Self-organizing fraud (or plain old fraud)?

Another fine piece by Russ, that will of course immediately get flooded with hate from bot accounts. Note that neither Russ nor the Researchers cited point the blame at Tesla.

This is important because the existence of $TSLA Bots is clearly a real thing. Who's behind it all??? https://t.co/fEJ84YD4hq

— ESG Hound (@ESGhound) April 12, 2022

Russ Mitchell writing for the LA Times:

Whether Twitter bots are being deliberately programmed to manipulate stock trading is among the questions that Kirsch and his research assistant, Moshen Chowdhury, are trying to answer.

...

A Twitter bot is a fake account, programmed to scour the social media site for specific posts or news content — Musk’s posts, for example — and respond with relevant, preprogrammed tweets: “Tremendous long term growth prospects” or “Why Tesla stock is rallying today” or “Tesla’s Delivery Miss Was ‘Meaningless.’” The bots can also be programmed to send nasty or threatening messages to company critics.

Kirsch and Chowdhury collected and reviewed Tesla-related tweets from 2010, when the company went public, to the end of 2020.

Over that period, Tesla lost an accumulated $5.7 billion, even as its stock soared and Musk became one of the richest humans on the planet; his net worth is estimated at $275 billion. Operational results can’t justify anything close to the company’s $1-trillion market value, based on any kind of traditional stock-pricing metric.

...

Using a software program called Botometer that social media researchers use to distinguish bot accounts from human accounts, the pair found that a fifth of the volume of tweets about Tesla were bot-generated. That’s not out of line with giants like Amazon and Apple, but their bots tended to push the stock market and tech stocks in general, with those companies as leaders, but not focus on any particular narrative about the companies.

While any direct link between bot tweets and stock prices has yet to be determined, the researchers found enough “smoke” to keep their project going.

Over the 10-year study period, of about 1.4 million tweets from the top 400 accounts posting to the “cashtag” $TSLA, 10% were produced by bots. Of 157,000 tweets posted to the hashtag #TSLA, 23% were from bots, the research showed.

...

The researchers are looking at the timing of the tweets and options activity in the overnight stock market, among other factors. One big unknown: whether the bots are the work of entities with a direct financial interest in Tesla.

I'm out of my area of expertise here but here are a few points that worry me about all this. 

1. Though we don't know the exact magnitude, we can be reasonably sure that bots are a relatively small part of the concerns with Tesla's valuation and Tesla is a relatively small part of the concern with bots. That does not mean that this is a trivial issue. When you have problems this big, even a small portion can still be pretty damned large in absolute terms. 

2. Bots and the larger problem of fake accounts and falsified metrics are not by any means limited to Twitter. The company formerly known as Facebook has a huge problem with fake accounts and fraudulent ad metrics. I'm sure there are similar issues with Snapchat. Even Tik-Tok where it's hard to imagine a big bot presence certainly has issues with cooking data such as viewership numbers. 

3. Social media metrics have gotten to be a huge part of data-driven systems and I assume social science research. I know from the business side they come up all the time. Our metrics, models, and algorithms are all vulnerable to these kinds of fraud. The big question at this point is how bad the problem has gotten. 

4. I wonder if our mental models for thinking about the next generation of fraud are sufficiently complex and open to unknown unknowns. In this case, my guess is that these bots come from multiple sources. Possibly Tesla or people working covertly but directly with the company. Investors looking to pump and better time the spikes. Fan boys wanting to amplify their displays of love and loyalty for Elon and their hatred of his enemies (particularly when those enemies are female journalists). We could easily see something that looks like coordination but without any direct communication, and as bots grow more sophisticated, their behavior will grow more complex and presumably more difficult to predict and detect. Which brings us to... 

5. Bots are a moving target.

Botometer, by its design, will always be a step behind the evolution of bots. I encourage @darchivist to:
a) Take a look at the bots on the $TSLAQ block list
b) Examine how Elon Musk/#Tesla/#SpaceX pays real people in India and Eastern Europe to pump his narrative
2/2

— Claire Musk (@ClaireMusk) April 12, 2022

Housing cost inflation

This is Joseph.

Mike Moffat posted this interesting graph:

The clear loser was Winnipeg, going from a little over $100K to a little over$ 300K, in terms of appreciation but the increase in inflation for the time period is $100 going to $134.61. So even the coldest Canadian market is briskly outpacing inflation. But Southern Ontario went from around $150K to over $800K. It seems odd that housing has exploded in value by so much across so many markets. None of them are even remotely close to the inflation rate, far exceeding it.

But the inability to secure affordable housing has numerous downstream social consequences -- from increased homelessness, inability to escape domestic violence, and financial instability. 

And this is not just a Canada problem. Look at housing prices in Seattle: in June of 2005 the average sale price was around $250K whereas in Jan 2022 it was around $800K and by Feb it was $814K (here the peak was before this at $870K). US inflation over this period was about 45% so you are seeing more than a doubling of real costs in the real estate market.

This means that we should think carefully about this from a policy perspective, keeping in mind that feeding a bubble is a bad idea. 

EDIT: A typo found by clever commenter DJL has been corrected. The correction is in bold

Megan McArdle, Disney, and the defending the indefensible adjacent.

One of Megan McArdle's go-to moves is to take some truly reprehensible Republican policy and come up with an argument that while it doesn't really make the same policy and it comes at the question from a completely different set of assumptions and justifications, is something kinda, sorta in the general ballpark which reasonable people might be able to accept. A bit like David Brooks but more hot-take centric. 

Unless you've done the sensible thing and stopped following politics, you've probably heard about this.

1. You don't know the difference between a trademark and a copyright.

2. It's (pretty famously) M-I-C-K-***E***-Y M-O-U-S-E https://t.co/sCwkXaxg00

— Cory Doctorow (@doctorow) April 4, 2022

Banks: If they’re going to attack the American laws… they don’t deserve the special laws and protections.. I wrote Disney today and said “when your copyright laws expire… I’m not gonna vote for it” pic.twitter.com/gobaTdJrHr

— Acyn (@Acyn) April 1, 2022

A political party promising to rewrite laws and regulations to punish a company for criticizing the party is about as blatant as corruption gets. With any kind of honest framing this is truly indefensible.

