
Taleb Says Fed Should Do 'Minimum Harm' [video] - ryansmccoy
https://www.bloomberg.com/news/videos/2019-05-09/taleb-says-fed-should-do-minimum-harm-and-expresses-his-concerns-about-deficits-video
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xstockix
I've never felt more conflicted over a public person than I am about Nassim
Taleb. He's clearly brilliant, and makes bold statements that he stands
behind- that takes guts and is to be applauded. On the other hand, he can be
an outright prick and I don't understand some of the fights he picks. Dude is
polarizing and fascinating.

~~~
781
One of the reasons for the replication crisis in science is the lack of more
people like Taleb who are not afraid to say "this study is bullshit" instead
of being ultra-polite and never daring to put into doubt the integrity of the
authors (p-hacking, data falsification, ...)

I've read quite a number of blog posts about scientists who were certain a
paper was p-hacked (and proven right later) but who said they would never dare
raise their voice publicly because it would kill their career.

~~~
justin66
I don't know what the equivalent to Taleb would be in the hard sciences, but
it wouldn't be an antidote to bullshit research. The answer to a bad paper is
generally a better paper, not loud whining.

~~~
cgiles
Funny, I'm a postdoc (in biomedical research), and I and my boss, a PI, had
this exact debate last night.

I took the side of 781, and he was justin66. My perspective is that you cannot
take data, or a concept, that is fundamentally broken, add a little effort,
and fix it.

For example, if a collaborator sends data for analysis where the sample size
was too small for the effect, or worse, asked to find statistical differences
between 1-2 samples per group, you can't fix that with any amount of
algorithmic mumbo-jumbo. You can only fix it by redoing the experiment
properly. Although we are asked to do this sort of thing almost daily (not
always this blatantly).

His perspective is, and maybe I'm being a bit uncharitable, you take what
you're given, do your best, clearly describe what you did and honestly note
the limitations, and move on. Even if the result is something highly dubious,
that is for the reviewers to decide.

But I personally think a little loud whining is called for in the sciences to
discourage totally half-baked ideas and data from ever seeing the light of
day. But the trouble is the pressures are so intense and funding is so tight,
people feel compelled to halfass many things, which is the real problem.

EDIT: I should add I am not talking about data falsification or major ethical
breaches like that. I'm talking about things that more amount to a form of
pressure-induced willful stupidity, no dishonesty involved. I would speculate
this is much more of a cause of the replication crisis than outright
dishonesty.

People don't like to outright lie because it could cost them their careers.
But they certainly can conveniently forget some basic scientific principles at
times if it suits them and they can't get a decent story while being rigorous.
And their excuse will be -- well, we clearly documented everything we did in
the paper, and the reviewers thought it was OK (because the reviewers do the
same sorts of thing). And this, folks, is how you get a lot of shitty papers.

~~~
astazangasta
>For example, if a collaborator sends data for analysis where the sample size
was too small for the effect, or worse, asked to find statistical differences
between 1-2 samples per group, you can't fix that with any amount of
algorithmic mumbo-jumbo.

Au contraire: a few years back my colleagues came to me with an shRNA screen
with no replication. I said you can't do this, without an estimate of
variability this is meaningless (NOT the first, or last, time i gave this
lecture). The reply was, analyze it anyway. I made up some bullshit. The
reviewers did nothing. We published in Nature Genetics.

~~~
cgiles
Ha. I have a lot of those papers too, but none that are BS in such a high
tier, congrats! (or "congrats")

At this point I am cynical enough to believe people include analysts on their
papers as an insurance policy to have the "licensed" person to give the seal
of approval, and take the blame if necessary, for their shitty data. Which
they will never listen to concerns about before publication.

Just today I am working on a qPCR array (yes people still use those) with one
"housekeeping" gene replicated 4 times for ddCt normalization. 80 miRs go up,
none go down, out of 400. No one sees any problem with this, the data is the
data.

Them: Oh, and can you, cgiles, also tell us about the genes regulated by these
miRs?

Me: Not really in any principled way, especially when the underlying data is
incredibly fishy, and even if I did, we would be saying all the target genes
go down. Don't you think people will find that odd? Do you think perhaps there
could be a problem with your "housekeeping" gene?

Them: Who cares? Just run the algorithm.

Thank you for this tale. I'm glad I'm not the only one in this situation.

