Free TV blogging -- betting against Felix Salmon

[Update: Andrew Gelman joins the conversation and, as usual, brings with him a fantastic comment section. Felix Salmon sites this Nielsen study to support his case. Rajiv Sethi (who was possibly the first major blogger on this beat) joins in. I'm still the only one talking about terrestrial superstations, but the night's still young so you never know.]

If you've been reading the last few posts, you know that Felix Salmon has weighed in on the free TV debate and that I find myself in the very unusual position of disputing pretty much everything he says (it is far more common for me to be completely in agreement). I'll be addressing the cost of Salmon's policy recommendations (born disproportionately by minorities and the poor) and questioning the economic implications later. Right now I want to focus on some disputed facts and assumptions.

In the post Salmon is dismissive of the claim that there are fifty million over-the-air television viewers:

The 50 million number, by the way, should not be considered particularly reliable: it’s Aereo’s guess as to the number of people who ever watch free-to-air TV, even if they mainly watch cable or satellite. (Maybe they have a hut somewhere with an old rabbit-ear TV in it.)

And he strongly suggests the number is not only smaller but shrinking. By comparison, here's a story from the broadcasting news site TV News Check from June of last year (if anyone has more recent numbers please let me know):

According to new research by GfK Media, the number of Americans now relying solely on over-the-air (OTA) television reception increased to almost 54 million, up from 46 million just a year ago. The recently completed survey also found that the demographics of broadcast-only households skew towards younger adults, minorities and lower-income families.

OTA can be tricky to measure -- unlike cable, there's no way of telling who has an old set of rabbit ears -- but we can look at other indicators and see which set of assumptions they are consistent with. Specifically consider the recent decisions of NBC and Fox to launch dedicated OTA channels this year

Let's assume Salmon's right and put ourselves in the position of a Fox or NBC executive who has to decide whether or not to create a new broadcast network. We can be reasonably confident that the executives have access to reliable data (particularly the Fox executive if the deal with Weigel included a look at some numbers from ThisTV and METV).

You find, given our premise, that the total over-the-air audience is, say, forty million, the technology is obsolete and entire medium will probably be gone in a few years. At this point, it's hard to imagine you'd proceed with an expensive, time-consuming project that is likely to be an embarrassing failure but the situation actually gets worse.

You are looking at launching an advertiser-driven, English-language station but the OTA market is disproportionately poor and immigrant (I get programming in over a half dozen languages); the maxim relevant audience for your station now drops to maybe thirty million and there's more bad news. You're going to have to share that thirty million with a crowded field of competitors. A major market will have dozens of OTA channels including multiple PBS channels, This, ME, Antenna, Bounce, RTV, three ION channels and various independents.

Given Salmon's assumptions about the size and trajectory of this market, there is simply no way NBC or Fox would have gone ahead with these channels. They couldn't possibly recoup their start-up costs before OTA is phased out. Put bluntly, both NBC and Fox are betting against Salmon's position.

Obviously this is not conclusive, but it's a strong piece of evidence and it's consistent with what we've seen elsewhere. It's also consistent with GfK's numbers.

There's more to come on this. There are many aspects to this story and I'll try to get to as many as I can but I've been looking at this for a long time from a lot of different angles and from every angle it looks to me like OTA is a promising technology supporting an innovative and growing industry, serving important economic and social roles.

The technology is doing fine in the marketplace. It's lobbyists who are likely to kill it.

The Me Generation -- re-updated

Blogger apparently really dislikes PDFs so I removed the embed but you can find the original here (you might want to check out some of the other press releases as well).

Here's the subject line:

Me-TV adds seven new affiliates
Classic TV network now clears 89% of the U.S.

At the risk of putting too fine a point on a dead horse, this is consistent with a growing market and a sound business model.

(and at the risk of saying you-know-what, I told you to keep an eye on Weigel)

Normally this sort of thing never works

Matt Yglesias talks about a plan to try and move defined benefit pension funds away from organizations that are trying to defund or remove access to defined benefit pensions.  Generally, you would have thought that the people making money off of these funds would have worked things out for themselves earlier on in the process.  That being said, immediate losses that exceed any possible tax benefit might well work if the problem is that these pension managers are excessively focused on the short term.

At the very least it is odd for teacher to be indirectly funding Students First. 

