One reason could be that success in baseball recruiting is a
lot more significant than failure in economic prediction. So a long winning
streak in baseball is much more easily remembered than a near economic
crash-landing. This is probably the lesson from some recent comments in the NYT
evoking “Moneyball.” In one article, Larry Summers lays out six fundamental
principles for education in the “digital age.” He formulated those at a
high-profile conference on education convened by the esteemed paper. Why
Summers is still to be considered an authority in that or any other area is a
big mystery to me; which is only deepened by the flippant nature of his
utilitarian sermonizing, One of his principles is: don’t waste time and effort
to learn a foreign language, because English will remain the global lingua
franca until the last judgment. Another nugget of wisdom points, yes, to “Moneyball”
as the final proof that “the marshalling of data to test presumptions and
locate paths to success is transforming almost every aspect of human life.” So,
instead of a useless foreign language, every college student should be required
to master “probability statistics.” Curiously, another NYT article (“The Age of
Big Data”) refers to “Moneyball” to drive home a similar point without making
any reference to the financial crisis. As I said, the latter has apparently
left a fairly weak – and fast fading – emotional trace (which is the true
measure of significance in the human brain) in the minds of many. As a result,
the Dow Jones has again soared to the heights it had reached four years ago. Back
in 2009, Stephen Colbert interviewed journalist Emily Yoffe. She had written an
article alleging that “narcissistic personality disorder” was spreading as a
cultural virus in American society, and the irresponsible behavior it
encouraged had helped usher in the crisis. He asked her: “But the market is all
based on confidence. Why don’t we just recapture that narcissism that we had
from a year ago and pretend everything is OK? And won’t the market just come right
back?” We now know the answer: yes it will; at least until the next bubble
bursts.
Sunday, February 19, 2012
Nerds can be destroyed but not defeated
“Moneyball” tells the story of a baseball
franchise manager who places his faith in the statistical models developed by a
recent economics graduate to recruit undervalued (i.e., cheap) players. They
then, despite their coach’s doubts, go on to score the longest winning streak
in baseball history against much more expensive opponents. My first thought on
watching the movie was: “Isn't the timing here a bit awkward – why tell such an
inspiring tale about the power of number crunching after blind faith in
mathematical modeling helped almost destroy the global economy and Western
civilization?"