worked there for at least 18 months. Karp also canceled annual performance reviews, saying the current system wasn’t working.

And:

Owing in part to the sensitive nature of its work, Palantir – which derives its name, the names of its offices (the Shire, Grey Havens, Rivendell, Gondor), and the name of its annual gathering (HobbitCon) from J.R.R. Tolkien’s Lord of the Rings books – forbids employees to speak with the press and uses quirky codenames to refer to its customers.

They include a table of such codenames, and they are actually kind of amusing:

buzzfeed-code

“Tophat” is pretty good for Bank of England, though when I enter a Walmart from now on, I will imagine the Oceans 11 team swooping in and snatching the discount toaster.

And after reading the article, I still don’t understand what Palantir actually does.

Misc

WSJ on Trump’s campaign style:

Republicans proved vulnerable to his unconventional campaign style. As a skilled entertainment professional, he made himself ubiquitous. His audience seemed ready to forgive any outrageous comment or slip-up.

Mr. Trump dominated the campaign conversation with a communications-heavy strategy that relied on mass rallies, TV interviews and debates. That meant no polling, no analytics, little paid media, no consultants.

“This election isn’t about the Republican Party, it’s about me,” Mr. Trump said in an interview this week. “I’m very proud I proved an outsider can win by massive victories from the people, not from party elites or state delegates.”

The Atlantic on the middle class:

According to Johnson, economists have long theorized that people smooth their consumption over their lifetime, offsetting bad years with good ones—borrowing in the bad, saving in the good. But recent research indicates that when people get some money—a bonus, a tax refund, a small inheritance—they are, in fact, more likely to spend it than to save it. “It could be,” Johnson says, “that people don’t have the money” to save. Many of us, it turns out, are living in a more or less continual state of financial peril. So if you really want to know why there is such deep economic discontent in America today, even when many indicators say the country is heading in the right direction, ask a member of that 47 percent. Ask me.

WBGH on Steven Strogatz on math education:

High school math, Strogatz notes, is organized the way it is because of the space race against the Soviets. The courses are literally “meant for rocket engineers in the 50s.”

But by forcing so many students to take classes like trigonometry, calculus, and algebra, Strogatz says we are forgetting about not just the utility but also the beauty of math.

NYT on Facebook:

Obviously there are limits to how much time Facebook users can spend since there are only 24 hours in a day. But short of that, “I don’t feel there’s any upper limit,” said Mr. Sena, the analyst. “Everybody wants to be the platform that’s on all day, kind of like some people used to have their television on all the time. Facebook is probably in the best position because people are already such active users.”

GDPs, Feelings, and Mountains

vintage-phone-ad

Human Progress, cont’d

The media is pretty good at reporting the most attention-grabbing headlines: popularity contests, controversies, and catastrophes. This part is fine. Companies should try to generate profits within reasonable moral bounds, and selectively reporting news stories that are the most interesting does not feel unethical.

But this causes us to miss the tiny incremental changes that have resulted in a better world, and instead focus on the seemingly endless problems that pop up every day. One would naively think, from things like the Flint water crisis, the popularized incidents of police brutality, random shooting deaths, terrorism worldwide, stagnant wages, and the growing rift of income inequality, that the United States and the world are eroding away. But this narrative misses all the positive things.

Remember 10 years ago? That’s not even the 1990s. That’s the early 21st century. In these dark ages of 2006, there was no iPhone, no Snapchat, no Twitter. There was neither Tumblr nor Tinder nor Uber, while Facebook and Youtube were in their infancy. 55% of Americans opposed same-sex marriage while only 35% were in support; today, those numbers have flipped. New art and new science have developed. The US emits less CO2, and global wind power capacity has increased by a factor of 6. Global poverty has continued to decline, infectious diseases take fewer lives, US cancer mortality rates have fallen, global childbirth mortality and child mortality rates are down, and even as the world population goes up the number of people undernourished is decreasing.