Felix Salmon vs. Chet Kanojia

It's too late for me to think through and research all of the possible issues with these numbers so I'm going to pass these on without further comment for now.

From Salmon's "Aereo and the death of broadcast TV"

Here's the passage Salmon quotes from from Forbes on Kanojia:

“The real question is a consumer question: Can you rightfully disenfranchise 50 million consumers?” he asked. “Is that what the preferred policy is?”

In the event that the networks did go through with it, he speculated that other programmers would be quick to replace them in the role of public broadcasters. “That spectrum is incredibly valuable. Somebody’s going to take advantage of that,” he said.

Here's Salmon's dismissive response:

The 50 million number, by the way, should not be considered particularly reliable: it’s Aereo’s guess as to the number of people who ever watch free-to-air TV, even if they mainly watch cable or satellite. (Maybe they have a hut somewhere with an old rabbit-ear TV in it.)

Here's a comment to Salmon's blog:

“The 50 million number .. is the number of people who ever watch free-to-air TV, even if they mainly watch cable or satellite. ” No! That is the number of people who rely exclusively on over-the-air TV without any cable or satellite. http://www.tvnewscheck.com/article/60230 /us-otaonly-tv-viewing-hits-178-of-hhs Also, far from being on the decline, this is actually one of the fastest growing segments of the market. I think it may have something to do with the digital switch and the accompanying radical improvement in visual quality of OTA TV. Exclusive OTA viewer estimates go from 42M in 2010, to 46M in 2011, to 54M in 2012. The reports of the death of bunny ears have been greatly exaggerated. But yes, it is true that OTA-only viewers rank low on the amount of political clout. They are disproportionally young adults and minorities.

And here's what you get when you follow the link:

According to new research by GfK Media, the number of Americans now relying solely on over-the-air (OTA) television reception increased to almost 54 million, up from 46 million just a year ago. The recently completed survey also found that the demographics of broadcast-only households skew towards younger adults, minorities and lower-income families.

The 2012 Ownership Survey and Trend Report, part of The Home Technology Monitor research series, found that 17.8% of all U.S. households with TVs use over-the-air signals to watch TV programming; this compares with 15.0% of homes reported as broadcast-only last year. Overall, GfK Media estimates that more than 20.7 million households representing 53.8 million consumers receive television exclusively through broadcast signals.

I will be posting some arguments that some of the activity we've seen (see the terrestrial superstations post) support Kanojia over Salmon but those come from a completely different direction. I'll take another look at these numbers in the morning.

Terrestrial Superstations

Normally, I have to work hard to find something to criticize in a Felix Salmon post. With this one, I'm having to work hard to lay the groundwork so I can spell out all of the problems.

When US television went digital, the new platform didn't just allow you to get HD video over a set of rabbit ears, it also allowed TV stations to broadcast multiple subchannels. This has created all sorts of interesting changes in the television landscape (for example, your PBS station is now probably putting out four times the programming). One area of particular relevance to this discussion is the appearance of general interest stations created specifically for the new technology.

The idea of using digital subchannels to launch a TBS style superstation seems to have originated with Weigel Broadcasting, a well-respected regional player noted at the time for being Chicago's last independent television broadcaster. (Both Weigel and Chicago figure prominently in this story.)

Weigel's ThisTV (a partnership with MGM) was up and broadcasting the day American television went digital. Here's what I said about the concept a couple of years ago.

ThisTV has caught on to the fact that the most interesting films are often on the far ends of the spectrum and has responded with a wonderful mixture of art house and grind house. Among the former, you can see films like Persona, the Music Lovers and Paths of Glory. Among the latter you'll find American International quickies and action pictures with titles like Pray for Death. You can even find films that fit into both categories like Corman's Poe films or Milius' Dillinger.

Of course, the other great insight was that movies on the far end of the spectrum tend to be cheaper.

I've written a great deal about Weigel and I have a lot more on the to-do pile. The company is one of my favorite examples of a well-run business but for the purposes of this story, the pertinent factors are: Weigel is an innovative with a good track record; it moves as decisively as any company I've ever seen; it is the most important player in the digital television landscape (as you'll see later).