With that in mind, check out Megan Mcardle's comment.

Republicans should threaten to let Disney's Mickey Mouse copyright lapse because it's an inexcusable giveaway to big business, with no economic benefit to anyone except Disney. https://t.co/EjDC6dxzev

— Megan McArdle (@asymmetricinfo) April 7, 2022

At the risk of putting too fine a point on it, we are talking about the most naked example of political extortion we've seen since the Trump Administration (I know that was only two years ago but they set the bar really high). The Republicans have loudly and openly spelled out that these threats are payback for Disney's (constitutionally protected) criticisms of Republican policies.

McArdle is absolutely correct to suggest that the endless extensions of copyrights to protect the intellectual property of companies like Disney and Warner Brothers has been a horrible example of regulatory capture. Lots of people have been making this point from much larger platforms than ours including Dean Baker, Adam Conover, and Cory Doctorow, but the Republicans have clearly stated their reasons for this and they have nothing to with the greater economic good.

Megan McArdle doesn't defend the GOP extortion scheme here, but she very clearly takes the edge off of it. It's a bit like hearing a news story about firemen refusing to hook the hoses until they get a pay-off and responding that putting out fires is a good thing. 

When the methods make you worried

This is Joseph

Thomas Lumley has a great piece on a recently published article. Go read that first, we'll still be here. In it he looks at a paper that is an ecological study of cannabis and cancer. Thomas probably got the most interesting parts, but I want to focus on two things that are in a professional paper.

In Table 6 we are presented with 3 measures of relative risk (presumably of cannabis use and prostate cancer). Relative risk is not mentioned in the text of the paper and is conventionally defined as:

Relative risk is a ratio of the probability of an event occurring in the exposed group versus the probability of the event occurring in the non-exposed group. 

The three relative risks proposed are: 1.25,1.66E+ 52, and 5.65E+ 05. No, the second two are not jokes. A relative risk of 1.25 is plausible, if hard to prove with a tricky outcome like cancer. But something went quite wrong with the other two. It might have been a hint when this was in the acknowledgements:

We wish to acknowledge with grateful thanks the work of Professor Mark Stevenson in modifying and enlarging the capacity of “epiR” to handle the enormous integers encountered in this study. His prompt and timely assistance is greatly appreciated indeed.

 The other issue is with E-values. An E-value is defined as: 

The E-value is defined as the minimum strength of association, on the risk ratio scale, that an unmeasured confounder would need to have with both the treatment and the outcome to fully explain away a specific treatment-outcome association, conditional on the measured covariates. A large E-value implies that considerable unmeasured confounding would be needed to explain away an effect estimate. A small E-value implies little unmeasured confounding would be needed to explain away an effect estimate. 

But the authors slide this into other forms of bias in a rather interesting way:

Furthermore this was also an ecological study. It is therefore potentially susceptible to the short-comings typical of ecological studies including the ecological fallacy and selection and information biases. Within the present paper we began to address these issues with the use of E-values in all Tables.

Now, E-values are quite useful for thinking about confounding but I am quite interested to see how they apply to things like selection bias, except insofar as a larger estimate requires more substantive bias to be entirely artifactual due to selection bias. The other stuff, about biological plausibility, is fine and that is the reason to have conducted the study. But the E-values say nothing about bias other than how strong a set of confounders would need to be to induce a spurious association. 

Also this is not quite true:

Causal inference was addressed in two ways. Firstly inverse probability weighting (IPW) was conducted on all mixed effects, robust and panel models which had the effect of equilibrating exposure across all observed groups. IPW were computed from the R-package “ipw”. Inverse probability weighting transforms an observational dataset into a pseudo-randomized dataset so that it becomes appropriate to draw inferences as to truly causal relationships.

This is only true under a set of assumptions,  

One, there is no unmeasured confounding present. Two, that the marginal structural model is correctly specified (both the marginal structural model and   the   model   for   exposure).   Three,   that   each participant’s    counterfactual    outcome    under    their observed   exposure   is   the   same  as   their   observed outcome  (consistency).  Finally,  we  need  to  assume positivity — that   there   are   exposed   and   unexposed participants  at  all  levels  of  the  confounders.  If  these assumptions are not met, then the marginal structural model may give misleading estimate

IPW can be a powerful and useful technique, but it is hardly magic and cannot replace randomized data in causal inference. The use of E-values immediately casts doubt on the first assumption being fully realistic.  

Now there may be some important information in this ecological study, but I find these epidemiological methods issues really detract from the potentially good science elsewhere in the paper.

Something offbeat: subverting expectations

This is Joseph.

Back in the day, there was a lot of discussion about how shows like Game of Thrones felt refreshing because they subverted expectations. Part of this was a willingness to reject literary tropes like plot armor that allowed for important and beloved characters to die. But this technique is a masterclass one, and hard to get right. It requires foreshadowing so that the reader or watcher can look back, afterwards, and feel like the resolution was expected and they'd have guessed it if they'd paid closer attention.

A good example is the Mountain and the Viper. Part of what makes the ending (spoilers for a 8 year old show follow) work is that it is so carefully set up. Bronn actually goes through, beat by beat, the way that one could win and the vulnerability to one mistake. The Viper uses an innovative method of attack that makes sense as being high risk, high reward. Tyrion even comments on the lack of a helmet, which ends up making a big difference in the event. The flaws that cause the Viper to lose are set up for many episodes and are the reason he volunteered for the fight. We end up with conflicting expectations: it is possible that the Viper could win (and he comes close) but it is clear from the beginning that the actual outcome is the most likely.

Clever foreshadowing of how it could all fall apart makes the twist make sense. We know the stakes and it is made clear how this could all come together. 

Now consider how different the killing of the Night King is. The foreshadowing is weak and the early part of the episode shows Arya struggling to hide from Zombies, who are hyper-aware. So when she ends up sneaking past a horde there is no real foreshadowing for what is about to happen. It's actually worse -- previously when a character got themselves in a deadly situation, adversaries did not suddenly get slow or incompetent unless that was also set up. 

A tragedy is made good by the failure of the protagonist to overcome known flaws (Hamlet's lack of decisiveness, for example, leads to disaster). By highlighting these personality traits, it makes sense when they end up coming back to haunt the character. 

