27 Comments
Jul 3Liked by eigenrobot

Perhaps part of what's happening here is that certain beliefs about the world become politically coded before there is actually enough data to make a judgment. Then, as data becomes available, it gets dismissed as misinformation, and if one were to believe it then that would undermine one's identity.

I think some of the same mechanisms were at play with beliefs about the origins of COVID and the safety/efficacy of the vaccines.

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author

this seems tidy and correct to me, i wish id been coherent enough to think of it, and i'll try to turn it over on the other side of next kiddo's arrival 🙏

it seems correct but i'm straining for some kind of generalization

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No rush to respond, but I've been mulling this over. I think this might be a case where the specific is more interesting than the general? People struggle to confront, uh, inconvenient truths, but that isn't a new phenomenon. These particular pockets of epistemic quicksand emerge from the complexity of our social environment, which is increasingly mediated by technologies that accelerate and amplify information.

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Great piece!

While I agree with you that journalists have failed us generally, I wonder what the local optimum might be in this case. Let's say you're a journalist and you want to break the "the president is senile" story. NYT won't publish it, WashPo won't publish it, WSJ might, but then NYT and WashPo and a thousand others will publish an article saying that your article is fake and all your sources are GOP and the videos you cite are doctored.

On a level above that, it is fascinating to me to watch this preference cascade play out. I think it's probably bad that we can have preference cascades on this level. But that doesn't make this one any less fascinating, and I thank you for writing your take before it is fully played out (unlike all the cowards).

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author

Thanks :)

>Let's say you're a journalist . . .

No, I agree it's a hard problem. I don't think they should or could have acted too much differently; as I hoped to demonstrate above, the actual professional output of journalists was actually more than sufficient to make the case to anyone who was monitoring the output.

The failure I'm identifying was about their inability to connect the dots internally, and ending up shocked to see the conclusion of that inference when it played out openly.

I guess they might have done something like written more longform pieces trying to systematically review that evidence, rather than presenting it in dribs and drabs as it came out. This might have had more of an effect on establishing the "narrative" that, ultimately, proved to be correct. But I get sort of nervous about this sort of thing, too.

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It's quite simple: if you were the sort of journalist who would struggle with this decision, you'd never be hired by NYT, WaPo, etc in the first place. There are powerful filtering mechanisms embedded across our society to weed out any overly-independent-minded troublemakers long before they'd get to that point.

It was always this way, of course, but with the layoffs to investigative journalism over the last decade and the political purges of 2020, it's double-plus so now.

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Curious about the Tanta post, I asked chatgpt (with your instructions) why it could have gone ignored.

"the message had a strong anti-big-corporation tone, which contributed to it being dismissed by many. its cynical and sarcastic delivery made it easier to brush off as just another "big companies bad" rant."

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i don't know too much about the social context of finance in '06-'07, but one other thing that feels likely to me is that there was just too much money to be made, if you could leave someone else holding the bag. it's hard to reason past that.

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This does seem to be the mechanism behind all bubbles, after all.

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Well said.

I love the litany of tarski in particular. A dead-simple statement that reveals, by contrast, how convoluted our default relationship to truth is.

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Jul 3Liked by eigenrobot

Thanks for this

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Jul 3Liked by eigenrobot

Scott Sumner's position is that the 2008 crash was caused by the decision of the Federal Reserve to contract in response to high oil prices they thought were signs of inflation. Therefore, unless you knew about the Fed's decisionmaking, it couldn't be predicted in advance. There are a number of economists who have concluded years in hindsight that there was no bubble in housing prices:

https://www.econlib.org/archives/2017/08/dont_be_early_i.html

Kevin Erdmann has probably been the one who has written the most on the topic:

https://www.econlib.org/kevin-erdmann-was-right/

https://kevinerdmann.substack.com/p/reassessing-the-role-of-supply-and-c36

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I don't think that the main contribution from CR was about predicting the recession specifically; that wasn't their special expertise nor what they were closely monitoring on their blog, IIRC. Rather, they were just on the housing market and on the practices of finance in and around that market, where frankly they were spot on.

Whether there was a "bubble" in the housing market is secondary to that. I've actually done a lot of detailed looking into mortgage finance from 2003-2008 in a professional capacity at the Fed; eg, although not necessarily maximally-salient here, the most important work was internal:

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2190606

While yeah a collapse in housing prices and the downstream effects on the ability of mortgage borrowers to make payments and on their incentive to do so were _bad_, the core issue is just that a huge number of loans were made to people who were unlikely to be able to pay them off even under the best of circumstances.

I'm not sure I made that clear in the post ofc but this wasn't super core to my main point.