Skip forward a couple of years and the follow-the-data approach starts to get interesting. The company with the most complete information (Weigel, obviously) announces another, more ambitious superstation called METV, a classic TV channel built around old but prestigious shows like Mary Tyler Moore, Columbo and the Twilight Zone (making very limited use of block programming to allow airing of fifty different programs a week) and promoted a surprising elaborate campaign. In-character station ads featured Betty White as Sue Ann Niven, Ed Asner as Lou Grant, Carl Reiner as Alan Brady and Bob Newhart as Bob Hartley.

The company that arguably had the second best information and experience was Weigel's long-time competitor, the Tribune Company's WGN. Tribune had data from its stations (including KTLA which carried ThisTV in the Los Angeles market), experience with one of the first and most successful cable superstations and finally the inevitable back channel communication you would expect from Chicago's famed television community. It is not a coincidence that Tribune launched its terrestrial superstation, AntennaTV about the same time METV went on the air.

After LA and New York, the two most important television towns are Chicago and Atlanta so it's not surprising that the next terrestrial superstation came from Atlanta. A few months after the launch of AntennaTV, Andrew Young and Martin Luther King III founded BounceTV as an over-the-air alternative to BET.

This is a good place to stop and note something interesting about all of these terrestrial superstations. Neither ThisTV, METV, BounceTV nor AntennaTV have regularly scheduled infomercials. This is a business model built on program driven advertising and we are going on five years of data that seems to say that it works.

2013 continues the trend of more investment on terrestrial television by bigger players. A few months ago NBCUniversal unveiled COZITV. COZI is the only terrestrial superstation with infomercials but, like Bounce, it also has original programming [link added].

And now there's this:

Movies! is an upcoming American digital multicast television network, that will feature an emphasis in its programming on feature films. The network will be a joint venture between Chicago-based Weigel Broadcasting and the Fox Entertainment Group subsidiary of News Corporation, and will be available in the United States through the digital subchannels of broadcast television stations, as well as on select cable systems. Movies! will broadcast 24 hours a day in 480i widescreen standard definition.

I have limited this post to commercial, general interest, English language stations created specifically for digital broadcasting. That's a small sliver of what's available over the air but it does, pretty much conclusively, show that the model is viable and that, unlike so many recent tech and media fads, the more data comes in, the more interested serious players get.

Unemployment and causation

Megan McArdle:

On Monday, I wrote about long-term unemployment, and why it's a large enough problem that the federal government should be trying to do something about it. I got pushback along two lines: 1. Extended unemployment benefits probably caused the unemployment, by giving people an incentive to stay home instead of finding a job.  2. Regulations and taxes are making it too hard to hire people. I am sympathetic to the basics of each argument. (. . .)

However, I don't see these as viable explanaitons for the current employment situation. Regulations and taxes did not suddenly spike in the fourth quarter of 2008, but unemployment did. And while Obamacare certainly imposes taxes and uncertainty on businesses, I don't think that it, by itself, can have driven the natural rate of unemployment up by 3-5 percentage points. (. . .) 

But six months is the current length of standard unemployment benefits. And if standard unemployment benefits cause very high long-term unemployment rates, how come they only started doing so in 2009? To sum up, unemployment benefits do cause some moral hazard, and taxes and regulation probably do somewhat depress the natural rate of employment in our country. But neither are an adequate explanation for the truly devastating conditions in the current labor market. Which means that--as much as I would love it to be true--we can't fix them by slashing taxes, regulation, and government spending.

This is a very insightful post from a pundit who is definitely not sympathetic to the role of government intervention in the economy.  But Megan very nicely hits at the core problem with a government induced recession story -- what changed in 2008 that was not true in the decade before?

Now you can argue about a financial collapse followed by central banks being uncertain about the best strategy to deal with interest rates that are nearing the zero lower bound that they can typically have.  It's possible that this narrative could explain some of these issues but it isn't an explanation that attaches blame to typical conservative bugbears.

So I think it is good to push back on these narratives.  They may have some role in particular circumstances, but are clearly insufficient on their own.  In fact, the unemployment insurance piece has the possibility of being counter-productive -- denying income to the very needy and reducing what they spend thus leading to even more economic contraction.  When the number of unemployed workers per job opening falls to the 2006/2007 level, that might be a good time to look at the long term wisdom of the program. 

So kudos to Megan for a very good post. 

