Thursday, May 17, 2012

Reinventing How We Think

This is an excerpt from my just-published book, What's the Big Idea? 39 Reinventions for a Better America. 

As individuals and as a country, we make many bad decisions because we haven't paid enough attention to cost/benefit. Examples:


Requiring all airline passengers to take off their shoes has a near-zero chance of stopping a terrorist attack. Terrorists know that all shoes are screened so, of course, they'll put a bomb, for example, in a body cavity. Or they'll use an almost impossible-to-stop attack: Open a vial of communicable biovirus in the pre-screening lobby of the international terminal,  its parking lot shuttle, or in a sports arena. Or inject it in fruit in a supermarket or into a suburb's not-very-secure water reservoir.  Or detonate a suitcase nuke in a car trunk in a busy downtown. 

The shoe removal/re-donning ritual on top of other low-payoff, time-consuming airport screens such as double-inspecting one's boarding pass and ensuring that your toothpaste weighs less than three ounces, wastes countless hours of passengers' time and a fortune of our tax dollars in airport security personnel. 

In addition, lengthening security screening decreases demand for air travel, which hurts the struggling airlines and any employer that otherwise would have chosen an in-person meeting over a tele-or videoconference..

And more personally, it means that grandparents less often get to see grandkids, long-distance lovers to see sweetie. 

Our policymakers need to make decisions on cost-benefit.


Seventy-seven percent of mutual fund buyers choose actively managed mutual funds rather than index funds and exchange-traded funds, even though decades of data are clear that index investors do better.

Faith in God

A Google search on "Surrender to God"  yields 940,000 results. Millions of people follow the Bible's urging to be passive, to wait for God to provide. For example, 
Philippians 4:19 Be not wise in your own eyes; God shall supply all your need. 

Proverbs 3:1: Trust in the Lord with all your heart, and do not lean on your own understanding.

1 Corinthians 10:17  God is faithful, and he will not let you be tempted beyond your ability, 

Matthew 17:20  If you have faith like a grain of mustard seed, you will say to this mountain, ‘Move from here to there,’ and it will move, and nothing will be impossible for you.
What are the odds that there is an omniscient, omnipotent deity who is watching the seven billion people's every move to ensure they all do okay? Forget about whether such advice will result in your landing a good job in this economy. Remember that billions of people, including newborns have died screaming in agony. And what about all those catastrophic earthquakes and epidemics? And if "God will provide," why do billions of the world's people lack basic food, water, shelter, and health care? Could anyone who makes decisions based on cost/benefit "surrender to God?" 

Global Warming

We're spending trillions to try to cool the planet. For that to be worth the costs and restrictions (e.g., pressuring people from their cars into the more time-consuming mass transit,) all of the following must be true.
1. The planet is warming. (estimated probability =.9)
2. The warming is substantially man-made  (probability = .9)
3. The warming''s net effect must be so negative as to justify the cost.  (probability = .6)
4. Here's a key one:  The world's 200 nations must all substantially comply with the severe restrictions on carbon footprint for the 50-75 years until alternatives to fossil fuels advance enough. (probability = .2)
 5. The money and human resources devoted elsewhere are less likely to do good for humankind. (probability = .2)

Of course, my probability estimates are just guesses. There are too many unknowns for anyone to make solid estimates, but I slanted my guesses toward the environmentalist consensus position rather than the more skeptical positions.  Alas, because of the many unpredictable variables, the models used to justify spending virtually without limit to cool the planet are also mere educated guesses, not solid enough to justify the massive expenditures.

The joint probability of those five occurring is 2%. In other words, the chances are 49:1 that the massive effort to cool the globe won't work well enough to justify the costs including the opportunity costs. Isn't such analysis at least worthy of a policy discussion on whether it would be wise to reallocate resources now spent on the least cost-beneficial elements of global-cooling policy? 

Unfortunately, the public and many leaders are swayed by the too broad-brush, non-analytic, "Well, what if we're wrong? Cataclysm!" Especially on issues as important and costly as this, the probabilities, the cost/benefit, deserve to be considered by the public as well as by its leaders. 

Attempting to Close the Achievement Gap

We continue to bet on education as the tool most likely to close the achievement gap. That, despite more than a half-century and trillions of dollars  (also see this) spent trying so many permutations and combinations of teaching style, curriculum, etc., and yet the achievement gap is as wide as ever. We have not been able to do better than to tout a non-replicable superstar teacher or pilot program: from Marva Collins (her school is now closed due to lack of enrollment) to Michelle Rhee's DC non-miracle, to bad-data KIPP , to the latest fad, Khan Academy. Go take a Khan Academy lesson and ask yourself if a year of that is likely to close the algebra achievement gap. They're boring. Only highly motivated students will learn algebra that way. Do you really think America's low achievers will learn algebra so much better with Khan lessons as to close the achievement gap?

Yet we continue to prefer to bury our head in the sand and bet a fortune and our children's future that the next classroom innovation du jour will close the achievement gap. Is it not time to start thinking cost-benefit: Could the enormous costs of those classroom programs, trainings, etc., be more wisely spent? For example, mightn't it be wise to accept that we aren't close to figuring out how to close the achievement gap and so rather than spending more trillions on unlikely-to-work classroom programs, isn't it time to reallocate those dollars to fundamental research aimed at figuring out the foundational bases for the achievement gap, and only then to develop programs based on those bases, and if there's money left, to return it to the taxpayer?

