What (Meta Skills) Do Computers Teach Us?

Posted on by David Wright

Easy: programming. But what does that do for us?

I just read Alan Kay‘s essay: The Computer Revolution Hasn’t Happened Yet. There’s also a video of the lecture on which this essay is based. Haven’t watched it yet.

Here’s the synopsis: when the boys at PARC in the 70s were inventing just about every major component of the personal computer we use today, they had gigantic aspirations. They had a printing press-style revolution in mind and Kay is unimpressed with humanity’s progress using those breakthroughs. He figures we’re still only scratching the surface of its power.  I agree.

Here’s how he rationalizes it:

One way to look at the real printing revolution in the 17th and 18th centuries is in the co-evolution in what was argued about and how the argumentation was done.

Increasingly, it was about how the real world was set up, both physically and psychologically, and the argumentation was done more and more by using and extending mathematics, and by trying to shape natural language into more logically connected and less story-like forms.

The point here is:

As McLuhan had pointed out in the 50s, when a new medium comes along it is first rejected on the grounds of “too strange and different”, but then is often gradually accepted if it can take on old familiar content. Years (even centuries) later, the big surprise comes if the medium’s hidden properties cause changes in the way people think and it is revealed as a wolf in sheep’s clothing.

So, the computer is going to literally change the way we think about and solve problems and this hasn’t really happened yet.

Big thought, that one. I like it a lot.

Kay would answer my questions at the beginning of this post as follows, perhaps: computers let us learn programming, which allows us how to simulate stuff, to play with ideas.

He spends quite some time on his work with children learning science by programming computers to test out ideas of their own. To learn the best way one can learn: by failing. Or let’s dust off an old metaphor: the printing press let us learn by watching, the computer allows us to learn by doing.

If this is right, it means that tomorrow’s people will simply have a better intuitive grasp of difficult concepts: they’ll be smarter. Is it crazy to say that a pedagogy with computer games as its centerpiece will revolutionize education and the world? Sure sounds a bit crazy.

Kay laments that our society sees a computer and thinks ‘super-TV’. Ouch, but he’s right. Remember the One Laptop Per Child program? Kay’s affiliated with it, unsurprisingly. When I heard that I had a flashback to some of the commentary: “What on earth will kids do with a cheap computer when they don’t have water? Watch YouTube?” Imagine Kay’s exasperated reply: “they’d learn, you fool!”

Because they aren’t super-televisions. Oh, no.

Computer literacy was once learning to type. Mechanical skills?!How laughably 19th century. More recently it meant learning how to open a document in Windows: pshah, that’s like teaching one book in an English class. Better to teach the kid to write!

You pick up those basic skills as you go along. The point is that we can’t rely on everyone teaching themselves. Computer literacy means literally learning how to read to and from computers. It is learning programming.

And it’s the future.

Some Amateur Speculation on The Stock Market

Posted on by David Wright

The economic disaster trade appears to be short commodities and long Treasuries.

Timing is everything, but when things turn around the USD is going to weaken and commodities prices are going to pick up. That’s when you would want to be long a Canadian or Australian Index Fund, I think.

The quickest way that happens, probably, is when the either the Fed or the ECB credibly commits to an expansionary monetary policy. A Euro breakup counts because the Dmark skyrockets and the Italian, Greek, Portugese and Spanish currencies plummet.

‘We’ need to destroy some wealth in those problem countries pronto.

Housing

Posted on by David Wright

The question that I don’t have a really good feel for is to what degree the housing market is a canary or millstone. Being only 5% of the economy, one is of course inclined to think of it as a canary.

But here’s the thing: Residential construction companies employ a lot of relatively casual labor. A lot of unskilled labor. A lot of the kind of labor that is, RIGHT NOW, unemployed.

The question then is what the marginal impact of a decline in the housing market might be. One thing’s for sure, anyway. That market is completely effed right now:

In New York we’re noticing some serious signs of the residential and commercial real estate markets recovering (our rent is going up and our expanding office is having some trouble finding a home).

One can take this to mean different things. One interpretation is that there is some serious regional variation contained in these graphs, which appears to have some weight

Philly Fed State Conincident Map
Another possibility is that I don’t know what I think I know because most data is actually just BS.

