Lunch at the Labs

Various web links I found to be of interest recently:

• Is There a Viable Alternative to the Iran Deal?

  Three Atlantic writers debate the merits of the Iran nuclear agreement.
  
  Peter Beinart, David Frum, and Jeffrey Goldberg -- July 17, 2015
  
  A reasonable and sensible discussion of pros and cons of the Iran deal. But still they only talk about problems trusting Iran and forget about problems trusting the United States as I have pointed out.

• Paul Krugman vs Steve Moore 720

  Video of a debate between Paul Krugman (New York Times) and Steve Moore (Heritage Foundation) at FreedomFest 2015.

  Some commentary about it:
  • Some highlights from Reason.com
  • A reply to Paul Krugman on state taxes and job growth made some incorrect claims
  • Guy Who Gets Paid to Say Obamacare Doesn't Work Can't Find a Single True Fact to Support His Case
• Here's what your stolen identity goes for on the internet's black market

  The going rate for a stolen identity is about twenty bucks.

  Though the transactions are usually illegal, marketplaces on the dark web function much like those on the popular internet. Prices for stolen identities vary based on factors like quality, reliability, robustness, and the seller's reputation.

• The (Dis)Honesty Project

  (Dis)Honesty -- The Truth About Lies is a documentary feature film that explores the human tendency to be dishonest. Inspired by the work of behavioral economist, Dan Ariely, the film interweaves personal stories, expert opinions, behavioral experiments, and archival footage to reveal how and why people lie.

• Harbingers Of Failure

  If You Buy The Stuff No One Else Likes, You Just May Be A "Harbinger Of Failure". In a study published in the Journal of Marketing Research, researchers identified particular kinds of consumers whose preferences can predict products that will flop, calling those folks "harbingers of failure," reports the Chicago Tribune.
  
  "Certain customers systematically purchase new products that prove unsuccessful," wrote the study authors. "Their early adoption of a new product is a strong signal that a product will fail."

• Predicting things is hard, but we keep doing it. Why?

  This Commerce Department report from 1948 shows how disastrously, off-the-charts wrong forecasters can be.

  If you had to make a list of America's most important developments during the 20th century, the baby boom would be in the top 10. And it was totally unpredictable.
  ...
  What's more, the report's projection of total U.S. population wasn't just a little off; it was disastrously, off-the-charts wrong. The baseline 1948 forecast predicted 163 million people would live in America by the year 2000. In reality, it was 282 million. That difference -- 119 million people -- is the equivalent of missing three Californias, or 14 New York Cities.

• Another 'Too Big to Fail' System in G.M.O.s

  By Mark Spitznagel and Nassim Nicholas Taleb

  The G.M.O. experiment, carried out in real time and with our entire food and ecological system as its laboratory, is perhaps the greatest case of human hubris ever. It creates yet another systemic, "too big too fail" enterprise -- but one for which no bailouts will be possible when it fails.

  I am not convinced by their argument. Scientists are not economists and they do not function in the same manner.

• Jon Stewart skewers Scalia after justice's string of Supreme Court outbursts

  Supreme Court Justice Antonin Scalia shown to be the hypocrite he is.

  For more evidence see The Incoherence of Antonin Scalia by Richard A. Posner.

• Judge Alex Kozinski identifies 12 huge lies about justice in America:
  1. Eyewitnesses are highly reliable
  2. Fingerprint evidence is foolproof
  3. Other types of forensic evidence are scientifically proven and therefore infallible
  4. DNA evidence is infallible
  5. Human memories are reliable
  6. Confessions are infallible because innocent people never confess
  7. Juries follow instructions
  8. Prosecutors play fair
  9. The prosecution is at a substantial disadvantage because it must prove its case beyond a reasonable doubt
  10. Police are objective in their investigations
  11. Guilty pleas are conclusive proof of guilt
  12. Long sentences deter crime
• A non-French speaker just won the French Scrabble championship

  On Monday, July 20, Richards-- a native of New Zealand--won the French-language world Scrabble championship.
  