This also works the same way for clever victories. They need to be set up in a way that we can all revel in the cleverness of the character. A pretty decent example is Die Hard, where the character is trying to alert authorities to the presence of terrorists. The blocks set up by the antagonists show them as competent and the final solution is precisely telegraphed by previous efforts by the protagonist. It feels earned. 

But the worst way of subverting expectations is to just do something unexpected because it contradicts the previous evidence and character development. There was a comic Armageddon 2001 where the ending was leaked. So they switched the character who was the secret villain. To one of the only characters seen alive in the future and fighting the villain. We even see that over a multitude of futures that this character fights the secret antagonist but never becomes them. They created surprise, because one of the only 2 characters actually ruled out by the investigation as definitely not the secret villain was the secret villain. Yes, we were surprised. No, it was not a good surprise.

I think that the key to this sort of "bait and switch" is to make conflicting promises. By following a trope you induce expectations in the reader. But by clever foreshadowing and a set of different promises (e.g., we are going to be realistic even when it hurts) then you end up with the reader being both surprised but accepting that the switch was done well. 

Surprise is easy. Smart surprise in storytelling is very hard and it is often better to just be conventional then to be simply bad. 

The big question now is when will Elon name himself founder of Twitter?

[For those who just tuned in to the Tech Messiah show, Musk retconned himself in as a founder of Tesla and of the company that would become PayPal. Twitter seems the next logical step.]

Opinion | Why Elon Musk Becoming Twitter's Biggest Shareholder Will Be Good for America's Free Speech Problem

by Elon Musk

— New York Times Pitchbot (@DougJBalloon) April 5, 2022

The Musk/Twitter story has been getting more play than I expected though, given the popularity of the platform with journalists, I should have seen it coming. Perhaps it merits one more post.

 Summer Concepcion writing for Talking Points Memo

News of Tesla CEO Elon Musk acquiring a 9.2 percent stake in Twitter has fired up the social media platform’s users in a special way today.

And the takes are, indeed, hot as right-wingers and Musk-devotees see the development as a sign their free speech savior has come to rescue the platform and seek vengeance for Donald Trump’s booting.

Musk’s appointment to Twitter’s board of director was confirmed by CEO Parag Agrawal in tweets posted Tuesday morning. Agrawal praised Musk as “both a passionate believer and intense critic of the service” who would “bring great value to our Board.”

Concepcion breaks down the responses into earnest critiques and right-wing praise. First the earnest.

Elon blocked me for suggesting that maybe he’s not a mechanical ventilation expert. https://t.co/KbJPm2KeWx

— Esther C, MD (@choo_ek) April 5, 2022

This one might need a quick recap. Early in the pandemic (in addition to denying its seriousness and insisting that his factories should be exempt from lockdown rules), Musk promised to have Tesla start making ventilators for ICUs (The good news is that he was right about car companies helping with the crisis. The bad news...). He also took to Twitter to explain subtle principles of ventilators, intubation, etc. I'm not going to go into these topics because I know nothing about them. Unfortunately, neither did Musk. Immediately doctors with relevant expertise piled on to humiliating effect.  Elon quietly dropped the subject, but not before blocking some of the offending experts. 
 

I’m trying to imagine any other context where a publicly traded company had seen a customer use their product to break federal law, and to try to destroy the lives of innocent people, and then added that person to their board.

— anildash (@anildash) April 5, 2022

If Elon's vision for Twitter is anything like his Tesla factories, then racists will get verified and people of color will be told to be "cool" about it https://t.co/pn4MlonXph

— Dr. Jorge A. Caballero stands with 🇺🇦 (@DataDrivenMD) April 5, 2022

And from the right.

Now that @ElonMusk is Twitter’s largest shareholder, it’s time to lift the political censorship.

Oh… and BRING BACK TRUMP!

— Lauren Boebert (@laurenboebert) April 4, 2022

Everyone at Twitter now works for and for the benefit of Elon Musk

All of the woke employees are now Elon Musk's underlings and work toward his whims

Enjoy

— Tim Pool (@Timcast) April 5, 2022

BRING TRUMP BACK TO TWITTER!!!! pic.twitter.com/hZqEq8wMpe

— Angelo Ray Gomez (@AngeloRayGomez) April 5, 2022

The Disney plug seems a bit ironic.


Michael Hiltzik (writing for the LA Times) points out that the legal issues are even worse than they first appeared to be.

Agrawal’s announcement glossed over what’s probably the real reason he invited Musk onto the Twitter board: A day earlier, Musk disclosed that he had accumulated a 9.2% stake in the company’s stock. That made Musk, who already was among Twitter’s largest users, with more than 80 million followers, Twitter’s largest shareholder.

Any shareholder with that much heft is going to make his views known to management in a way that would be impossible to ignore, so from Agrawal’s vantage point, it was probably just as well that Musk be on the inside than on the outside looking in.

It’s proper to observe that Musk may not have been entirely candid about his intentions for Twitter.

He disclosed his ownership stake on the Security and Exchange Commission’s schedule 13G, which is typically used by shareholders intending to play a passive role in the subject company; investors buying stakes to play an active role, such as seeking control, generally disclose on schedule 13D, which is more detailed and requires more prompt disclosures of changes in shareholdings and intentions.

Musk also checked a box on the 13G form designating himself as a “passive investor.”

It’s possible that Musk never intended to be more than a passive investor, but Agrawal offered him a board set unbidden.

Agrawal did disclose, however, that he had held discussions with Musk, apparently about his joining the Twitter board, for “weeks.” It’s also worth noting that Agrawal did extract a written commitment from Musk not to increase his holdings beyond 14.9% as long as he’s on the board and for 90 days after he leaves.

It’s also possible that Musk is testing the SEC’s determination to force him to comply with its regulations, a practice that has made him a thorn in the agency’s side for years.

Or as another LAT writer puts it...

You act as if the SEC might give a damn https://t.co/EnTJTstfYu

— Russ Mitchell (@russ1mitchell) April 6, 2022

And for those who like their social media news with no Twitter but plenty of schadenfreude, enjoy.

It's not quite like Ponzi buying the Boston Post, but...

Elon Musk just became the largest shareholder in Twitter with almost 9% of the company. This would be big news whoever the buyer was, but it takes on layer upon layer because of the relationship Musk and Tesla have with the social media platform. 