The problem with new Keynesian economists is that they believe the government data for inflation, real wages, etc, actually measures the theoretical concepts that the model tries to address. But they don’t. Even NGDP is far from perfect, but at least it’s not as distorted as the CPI.

That’s Scott Sumner defending his use of NGDP because it’s the least BS stat out there. I’m heavily persuaded by this kind of argument. A little while ago, I posted something similar to this and actually got into a comment discussion, which is a rather novel thing for me here.

I feel like educated folks tend to make decisions with the part of their brains they trained in school, the part that’s wired for analysis on a given dataset and coming up with The Right Answer is the challenge.

Big contrast to real life. If you had described my job to me when I was a student, I’d imagine myself slogging through difficult math and trying to figure out how to optimally process a dataset. No so. In fact, I’m not sure I’d really want that job or be anywhere near as good at it as I feel I am at this one.

I actually spend about 75% of my time trying to figure out whether this steaming datapile is in ANY way useful. The analytical part is usually pretty straightforward. It has to be. Heck, the rest of my job is trying to shoehorn this datapile into an analysis everyone can understand instantly.

Clients are distracted, busy people and they’d say my work is important but they are often juggling a lot. My complexity test, therefore, goes like this: can this analysis be explained to a child?

And that’s as it should be. Fancy models have their place, but only when used to support conventional wisdom and gut instinct. Counter-intuitive, Complex and Useful: pick two.

I often get the feeling that macroeconomics in particular is a bit too counter-intuitive for its own good. Practitioners get wrapped up in their models and don’t spend quite enough time understanding exactly what is and is not BS. As a result, they have very weak intuition. I suspect they’d be pretty freaked out if they went down to the sausage factory and had a look.

Let’s Flip This Around

Posted on by David Wright

Here’s the conclusion of a Barker-linked paper:

Corporations listed in Fortune’s “100 Best Companies to Work For in America” had equity returns that were 3.5% per year higher than those of their peers, indicating that employee satisfaction correlates positively with shareholder returns, says Alex Edmans of the Wharton School.

more here.

A friend of mine once told me that every single one of these ‘puff lists’ is compiled with extreme cynicism. The point is to check very carefully for potential bias by asking questions like: who has compiled this list and what companies would yield maximum benefits for this author? Are those the same companies as the ones on the list?

It doesn’t surprise me that these puffed up companies are the most profitable ones: those are the companies that are the highest value/status advertisers, affiliates and clients. Perhaps Alex Edmans is revealing bias as opposed to correlation.

The New Pitchbook Paradigm

Posted on by David Wright

One of my pet theories is that eventually all information is going to be distributed via the “web browser stack” of technologies. Here’s what I mean by this:

Today, people in jobs like mine spend a lot of time building sales presentations. People call these different things: “decks”, “pitchbooks”, “submissions”, etc. They’re all the same thing: a summary of deal-relevant data, narrative and visualizations available in both print and electronic form distributed by email or ftp.

The technologies used are still dominated by Microsoft Office, which is probably 90% of the reason why Microsoft is in any way relevant these days. We write using Word, we analyze using Excel and Access, we present with Powerpoint and we (ugh) code in VBA. We then ‘pdf’ (verb) the documents, which is another proprietary bit of software, and email the files out.

This setup is expensive, time consuming and will one day go to the way of the Telex and the Typing Pool. Here’s tomorrow’s paradigm:

  • Write Text In HTML
  • Style in CSS
  • Distribute Information by Web Server
  • Send Data via FTP
  • Visualize With Jquery-based applications (yikes!)

The data are immutable (bye bye adobe), the odious Microsoft Word is finally slayed and email file limits are forever circumvented. Microsoft’s last stand will be with Excel, as long as it doesn’t commit upgrade suicide, which the latest version suggests is a real possibility. That program is still one of the greatest products ever developed.

One of the projects I’m taking on at work is to build parallel sales documents in HTML/CSS (Powerpoint may already be almost dead). Because I don’t want to infect my mind with the odious MS Word any more than I need to, I’ll probably build everything in HTML and write a script that translates it into Word.

Hopefully, I’ll be successful and begin to engineer a transition from the old stack to the new. We may be first movers here, folks! We’ll be so high status, clients will shower us with business.

Would You Walk Away?

Posted on by David Wright

Let’s say you bought a house at the top of the market and a subsequent market crash left you with substantial negative equity.