Add Fox to the list of companies that think Felix Salmon is wrong about terrestrial television

[Corrected]

Much more on this soon, but soon after reading this uncharacteristically misinformed post by Felix Salmon on the dismal prospects of broadcast television I came across this link on Weigel Broadcasting's Wikipedia page:

Movies! is an upcoming American digital multicast television network, that will feature an emphasis in its programming on feature films. The network will be a joint venture between Chicago-based Weigel Broadcasting and the Fox Entertainment Group subsidiary of News Corporation, and will be available in the United States through the digital subchannels of broadcast television stations, as well as on select cable systems. Movies! will broadcast 24 hours a day in 480i widescreen standard definition.

So we have Fox, NBCUniversal, Tribune, BounceTV, PBS and others betting (in some cases betting big) that digital broadcasting is growing, not dying.

I have tremendous respect for Salmon but he's out of his area of expertise here and he's been sucked up into a narrative that has an army of flacks and lobbyists behind it but which does not have the evidence to back it up.

More on that later, in the meantime, check out this post by Rajiv Sethi for another take on the question.

[I originally wrote BET when I should have written BounceTV, the terrestrial superstation founded by Andrew Young and Martin Luther King III]

Free TV blogging -- results may vary

[Update: you really should check out the comments at the end of this post.]

It's always a bit of a shock when you're reminded that people do occasionally read your blog and even more of a shock when someone actually follows your suggestions. That was the case recently when, in response to a post on free TV, Andrew Gelman tried plugging an antenna into his set and couldn't get much of anything.

As a proponent of free TV and a reasonably honest  blogger, this forces me to confront an uncomfortable fact: some people need cable or satellite to watch live TV.

There are some caveats (you might improve your results with an amplified antenna; you can almost certainly do better with an external one) but there's no way to get around the fact that people who live in certain areas are going to get crappy results from terrestrial television.

NYC may be one of those areas. Most of my experience with over the air television has been in LA, a city of short buildings and tall mountains, obviously not the best proxy for the big apple. I believe NYC was one of the leaders in cable back in the Seventies and Eighties. I had assumed that the reason was density and infrastructure, but it could also have been due to the difficulty TV signals had making it through that famous New York City skyline.

But, even though it may not pay off, I still recommend testing out a set of rabbit ears if you haven't already, partially because you might find that what you can get for free is better than what you're paying thirty a month for, but mainly because over-the-air television may pay its biggest dividends for the people who don't use it.

In a healthy, competitive market, suppliers are under constant pressure to provide the best possible product at the the cheapest price, innovators find fertile ground and forces tend to align to keep people honest. In television, the market is anything but healthy. Content production is dominated by a small number of producers and channeled through a tiny handful of providers. Competition is severely limited.

As long as awareness of terrestrial television remains low, a Time Warner can overcharge for low quality product and force customers to buy bundles of mostly unwanted channels, safe in the knowledge that most people won't go to the trouble of switching as long as the TV packages provided by Dish, Direct and the local phone company also suck.

Free TV throws a huge monkey wrench in that business model. If a significant portion of of cable customers know that they can get fifty to a hundred digital channels for free, "We suck less than ATT" no longer works as a marketing slogan.

What if you're one of those people who can't get those fifty to a hundred channels? That might be the best part, because your cable company doesn't know who's in what group and even they did, it would be difficult, both in terms of implementation and PR, to set up a pricing system that selectively gouged people who got bad reception. The result is that no customer gets screwed.

And after all, that's how efficient markets are supposed to work.

Note to journalists -- you don't have to believe everything they tell you (business model edition)

File this one with the flack-to-hack series, that part of the decline in journalism that can be attributed to increased willingness to print whatever the PR person hands you.

You've probably heard about this:

While the world has no shortage of pie-in-the-sky renderings for floating cities, a new proposal by Silicon Valley start-up Blueseed is perhaps the first to invoke entrepreneurial spirit and the American Dream in its soapbox pitch. Looking for a way to give foreign-born tech entrepreneurs access to the enterprising atmosphere of Silicon Valley, the founders of Blueseed are hoping to revamp an old cruise ship to create a community, of sorts, 12 nautical miles off California's coast in international waters, so international techies could live within commuting distance without a work visa. With a simple business tourism visa, denizens of the vessel could take a 30-minute boat ride to the mainland once or twice a week. Of course, creating an inhabitable community on water—one that people would live on six months or a year at a time—requires some interior design finagling, including incorporating lots of light and open space.