Tesla, unlike virtually every other major company, does not have a PR department. There are literally no set official channels for journalists to reach out to for questions or for comments on articles. Practically everything is done through tweets to Musk's eighty million followers (a plurality of who are fan boys or bots) giving him a great deal of control over the narrative, particularly with damaging stories like the revelation of widespread racial harassment at Tesla plants.

 

A lot of those followers are also retail investors, making Twitter an ideal platform for stock manipulation. 

Brian Contreras and Russ Mitchell writing for the LA Times.

Indeed, the CEO has clashed repeatedly with financial regulators over his use of Twitter. His latest purchase comes as he’s locked in a bitter dispute with U.S. securities regulators over his ability to post on the site.

In October 2018, Musk and Tesla agreed to pay $40 million in civil fines and for Musk to have his tweets approved by a corporate lawyer after he tweeted about having the money to take Tesla private at $420 per share.

The funding was far from secured and the electric vehicle company remains public, but Tesla’s stock price jumped. The settlement specified governance changes, including Musk’s ouster as board chairman, as well as preapproval of his tweets. The SEC brought a securities fraud charge, alleging that Musk was manipulating the stock price with his posts.

Musk’s lawyer is now asking a U.S. District Court judge in Manhattan to throw out the settlement, contending that the SEC is harassing him and infringing on his 1st Amendment rights.

Not to put too fine a point on it, but Musk's stock manipulations have made him the world's richest man and conveniently allowed his brother Kimbal to unload over a hundred million dollars worth of stock at the exact peak of the market.  The SEC is looking into this but if Elon's attitude is the same as it was, he's not too concerned.

SEC, three letter acronym, middle word is Elon’s

— Elon Musk (@elonmusk) July 2, 2020

Twitter is also the primary platform for critics of Tesla and Musk, which brings up some troubling free speech questions, as does Musk's recent and increasingly open move toward the MAGA wing of the Republican Party. 

Honestly, @elonmusk may use his Twitter stake to silence critics and wage culture war for the right... or he may not.

There's really only one way to gauge his actual commitment to free speech: trolling him savagely at every available chance, right here on the platform he owns.

— E.W. Niedermeyer (@Tweetermeyer) April 4, 2022

I think we are saying the same thing? I don't believe I accused Musk of having actual political principles, my claim is just that he is targeting the "post-Trump right" for the next level in his affinity-meme game. A step away from his partisan straddle posture.

— E.W. Niedermeyer (@Tweetermeyer) April 4, 2022

Musk is entirely driven by self-interest and vanity. When he was a liberal darling praised by Vox, the NYT and Rolling Stone and cashing in on subsidies, he played the left-leaning bipartisan, but that honeymoon is over. Revelations from LAT, FT, Ed ended that.

— Mark Palko (@MarkPalko1) April 4, 2022

He has a fan base, but I’m not sure what his endgame is. Giant subsidies? I’m not sure that even Trump’s/Greg Abbott’s version of the right will do that. Career regulators are also largely left leaning. Is it, merely, a version of Michael Jordan’s “Republicans buy sneakers, too”?

— Seth Horwitz (@Seth_Horwitz) April 4, 2022

Elon has been pushing the "only the regulators are holding us back from greatness" line for a long time, and he has found plenty of gullible journalists like Kevin Roose willing to buy it.https://t.co/BAsmwvnVwb

— Mark Palko (@MarkPalko1) April 4, 2022

For more from Ed (who literally wrote the book on Tesla), check out this thread.

Musk buying nearly 10% of Twitter is the rare realpolitik move for a guy who likes to style himself a "memelord."

This platform, and the public imagination more broadly, is as central to his success as anything to do with the engineering of EVs or rockets. Much more, actually.

— E.W. Niedermeyer (@Tweetermeyer) April 4, 2022

The good news is that, in order to get around some pesky rules, Musk signed on as a passive investor. 

From the LA Times:

Although Musk is now Twitter’s largest shareholder, his stake is a “passive investment,” meaning under U.S. securities laws he is barred from seeking control of the company — but that doesn’t preclude him from doing so in the future, through active investments.

It also doesn’t mean Musk must remain passive in communicating his thoughts about Twitter, in public or within the company, said Charles Elson, founding director of the Weinberg Center for Corporate Governance.

"...Musk had to pledge that he was a passive investor only, with no plans to try and take control or influence the management of the company. For Musk, that would seem to defeat the entire point of the purchase!" $tslaQ $TSLA https://t.co/o3NZAgfAcB

— Machine Planet (@Paul91701736) April 5, 2022

In case you were wondering how long it took Musk to start pushing that envelope...

Yes! But the more important question: how do you define “passive investor”? https://t.co/XviMrcaMXc

— Russ Mitchell (@russ1mitchell) April 5, 2022

Update: There's more.

"Incorporation by reference"

Cory Doctorow has a disturbing thread (rolled up here) on how for pro-fit entities have managed to set up a system where you actually have to pay them to read actual laws. 

These days, he's tangling with the Great State of Wisconsin, where access to the publicly financed manual of jury instructions will cost you $500/year (nothing for a white shoe firm, an infinite sum for, say, an incarcerated person working on an appeal):

https://pluralistic.net/2020/10/22/the-robots-are-listening/#rogue-archivist

...

And nowhere is the law more closed than when it comes to public safety codes. Across the world – but especially in the USA – local and state governments have fallen in love with the idea of "incorporation by reference." That's when a town council writes in its law books that "The plumbing code of Lower Pigsknuckle shall be version 2.1 of the American Society of Plumbers and Pipefitters Standard Plumbing Manual."

In theory, that's a reasonable way to make safety codes – each town shouldn't have to hire experts to create its own hand-rolled plumbing, electric, fire and other rules. But the problem comes with the standards bodies – generally adjuncts to or offshoots of industry associations – that develop these codes. These bodies are nominally nonprofits, but they still charge fortunes – thousands of dollars – to access their documents (some of that money goes to paying for standards development, but their IRS filings reveal that their top officers also skim 6- and 7-figure salaries from those fees).