(And for computer geeks: The laptop I had in 2006 had 1 GB RAM and a 40 GB non-SSD hard drive. The one I am using to write this post costs about the same and has 16 GB RAM and a 256 GB SSD. )

So it is very puzzling that Donald Trump and Bernie Sanders have engaged so many people by essentially ignoring progress and calling on their followers to ignore it as well. The very idea of “Make America Great Again” is based on the narrative that the US has declined, yet there has not been a better time for the US or for the world. And the “capitalism has failed you” narrative from the other side of the spectrum is no better. Get rid of your iPhone first and then talk about capitalism produces nothing of value. Hillary Clinton understood this when she stated, “America never stopped being great.”

And here is The Economist:

Which would you prefer to be: a medieval monarch or a modern office-worker? The king has armies of servants. He wears the finest silks and eats the richest foods. But he is also a martyr to toothache. He is prone to fatal infections. It takes him a week by carriage to travel between palaces. And he is tired of listening to the same jesters. Life as a 21st-century office drone looks more appealing once you think about modern dentistry, antibiotics, air travel, smartphones and YouTube.

The question is more than just a parlour game. It shows how tricky it is to compare living standards over time. Yet such comparisons are not just routinely made, but rely heavily on a single metric: gross domestic product (GDP). This one number has become shorthand for material well-being, even though it is a deeply flawed gauge of prosperity, and getting worse all the time […]. That may in turn be distorting levels of anxiety in the rich world about everything from stagnant incomes to disappointing productivity growth.

And my favorite part from the ad at the top is, “Even use on your boat,” as if everyone had boats back then.

“I Feel Like”

Here is Molly Worthen, whose article in the NYT is titled “Stop Saying ‘I Feel Like’“:

In American politics, few forces are more powerful than a voter’s vague intuition. “I support Donald Trump because I feel like he is a doer,” a senior at the University of South Carolina told Cosmopolitan. “Personally, I feel like Bernie Sanders is too idealistic,” a Yale student explained to a reporter in Florida. At a Ted Cruz rally in Wisconsin in April, a Cruz fan declared, “I feel like I can trust that he will keep his promises.”

These people don’t think, believe or reckon. They “feel like.” Listen for this phrase and you’ll hear it everywhere, inside and outside politics. This reflex to hedge every statement as a feeling or a hunch is most common among millennials. But I hear it almost as often among Generation Xers and my own colleagues in academia. As in so many things, the young are early carriers of a broad cultural contagion.

Hedging my written remarks is pretty useful when I say things on the internet that are archived permanently. It is so easy to take things out of context that I preemptively qualify statements to avoid misunderstanding.

On the other hand, I agree with all the reasons against over-hedging as discussed in the article. I am in favor of things that are rational and encourage discussion, and I detest things that shut down debates.

Yet here is the paradox: “I feel like” masquerades as a humble conversational offering, an invitation to share your feelings, too — but the phrase is an absolutist trump card. It halts argument in its tracks.

When people cite feelings or personal experience, “you can’t really refute them with logic, because that would imply they didn’t have that experience, or their experience is less valid,” Ms. Chai told me.

“It’s a way of deflecting, avoiding full engagement with another person or group,” Elisabeth Lasch-Quinn, a historian at Syracuse University, said, “because it puts a shield up immediately. You cannot disagree.”

This is also the primary reason why recent campus social justice movements go too far: they stifle debate rather than encourage it.

That said, there is a difference between hedging a statement and expressing an opinion:

  • If I recall correctly, the speed of light is 299,792,458 m/s.
  • I feel like Ted Cruz would make a bad president.

The first statement makes a factual claim but also expresses some uncertainty as to whether it is true. It doesn’t deflect engagement.

But the second is an opinion, and technically speaking, the claim is not that “Ted Cruz would make a bad president,” but that “I feel like Ted Cruz would make a bad president.” In this sense, you can’t really argue with the statement even if you miraculously provided evidence that Ted Cruz would make a good president, because that would not affect the person’s feelings that Ted Cruz would be a bad president.

So hedge more, “feel like” less.

Misc

NYT on Margot Robbie:

“It’s always a hustle,” she said. “I thought it would be a mountain, where you get to the top, and then it’s like: ‘Wheeee! It’s so easy after this.’”