There’s no recourse against your other assets if you walk. You haven’t got many other assets, anyway.

All you lose is your credit rating.

What good is credit for?

As far as I can tell, the only thing credit is really any good for is a mortgage. The rest you can save for pretty easily. And maybe you should be living your life that way, anyway.

Remember that borrowing includes tail risk of a Kafkaesque lack of control. Trouble likes company.

I’d probably chuck the keys.

On China

Posted on by David Wright

Wow, a lot to digest here.

I’m way too tired after 12 hours of driving to think hard enough to sound coherent on that piece. Instead, I’ll just list my biases about China and hopefully have the presence of mind to check back in when I’ve learned more:

  1. China is poorer than Mexico (per capita)
  2. Never take futurists or medium/long term forecasts seriously (as a test, I offer some below)
  3. Talk of China’s GDP in 2030 (or whatever) is ridiculous
  4. China has an economic growth profile that is radically different than any developed country
  5. Therefore China’s economy will undergo a radical change when it approaches developed status (was that a forecast?! Watch it, now!)
  6. Informal economic and information channels are the only reliable ones. (ie Official China is more Kafkaesque than capitalist).
  7. Chinese consumers have thus far accepted a lower standard of living than they ‘earn’ (ie high inflation and a depressed currency)
  8. Nevertheless, Living standards are rising rapidly. This makes folks feel good.
  9. In spite of their lack of control, Incumbent politicians are blamed for economic malaise. The capacity for a bloodless purge, however senseless, is of course democracy’s strength.
  10. China isn’t a democracy.
  11. And booms always end.
  12. Michael Mandel has taught me to (selectively) mistrust productivity stats and GDP figures for the USA. I chuckle at the skeptical feeding frenzy he’d have with China’s data (ie it’s possibly all complete BS and will perhaps have a Greece-style reckoning)
  13. Nevertheless, living standards have recently been rising rapidly. This makes folks feel good.

In Praise of Stasis

Posted on by David Wright

I think that the worst thing for many television shows is plot progression.

Take The Office (US Version). Season 1 was more or less a replica of the UK version. In Season two it really came into its own. I think Season two of that show was one of the finest television achievements of all time.

Then it got worse. The writers couldn’t help themselves. They had to progress ‘the plot’. The characters changed, the relationships changed. The finely tuned balance was disrupted.

And it stopped being funny.

I love the second season. I miss the second season. Seinfeld, The Simpsons, Arrested Development, 30 Rock, Family Guy. These shows were funny to the extent that they DIDN’T change once they figured out what worked. If they did and realized it sucked, they found a way back.

Comedy is a formula, not a narrative. Once you get a mix of characters and relationships that work, don’t screw around with it.

An Anonymous Rant Against A Professional Writer

Posted on by David Wright

PC360 gives us this. It’s so sticky with jargon to be barely readable.

Let me summarize the (2,300 word) article:

Claims data can teach underwriters about where claims come from and expose new drivers of claims cost. Analyzing claims databases is a good way of testing new hypotheses but,  for organizational reasons, most companies aren’t great at this.

Yawn. Could have been written at any point in the last 300 years.

Next is a big discussion about how automated computer programs can correlate variables without the burden of actually ‘understanding’ the data.

[shields up! BS ALERT!]

My old man once spent some time learning about a stock picking technique which, to be perfectly honest, looked like garbage to me. But sometimes it worked!

I’d argue it’s complete luck. As they say, “even a broken watch is right twice a day”.

Narrative validation a powerful test for statistical conclusions: correlation is useless without a deep understanding for the causal mechanism. Unexplained, ‘dumb’ empirical relationships (describes all too much of medical research, imo) are too unreliable for me to back with cash.

If you don’t know how it works, how on earth do you know when it breaks?

Finance is High Status Welfare

Posted on by David Wright

At my alma matter, the students lived in a ‘ghetto’ of run down houses ripe for trashing right next to the University. This ghetto abutted an actual somewhat poor neighborhood.

I spent my first year off campus living in this actual poor neighborhood and have vivid memories of obese porch monkeys bitching into the phone about their petty social conflicts. Get a #$%$ job, I silently scoffed.

Little did I know…

-=- Continue reading Finance is High Status Welfare