Which means that if your plumber or electrician assures you that your wiring or pipes are up to code, you have to spend thousands of dollars to check on them, or just take their word for it. It also means that if you think that these codes are deficient, you have to pay to find out their exact wording, and your neighbors have to pay to figure out if you're onto something before they join with you in pressing the city council to amend them. Finally, it means that everyone who ever pays for a plumber, an electrician or other tradesperson is subsidizing these societies, because the cost to access the law is passed along in the prices that the trades charge to their customers.

The fight to erode access to information has been a relentless, multi-front effort for the past few decades. Copyrights have not only been extended beyond all reason, but we've actually seen works like It's a Wonderful Life snatched out of the public domain. Farmers can often no longer plant seeds from their own crops. Ridiculously broad patents are issued.

Eventually all information will belong to whoever has the best lawyers.

Eight years ago at the blog -- reposted because of the April Fools connection and because I really liked the title on this one

 Tuesday, April 1, 2014

Being a management consultant who does not suffer fools is like being an EMT who faints at the sight of blood

An April 1st post on foolishness.

When [David] Coleman attended Stuyvesant High in Manhattan, he was a member of the championship debate team, and the urge to overpower with evidence — and his unwillingness to suffer fools — is right there on the surface when you talk with him.

Todd Balf writing in the New York Times Magazine

Andrew Gelman has already commented on the way Balf builds his narrative around Coleman ( "In Balf’s article, College Board president David Coleman is the hero and so everything about him has to be good and everything he’s changed has to have been bad.") and the not suffering fools quote certainly illustrates Gelman's point, but it also illustrates a more important concern: the disconnect between the culture of the education reform movement and the way it's perceived in most of the media.

(Though not directly relevant to the main point of this post, it is worth noting that the implied example that follows the line about not suffering fools is a description of Coleman rudely dismissing those who disagree with his rather controversial belief that improvement in writing skills acquired through composing essays doesn't transfer to improvements in writing in a professional context.)

There are other powerful players (particularly when it comes to funding), but when it comes to its intellectual framework, the education reform movement is very much a product of the world of management consultants with its reliance on Taylorism, MBA thinking and CEO worship. This is never more true than with David Coleman. Coleman is arguably the most powerful figure in American education despite having no significant background in either teaching or statistics. His only relevant experience is as a consultant for McKinsey & Company.

Companies like McKinsey spend a great deal off their time trying to convince C-level executive to gamble on trendy and expensive "business solutions" that are usually unsupported by solid evidence and are often the butt of running jokes in recent Dilbert cartoons.  While it may be going too far to call fools the target market of these pitches, they certainly constitute an incredibly valuable segment.

Fools tend to be easily impressed by invocations of data (even in the form of meaningless phrases like 'data-driven'), they are less likely to ask hard questions (nothing takes the air out of a proposal faster than having to explain the subtle difference between your current proposal and the advice you gave SwissAir or AOL Time Warner), and fools are always open to the idea of a simple solution to all their problems which everyone else in the industry had somehow missed. Not suffering fools gladly would have made for a very short career for Coleman at McKinsey.

"You say this daily walk will reduce my risk of death from cardiovascular disease by 30%, but also increase my risk of death by bear attack by 300%? That's a 280% increased! I'm not a sucker; I'm staying inside."

 It's an odds ratio cartoon. We're contractually obligated to run it.

How extreme is Peter Thiel?

A quick follow-up to yesterday's post. 

I've noticed that mainstream media have a tendency to underplay or perhaps underestimate how far out of the mainstream Thiel is, despite the man literally being on the record that he thought women's suffrage was bad for the country. Nonetheless, outlets like the New York Times and NPR continue to treat him as a deep and sensible thinker. He is neither.

His reputation comes partly from the bizarre but widespread view that the elite of Silicon Valley are some unearthly breed of super-intellects. Thiel is smarter than peers like Musk, but you'd be hard pressed to find anything that he said that was either profound or insightful. He's a reasonably bright fellow who won the lottery a couple of times by being at the right place at the right moment hanging out with the right people. 

He is also arguably to the right of the Koch Brothers with a comparable sense of personal ethics.

The is a real tweet from an actual US Senate candidate. pic.twitter.com/SrCVTfkh5c

— Ron Filipkowski 🇺🇦 (@RonFilipkowski) March 28, 2022

From TPM:

But fear not, [Thiel protégé and good ol' boy cosplayer J.D.] Vance has their back — or at least Greene’s. Referring to Greene as a “friend” last night, Vance declared the congresswoman — who has turned her role as a lawmaker into a platform for annoying everyone in the Republican caucus, spreading vicious conspiracy theories and calling for violence against her colleagues — “did nothing wrong.”

“The accusation against Marjorie is pretty simple: that she appeared at a conference where somebody said something bad,” he said, referencing Holocaust-denier Fuentes, who used the event last month to lament that America has abandoned “young white men” and to praise Russian President Vladimir Putin.

“Did she say something bad at the conference?” Vance continued. “I actually watched her remarks, I agreed with nearly every word that she said.

From Vanity Fair:

Billionaire Peter Thiel hosted about two dozen Republican donors at his 10,000-square-foot Miami compound on Wednesday night to raise money for Wyoming Republican Harriet Hageman, the Donald Trump–backed candidate running a primary challenge against GOP representative Liz Cheney. According to a person briefed on the event by an attendee, the gathering had the feel of a MAGA rally in miniature. Thiel introduced Hageman, who then launched into a stump speech about why Cheney needed to be defeated because of her disloyalty to Trump. “It was all about how the 2020 election was stolen and Cheney is a RINO,” the source told me. The source added that Donald Trump Jr. arrived with heavy security and spoke about how Republicans need “to take back the country.” 

Thiel’s foray into the Wyoming Republican primary shows how devoted the secretive PayPal cofounder and early Facebook investor has become to the MAGA movement. In October, Politico reported that Thiel donated the maximum $5,800 to Hageman’s campaign. His support is helping Hageman, a Wyoming lawyer, close the significant fundraising gap with Cheney, who raised more than $3.6 million by the end of September, Politico reported last month. According to the outlet, Hageman reported having only $245,000 in the bank at the end of September.

...

A spokesperson for Thiel did not respond to a request for comment. 

The New York Times – for it before they were against it

If you haven't already, read Joseph's post "Free speech for the first speaker," a dismantling of the New York Times recent editorial on cancel culture. He does an excellent job addressing the logical flaws. Personally, I couldn't get past the stomach-turning hypocrisy.