Instead, Ms. Robbie said: “Any time I get near the top, I’m like, ‘There’s another mountain!’ The hustle continues.”

WSJ on making friends:

People with higher I.Q.s were less content when they spent more time with friends. Psychologists theorize that these folks keep themselves intellectually stimulated without a lot of social interaction, and often have a long-term goal they are pursuing.

Harvard on young people:

Sanders remains most popular candidate for America’s 18- to 29-year-olds; Nearly half believe today’s politics are unable to meet the country’s challenges; Majority reject both socialism and capitalism.

 

Brains, Stories, and Yelling

Cognitive Styles

I’m always skeptical of any explanation that involves “culture,” but here is Jennifer Richler in the latest issue of Scientific American Mind:

Previous research has shown that people from cultures that are Western,educated, industrialized, rich and democratic (“WEIRD,” in psychological parlance) tend to think analytically, using logical rules, whereas those that are non-WEIRD process information more intuitively. They even perform differently on problem-solving tasks: Americans, who are more analytical, remember individual components of a complex visual scene better than East Asians, who are more holistic.

They compared the minds of liberals and conservatives by giving them three words, e.g. “panda”, “monkey”, and “banana”, and asking which two were most related:

Liberals acted more like Westerners, pairing items that belonged to the same abstract category (for instance, two animals), whereas conservatives tended to pair items that were functionally related (monkey and banana), as non-Westerners do. One other classic test of holistic thinking also suggested that liberals tended to use a more typically WEIRD cognitive style.

The finding that conservatives think more like those from collectivistic cultures might sound counterintuitive. Aren’t liberals, who favor safety-net programs for the needy, the collectivist ones? Thomas Talhelm, now a professor of behavior science at the University of Chicago and lead author of the study, explains that true collectivism “doesn’t mean general sharing with other people. It’s about social ties and responsibilities to those within your group.” Antipoverty programs usually serve to help individuals get a leg up rather than strengthening groups—thus aligning with WEIRD cultures’ focus on individuality.

This confuses me a little because when I think about recent “liberal” examples in individualism vs collectivism, the thing that jumps out is the “check your privilege” movement, which is ultra anti-individualist. You belong to X racial group or Y social class? Privileged! Your “identity” is based on pre-defined groups (often which you did not make a choice to join) and not on your individual experience.

The counterintuitive story, that liberals are the individualistic ones, makes more sense after some thought. If you go through liberal vs conservative stances on social issues, it does seem like liberals in general favor the individual. The most glaring example is abortion, with the liberal position literally called “pro-choice.”

Here is a passage about where libertarians fit in this framework, from this article:

Historically, libertarians and modern liberals share an ideological ancestry, both tracing our roots to the classical liberal tradition of Locke, Hume, Smith, Mill, and others. In the 19th century, the classical liberals triumphed by advocating the primacy of the individual against the status quo of monarchy, mercantilism, aristocracy, theology, slavery, and the like. While the progressive movement stole our liberal terminology in the early 20th century, modern liberals and libertarians today still share that same valuation of the individual in society. This is most easily seen today in the issue of marriage equality, where social conservatives try to use the power of the state to control marriage because it is an important social institution, while liberals and libertarians focus on the importance of marriage in the lives of all individuals. It is the same core conflict between a holistic worldview that emphasizes tradition against a more analytic worldview that prioritizes the individual.

Oh, and I’m totally on team panda+monkey rather than monkey+banana. I would guess most people I know (liberals and math people) would pick the two animals as well.

Bonus: Here is a chart from the Scientific American Mind article on political party and Twitter language. It does further the story that “liberals are the real individualists”:

twitter_democrat_republican_language

Stories

Saw this on Tyler Cowen’s blog, so here is the story within a story. Just to be clear, I am quoting Tyler Cowen quoting Marti Leimbach:

“A question of privilege”

An excellent short essay by Marti Leimbach.  Here is the opening:

My university-aged daughter is always telling me about the “privilege” that people like me have and how it makes it impossible for me to understand and empathise with those whose lives are without such privilege. I do see her point. I’ve never been black or gay or trans or gender queer or mentally ill. I don’t know what it would be like to grow up in a derelict building in a dangerous neighbourhood, to have drug addicts for parents, to fear for my safety while walking to school, to be openly despised for being female, denied education or refused employment based on my skin colour or gender. And while I have been poor enough not to be able to afford a car or health insurance, I have never been so poor I had to steal food. Clearly, I’ve not suffered the worst of what society can throw at a person.