The big issues here have to do with labor, immigration and industrial policy, but this also provides a small but useful example of gee-whiz, ddulite journalism. I will give the writer, Amy Schellenbaum, credit for using the phrase 'pie-in-the-sky' in her opening sentence but other than the occasional qualifier, that's pretty much the last trace of incredulity you'll find.

For example:

Blueseed still needs $18M (of the $27M required, total) before any building can take place, but if this actually gets rolling, Mart imagines he'll charge organizations anywhere between $1,200 a month to house their employees in a shared cabin to $3,000 a month per person. Just what everyone wants to do: shack up with their coworkers!

I looked at a few cruise ships on Wikipedia and where cost was given, they were all in the hundreds of millions (and sometimes much higher). Even done on the cheap with an old ship, between buying the damned thing and doing the kind of major refit described here, we've got to be talking nine figures.

Now, I have to admit, my experience with start-ups is very limited, so it's very likely that I'm missing some important aspect of funding in this casse. Perhaps this proposal is more credible than it looks, but as presented here, these numbers seem awfully screwy, and it's worrisome that the reporter either doesn't feel the need to explain the screwiness or, worse yet, doesn't even notice it.

Quote of the day

From Norman Geisler’s book on Thomas Aquinas via John D. Cook:

No, I do not agree with everything he [Aquinas] ever wrote. On the other hand, neither do I agree with everything I ever wrote.

More on statistics in research

One last good point out of the whole excel error in the 2010 Reinhart and Rogoff paper:

This raises another issue. Programming is getting easier and easier, but it’s hard to do well. Economics these days depends heavily on programming. It seems to problematic to me that we rely on economists to also be programmers; surely there are people who are good economists but mediocre programmers (especially since the best programmers don’t become economists). If you crawl through a random sample of econometric papers and try to reproduce their results, I’m sure you will find bucketloads of errors, whether the analysis was done in R, Stata, SAS, or Excel. But people only find them when the stakes are high, as with the Reinhart and Rogoff paper, which has been cited all around the globe (not necessarily with their approval) as an argument for austerity.

It is the most generally applicable advice, in that it might well have prevented many of the other errors.  But it is not a one directional attribution of responsibility.  A careful analyst should have done sensitivity analysis for things like outliers and found the critical sensitivity of the results to the inclusion of New Zealand.  Or compared the different weighting schemes.  If you are going to try and understand a small dataset you need to be very thorough at looking at all of the ways that the data itself could be summarized. 

So statisticians also have a burden of care, here, even if one was not directly involved in this analysis to counsel researchers on how to approach these difficult data problems.  In the same sense, it would not be a bad structural change for researchers to consult more with methodologists, who can look at the problem outside of the lens of strong priors and might be more quick to question a surprisingly good result. 

Weekend blogging -- Gained in translation

Specifically, where does translation stop and adaptation start?

This is never a trivial question. When you read Tartuffe in college, the story was by Molière but there's a good chance the words were by someone like Richard Wilbur. If you reacted to something other than the plot -- a turn of phrase, a subtle shading of character -- it is not immediately clear who should get the credit.

Of course, a Wilbur starts from a position of respect of the original work and tries to capture what it's like to experience a work in its original form. What happen's when a translator simply says "to hell with it"?




From Wikipedia:

Die Zwei, the German version of The Persuaders, became a cult hit in Germany. This was largely because the dubbing was substantively altered creating a completely different program.^[11] In France Amicalement vôtre (Yours, Friendly) also became a popular show because it was based on the redubbed German version instead of the English original. 

The German dubbing was "a unique mixture of street slang and ironic tongue-in-cheek remarks" and that it "even mentioned Lord Sinclair becoming 007 on one or two occasions".^[18] Dialogue frequently broke the fourth wall with lines like "Junge, lass doch die Sprüche, die setzen ja die nächste Folge ab!" (Quit the big talk, lad, or they'll cancel the series) or "Du musst jetzt etwas schneller werden, sonst bist Du nicht synchron" (Talk faster, you aren't in sync any more).
Research from the University of Hamburg notes the only common elements between Die Zwei and The Persuaders! is they use the same imagery. Other than the "the linguistic changes entailed by the process of translation result in radically different characterizations of the protagonists of the series. The language use in the translations is characterized by a greater degree of sexual explicitness and verbal violence as well as an unveiled pro-American attitude, which is not found in the source texts".^[19] 