Actual examples of cancellation are rare, vanishingly so when the opinions are on the right. The conservative movement always made sure that those pushing the correct views worked with a net. Between sinecures, sympathetic (and often heavily subsidized) publications, right wing media and the occasional discreet bulk purchase of a “New York Times best-selling” book, journalists and pundits who stand up against the liberal establishment know they will never walk alone. No one who still routinely appears on Fox News or has cashed in big on Substack has been in any meaningful way canceled. 

If you’re looking for a real example of someone with what had been a wide-reaching voice being effectively forced out of the discourse for expressing controversial opinions, the first name to come to my mind would be Gawker.

In case you’ve forgotten, Gawker was an angry, bomb throwing, afflict-the-comfortable family of blogs. They violently rejected bothsiderism and the view from nowhere. Instead, they were completely open with their biases, especially a hatred and disgust with tech messiahs, obscenely rich people, and the establishment press.

This post [dead link but you might be able to find it on the Internet Archive]by Ryan Tate originally spotted by Andrew Gelman and the subject of one of our posts, shows a perfect example of a Gawker 3 for 3:

If you want Facebook to spend millions of dollars hiring you, it helps to be a talented engineer, as the New York Times today [18 May 2011] suggests. But it also helps to carouse with Facebook honchos, invite them to your dad's Mediterranean party palace, and get them introduced to your father's venture capital pals, like Sam Lessin did.

Lessin is the poster boy for today's Times story on Facebook "talent acquisitions." Facebook spent several million dollars to buy Lessin's drop.io, only to shut it down and put Lessin to work on internal projects. To the Times, Lessin is an example of how "the best talent" fetches tons of money these days. "Engineers are worth half a million to one million," a Facebook executive told the paper.

We'll let you in on a few things the Times left out: Lessin is not an engineer, but a Harvard social studies major and a former Bain consultant. His file-sharing startup drop.io was an also-ran competitor to the much more popular Dropbox, and was funded by a chum from Lessin's very rich childhood. Lessin's wealthy investment banker dad provided Facebook founder Mark Zuckerberg crucial access to venture capitalists in Facebook's early days. And Lessin had made a habit of wining and dining with Facebook executives for years before he finally scored a deal, including at a famous party he threw at his father's vacation home in Cyprus with girlfriend and Wall Street Journal tech reporter Jessica Vascellaro. (Lessin is well connected in media, too.) . . .

That attitude combined with sharp, funny writing and a willingness to tell interesting, important stories that the rest of the press were ignoring made Gawker a remarkable success story. It also unsurprisingly pissed off tech messiahs, obscenely rich people, and the establishment press

The editors did believe in pushing the envelope, especially when the target were rich white men doing despicable things. They were also reckless and self-destructive and had a huge problem with authority. Combine that with a desire to be provocative to the point of shocking, and you guaranteed that any enemy with deep pockets and a deeper grudge would have plenty of ammunition.

It was right wing billionaire and cartoon villain Peter Thiel who finally came after them. Thiel was a member of the PayPal mafia along with Elon Musk. According to a mutual acquaintance "Musk thinks Peter is a sociopath, and Peter thinks Musk is a fraud and a braggart" showing that for all their other flaws, both men are reasonably good judges of character. 

Thiel’s politics are not central to this story, but it is worth noting that he’s arguably the biggest Trump supporter in the tech industry (now even more so) and is also on the record as believing that it was a mistake to give women the vote.

Rather than take open action, Thiel went the coward's route and secretly bankrolled a lawsuit then engineered it so that Gawker was forced into bankruptcy. When word leaked out of his involvement, he showed no shame (because shame’s not really a big emotion for sociopaths). Instead, he immediately started depicting himself as a courageous defender of privacy (which was pretty ripe coming from someone who'd made a billion off of Facebook, but remember what we said about shame), and he was given the world’s best piece of journalistic real estate to do it from.

Thiel’s NYT opinion piece was as bad as you would expect -- self-serving and highly distorted – but even if it had been objective and honest, the very fact that the paper handed him the biggest gift it had to bestow meant that the gray lady was actively supporting the billionaire who set out, not just to punish, but to silence a publication that criticized him and his circle. 

Have there been excesses on the left? Progressive intolerance of other ideas? Instances of free expression of ideas being squelched? Of course. It is by no means the cultural epidemic we’ve been warned about, but the right does not have a monopoly on assholes. 

There is room for an intelligent and measured conversation about how “constraints on speech can turn into arbitrary rules with disproportionate consequences,” but this is one topic on which the New York Times should keep its goddamn mouth shut.

Eight years ago at the blog -- R.I.P. old (and better) SAT

 Not the timeliest subject, I'll admit, but the way bad changes are sold to a mathematically illiterate press as improvements is always relevant. 

Wednesday, March 26, 2014

The SAT and the penalty for NOT guessing

Last week we had a post on why David Coleman's announcement that the SAT would now feature more "real world" problems was bad news, probably leading to worse questions and almost certainly hurting the test's orthogonality with respect to GPA and other transcript-based variables. Now let's take a at the elimination of the so-called penalty for guessing.

The SAT never had a penalty for guessing, not in the sense that guessing lowed your expected score. What the SAT did have was a correction for guessing. On a multiple-choice test without the correction (which is to say, pretty much all tests except the SAT), blindly guessing on the questions you didn't get a chance to look at will tend to raise your score. Let's say, for example, two students took a five-option test where they knew the answers to the first fifty questions and had no clue what the second fifty were asking (assume they were in Sanskrit). If Student 1 left the Sanskrit questions blank, he or she would get fifty point on the test. If Student 2 answered 'B' to all the Sanskrit questions, he or she would probably get around sixty points.

From an analytic standpoint, that's a big concern. We want to rank the students based on their knowledge of the material but here we have two students with the same mastery of the material but with a ten-point difference in scores. Worse yet, let's say we have a third student who knows a bit of Sanskrit and manages to answer five of those questions, leaving the rest blank thus making fifty-five points. Student 3 knows the material better than Student 2 but Student 2 makes a higher score. That's pretty much the worst possible case scenario for a test.