Nonetheless, this whole notion of “privilege” vexes me. We talk about it as though we can all recognise what it is. I am not always so sure. I can tell one narrative of my life and it seems to describe someone who grew up without privilege, and I can tell another narrative and it seems almost as though my life was one of ease and privilege from the time I was born.

The story continues…it is hard to excerpt with its various twists and turns, definitely recommended…

As advertised, Leimbach paints two widely differing narratives of the same set of events. It is definitely worth a read. (It also reminds me of the underrated movie Vantage Point, which shows the same plot unfold several times from the perspective of different characters.)

The power of narrative is strong. You can take the same set of facts and wind up with opposite interpretations, as was the case in Leimbach’s story. For very different example, here is a graph of US stock market investment, via Gallup:

gallup-stock-market

So should you buy into the market?

  • Story 1: “It is obviously a time to buy stocks. When the number of investors in the stock market recovers and comes back to normal levels near 60%, tens of millions of Americans will have bought stocks, making the market much higher than it is now.”
  • Story 2: “It is obviously a time to sell all your stocks. Fewer Americans are investing in the market than ever before, and this trend will only continue. Combined with the market near all-time highs, a crash is imminent.”
  • (Meta-story: “The markets are efficient and have priced in both stories 1 and 2, so it is not obviously a time to buy or to sell.”)

Do violent video games increase crime? [from this post]

  • Story 1: “People who play violent video games are likely to imitate the characters they play, thus becoming more aggressive in real life.”
  • Story 2: “People who would otherwise commit violent crimes satisfy their urges in video games and not in real life, thus decreasing the crime rate.”

So unless you have numbers to back you up or comprehensive explanations for complex issues, stay away from explaining things via simple stories.

These kinds of narratives make me skeptical of many political movements as well, whether from the right (e.g. the “war on Christianity” narrative) or from the left (e.g. the “privilege” narrative mentioned in Leimbach’s article).

Here is Cowen again, really hammering the point in a TED talk on narratives.

Basically, make sure you understand as much of the situation as you can, not just some simplified narrative.

How to Social Activism

Earlier this week, The Huffington Post on President Obama on Black Lives Matter:

President Barack Obama on Saturday praised the work the Black Lives Matter movement has done to highlight racial inequality, but also strongly cautioned activists that they needed to be realistic about their proposals and be willing to compromise.

Speaking at a town hall in London, the president mentioned Black Lives Matter specifically as he laid out his vision of how activists can achieve social change.

As a general rule, I think that what, for example, Black Lives Matter is doing now to bring attention to the problem of a criminal justice system that sometimes is not treating people fairly based on race, or reacting to shootings of individuals by police officers, has been really effective in bringing attention to problems,” Obama said.

But the president went on to say that activists needed to be realistic about what could be achieved immediately and sometimes needed to compromise to achieve long-term goals.

One of the things I caution young people about, though, that I don’t think is effective is once you’ve highlighted an issue and brought it to people’s attention and shined a spotlight, and elected officials or people who are in a position to start bringing about change are ready to sit down with you, then you can’t just keep on yelling at them,” Obama said.

Thanks Obama! And no, that was not sarcastic. As a rationalist and individualist, I generally disapprove of schemes in which your identity is based on something that you had no control over, such as race.

I’m on team Clinton and I think many of Sanders’s plans are insane. However, I fully support Sanders’s right to speak at his own rallies, especially with so many supporters there to see and listen to Sanders, not some random people who hijacked the podium, which happened in Aug. 2015.

Things like this just alienate would-be allies. I was generally favorable towards Black Lives Matter before this and certainly had a lower view of the group after the event. And it’s not like Sanders did anything horrible to them before or during the event. I am glad President Obama was not afraid to address this.