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That's part of what Kevin Erdmann is arguing against. He's saying credit got choked off for home-buyers. This is from a comment he posted in the post my last link above directs to:

> Since so many people either ignore or see the changes in credit access after 2007 as a return to sanity, it simply isn't a factor that they can acknowledge as a change agent. So, they blame the deep decline in minority homeownership on the bubble. Those people were unqualified to have mortgages, and so the decline was an inevitable result of the boom.

> The decline was almost purely due to the crackdown on lending that reversed those gains, which both locked out new buyers and devastated urban working class property values. And, yet, so many people now conclude that those institutional improvements in lending in the 1990s were the problem.

> It's very hard to convince them otherwise because there are plenty of anecdotes of borrowers in 2005-2007 who quickly defaulted, but the truth doesn't require ignoring those anecdotes, it just requires realizing that they were a sideshow unrelated to more important trends.

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This mixes up several issues. Why do we even care about bubbles?

Erdmann claims that the price of houses was driven by the availability of credit. For many purposes, that's conceding that it was a bubble. It certainly was fragile, vulnerable to credit market decisions.

Is "devastated urban working class property values" a bad thing? Low prices are good. If reduced credit destroyed jobs causing people to default on their mortgages, that would be purely bad. But the failure of the insolvent to refinance is largely good. The creation of new mortgages is largely neutral.

The defaults were not sideshows. A single default is a huge cost, not only a financial cost to the parties involved but usually a material cost of an unoccupied house. But the systematic defaults that congested the courts are not a matter of "anecdotes"!

If the price of housing is driven by supply (regulation) and demand (credit), then perhaps the people who bought houses were correctly predicting the future price. Is this a good thing? If both supply and demand are dictated by the government, rewarding people who predict the government sounds corrupt. If the middle class gets all their money from the government, expanding that to the poor is making things more fair, but materially worse.

There is a question of point of view. If you are speaking as if you can influence the government, you should say that this bubble demands the legalization of building. If you treat the government as an alien mind, then you should not complain about its actions driving housing prices, but only worry about the fragility of individual loans, from the both the perspective of buyer and seller.

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He doesn't view high housing prices as being an inherently good thing. He regularly writes about supply constraints on housing as a problem.

> For many purposes, that's conceding that it was a bubble.

Going back to the Scott Sumner argument, if prices rise past a previous peak, doesn't it show that previous peak wasn't a "bubble"? Wouldn't it just be as logical to conclude that the trough in between was a "negative bubble"? https://www.themoneyillusion.com/what-is-a-bubble/

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Jul 3Liked by eigenrobot

Heartwarming that you wrote about Bill and Tanta. Quite possibly the best Econ blog ever. I spent hours reading Calculated Risk back before the GFC. Here is the link to the Tanta compendium.

https://www.calculatedriskblog.com/2008/12/compendium-of-tantas-posts.html?m=1

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<3

Bill and Tanta were essential reading for us at my regional Fed branch in 2008. That summer was a bewildering time for all of the economists; in August and early September in particular we mostly spent our time trying to understand what was happening in markets, very quickly. The Research Division mostly spent its time on fairly abstract economic macro and finance research, and CR was core to our getting up to speed on the details of mortgage finance and its derivatives.

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I see your spelling of lorek.

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author

oh no

i stole the text from what i think was an optical scan of the novel someone had uploaded. all of the Is were ls of course. i thought i'd gotten all of them changed because (1) i'm slightly OCD about text aesthetics and (2) i figured someone else would check. but apparently not :(

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As someone who was surprised, I think a big factor was normalization of deviancy from the belief that Biden had lost a (1) step, but wasn't seriously impaired. If your belief is that Biden has slipped some but wasn't senile, then all the little pieces of evidence don't necessarily disprove your theory, it's all still compatible with him having slipped just a bit. Then the debate happened, and it's very obvious Biden has lost a lot more than one step.

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While it is true that major news outlet hinted that Biden was showing signs of age-related decline, there were more articles like this that incriminated those that believed in such things.

https://www.nytimes.com/2024/06/21/us/politics/biden-age-videos.html

It seems like this meta-commentary on other coverage bears a lot of blame. Rather than refute the implications directly (because they couldn't), they attack the sources, which are, sometimes fairly and sometimes not, susceptible to attack. Unfortunately, though, truth is not always borne by respectable messengers, and stories that focus on the messengers rather than the subject seem more apt to go astray.

Have newspapers always been this eager to provide meta-commentary? I'm not sure. It would be interesting if this is a new trend. Perhaps it's one that should be reversed by revisiting some journalistic practices. If you don't think that other media sources are leading their readership to correct conclusions, publish your own story, and not merely a critique of those sources. Doing so would have revealed the gaps in the contrary story, which may have led these journalistic institutions, like the New York Times, to do some questioning. Or, more likely, given space to the many good journalists at the Times to do that questioning. I have to imagine it's hard to write a story about Biden's decline right after your colleagues have published a criticism of people who say such things.