Now let's say that we subtracted a fraction of a point for each wrong answer -- 1/4 in this case, 1/(number of options - 1) in general -- but not for a blank. Now Student 1 and Student 2 both have fifty points while Student 3 still has fifty-five. The lark's on the wing, the snail's on the thorn, the statistician has rank/ordered the population and all's right with the world.

[Note that these scales are set to balance out for blind guessing. Students making informed guesses ("I know it can't be 'E'") will still come out ahead of those leaving a question blank. This too is as it should be.]

You can't really say that Student 2 has been penalized for guessing since the outcome for guessing is, on average, the same as the outcome for not guessing. It would be more accurate to say that 1 and 3 were originally penalized for NOT guessing.

Compared to some of the other issues we've discussed regarding the SAT, this one is fairly small, but it does illustrate a couple of important points about the test. First, the SAT is a carefully designed tests and second, some of the recent changes aren't nearly so well thought out.

Thursday, March 27, 2014

On SAT changes, The New York Times gets the effect right but the direction wrong

That was quick.

Almost immediately after posting this piece on the elimination of the SAT's correction for guessing (The SAT and the penalty for NOT guessing), I came across this from Todd Balf in the New York Times Magazine.

Students were docked one-quarter point for every multiple-choice question they got wrong, requiring a time-consuming risk analysis to determine which questions to answer and which to leave blank. 

I went through this in some detail in the previous post but for a second opinion (and a more concise one), here's Wikipedia:

The questions are weighted equally. For each correct answer, one raw point is added. For each incorrect answer one-fourth of a point is deducted. No points are deducted for incorrect math grid-in questions. This ensures that a student's mathematically expected gain from guessing is zero. The final score is derived from the raw score; the precise conversion chart varies between test administrations.

The SAT therefore recommends only making educated guesses, that is, when the test taker can eliminate at least one answer he or she thinks is wrong. Without eliminating any answers one's probability of answering correctly is 20%. Eliminating one wrong answer increases this probability to 25% (and the expected gain to 1/16 of a point); two, a 33.3% probability (1/6 of a point); and three, a 50% probability (3/8 of a point). 

You could go even further. You don't actually have to eliminate a wrong answer to make guessing a good strategy. If you have any information about the relative likelihood of the options, guessing will have positive expected value.

The result is that, while time management for a test like the SAT can be complicated, the rule for guessing is embarrassingly simple: give your best guess for questions you read; don't waste time guessing on questions that you didn't have time to read.

The risk analysis actually becomes much more complicated when you take away the penalty for guessing. On the ACT (or the new SAT), there is a positive expected value associated with blind guessing and that value is large enough to cause trouble. Under severe time constraints (a fairly common occurrence with these tests), the minute it would take you to attempt a problem, even if you get it right, would be better spent filling in bubbles for questions you haven't read.

Putting aside what this does to the validity of the test, trying to decide when to start guessing is a real and needless distraction for test takers. In other words, just to put far too fine a point on it, the claim about the effects of the correction for guessing aren't just wrong; they are the opposite of right. The old system didn't  require time-consuming risk analysis but the new one does.

As I said in the previous post, this represents a fairly small aspect of the changes in the SAT (loss of orthogonality being a much bigger concern). Furthermore, the SAT represents a fairly small and perhaps even relatively benign part of the story of David Coleman's education reform initiatives. Nonetheless, this one shouldn't be that difficult to get right, particularly for a publication with the reputation of the New York Times.

Of course, given that this is the second recent high-profile piece from the paper to take an anti-SAT slant, it's possible certain claims weren't vetted as well as others.

Free speech for the first speaker

This is Joseph

In the process of pointing out actual laws limiting free speech, the New York Times manages this interesting perspective: 

Liberals — and anyone concerned with protecting free speech — are right to fight against these pernicious laws. But legal limits are not the only constraints on Americans’ freedom of speech. On college campuses and in many workplaces, speech that others find harmful or offensive can result not only in online shaming but also in the loss of livelihood. Some progressives believe this has provided a necessary, and even welcome, check on those in power. But when social norms around acceptable speech are constantly shifting and when there is no clear definition of harm, these constraints on speech can turn into arbitrary rules with disproportionate consequences

I think that this perspective is shifting between "free speech" and "consequence free speech". The first is an important way to introduce new thinking and to allow for political discourse. The second gives enormous privilege to the first speaker. 

That said, there is a lot of nuance here. For example, when teaching I can occasionally adopt an unpopular position (that I don't necessarily hold) to force students to engage with criticism. When I discussed IRBs, I ended up seeing it on teaching evaluations. It pushed me to improve how I taught the topic, as offending students is rarely the way to force them to critically evaluate assumptions (even if only to strengthen them and ground them in principle). 

It is common to want the rules to favor your own viewpoint. Newspaper opinion writers have a challenging job in which they have to create provocative opinions to generate interest but are very visible if there is a backlash. I can see why they would prefer to not face consequences for misjudgments and I am sympathetic to wanting economic security.

But the marketplace of ideas requires a robust culture of criticism. This is a fine paragraph until the last sentence:

The progressive movement in America has been a force for good in many ways: for social and racial justice, for pay equity, for a fairer system and society and for calling out hate and hate speech. In the course of their fight for tolerance, many progressives have become intolerant of those who disagree with them or express other opinions and taken on a kind of self-righteousness and censoriousness that the right long displayed and the left long abhorred. It has made people uncertain about the contours of speech: Many know they shouldn’t utter racist things, but they don’t understand what they can say about race or can say to a person of a different race from theirs. Attacking people in the workplace, on campus, on social media and elsewhere who express unpopular views from a place of good faith is the practice of a closed society.

 How do you tell that the views are coming from a place of good faith? "I am just asking questions" is a powerful bad faith rhetorical technique. Assessment of good or bad faith is going to be inherently a subjective question and there are some cases where it just strains plausibility.

For example, Loving versus Virginia (a landmark civil rights case allowing for interracial marriage) cam up in the confirmation hearings of Ketanji Brown Jackson. In context, Judge Jackson has an interracial marriage (as do many prominent figures in government/judiciary like Judge Thomas and Mitch McConnell). Consider:

When asked by a reporter whether he would consider the Supreme Court potentially striking down Roe this year to be “judicial activism,” Braun said he thought what justices did in 1973 to pass Roe was “judicial activism.”