Bots, Markets, and Assortative Mating

tayprofile

Tay, AlphaGo, and News Feed Algorithms

AI reached two milestones last month: beating the top human player in the world at Go, and creating a “teen girl AI” that “became a Hitler-loving sex robot.” As an enthusiast in chess, I was under the impression that Go was way more complicated and that it would take decades from now for a computer to outplay a human. Oops. The future is here. It seems pretty awesome, but other than that, I feel unqualified to speak further about the Go match.

I do feel more than qualified, however, to talk about Tay. I mean, I’m not an expert on Hitler-loving sex robots, but I have spent a lot of time arguing with people on the internet, and wow do things derail quickly. So my obviously hindsight reaction is Come on, how did you not expect this? Like, have you ever seen the comments section of a YouTube video? If you train on that, was any other result even possible? My solution is, find anyone who has made any angry comment on any YouTube video, and hire them to break your AI during testing. Also, when I imagine what people in the 1990s worried about in terms of AI development, I’m sure this was not one of them. Thanks, internet.

One more thing about AI: Facebook and Twitter news feeds. I’m generally in favor of any change that makes me have to do less work, such as scrolling past posts which, according to some algorithm, I probably don’t care about. However, the paranoia is that if I “like” an article titled, “Microsoft deletes ‘teen girl’ AI after it became a Hitler-loving sex robot within 24 hours,” I would be horrified if Facebook thought I were interested in Microsoft, teen girl AIs, and Hitler-loving sex robots from that action and then show me posts about them. Apparently, this worry is already prevalent:

In Karahalios’ study, many people voiced a common Facebook complaint: too many baby photos in their feeds. They said they would Like a friend’s baby picture out of a feeling of obligation, but then immediately hide the post to try to tell Facebook they didn’t actually want a feed full of toddlers.

So the solution is to like the story but then immediately hide it? I’ll remember that for the day when Microsoft releases a schoolgirl chatbot in the culture that is Japan.

Oh wait, that already happened.

Stocks and College Tuition

When a stock price is too low, you buy, and when it is too high, you sell. That is the most basic thing about a market. Of course, there are a million reasons why this is not so easy to do and why there is an entire sector of the economy trying to do this. And of course, as a disclaimer, nothing on this blog is ever financial advice, even “buy low, sell high.”

Now the “buy low, sell high” strategy may be even more difficult to do in things outside of stocks. One side is pretty easy to do: if groceries or cars or houses are being offered too low, buy them.

But the other side is tricky. If your grocery store is selling oranges at $50 per orange, and people are actually buying them, you probably want to sell oranges at $45 to compete with them. But you need oranges! One way to obtain oranges is to buy them for a cheaper price elsewhere, and resell them at a higher price. So you could go to a nearby city, buy 100 oranges for $1 a piece, pay $100 in transportation fees and resell them for $45 a piece, for a net profit of $4,300. But if oranges are also selling $50 in the other town, you can’t do this, so you would need to grow your own oranges, and that takes some effort, but may be worth doing depending on how much demand there is for these oranges.

The same is true for cars and houses. If the prices for them are just too high overall, the right thing to do may be to found a company that produces oranges or cars or houses and sell them at exorbitant prices. By creating competition, you are also ever so slightly lowering prices to be closer to the fair price.

During the housing bubble, if you thought prices for houses were too low, you would buy houses hoping to flip them out at an even higher fair price. But if you thought house prices were too high, it was more difficult to make that bet. You could buy a financial instrument called a credit default swap on subprime mortgage bonds, or you enter the competition by building houses for a relatively low cost and selling them at very high prices. Both options were difficult and risky.

Enter college tuition [Bloomberg]:

college_tuition

No longer is it the rent that is too damn high, but the college tuition. It has become a political issue now, with politicians in both parties decrying the cost of higher education. Among the 2016 presidential candidates, Bernie Sanders has made a particularly big deal about this, going so far as to propose universal free college tuition. Even Donald Trump agrees in spirit: “That’s probably one of the only things the government shouldn’t make money off – I think it’s terrible that one of the only profit centers we have is student loans.”