In 2006 a news story by CBS News on the German dubbing industry mentioned The Persuaders! The report discovered that many German dubbing artists believed that "staying exactly true to the original is not always the highest aim". Rainer Brandt, co-ordinator of the German dubbing of The Persuaders and Tony Curtis' dubbing voice, said "This spirit was invoked by the person who oversaw the adaption and also performed Tony Curtis' role: When a company says they want something to be commercially successful, to make people laugh, I give it a woof. I make them laugh like they would in a Bavarian beer garden." ^[20] 

Other researchers suggest international versions of The Persuaders! were given different translations simply because the original English series would not have made sense to local audiences. For instance the nuanced differences between the accents and manners of Tony Curtis, the American self-made millionaire Danny Wild from the Brooklyn slums, and Roger Moore, the most polished British Lord Sinclair, would be hard to convey to foreign viewers. Argentinian academic Sergio Viaggio commented "how could it have been preserved in Spanish? By turning Curtis into a low class Caracan and Moore into an aristocratic Madrileño? Here not even the approach that works with My Fair Lady would be of any avail; different sociolects of the same vernacular will not do—much less in subtitling, where all differences in accent are irreparably lost".^[21]

War and research

Though it's too early to tell whether the geopolitical lessons are going to take, we did learn some things from the war in Iraq.

From the New Republic:

Neither Boston Medical Center nor Boston Emergency Medical Services have responded to queries about how tourniquets were used after the marathon bombings, so we can't yet confirm their effectiveness. It wouldn't be the first time, though, that killing abroad has saved lives at home: Wartime medical advances have long translated into civilian life (trauma centers full of specialists sprouted up in cities, for examples, after they’d worked to great effect in Vietnam). America's latest conflicts have also improved techniques to repair tissues and nerves that have prevented amputations in operating rooms around the country.

That kind of research funding tends to dry up when the soldiers come home. But hundreds of thousands of people die from traumatic injuries every year, and Jenkins says that huge gaps still remain in our knowledge of how to treat them. The National Trauma Institute has been campaigning for more money to research trauma, which doesn't loom as large in the public consciousness as many diseases do.

This goes beyond tourniquets. As NPR reported a few years ago, techniques from the war have revolutionized emergency medicine:

The medevac choppers land and then taxi over to the gate just outside the emergency room, where gurneys are waiting. Nightfall has brought a bone-chilling wind, and a gang of nurses and orderlies rushes four patients into the warmth of the ER.

It's more than warm inside. In fact it's 100 degrees. It's the first clue that this hospital — the Joint Theater Hospital at Afghanistan's Bagram Air Field — is a little different. Through years of war, combat surgeons have learned that hypothermia is a big risk in patients with significant blood loss. Nine years of conflict in Iraq and Afghanistan have brought some grim benefits: a new wealth of knowledge about treating war wounds.

"At the beginning of this conflict, we were taking the best trauma medicine from the civilian sector, and we brought it to Iraq and Afghanistan," says U.S. Air Force Col. Chris Benjamin, the hospital commander. He says now his doctors tell him it's the other way around.

"Here we are seven, eight years later, taking what we've learned in these conflicts to teach them the advances that we've made with this data collection here in theater," he says.

It seems strange to discuss war in terms of research and data collection, but despite what you constantly hear, most big problems are solved by throwing large sums of money at them and one of the most effective ways of convincing a government to start throwing money is to get it into a war. I'm not saying that the means justify the ends or that we couldn't find a way to get better results without the horrific costs.

What I am saying is that, in the world we've got, for researchers, like Keynesians, the steps we think society should take (like spending significant amounts of money on trauma research) often only came as a byproduct of war.

Trying to wean myself off "hibernate"

I assume I'm not the only blogger with this bad habit: I'll come across something that's either worth sharing or worthy of comment or a good jumping-off point for a discussion, but I won't have the time (or perhaps the will) to write out the post right then so I leave the tab up and hibernate the computer rather than shutting it down.

Here are the tabs I currently have open. Hopefully, some will eventually grow into posts of there own. If not, maybe you'll find something of interest in the list.

Dana Goldstein has an article at the Smithsonian on the influence of American industry on education. 

ThisTV is showing The Sweet Smell of Success and I can't help thinking that it's time for a sequel.

I've been thinking about the problem of pivoting something as complex and amorphous as a political party, or maybe thinking about the problem of how to think about the problem, either way this and this (both from TPM) highlight the difficulty.