“That issue should have never been federalized, [it was] way out of sync I think with the contour of America then,” he said. “One side of the aisle wants to homogenize [issues] federally, [and that] is not the right way to do it.”

Individual states, he said, should be able to weigh in on these issues “through their own legislation, through their own court systems.”

The same reporter asked Braun whether he would apply the same judgment to Loving, and Braun said “yes.”

“I think that that’s something that if you’re not wanting the Supreme Court to weigh in on issues like that, you’re not going to be able to have your cake and eat it too,” he said. “I think that’s hypocritical.

Now is it inappropriate to wonder why this question was asked of Judge Jackson and not Judge Barrett? Is it because people assume that Judge Barrett is against Loving v. Virginia? Or because it is settled law with broad national support and was a tool to try to rattle a candidate based on their personal situation? Or because Senator Braun was just a curious person who happened to bring up an example that shows that he holds very polarizing opinions?

I think that it is reasonable for people to critique the decision of how to spend the limited time in a Supreme Court confirmation. In other words, like a classical liberal, I am strongly in favor of Senator Braun being free to speak his mind but I am also free to change my opinion of his character (in a positive or negative way) based on his speech. Similarly, the whole point of Judge Jackson's confirmation hearing is to try and change people's opinion of her (reassuring political allies and converting political foes, one presumes). 

So I think that this perspective on free speech is not really advancing the conversation but rather erring on the side of being a bit to kind to provocative speakers. It's a big privilege to be able to be provocative (many places have not allowed it at all) but the only way it makes sense is to the ability to freely respond to the original speech. 

Twelve years ago at the blog -- part II

Wednesday, March 31, 2010

Blockbusters, Franchises and Apostrophes

More on the economics of genre fiction

The story so far: last week Andrew Gelman had a post on a book that discussed the dominance of best seller lists and suggested that it was due to their increased quality and respectability. I argued that the quality and respectability had if anything decreased (here), posted some background information (here and here) then discussed how the economics of publishing from the late Nineteenth Century through the Post-War era had influenced genre fiction. The following closes with a look at where we are now and how the current state of the market determines what we're seeing at the bookstore.

As the market shrank in the last part of the Twentieth Century, the pay scale shifted to the feast and (mostly) famine distribution of today. (The century also saw a similar shift for musicians, artists and actors.) Non-paying outlets sprang up. Fan fiction emerged (non-licensed use of characters had, of course, been around for years -- Tiajuana bibles being a classic example -- but fan fiction was written for the author's enjoyment without any real expectation of payment). These changes are generally blamed on the internet but the conventional wisdom is at least a couple of decades off. All of these trends were well established by the Seventies.

With the loss of the short story market and the consolidation of publishing, the economics of writing on spec became brutal. Writing and trying to sell a novel represents a tremendous investment of time and energy with little hope of success. By comparison writing on spec in the Forties meant coming up with twelve to fifteen pages then sending them off to twenty or so potential markets. The best of these markets paid good money; the worst were hungry for anything publishable.

The shift from short story to novel also meant greater risk for the publisher (and, though we don't normally think of it in these terms, for the reader who also invested money and time). A back-pages story that most readers skipped over might hurt the sales and reputation of a magazine slightly but as long as the featured stories were strong, the effect would be negligible. Novels though are free-standing and the novel gets that gets skipped over is the novel that goes unsold.

When Gold Medal signed John. D. MacDonald they knew were getting a skilled, prolific writer with a track record artistically and commercially successful short fiction. The same could be said about the signing of Donald Westlake, Lawrence Block, Joe Gores and many others. Publishing these first time authors was a remarkably low risk proposition.

Unfortunately for publishers today, there are no potential first time authors with those resumes. Publishers now have to roll the dice on inexperienced writers of unknown talent and productivity. In response to that change, they have taken various steps to mitigate the risk.

One response was the rise of the marketable blockbuster. The earliest example I can think of is the book Lace by Shirley Conran. If memory serves, Lace got a great deal of attention in the publishing world for Conran's huge advance, her lack of fiction-writing experience, and the role marketing played in the process. The general feeling was that the tagline ("Which one of you bitches is my mother? ") came first while the book itself was merely an afterthought.

More recently we have Dexter, a marketer's dream ("He's a serial killer who kills serial killers... It's torture porn you can feel good about!"). The author had a few books in his resume but nothing distinguished. The most notable was probably a collaboration with Star Trek actor Michael Dorn. The first book in the series, Darkly Dreaming Dexter was so poorly constructed that all of the principals had to act completely out of character to resolve the plot (tip for new authors: when a character casually overlooks her own attempted vivisection, it's time for a rewrite*).

The problems with the quality of the novel had no apparent effect on sales, nor did it prevent the character from appearing in a successful series of sequels and being picked up by Showtime (The TV show was handled by far more experienced writers who managed to seal up almost all of the plot holes).

The point here is not that Darkly Dreaming Dexter was a bad book or that publishing standards have declined. The point is that the economics have changed. Experienced fiction writers are more rare. Marketable concepts and franchises are more valuable, as is synergy with other media. The markets are smaller. There are fewer players. And much of the audience has a troublesome form of brand loyalty.

Normally of course brand loyalty is a plus, but books are an unusual case. If you convince a Coke drinker to also to drink Sprite you probably won't increase his overall soda consumption; you'll just have cannibalization. But readers who stick exclusively with one writer are severely underconsuming. Convince James Patterson readers to start reading Dean Koontz and you could double overall sales.

When most readers got their fiction either through magazines or by leafing through paperback racks, it was easy to introduce them to new writers. Now the situation is more difficult. One creative solution has been apostrophe series such as Tom Clancy's Op Center. Other people are credited with actually writing the books but the name above the title is there for branding purposes.

Which all leads us back to the original question: Why did thrillers become so dominant?

They tend to be easily marketable.

They are compatible with franchises.

They lend themselves to adaptation as big budget action movies.

Their somewhat impersonal style makes them suitable for ghosting or apostrophe branding.

They are, in short, they are what the market is looking for. As for me, I'm looking for the next reprint from Hard Case, but I might borrow the latest Turow after you're done with it.


* "Is that a spoiler?"
"No, sir. It was spoiled when I got here."