How are markets supposed to work again? Do you buy when prices are too high? No, you sell! That’s how you both make money and help drive down prices to some reasonable level. The simple theoretic solution is to found new universities. Unfortunately, the for-profit college idea has empirically been a failure so far.

I’m still hopeful for a better solution. Nonetheless, I’m glad I have already gone through college. My alma mater currently costs $67,613 a year.

Not-Often-Talked-About Sources of Income Inequality

My news feeds on Facebook and Twitter seem more political than before,  which is unsurprising given the proximity to the presidential election. At least on the Democratic side, there is much talk of economic inequality.

I roughly agree with this Paul Graham essay written a few months ago. It starts off the contradiction that startups seem to both help the world and increase inequality:

I’m interested in this topic because I was one of the founders of a company called Y Combinator that helps people start startups. Almost by definition, if a startup succeeds its founders become rich. Which means by helping startup founders I’ve been helping to increase economic inequality. If economic inequality should be decreased, I shouldn’t be helping founders. No one should be.

It then talks about how there are some good sources of inequality (startups, variation in productivity) and some bad ones (tax loopholes, high incarceration rates), and we should be focusing on the latter group, not on inequality categorically.

Besides startups and productive gaps, what are other good sources of inequality? The one that came to mind was assortative mating. Basically, if two rich people married each other and two poor people married each other, you have household inequality, but if they cross-married, you have equality, at least on a household level. The former is becoming more prevalent. Not only does this increase immediate inequality, but it also decreases economic mobility by denying poor people from marrying up.

Tyler Cowen thinks this is nontrivial [NYT]:

These matches are great for those individuals who can build prosperous and happy family alliances, but they also propagate inequality across the generations. Of all the causes behind growing income inequality, in the longer run this development may prove one of the most significant and also one of the hardest to counter.

And more sentences here:

As it becomes harder for many people to “marry up” as a path for income mobility for themselves or their children, families that are not well connected may feel disengaged, and the significant, family-based advantages for some children may discourage others from even trying. The numbers show that assortative mating really matters.

One study indicated that combined family decisions on assortative mating, divorce and female labor supply accounted for about one-third of the increase in income inequality from 1960 to 2005.

Will the fight against economic inequality be so fervent that, in the future, startups and assortative marriages will be shunned? It would be a strange world to imagine.

Misc

I’m a space geek, but someone definitely spent too much effort making this Pluto and Charon video [Business Insider]. Also, when it states that Pluto and Charon are tidally locked, it is one of the times during which the animation does not show them tidally locked.

2015 and What I’m Thinking About

effective_altruism1

Effective Altruism

One thing I’ve never discussed on this blog is effective altruism. It is basically a movement to optimize doing good, and it does so by number crunching rather than by random donating. Here are a couple of main results:

  • Certain charities are 10 or 100 times more efficient than others. The most effective of them all is to distribute mosquito nets to sub-Saharan Africa, according to the famous site GiveWell, which ranks charities in effectiveness.
  • A high income earner can create more social impact than a social worker. The idea is that a software engineer earning $100,000 a year and donating 50% of it (to efficient charities like above) can generate a lot more good than a non-profit worker. The site 80,000 Hours has more about this.

I am fine with this movement and I really enjoy the discussions it causes. I would defend effective altruism against many of its usual criticisms.

But I am still personally skeptical for now. Which brings me to…

Markets

One thing about working in trading is that I now see everything in terms of markets. (Tyler Cowen’s blog often highlights “markets in everything“.) I naturally think about the cost and value of everyday things and decisions. This mindset probably makes effective altruism become more understandable. If every $3000 in mosquito nets saves one life, why would I ever donate to my alma mater?

Yet the same market mentality also raises some questions. I believe people are generally good, that markets are generally efficient, and that companies are generally beneficial to society. So when billions of dollars go into a tech company like Facebook (market cap of $300 billion as of this post) instead of anti-mosquito nets, there is probably a lot of hard-to-measure good that Facebook is providing and which is widely ignored.

Disenchantment with the Left

I wrote only 3 blog posts this year, and sadly two of them were about terrorist attacks in Paris. Back in college I blogged about atheism, and I kind of want to get into this again considering the Paris tragedies, and I believe that combating religion is still important.

