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December 10, 2012

Comments

Sasha

Great article.. Since couple of years I'm working on this area...We are using software ag stack to implement this...the concept is good but it is very hard to find talented people in this niche area...

Hank Bennett

Hi Irving - In regard to foreseeing the outcome of the election, I pay the most attention to Nate Silver's 538 blog in the New York Times. He very accurately predicted the outcome of the presidential race and several Senatorial and Congressional races as well. As to foreseeing the recent market crash, about one year before it occurred I was in a meeting with my financial adviser discussing how best to manage my money - I told her I wanted her to manage it with modest income if possible, but primarily for preservation of capital as I felt that a crash was imminent. She asked me why I thought so and I told her it was because the income disparity between the rich and everybody else was at its highest level since just before the Great Depression, and that those very rich people who were getting paid so much money thought that they were actually worth it, and for the most part they are NOT! She agreed and did manage my money as I asked her to and I came through the crash pretty much unscathed.

I mention these things not because I am trying to brag, but because sometimes the data is so voluminous that it gets in the way of analysis and you need to step back and look at the big picture, and sometimes at aspects of it that other people seem to be ignoring, and if you do so well enough you can see things coming that others do not. Nate Silver is a first rate statistician, and I am just an average guy who can occasionally looks at things a little differently than others do and sometimes sees some things that they do not. Neither of us is that unique - I think that we just try to keep our wishful thinking out of what we are looking at and see only what the data is actually telling us. As I recall, you were pretty good at this when we were at the U of C, and I suspect that you still are!

Hank Bennett

Hank Bennett

One additional comment - In my opinion, Milton Friedman and his cohorts at the Chicago School of Economics have proven to be enormously damaging whenever there precepts are actually followed by governments - just look at Greece and Spain right now! Like Mr. Krugman, I believe that Keynesian economics much more accurately describe the real world. Severe recessions and depressions require stimulus and a lot of it. One need only look back at the Great Depression of the 1930s to see this in action. FDR's stimulus efforts were actually working to pull the US out of the Great Depression, albeit somewhat slowly, until the great mistake of 1937 when Roosevelt fell prey to those who were concerned with the deficits the USA was running and cut back on his New Deal programs. This caused a recession that lasted until the MASSIVE deficit spending required to fight and win WWII pulled us out of the Great Depression. This simple fact alone should be enough to convince anyone that Keynes was right, but there are those who quite simply don't want to see it because their preconceived ideas don't fit that model, so they don't see it!

Albert Soer

Dear Irving,
What a nice blog!I cannot avoid being impressed by such a breath of reference.
Working in an international development agency we are 'frantically' searching to get to terms with complexity and data. The counter-intuitive nature of many of the complexity arguments does not only make it difficult to understand, it makes it also difficult to design an action perspective, and to advocate, to create common understanding. Although the probability approach sounds nice, it is not so easy to actually find which direction is more likely than another.
Data, big and small, is essential, but I am not so sure about this argument that they are only safe in the hands of the 'talented professionals'. How can I know who is talented? Or a professional for that matter? I believe more in getting data 'out there' and let those who are interested play with it... But that Data is just data is for sure. If we wish to remain relevant, it is up to us to make sense (http://europeandcis.undp.org/blog/2012/11/28/development-data-still-needs-its-captain-kirk/).
We soon will start our in-field experiments with the narrative approach (Snowden c.s.) and Big Data. You can follow us on our blog page where we report back our experiences (http://europeandcis.undp.org/blog/).

Dcmartin

Irving,

I think you should more closely examine Greenspan's testimony; he was shocked at the fact that organizations would not act in their long-term interest and would take short-term gains that would kill the company.

I don't think he understood the level of greed and self-interest that were demonstrated, but then again, we no longer hang people in the public square nor hold those accountable, but rather bail-out the companies and spread the blame so that no one is to blame.

Talk about moral hazard.

Mona Vernon

I read you post and cannot help but think of Jay Forrester. If only economics and system dynamics would have met and find a common ground...

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