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But simple, beautiful mathematical explanations can make us greedy. While we wish for all explanations of the world around us to be elegant, science often involves “the slaying of a beautiful hypothesis by an ugly fact,”

…“there is growing empirical evidence that people use a common source for evaluations of both beauty and truth.” The source he refers to is processing fluency, the state of being able to easily parse and understand a situation. Essentially, the more easily we can get a handle on a situation (because it’s mathematically simple, we’ve seen it many times before, it’s symmetrical, etc.), the more likely it is to seem right.

That’s from this article by Sam Arbesman. I’ll bang my actuarial drum again here: we are trained to use a series of very elegant models of random processes which often involve some clever math but in reality the models only become convincing once you have enough historical data to… well, throw the model away.

There is nothing elegant about social/economic interaction. Go crude and go ugly.

Wolfers and Stevenson with a checklist for evaluating statistics. Here is the most important one, to me:

If the author can’t explain what they’re doing in terms you can understand, then you shouldn’t be convinced.

It’s the biggest problem I have with what I do for a living. I often don’t understand what I’m measuring, be it weather phenomena or auto accidents. They systems that produce Hurricanes and car crashes are too complex for anyone to understand.

Yet we fit statistical parameters to them and cross our fingers.

Another perspective on the big market turn in the early 00s:

consider what happened to the European insurance industry in 2002. European insurers are allowed to invest much more in equities than their U.S. counterparts can. (Berkshire Hathaway (BRK.A:NYSE) is an interesting exception here.) As the bull market of the 1990s came to an end, European insurers found themselves flush with surplus from years of excellent stock-market returns, and adequate, if declining, underwriting performance. The fat years had led to sloppiness in underwriting from 1997 to 2001.

During the bull market, many of the European insurers let their bets ride and did not significantly rebalance away from equities. Running asset policies that were, in hindsight, very aggressive, they came into a period from 2000 to 2002 that would qualify as the perfect storm: large underwriting losses, losses in the equity and corporate bond markets and rating agencies on the warpath, downgrading newly weak companies at a time when higher ratings would have helped cash flow. In mid-2002, their regulators delivered the coup de grace, ordering the European insurers to sell their now-depressed stocks and bonds into a falling market. Sell they did, buying safer bonds with the proceeds. Their forced selling put in the bottom of the stock and corporate bond markets in September and October of 2002. Investors with sufficient financial slack, like Warren Buffett, were able to wave in assets at bargain prices.

From this awesome piece by David Merkel.

When discussing that turn, everyone points to the claims costs ticking up and 9/11. But it takes more than that to turn a market.

That’s the result of this bombing that will affect your lives and mine.

Wait for the regulations to come out that say a minimum of 5 police officers and k-9 unit for every mile of race distance, or something similar.

Somebody pays for that. The cost of marathons just became prohibitive.

If we all came to see our political opponents not as nonsensical fools but as basically reasonable speakers of another language, we would not elect the demagogues we do now, or watch the same clowns on cable news.

From this review of Arnold Kling’s new book, which (sigh) I hope to read.

The biggest problem with maintaining such ancient computer systems is that the original technicians who knew how to configure and maintain them have long since retired or passed away, so no one is left with the knowledge required to fix them if they break.

That’s from this amusing article on ancient computer systems still in use today (how about the company in Texas using punchcards!).

In Asimov’s Foundation series we’re introduced to the idea of technology beyond the understanding of anyone that uses it. Its use spawns a religion around the ‘magic’ it performs.  God forbid it breaks!

I’m also reminded of Kevin Kelly’s book on technology:

I told him it would take me a half hour to find a tool, an invention that is no longer being made anywhere by anybody.

Go ahead, he said. Try.

If you listen to our Morning Edition debate, I tried carbon paper (still being made), steam powered car engine parts (still being made), Paleolithic hammers (still being made), 6 pages of agricultural tools from an 1895 Montgomery Ward & Co. Catalogue (every one of them still being made), and to my utter astonishment, I couldn’t find a provable example of an technology that has disappeared completely.

As much as 96% of software in China is pirated.

More here and here, on the topic of the hopeful eradication of Internet Explorer 6, perhaps the worst program ever created.

Ten years ago I was in Guangzhou, China, and next in line for a bus ticket. As the teller came free some lady comes out of nowhere, brushes past me and glides up to the wicket. Like I wasn’t even there.

I was astonished. And infuriated, but what could I do? I turned to my guide (from Hong Kong) who didn’t even wait for the question: “they don’t queue, here,” his lip curled in disgust. Queuing being the height of civilization, this only confirmed to my HK Chinese friend that mainlanders are a backward bunch.

I think about what annoys me about this episode and three things come to mind:

1. Someone broke the rules and I got effed over
2. There was nothing I could do about it
3. As an uncommunicative foreigner, I couldn’t even shame the perpetrator for breaking the rule. I was helpless.

To me this is exactly what road rage is. As your avatar on road, a car can’t tell someone to go f$%# himself. Or, more likely, a car can’t shoot someone a dirty look after they cut you off. Better still, the other person’s car can’t exactly look back, realize it cut you off, blush and sheepishly shuffle its feet.

We live in an incredibly complex social world with incredibly rich communication technology (body language, facial expression, language, etc) for enforcing its norms. And the urge to keep your neighbors in line is powerful.

Road rage is when that urge is frustrated and compounded with a feeling of helplessness.

File under “Holy Cow”.

Visual image reconstruction allows us to reconstruct images that a person sees, displaying complex perceptual contents as they are represented in the brain….

In this study, we developed a method to reconstruct visual images by combining local image decoders that predict local image contrast at multiple spatial scales, using brain activity patterns measured by fMRI scanners. Using this method, we can reconstruct arbitrary visual images, including geometric figures and alphabet letters, which are not used to train the decoders.

More here with an astonishing video of what a person is seeing.

Online learning is quickly gaining in importance in U.S. higher education, but little rigorous evidence exists as to its effect on student learning outcomes. In “Interactive Learning Online at Public Universities: Evidence from Randomized Trials,” we measure the effect on learning outcomes of a prototypical interactive learning online (ILO) statistics course by randomly assigning students on six public university campuses to take the course in a hybrid format (with machine-guided instruction accompanied by one hour of face-to-face instruction each week) or a traditional format (as it is usually offered by their campus, typically with 3-4 hours of face-to-face instruction each week).

We find that learning outcomes are essentially the same—that students in the hybrid format “pay no price” for this mode of instruction in terms of pass rates, final exam scores, and performance on a standardized assessment of statistical literacy. These zero-difference coefficients are precisely estimated. We also conduct speculative cost simulations and find that adopting hybrid models of instruction in large introductory courses have the potential to significantly reduce instructor compensation costs in the long run.

From this study. My bias here is that learning is, above all, linked to motivation to learn and that is rarely affected by the classroom environment.

Learning requires engagement, requires presence, which mostly comes from within. To me this is what great teachers do differently: they grab students’ attention and direct it to the material.

Without that gift, much of teaching is replaceable.