That is also why I am becoming disillusioned with being a liberal. Both in the media and on my Facebook feed, people are too afraid (of being called racist or worse, Islamophobic) to criticize Islam and its role in the attacks. The Koran says to do horrific things to infidels, and it is emphatically not a tiny minority that believe this literally.

Liberals do a great job standing up for women, LGBT people, and religious minorities—in America and Europe. But in entire swathes of Islamic countries, in both the Middle East and Africa, women are considered second-class, legally beaten by their husbands, and even sentenced to 200 lashes for the crime of being raped. And we liberals just look the other way because it would be racist and colonialist to criticize their culture. (That last sentence is just out of anger, I hope nobody actually thinks that.)

Here is a very graphic New York Times video from just yesterday, showing a woman literally beaten and stoned to death by a mob, in a public space in broad daylight, because of rumors she burned a Koran. Can you really watch that and claim Islam had nothing to do with it?

My other disillusionment with being a liberal is the whole safe-space/microaggression/trigger-warning/check-your-privilege movement, which I talked about previously.

Anyway, I want to make a hobby out of writing in 2016, and I’m not sure if I should stick with tame topics like effective altruism and markets, or also include charged ones like religion and politics.

Bonus: My 2015 Reading List

  • The Occupy Wall Street Handbook, Various Authors: This is a compilation of essays written on the Occupy movement. I read this to challenge my positive views towards Wall Street, but I was mostly unpersuaded. The essays presume that you are against Wall Street and then talk about the movement or stats about inequality, without much attempt at persuasion.
  • A Random Walk Down Wall Street, Burton G. Malkiel: A decent chronicle of the rise of finance and Wall Street.
  • The Millionaire Next Door, Thomas J. Stanley and William D. Danko: An eye-opening book about American attitudes on saving, spending, and the accumulation of wealth. It provides so many instances where two households have the same income yet have vastly differing net worths, even when age, location, education, previous incomes, etc. are similar.
  • Atlas Shrugged, Ayn Rand: I expected Atlas Shrugged to be pure evil based on so many peoples’ hatred of Ayn Rand and this book, but I actually enjoyed it. At least within the story, I cheered at the end. Does this make me a bad person? I definitely agreed with the reverence of scientists/inventors/creators.
  • On the Origin of Species, Charles Darwin: We are all familiar with classics in literature, so why not in science? Its force and detail are impressive.
  • Average is Over, Tyler Cowen: The title says it all. Jobs will increasingly cluster towards high-wage and low-wage, with little in between.
  • The Great Stagnation, Tyler Cowen: Good discussion of low hanging fruit in economic growth.
  • The Myth of the Rational Voter, Bryan Caplan: Excellent treatise on voter rationality and the public’s views on economic issues, and how frighteningly different they are from economists’ views.
  • The Intelligent Investor, Benjamin Graham: I didn’t find it very useful.
  • The Sense of Style, Steven Pinker: A useful writing-style guide.
  • The Price of Inequality, Joseph Stiglitz: I had a similar reaction as to the Occupy handbook. It basically listed some facts but wasn’t that convincing. I mean, I agree that too much inequality is bad, but this book somehow made the case weaker for me. It had at least one “are you kidding me” moment.
  • Humans Are Underrated, Geoff Colvin: An interesting take on the idea that machines will take over even more jobs than today and that jobs will be all about human-to-human interaction.
  • Islam and the Future of Tolerance, Sam Harris and Maajid Nawaz: A very refreshing, actual dialog between an unapologetic atheist and a pro-reform Muslim. More discussions like this need to exist.
  • Brief Candle in the Dark, Richard Dawkins: Full of captivating and often humorous tales of Oxford, science, and atheism.
  • You’re Never Weird on the Internet (Almost), Felicia Day: Really, thank you so much for creating The Guild and this memoir. It also feels good to read another person’s experience with World of Warcraft.

Caplan’s book discusses anti-market bias, and I feel like I did had lower expectations for books that were pro-market and higher expectations for ones that were anti-market. Both sides surprised me.

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