Digest: 22 October 2013
In Experience As It Once Was, Roger Cohen (for The New York Times) discusses how technology and excessive-regulation removes us from direct experience of the world around us. He opens his discussion with a recollection of driving at a legal 115mph on the German Autobahn, how the feeling of that speed gave him of a sense of actual experience, a feeling of living. The feeling was not one necessarily derived from speed alone – a slow river ferry or a quiet experience of art in an Italian church brought about the same. Ultimately his discussion focuses on how we distract ourselves from real experience through over-regulation of our lives. The result is a controlled, filtered experience of smart-phone screens and top-ten lists, of speed limits and other means by which we think we make ourselves safer or more efficient. By insulating ourselves from the need to employ discretion and judgement we fail to exercise those faculties and lose the ability to employ them. In the process we also lose the opportunity to navigate the world, to directly experience the joys that real experience has to offer.
In The Origins of the Financial Crisis: Crash Course, The Economist gives a clear and concise discussion of the various factors that gave rise to the financial crisis. Multiple factors were to blame including, most prominently, the financiers behind the irresponsible mortgage lending that triggered the crisis, but also the central bankers and regulators who failed to reign in the lending, the macroeconomic backdrop of low inflation and stable growth which fostered complacency and risk-taking, the savings glut in Asia which pushed down global interest rates, the European banks that borrowed excessively in US money markets so as to buy the dodgy securities offered by the financiers. All of these factors came together in creating the crisis, and part of the problem was the ever-present political pressure to not rock the boat, and the sense that the growth would continue despite the ever-increasing piles of debt accumulated throughout the economy.
In Did Capitalism Fail?, Roman Frydman and Michael Goldberg (for Project Syndicate) discuss how the financial crisis was not so much a failure of capitalism as it was a failure of contemporary economic models. These economic models rely heavily on mechanical rules that fail to adequately account for changing conditions in the reality on the ground. Economists would do better to not rely so heavily on theoretical models relevant to the past and to accept instead the inherent uncertainty of markets and the extent to which what we don’t know may affect future conditions. By employing static models we ignore the organic, changing nature of markets. If we do not embrace this understanding, we will continue to suffer crises along the lines of the last.
In Clever Cities: Multiplexed Metropolis, The Economist discusses the development of integrated systems for collecting, processing and acting on data in cities. The question of which systems to develop and how to employ them has been much on the mind of city policymakers recently. One fundamental question is whether such systems should be designed to function from the top down or from the bottom up – that is to say to what extent should a given system be centralized or dispersed. Centralized systems (think of an airport control tower but for traffic, parking, fire control, etc.) make a lot of sense in that they provide the possibility of coordinating many separate functions within a city from a single control point. But aside from being potentially expensive many are concerned that such a course would undermine precisely what makes cities into special places – the possibility for diverse serendipitous experienced as fosters creativity. Bottom up systems focus more on diversified awareness, such as through smartphones running numerous independent apps that individually increase collective efficiency and awareness. Each city will ultimately make the choices that fit their resources and residents, the ultimate (arguably limited) protection being the extent to which residents will leave if things develop in ways they don’t like.
In When the Financial Past Is Not Prologue, Carl Richards (for The New York Times) discusses the cognitive bias that causes us to assume that the characteristics of long-term averages apply to every observation. This cognitive bias has been called the gambler’s fallacy – it refers to our tendency to shift our view of probabilities as soon as something begins to stray from overall average odds. The example Richards gives is flipping a coin – at the outset we know there is a 50/50 chance of heads, but if tails comes up five times in a row we have a tendency to assume that the probability of tails has increased. But of course no matter how many times the coin lands on heads there is still a 50/50 chance that the next time it will do so again. Richards applies this bias to overall financial planning, and points out that we know that on average markets hit a financial pothole every 600 days. By focusing on the overall macro average we fail to take into account the many various factors that apply at the micro level – we should focus more on those, that way we can take into account that the pothole will arrive, without trying to guess exactly when it will arrive, by focusing on the reality we can limit volatility.