A Solution

The most important thing schools and colleges should teach is how to think rationally: cost/benefit, risk/reward, opportunity costs. But we're too busy teaching the periodic table of elements, the causes of the War of 1812, the intricacies of Shakespeare, and how to solve quadratic equations.


Maria Lopez said...

Though I disagree with several of the probabilities you picked in your argument about global warming, I'm really wondering if some of the irrationalities you write about aren't linked to habits of thought that worked well over evolutionary time scale.

It is possible that trying to do quantitative analysis of probabilities of certain classes of events, would cause analysis paralysis or other problems if applied too broadly. (If the problem is narrow even apes can do it despite lacking the ability to consciously think about it.)

For instance, thinking things will be better if you control them directly is obviously true most of the time but backfires in peculiar cases such picking investments.

Anonymous said...

I've found that a healthy trust in God brings peace of mind, forgiveness, purpose, and confidence. These are not trivial things. Many millions of people down through history have had the same life transforming experience. My life became much more settled, stable, and productive through faith in Christ. The Bible provides a record of such people. It is one of the reasons I cherish it. Trusting in God doesn't mean not doing anything. It brings assurance that good can win out in an imperfect world, providing additional strength. Surrendering to God means also surrendering to a certain way of disciplined, caring, productive living. Trusting in God provides hope and peace when circumstances are beyond my control or influence. In prayer and worship, I find a sense of creativity, awe, and satisfaction.

Martin Luther said it well, if I may paraphrase, "The question is not whether we will worship, but rather at which altar we will worship." Human beings are innately spiritual. They have a deep seated need to serve a cause higher than themselves. You echo that in your passionate, virtually religious commitments to certain causes and higher principles, e.g. justice.

You have clearly devoted your life to causes higher than yourself, to service to others. Why be so mean spirited to those who exercise a different spirituality, who define ultimate meaning through a different lens? Religious faith is not stupid or irrational. Christian faith, theology, and ethics have had a profoundly positive impact on the best aspects of our country. Read Washington and Lincoln. I am very grateful that the Declaration of Independence roots inalienable rights in nature's God. There's an absolute I believe in. I prefer them resting there rather than with the government, a board of experts, or a committee of corporate executives.

I find myself often agreeing with you on issues. But you needlessly antagonize folks of my ilk, who are practical allies, with your rants on religion. Take a deep breath, be cool. You may even be able to find some things to like about the Christian faith and the Bible.

Thanks for reading my comments.

frankly speaking

Marty Nemko said...

Dear Anonymous,

I am, of course, glad your faith gives you peace. Indeed, it does so for many people. And for that reason, perhaps I shouldn't have included "God will provide" as an example of irrationality. But I find myself--to my own detriment--feeling compelled to speak my truth, even though, as you say, it costs me friends, adherents, and yes, jobs.

ST said...

I think belief in God is a psychological adaptation inherited through evolution. It gives people peace of mind. Thinking that there's nothing out there is scary. Some are more prone to religious inclinations than others.

What I don't like is when religious people push it on other people and try to find converts. "Have an open mind", they say. Little do they know what having an open mind means.

Global Warming.
Unfortunately, this is not a political or economic question, it's a scientific question, and the question is not if, but when. The when also applies when we're going to run out of petroleum. Science if self-correcting. If indeed, there is "no global warming", the evidence will start presenting itself over time.

There was a good PBS special on showing how China and Europe are going to great lengths to find cleaner ways to burn carbon-emitting fuels. Meanwhile, the USA's energy policies swing with the election cycle, they said.

Here's probably the best recap I've seen in recent months:
"How we know Global Warming is Real and Human caused"

As far as the link about no warming in the last 11 years, of course right away, I see the two charts completely out of scale from each other. Well, what if we have another uptick like after the 1945-1970 period? Cherry picking the data.

The main problem is it isn't short term enough for our typical American to grasp. "I want it now" is better than taking a good look at the long term and even caring. If there is nothing else out there, we should probably care a little more with what we actually have now.

I'm not sure the probability calculation works, unless the events are independent from each other.

Maria Lopez said...

I agree about the probability calculation. The need not to burn fossil fuels is dependent on whether or not the earth is warming, whether or not change is human caused, and whether or not the damage will be catastrophic.

Of the three only the third is at all political or genuinely controversial, the other questions are ones where the answers are known although not accepted by all.

One thing that I'm surprised Marty didn't bring up since it is indeed outside the accepted Narrative is geoengineering.

The word has gotten such a bad odor that a kooky Democratic congressional candidate declared his opposition to it in a pamphlet he produced. However, he didn't know the meaning of the word and rather than equating it with deliberate manmade
global cooling, he thought it had to do with biological and chemical experiments on unwitting US citizens.

TahoeJohn said...

Marty - this blog was one of your best. I come from a trading background and have studied
the math and psychology of risk for most of my adult life and your examples were spot on.

I am not a religious person but I am afraid that the religious discussion is so emotional and so
ingrained in many of your readers' minds that too many of them stopped reading when you got to that part.


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