Daniel

In the course of an article arguing that a large vote for Obama is not a vote for his policies (and, equally curiously, that the total and utter failure of conservative policies is not in and of itself a reason to try something else), Gerard Baker, who is to Thomas Friedman as Ricky Valance was to Richie Valens, says:

What, in these circumstances, would a scientific model predict as the winning margin for the Democratic presidential candidate: 10, 15, 20 percentage points? In fact, as of yesterday, Mr Obama seemed to have a solid but by no means overwhelming advantage of between 5 and 6 percentage points.

In fact, the Ray Fair model, with default values, predicts four points.

It is actually quite easy to look these things up you know.

It appears to be a commonplace gaining ground every day that the main reason we have a credit crisis (about which I am not writing; this is an essay in recent monetary history) is that bankers created it, and specifically that they created it because they are stupid. Nicholas Taleb (who doesn’t eat foods unless they have a name in Hebrew or Doric Greek, I just bring this up as an interesting fact rather than to suggest that here’s a man who knows stupid when he sees it) has been really quite cutting on the subject, among others. Stupid, stupid stupid. Isn’t it a shame that these stupid people in their stupidity brought this crisis among us? Don’t we need a blue-ribbon commission to make sure that such stupids never have the chance to do so much damage again?

Harrumph.
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Nate Silver wants to scrap the “squiggly” audience reaction dials during Presidential debates. My instinctive reaction to this is “step away from the bacon, son, leave the bacon out of this. I love the crawler and think that it really helps you understand what’s going on in the debates – in particular, it helps you take one step back from your own prejudices. It’s also just about the only input into debate commentary that comes more or less unmediated; the anonymous “undecided” focus group participants might be dumb or irrational, but they’re at least not pushing an agenda. Raw data is always good to have – although Nate’s sample size points are well made, I actually doubt how much potential there is for practical error to be introduced, given that one doesn’t actually look to the crawler for straightforward yes/no answers to questions, just for an overall impression of how the participants are going over.

My only complaint about the crawler is that CNN removes it from the screen when the debate finishes. I absolutely wish that they continued to show the favourable/unfavourable reactions of the dial-testing focus group to the talking heads on the news afterwards; you’d be able to see the worm plunging every time Wolf Blitzer opened his gob.. I suspect a few uncomfortable home truths would arise out of that one. In general, more new programs should use dial-testing crawlers. And not just news, thinking about it; why doesn’t Big Brother have a crawler, since it’s also basically a popularity contest? Or the Eurovision? Chat shows would be great entertainment if you could see boring or vain starlets bleeding their popularity away in real time. At this precise moment, I can’t think of a single program on TV that wouldn’t be improved by having a dial-test at the bottom of the screen.

And indeed it was – Paul Krugman has won the Nobel Prize for Economics[1].

The citation says he got it “for his analysis of trade patterns and location of economic activity” – ie for new trade theory. Which certainly did pretty much light a bomb under the subject when he published it in the 1980s, but if this is all it’s for, it’s frankly surprising that Krugman got it all to himself; there were plenty of other people who might have felt they deserved a share.

I can’t help thinking that this is actually Krugman’s reward for being the public voice of mainstream sensible Keynesianism for the last fifteen years, starting with the use of the liquidity trap to explain the Japanese slump, going through his prediction of the Asian crises and onward to today. In which case, well done the Nobel[see note 1 again] committee – Krugman’s NYT column has been more use to the public standing of economists than more or less anything published in the journals.

And, of course, congratulations to Prof. Krugman himself, who might very well have believed that he’d done his professional status irreparable harm by taking such an aggressive line against the government of the day; he now gets the double pleasure of receiving the highest reward in economics, just as all of his detractors see their repuations ruined. There is probably some pithy epithet from Keynes or JK Galbraith to be inserted here on the general subject of honesty being the best politics, but I can’t think of it just at this instant.

Update: Hey, have you seen the new Guinness advert?

[1] blah blah blah Sveriges Riksbank. Nobody cares, you know.

Although I am not commenting on the current crisis, I think it would be irresponsible of me not to point out that I not only saw it coming five years ago, I even suggested a number of potential solutions which were similar in shape to the one actually chosen, but decidedly more innovative. If any readers are emailing their congressmen etc, you can quote me if you like. I promise that I am not trying to talk up a massive speculative book of Beanie Babies.

I suppose that I ought to make this clear; I’m not going to be writing anything, on CT or any of my other blogs, about the current global financial markets meltdown. This is basically because of my professional commitments; as you know, I’m a stockbroker by trade, and what with one thing and another, I’m in a more responsible position than I was when I started blogging. Going through my reasons in a numbered list:
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… But this is perhaps taking it a bit too far.

