Thursday, December 23, 2010

Quotes of the day

What we found are the constants that describe every city. I can take these laws and make precise predictions about the number of violent crimes and the surface area of roads in a city in Japan with 200,000 people. I don’t know anything about this city or even where it is or its history, but I can tell you all about it. And the reason I can do that is because every city is really the same. ... you can take the same person, and if you just move them to a city that’s twice as big, then all of a sudden they’ll do 15 percent more of everything that we can measure. ... Think about how powerless a mayor is. They can’t tell people where to live or what to do or who to talk to. Cities can’t be managed, and that’s what keeps them so vibrant. They’re just these insane masses of people, bumping into each other and maybe sharing an idea or two. It’s the freedom of the city that keeps it alive.--Geoffrey West

According to the data, people who live in densely populated places require less heat in the winter and need fewer miles of asphalt per capita. (A recent analysis by economists at Harvard and U.C.L.A. demonstrated that the average Manhattanite emits 14,127 fewer pounds of carbon dioxide annually than someone living in the New York suburbs.) Small communities might look green, but they consume a disproportionate amount of everything. As a result, West argues, creating a more sustainable society will require our big cities to get even bigger. We need more megalopolises.--Jonah Lehrer

Impractical is the antidote to doomed.--Scott Adams

Fear is not in the habit of speaking truth; when perfect sincerity is expected, perfect freedom must be allowed; nor has anyone who is apt to be angry when he hears the truth any cause to wonder that he does not hear it.--Tacitus

Leverage regulation is "stupid" regulation. You require, say, a ratio of capital to assets of 15 percent. The way that banks respond is to raise the riskiness of assets. So even though the bank holds a lot of capital, it takes a huge amount of risk, and wins the game. Risk-based capital regulation is "clever" regulation. In my view, the best form of clever regulation is stress testing. You apply tests, such as "what happens if interest rates jump 200 basis points?" or "what happens if house prices fall 20 percent?" The problem with stress testing is that the results are model-dependent. As the financial crisis hit, the Basel rules were in the process of pivoting toward stress testing, with banks doing their own modeling (as Tyler would say, Yikes!). The problem with clever regulation is that whatever stress test you use, the bank can structure its balance sheet to just pass the stress test even though it holds practically no capital. In a sense, that is what the whole mortgage securitization structure was all about, except that the regulatory regime relied on AAA ratings to serve the function of stress tests. I think that a combination of both forms of regulation would be much better than either one alone. Clever regulation can spot the worst abuses of stupid regulation. Stupid regulation can serve as a backstop as banks learn to how to game clever regulation. So the question of which type of regulation should be employed should not be answered "either-or," it should be answered "both."--Arnold Kling

[Joe] Nocera and [Bethany] McClean suggest that [Brooksley] Born was insufficiently deferential to [Bob] Rubin whose ego demanded more stroking. They say [Larry] Summers had the same problem. Nocera and McClean also mention Ed Gramlich, a Fed governor who saw the warning signs that subprime was heading in a bad direction but was too polite and diffident to push back when his warnings were dismissed. So [Alan] Greenspan’s ideology, Rubin and Summers’s ego, and Gramlich’s lack of one explain their mutual failure to do something about subprime. I have a simpler explanation. All of those folks had an incentive to ignore subprime. Ideology was just window-dressing. They liked their jobs. They wanted to stay in them. Helping Wall Street or at least not rocking Wall Street’s boat was the politically savvy thing to do. Ignore what people say is their motivation. Look at what they do. ... The journalist comes along after the fact and sees the flaw. But I think it’s the wrong flaw. The flaw isn’t in the man who is the ideologue or the egotist or the gentle one. The flaw is the system that gives a louder voice to some rather than others. One of the deepest things I have learned from Bruce Yandle is his observation that we ourselves have a bootlegger and baptist inside of us–a good motive and a bad motive. And when we do bad, we find ways to convince ourselves, to deceive ourselves, that we are doing good. ... The challenge of economics and of journalism is to remind us that motives are less important than actions.--Russ Roberts

Ralph Raico's new book also powerfully argues that compared to Woodrow Wilson, Joseph McCarthy was a tolerant and fair-minded man.--Bryan Caplan

The “let me explain” component of journalism fell out of favor as there was always a faction of the audience that had a problem with the empirical facts – a faction that the company’s finances could not afford to lose. The personal – including phatic – was carefully eliminated as it was perceived as unobjective and inviting the criticism of bias. The way for a reporter to inject one’s opinion into the article was to find a person who thinks the same in order to get the target quote. A defensive (perhaps cowardly) move that became the norm. And, once the audience caught on, led to the loss of trust in traditional media. Reduction of local media to a single newspaper, a couple of local radio stations and a handful of broadcast TV channels (that said esentially the same thing), left little choice for the audience. With only one source in town, there was no opportunity to filter among a variety of news sources. Thus, many people started unquestioningly accepting what 20th-century style broadcast media served them. Just because articles were under the banners of big companies did not make them any more trustworthy by definition, but with no alternative it is still better to be poorly informed than not informed at all. Thus, in the 20th century we gradually lost the ability to read everything critically, awed by the big names like NYT and BBC and CBS and CNN. Those became the new parents, teachers, tribal elders and priests, the authority figures whose words are taken unquestioningly. In science, explosion in funding not matched by explosion of job positions, led to overproduction of PhDs and a rise of hyper-competitive culture in academia. Writing books became unproductive. The only way to succeed is to keep getting grants and the only way to do that is to publish very frequently. Everything else had to fall by the wayside. False measures of journal quality – like the infamous Impact Factor – were used to determine who gets a job and tenure and who falls out of the pipeline. The progress of science led inevitably to specialization and to the development of specialized jargon. Proliferation of expensive journals ensured that nobody but people in highest-level research institutions had access to the literature, so scientists started writing only for each other. Scientific papers became dense, but also narrowed themselves to only “this is how the world works”. The “this is new” became left out as the audience already knew this, and it became obvious that a paper would not be published if it did not produce something new, almost by definition. And the personal was so carefully excised for the purpose of seeming unbiased by human beings that it sometimes seems like the laboratory equipment did all the experiments of its own volition. So, at the close of the 20th century, we had a situation in which journalism and science, for the first time in history, completely separated from each other. Journalism covered what’s new without providing the explanation and context for new readers just joining the topic. Science covered only explanation and only to one’s peers.--Bora Zivkovic

There are many reasons sciencebloggers are more trusted than journalists covering science. First, they have the scientific expertise that journalists lack – they really know what they are talking about on the topic of their expertise and the audience understands this. Second, they link out to more, more diverse and more reliable sources. Third, being digital natives, they are not familiar with the concept of word-limits. They start writing, they explain it as it needs to be explained and when they are done explaining they end the post. Whatever length it takes to give the subject what it’s due.Finally, not being trained by j-schools, they never learned not to let their personality shine through their writing. So they gain trust by connecting to their readers – the phatic component of communication.--Bora Zivkovic

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