In The Known Knowns of Climate Change, Stefan Rahmstorf (for Project Syndicate) discusses the long term consistency of our understanding of the climate, and how uncertainties should not prevent immediate response. There is much we don’t know about the climate, but we should not overlook the fact that there is a lot we know. Rahmstorf applies philosopher Daniel Dennett’s model of the building of science as a pyramid to our knowledge of climate change. The base of the pyramid is what we know and the apex is what we don’t know – the peak of the mountain shrouded in clouds. He points out that the history of climate research is now at least 200 years old – the base of the pyramid is well-established and in the last 25 years of IPCC Reports the fundamentals of what we know have stayed highly consistent. This basis of understanding is sufficient in itself to warrant major policy changes, but the policy changes are held up because we can not see the apex. To delay action on the basis of the fact that we don’t have total understanding constitutes a failure of reason. We should continue to study and debate what we don’t yet know, but in the meantime we should act on what we do already know, and to be sensible we should do it quickly.
In Viewing the US in Fear and Dismay, Damien Cave (for The New York Times) discusses international responses to the dysfunction in Washington politics. In Mexico, Greece, Egypt and Russia, people are looking on with disbelief at the political mess taking place in Washington. These are countries that are used to democratic dysfunction of one form or another, and have looked to the US as an example of consensus and sound internal governance. A major concern however is the difference between the repercussions of dysfunction in one of those countries as against such dysfunction in the US – Washington failing to function properly has global implications. In Mexico, which relies enormously on trade with the US, there is concern that heightened uncertainty will bring about lay-offs in Mexican businesses. The US stands at the apex of the world monetary system – failure to govern responsibly and reliably not only undermines US moral credibility, it has real effects on the stability of people’s lives all over the world.
In 14 Reasons to be Hopeful About the Future of Food, Danielle Nirenberg and Thais Bassinello (for Nation of Change) discuss some positive signs of development in international food systems. Despite lots of obvious issues such as junk-food fueled obesity, starvation, and billions of tons of food waste each year, counteracting steps are being made. These include increased understanding regarding the origins of food, more sustainably sourced school lunches, more composting, more permaculture projects, declining obesity in the US for low-income children, better food governance and food aid, increased urban-agriculture, guarantees for women’s rights to land ownership, greater awareness regarding the importance of sustainable eating habits, increases in farmers’ markets and sustainable food technologies.
In Health Act Embraced in California, (for The New York Times) discusses efforts underway to introduce Obamacare to California’s uninsured. California is quickly proving to be an important representation of the potential for the successful implementation of Obamacare. The state has been surging ahead in its efforts to bring people under coverage. These efforts started months ago and include high levels of investment both financially and in terms of human effort in the form of training programs for enrollment counselors.
In Freedom of Information, Ken Auletta (for The New Yorker) discusses, at length, the Guardian newspaper and its editor Alan Rusbridger in the context of the paper’s investigative journalism and its financial troubles. The UK-based Guardian newspaper has recently been at the forefront of groundbreaking disclosures. In 2009, Nick Davies’ reports shed light on the scandalous and criminal email hacking and police-payoff activities of Rupert Murdoch’s News of the World, ultimately bringing about the end of that paper and the arrest of senior editorial staff. The scoops continued with the publication of documents that WikiLeaks received from Bradley Manning which exposed controversial material such as the condoning by US officials of torture by Iraqi allies. The apex though has been the recent reporting by Glenn Greenwald of the Edward Snowden materials that expose the highly controversial privacy-encroaching activities of the NSA. All of this has taken place under the steadfast leadership of the paper’s editor, Alan Rusbridger, who has pushed forward despite direct interventions by the UK government. Despite these valuable successes, which raised the Guardian website’s popularity to third place among English language news sites, the paper is in dire straits financially. It is largely funded by a trust that dates back eighty years, but it has been operating at a loss for years and the trust may not be able to continue its support under current conditions. Discussions are underway as to whether to charge for access to the website, but this goes against the desired grain which is for open access, to reach as many people as possible.