  He does not speak a word of French.
  ...
  Richards reportedly memorized an entire French dictionary in the two months leading up to the competition.

• Give Well

  In-depth charity research.

  Thousands of hours have gone into finding our top-rated charities. They're evidence-backed, thoroughly vetted, and underfunded.

With the signing of a nuclear agreement between Iran and the five permanent members of the United Nations Security Council plus Germany (P5+1), there is talk of Iran's support for people and groups the United States does not like, for example Bashar al-Assad in Syria and Hezbollah in Lebanon.

How do Iran's actions compare with those of the United States:

• overthrow of the democratically elected Prime Minister of Iran in 1953 and support for the Shah
• support for Iraq and its use of chemical weapons in war against Iran in the 1980's
• support for terrorist groups inside Iran to kill their nuclear scientists
• infecting with destructive software Iran's computers that were being used in their nuclear efforts (in support of or with Israel)
• flying drones over Iran (they shot one down)

Which country has more reasons to distrust the other?

And why is Saudi Arabia considered a better ally than Iran?

• Saudi Arabia is a monarchy and Iran is a democracy (albeit one we may not like)
• Saudi Arabia has had 85 beheadings so far this year. All I can find for Iran is one beheading in 2003.
• Saudi Arabia has given free reign to the conservative Islam movement Wahhabism and this has led to ISIL. Now they may be having second thoughts about it's alliance with conservative clerics, but it may be too late.
• Fifteen of the nineteen 9/11 hijackers were citizens of Saudi Arabia. Can you imagine what people would be saying if they were from Iran?

Why during the endless interviews with those discussing the pros and cons of the Iranian nuclear deal are these issues not mentioned every time? I would like the opportunity to do so.

And finally this odd fact from The Economist:

Iran is not as unfamiliar with the West as it may seem. Mr Rouhani's cabinet boasts more American doctorates than Mr Obama's.

I've been listening to Russ Roberts' podcasts EconTalk for many years and it is one of my favorites, even though I often disagree. In Krugman is human, just like me he writes:

Krugman has responded to my claims about empirical evidence, confirmation bias, and the lack of science in macro policy discussions. Here's the argument so far.

I suggested on Twitter that economists see what they want to see. We tend to latch on to evidence that supports our worldview and ideology and ignore evidence to the contrary.

Krugman responded by saying that might be true of me, but not him. He is a Keynesian because of the evidence. He is mainly unbiased. Nor does his desire for a larger government role in the economy pre-dispose him to interpret the effects of fiscal policy in a particular way.

I responded that the evidence in support of Keynesian fiscal policy is very mixed. There is too much evidence. People on each side of this debate can easily find lots of evidence--some historical, some econometric to support there view. As an example of the challenge of using evidence vs. bias to reach a policy conclusion, I pointed out that in 2013, Krugman predicted that the fiscal contraction from increased taxes and reduced spending would hurt the economy. When economic growth turned out to be healthy in 2013 and greater than in 2012, Krugman responded by arguing that "other stuff" explained the failure of his prediction. This is a common response by people on both side of these kinds of debates. Very rarely does one side concede that their worldview may need revision. There is always "other stuff."

What and why people believe fascinates me and I've blogged about it and the associated confirmation bias a fair amount. It's been interesting for me to see how Roberts has, over the years I've been listening to him, come to realize that everyone, including himself, is susceptible to easily accepting evidence that supports their view while ignoring evidence that doesn't. However knowing this doesn't stop him from taking sides as witnessed that he blogs at Cafe Hayek.

But still that is better than claiming to be (mostly) bias free. Saying your predictions failed because "other stuff" happened is similar to some religious cult leader predicting the end of the universe and then when it doesn't occur saying it was because people didn't pray enough. Why when a prediction does come true, do you never hear anyone say it's because ""other stuff" happened?

For more discussion on the topic see Noah Smith's blog Economic arguments as stalking horses.

Following in the footsteps of the Open Science Framework, when economists make predictions they need to write down in advance what they think will happen and when and under what conditions, and what outcome would prove them wrong.