Kieran, would you mind popping down the corridor and telling Councillor Thompson that I’d like a word with him about the changes to residents’ parking at the end of my road? Thanks

(yes yes, I know he doesn’t work there any more, but that would have spoiled the joke, wouldn’t it?)

Following on from my stock-picking post of a couple of days ago, it appears that the people selling Obama into the convention were right in as much as they didn’t expect a post-convention bounce.

However, the Obama WTA contract was offered around 54 when I wrote the post, and remained at that level all day. CT readers who bought on my advice can now close out at 59.8 and make a quick 10% turn. So at least I haven’t cost you money.

Two points (I realise I’m getting sucked back into a debate I had sworn to give up, but there you go). First, there was no convention bounce in the polls but there was in the IEM numbers. So was there a convention bounce? I think the fact that this question doesn’t obviously have an answer rather underlines the fact that the IEM market prices aren’t giving us very much useful additional information over and above the daily tracking polls (which are themselves not incredibly useful). Second, all the action is in the WTA contract; the vote share contracts have hardly moved at all over the last few days.

Update: I’m now seeing reports of an “8-point convention bounce, which would make the IEM action seem more sensible, albeit at the cost of rather demonstrating how pointless this short-term horse race coverage is.

Why are people selling the Obama WTA contract into the convention? The “convention pop” is a pretty well-established phenomenon in the polls and is visible in IEM data from previous races too. Added to that, Obama is pretty well-known for being good at set-piece speeches. All I can find in the pundosphere is a suggestion that Hillary Clinton might steal Obama’s thunder, but this seems pretty weak beer to me. Any theories, or is there a genuine short-term trading opportunity here?

Over at the Guardian website, I have another piece up about my general scepticism of both big government IT projects, and the possibility under our current political and economic system of not being deluged with big government IT projects. I filled it full of jokes because I’m not yet really sure what I believe about the underlying causal mechanism. There’s a half-joking suggestion that the business development offices of the major IT consultancies probably ought to be considered as a material interest group in any analysis of British politics; we’ve not yet reached the levels of a “consultancy/government complex” but we’re not far off.

But on the other hand, I might be committing a version of fundamental attribution error here. The sales process is an important part of the procurement of big, failed IT projects, but the proliferation of big failed IT projects isn’t really a result of successful selling – it’s a result of the fact that nearly anything new that the government does is going to require an IT element, and that government projects tend to only come in one size, “big”, and to very often come in the variety “failed”.

And a lot of the reason why these projects screw up so badly has to do with the fact that they have to reinvent a lot of wheels, duplicate data collection exercises, and integrate incompatible systems (useful rule of thumb: whenever you hear an IT person use the word “metadata”, as in the sentence “all we need to do in order to make this work is to define suitable metadata”, you can take it to the bank; this project is fucked). In Sweden, for example, they have a working education vouchers system not unlike the one I discuss in the article, but in Sweden they have a big central database linked to the national identity card system.

In the UK, we don’t have a big central identity card database, and the main reason for that is that we don’t want one. And so I find myself entertaining the hypothesis that the constant parade of halt and lame IT projects which is British administrative politics, is actually an equilibrium outcome.

I am also rather pleased that, after two years of removing my bad language, the website editors actually introduced a swear-word into this piece that I hadn’t originally put in there.

Talk about burying the lead! All the press coverage of Shadow Education Secretary Michael Gove’s recent speech to the Institute of Public Policy Research focused on the fact that he had a bit of a go at “Nuts” and “Zoo”[1]. But they missed the real highlight of Gove’s speech, which is that he favourably cited CT’s own Harry Brighouse (and some bloke called Adam Swift, who is less newsworthy. Yay Harry.

If you look at Gove’s speech, it’s actually surprisingly socially liberal and sensible stuff – a bit of apologia for the Tory Party’s historical treatment of gays and single mums, a bit of blah about communitarianism and a strong hint that Crooked Timber will be invited to draft future Conservative education policy once they get into power (I may be reading a bit too much between the lines here). I could almost see myself voting for the guy if it wasn’t all so transparently a pack of bollocks. I mean really, the Conservative Party, in office, is going to subsidise unprofitable post offices? I was born during a shower of rain, but I wasn’t born during the last shower of rain. Increased devolution to local government? Subsidised maternity nurses on the Dutch model? I scratch my chin, sir, and nod vaguely in the direction of the marginal rate of capital gains tax. About the only thing in this speech which you’re ever going to see is the education vouchers proposal, and I confidently predict that the administration of that one is going to be cocked up on an epic scale.

But nonetheless, the philosophical underpinnings of Cameronism, in as much as Gove sets them out here, are both interesting and sensible. Worth a look.

Update: Despite the implication given by the title of this post, the Conservative Party are not currently the government.
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