~~~
astazangasta
This sort of stuff, the general lack of interest in method in the drive to
publish, has really killed a lot of my faith in the idea of a scientific
method. It can't work, we can't produce good, useful knowledge if even the
best scientists at top flight institutions just regard it as a shell game
where the facsimile of a result is as good as a real result, as long as you
can sneak it past publishers, who are playing the same game with the public.

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Animats
_" The job of the Federal Reserve is to take away the punch bowl just as the
party gets going."_ \- William McChesney Martin, head of the Fed in the 1960s.

His point was that if you don't want a crash, steps have to be taken to stop a
boom before it's too late. Politicians hate that, because it means
deliberately stopping a boom. But that's the Fed's job, and it's why they have
some independence from administration policy.

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povertyworld
Weird interview. He starts out angry that someone insulted risk takers who
lose money. Then by the end of the interview he says people should just get
jobs and make super conservative investments like gold and short term bonds.
Waste of 20 minutes.

~~~
ixtli
Honestly Taleb's cult is pretty disconcerting.

~~~
spenuke
Can somebody please ELI5 his whole phenomenon? I don't really understand who
are the targets (other than Nate Silver) of all his polemic. From my limited
exposure, he's basically making age-old conservative points, arguing that the
Enlightenment ideal of human knowledge has strong (but unidentified) limits.

Why is he so popular? And how did he get so rich on Wall Street if he just
thinks randomness blows all the statistical experts out of the water? I know
I'm missing something.

~~~
pfortuny
No: he does not say that statistics are useless. He says that the assumption
of normality does not hold in real life: fat tails and the absence of means
are ubiquitous. That is all the “black swan” means and how he got rich: taking
risks which are nonsense under normal distributions but not so under, for
instance, the Cauchy distribution.

~~~
Animats
Taleb's basic claim is that options that are way out of the money are
underpriced. So he set up a fund, Empirica, which bought options a long way
from the current value. This strategy does extremely well in years of a sudden
downturn, and loses money in all other years. He and his investors did really
well in 2008. He doesn't talk about the other years. Solid numbers for
Empirica are really hard to find. Whether this is a win as an ongoing strategy
is a big question. If you'd bought into that strategy in 2009, after it worked
once, you'd have lost money for a decade.

~~~
pfortuny
Not trying to argue (wp is not a source) but it says he closed down in 2004?

~~~
Animats
Right, Empirica was the first "black swan" fund, which caught the crash of
2000. Universa was the next round, starting in 2007. That caught the 2008
crash.

As a strategy, this depends on a rough prediction of when the next crash will
occur.

~~~
repsilat
> _this depends on a rough prediction of when the next crash will occur_

If you think the tails are mispriced (and you have some kind of alternative
distribution), and markets are liquid, can't you just keep on making Kelly
bets? Maybe you need to model third-party investors bailing too, though...

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User23
I have great respect for Taleb, but the value of his work is pretty much a
linear function of closeness to the statistical math he used to get rich
trading derivatives. He has extremely interesting things to say about
uncertainty, randomness, fat tails, dynamic systems, and more. And he offers
theorems to support his assertions.

At the other extreme, the limit case so far is when he starts tweeting about
anthropology: it's utterly cringe-worthy.