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Jul 9·edited Jul 9

Lemme throw a few thoughts at you.

Baseline: Voted third party in 2020, I never believed he was totally fine, I never believed he was as bad as his worst critics claimed, but I think the well was poisoned by a lack of objective coverage, and I guess I just didn't think it mattered as much as everyone said it did.

1. For me the most obvious lesson is the sheer power of how what you want to see and believe shaping your view of reality. You shop for a blue car, you see blue cars everywhere. You want to believe/not believe in God, you work around the clock to justify it. You want to think Biden is fine/senile? You'll find ways to justify that. People overlook the flaws of people that they love or like all the time; it's an extremely normal and human thing to do.

2. It's pretty much impossible for anyone to be objective here. There's no Mendoza Line for Presidential fitness; there's no definite age when old people stop being useful. Meanwhile, anyone who wants to talk about this either _really_ wants him out or _really_ wants him to stay. If the culture war is a courtroom, some people are litigants and some are judges or juries; if you're the latter, it's very hard to parse all of that.

3. I share Scott's view of "I guess he used the magic drug again but we’ll get him next time" - people kept saying he was senile, then I'd finally tune in, and he'd always be...you know. Fine.

4. I just lived through a Senate race where a literal recovering stroke victim beat the other guy. There are a few reasons why, but a few factors are in play

a. Sometimes people really just don't like the other guy

b. Government is a massive, sprawling bureaucracy: one cog in the machine with some deficiencies probably won't break it, and the machine run on inertia for quite some time

c. Candidacies, on the other hand, are more like trains rolling on a track. A ton of force and momentum is involved, and one bad section of track (that is, changing candidates; sorry, not a fully refined analogy) can derail the whole thing

c. Once you're out of the primaries, "D" and "R" matter more than people for a huge chunk of the electorate. You're electing Biden or Fetterman, sure, but they're gonna bring on people who generally share their vision and will work to implement it. Biden might have to go to bed early but if he can make his appointments, set the policy agenda you want, and cover the decisions only he can make during the day...I guess plenty of people can live with that?

Speaking of primaries: 92.8% of the popular vote in the 2020 primaries went to Biden (aged 77), Sanders (78), Warren (71), and Bloomberg (78). No one under 70 got more than 3% of the popular vote. So, whatever concerns people have about age/fitness, they clearly took a backseat to other things that were more important to voters. As long as those issues still matter more than age, worsening age issues won't change the math, especially when trying to change the candidate results in a host of unknowns.

If that all seems a bit feckless or copium-huffing...sure. Fair. But I think all of that softens the blow of Biden losing a few steps.

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“This is the easiest empirical exercise imaginable. If you are trying to evaluate whether an eighty year old man is senility-adjacent for the purposes of holding high office the burden of proof ought to be on the people making the case that he is not.”

I liked that point ☺️

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I think you're missing the causal analysis of the psychology here.

Some people were performatively and inauthentically surprised BECAUSE they had been performatively-and-inauthentically supporting the idea that Biden's mental health was perfectly OK in the first place.

Then they changed their mind about what the best performance would be in a direct and pure way based on new social facts that they couldn't manage or control, and now we have new performances.

When these people "pretend to be surprised", if we accept that they "were really surprised", we would then be GOING ALONG WITH THEIR LIES...

[[ 2058 words explaining how the system of lying and posing and calculating and socially fractionating tends to work was TRIMMED because "Please type a shorter comment".]]

...One deep problem here is that Nth Order Players do all of this shit by default... like by college nearly everyone *can* be a Players... and some of them think it is bad and others good.

In fact, some of them think that "flocking with the flock" IS the essence of "morality". And this isn't even something that wise and good rulers would or should disabuse everyone in their country of thinking (and least if their country lacks immortality, and will constantly have "yet another influx of 19 year olds who are allowed to vote" (this way of implementing "the highest morality they can see" is better than simpler ones that children do, and is a natural extension of children's morality)).

It is GOOD for large groups of non-immortals to be able to "stay together" and "work together" and "grow up together".

Having people who think that "aligning with the aligned people is the essence of morality" is OK... so long as that isn't >50% of your voters... Or if it is >50% of your voters (which I think is the case in America?) then you had f-ing better have some highly skilled 1st Order Players who understand the stakes of their performance and who Actually Care.

AND... all of this is why TikTok should be banned or else taken out of the control of the CCP, who hates America and holds Americans in contempt, and would be happy to control HOW a large fraction of our voters flock, and WHO they take cues from.

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Agree; taking performative surprise at face value from people who live and breathe preference falsification might be a bit foolish.

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“May I believe/must I believe it?” comes for us all. Scott’s rep, and the rationalist movement generally has taken several deserved hits of late and will accordingly be discounted going forward.

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