It is generally both foolish and dangerous for a reformer to say nothing could be worse than what we have now (worse is almost always a possibility), but when the speaker is a college president in the state with arguably the best university system in the country with probably the best university system in the world, it indicates just how detached from reality the debate has become. (via More or less bunk.)

On a related note, I've been meaning to discuss the Hawthorne effect in educational research but now I have no idea what to call it.

I've never been a big Fitzgerald fan (more of a Count No 'Count man, myself), but if I were, this would worry the hell out of me (in 3D):

Maybe I can sucker Joseph into writing a few posts on the wrong kind of government assistance for business.

This Felix Salmon piece on Ripple nicely compliments all of the Bitcoin coverage.

On a related note, though it's not really an insult to say a rich person has more money than sense, some rich people apparently have less sense than you have money.

Finally, it seems that a stock based on a gourmet snack fad may not hold its value.

Two views of Excel

Part of the Reinhart-Rogoff fall-out (see here for Joseph's take) has been a discussion of the role of Excel and similar programs in analytic work. Andrew Gelman has a post up on the subject that includes this quote from an unnamed statistics professor:

It’s somewhat surprising to see Very Serious Researchers (apologies to Paul Krugman) using Excel. Some years ago, I was consulting on a trademark infringement case and was trying (unsuccessfully) to replicate another expert’s regression analysis. It wasn’t until I had the brainstorm to use Excel that I was able to reproduce his results – it may be better now, but at the time, Excel could propagate round-off error and catastrophically cancel like no other software!

Followed by this assessment by Gelman himself:

Microsoft has lots of top researchers so it’s hard for me to understand how Excel can remain so crappy. I mean, sure, I understand in some general way that they have a large user base, it’s hard to maintain backward compatibility, there’s feature creep, and, besides all that, lots of people have different preferences in data analysis than I do. But still, it’s such a joke. Word has problems too, but I can see how these problems arise from its desirable features. The disaster that is Excel seems like more of a mystery.

In contrast, here's James Kwak discussing Excel (prompted by news that an embarrassingly simple spreadsheet error contributed to the London Whale fiasco and, yes, the similarities have been noted):

Microsoft Excel is one of the greatest, most powerful, most important software applications of all time.** [** But, like many other Microsoft products, it was not particularly innovative: it was a rip-off of Lotus 1-2-3, which was a major improvement on VisiCalc.] Many in the industry will no doubt object. But it provides enormous capacity to do quantitative analysis, letting you do anything from statistical analyses of databases with hundreds of thousands of records to complex estimation tools with user-friendly front ends. And unlike traditional statistical programs, it provides an intuitive interface that lets you see what happens to the data as you manipulate them.

As a consequence, Excel is everywhere you look in the business world—especially in areas where people are adding up numbers a lot, like marketing, business development, sales, and, yes, finance. For all the talk about end-to-end financial suites like SAP, Oracle, and Peoplesoft, at the end of the day people do financial analysis by extracting data from those back-end systems and shoving it around in Excel spreadsheets. I have seen internal accountants calculate revenue from deals in Excel. I have a probably untestable hypothesis that, were you to come up with some measure of units of software output, Excel would be the most-used program in the business world.

But while Excel the program is reasonably robust, the spreadsheets that people create with Excel are incredibly fragile. There is no way to trace where your data come from, there’s no audit trail (so you can overtype numbers and not know it), and there’s no easy way to test spreadsheets, for starters. The biggest problem is that anyone can create Excel spreadsheets—badly. Because it’s so easy to use, the creation of even important spreadsheets is not restricted to people who understand programming and do it in a methodical, well-documented way.*** [*** PowerPoint has an oft-noted, parallel problem: It’s so easy to use that people with no sense of narrative, visual design, or proportion are out there creating presentations and inflicting them on all of us. ]

To the extent there's a conflict here, I'm with Kwak on this one. For all their problems, I'm still a big fan of Excel and similar programs (such as the OpenOffice version I have on my laptop). They are indispensable in business for just the reasons Kwak lists.

Furthermore, I'd like to see them have a similar role in secondary and even primary education. I've long found spreadsheets to be a great tool for introducing basic concepts about math, computing and data visualization. You can see some sample lessons over at You Do the Math (one on functions and iteration, another on geometry and Monte Carlo techniques).