~~~
m_sahaf
And if you disagree with him, he'll reach for his ad homonym stash (mostly
calling others "imbecile"), which is why I stopped following him in social
media. Read his books, but stay away from everything else he produces.

~~~
ixtli
Being anti-fragile means that everyone who disagrees with you is fragile ;)

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rfrey
Any discussion about Taleb always leads to questions about why he picks such
public fights. I've said this before:

The most salient anecdote Taleb tells about himself is the one where he's
going onstage to debate an opponent. He asks his publisher if punching the
other guy in the face would be against his contract, and his publisher notes
that it would be very good for book sales.

All Taleb does is punch people in the face nowadays. It's probably very good
for book sales. He notes elsewhere, rightly I think, that the goal of anybody
seeking PR should be to get the attention of somebody more famous then them:
since it's much easier to pick fights than make friendships, and either will
do, he picks fights with anybody he thinks has prominence. I believe it's a
persona, and he's a very good method actor.

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vowelless
Tldw version?

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temac
I question that kind of opinion talk, which boils down to (often implicitly)
debating the definition of words in a boring way and/or trying to attribute
meaningless merits and demerits to whole arbitrary idealized "class" of
people.

There is so little information and it is so caricatural and simplistic to come
and state in a kind of absolute tone that "entrepreneurs" are good and they
build "value" (while basically the "others" are all of the inverse?)

I do not expect to get any insight from somebody with that kind of point of
view. I already know that some people have that kind of point of view, and I
already know that some people have radically different one, and the
philosophical framework in both cases has some validity, with idealistic
components and realistic ones, of which both intuitively and descriptively we
should strive to get a balance from.

On top of that, postmodern capitalism has taken a turn that very few academics
would found merits in (and even fewer have called for), yet it managed to
influence the policies in way that are not even widely debated (at least as
widely as they should) by the media and the public. So the ever increasing
amount of discretionary power that a defacto class (real this time, because
having 100000 times more wealth than your "neighbor" is a criteria vastly more
useful than being e.g. an Uber driver vs. being salaried in a taxi company) of
people already have achieved and are continuing to amass is extremely
concerning, even more so given the choice that have been made, the impact that
this yield, and the quasi complete lack of action that could show we could
have some confidence in their infinite wisdom.

I do not buy that the only thing that is needed is some kind of natural
regulation by (re-?)allowing "failure". "Risk takers" can still have a
shitload amount of money after they loose some.

If some attempts of political organization in other forms failed, my guess is
that postmodern capitalism in the form of unbridled individualism and
deathmatch to grab control and dispend resources will fail harder.

And I'm not sold on the concept on "not true capitalism", because of the
principle of realism, that I refuses to apply only when it suits my narrative.
A far better and hopefully far more actionable way to present things is to
state that model X tends to degenerate into concrete situation Y, while model
T tends to yield Z. So of course there will be some corrections to give. AND I
do not believe we should primarily listen to people who do not recognize some
_extraordinary_ value brought by some people in the society (e.g. nurses, they
could be on the "sideline collecting their salary"?), to decide of those
corrections. I believe that individualism and hubris is a big component in
those deviations, regardless of the original ideal.

On the other hand, trying to attribute merit or demerit on abstract mythical
"entrepreneurship" without the details is an activity I consider having
absolutely no meaning: I'll be more happy that some projects fail so I could
consider people achieving success in horrible projects even "worse" than
people failing at such projects, and on another dimension failures (on both
horrible and wonderful projects) can be attributed on their leaders while
other on other factors.

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ixtli
I'm wary this might end up aggravating the subset of Taleb adherents on here
but from what I've seen of him (segments of some of his books, tweets, essays)
he cultivates a pretty brazenly idealistic / ideological (as opposed to
materialistic) worldview that he repackages in academic language in order to
bolster his authority.

To be clear this is not to imply that he isn't in control of his subject
matter. Just that to say Ray Dalio is "mistaken" about his largely
philosophical/ideological claims about capitalism fits into a pattern I
observe from Taleb where he uses a deep and nuanced understanding of the
status quo as a weapon to beat down normative arguments that the status quo
should be changed. It's very similar to how Sam Harris uses his specialist
authority to deliver regressive social critiques that he wraps in academic
language.

We need to remember that expertise on a subject is a tool, but how you use
that tool is always guided by ideologies. I challenge people to think
critically about what those like Harris and Taleb's morality and ideological
positions are.

