Interpreting The Evidence on Human Reasoning

I recently read two largely unrelated articles. Much like french fries and milkshakes, they go together well even though you might not expect it.

If you have a technical bent, read this whole article. It's about a guy building electronic brains, and it's fascinating. If you just want the salty-sweet juxtaposition, just read the first question on the third page here.

Now read this article on the recent friction between science and politics.

What's interesting is the fact that the observations of the first article cast the second article in a disturbing but understandable light.  As thinking creatures in what some assume is an age of reason, it's comforting to think of reason as being somehow inherent in ourselves.  In a democracy, it's most depressing to conceive that your voting peers might lack that spark of reason that we've hoped drives a democracy towards informed legislation.

The sad truth appears to be that the brain is really just a powerful, dynamic pattern-matching system.  While this makes it very generally applicable, it also means that it's possible to train it to match in a way that is wholly incompatible with logic and reason.  I guess nurture wins out of nature on this one.

What I find to be most interesting is that this is a clue that many AI researchers are focusing in the wrong places.  It's pretty clear that achieving intelligence in a human sense will have to be highly statistical in implementation.  While I do sincerely hope that we can someday build a logic processor that is based entirely on semantically-infused logic, I wonder at how such a machine would contrast with humanity.

What If There Were No CDs?

I was just retagging some of my music.  I ran across an interesting set of unexpected issues with Sgt. Pepper's Lonely Hearts Club Band (by the Beatles, duh!).  The end was cut off of some of the song names, so I wanted to fix it up.  I looked up the album on the Internet and began fixing song names.  Immediately, I noticed that the number of tracks in my list didn't match the number of songs on the record.

After some headscratching I realized that the songs were listed by side of the record.  After smacking my forehead, I started thinking about how iTunes indexes songs.  It has metadata for multiple discs, but not different sides.  My immediate thought was, "What if there had never been CDs?  Would there be extra data for which side of the disk the song was on?"

After pondering this deeply philosophical alternate history, I noticed on the above Wikipedia article that the original release had some interesting quirks.  Specifically, after the last song was a 15 kilohertz tone designed by John Lennon to annoy people's dogs, followed by some jibberish studio noise put into the gutter track.  So, the original record would end by annoying your dog and then playing gibberish endlessly.

Apparently the CD re-release only repeats the noise eight or nine times and then fades out, since CDs can't really simulate an infinite loop like you get out of the gutter track.  Similarly, I'd imagine that the 15 kilohertz tone might not survive the MP3 encoding process.  Even though the tone and gutter track magic are really just tricks of the vinyl, it's interesting to think that these aspects of that album are effectively forever lost on future generations of Beatles fans.

Oh, well.  Endlessly repeating gibberish probably doesn't have much of a place in the world of iPod playlists.  Still, I can't help but feel that a little something is missing...

No to Bail-Out; Yes to Buy-Out

Leave it up to an opinion column in Bloomberg to perfectly articulate what I've had brewing in my head.

I kept thinking, "How does putting money into the banks fix the problem that these assets are overvalued?"  Unless we are buying these securities, and then writing them down to a corrected value, nothing is fixed.  It's quintessentially anti-market.  The properties aren't allowed to go down in value.

Ron Paul hit it on the head, it's price-fixing.  As with most of Ron Paul's theories, I don't completely agree with his solution (i.e. the Federal Reserve and paper currency is the root of all evil).  I think that there's a balance to be struck between letting banks set prudent interest rates and preventing a predatory banker's trust to form again.  Pure-free-market types often forget that freedom, liberty, and justice are rarely selected by the market.

At any rate, it appears that this has been solved before by buying an interest in the bad securities, rather than just extending the failing banks more credit (i.e. letting them dig the hole deeper).  Despite a deep understanding of all of the issues, this solution already is a favorite on Main Street.

The right solution seems to have worked for other people before, where the wrong solution didn't work so well.  Of course, they eventually figured it out and appear to have learned something in the process.

Sidestep The Little Bits of History Repeating

Is it just me, or does this make anyone else nervous.

Read this.

Then read this.

Deja vu?  Is it just me, or is this exactly history repeating itself.  The most disturbing confluence is:

• Cheap Credit
• Bad Loans
• Reinvestment in Real Estate

Basically, credit gets cheap.  Banks compete too much because of the cheap credit.  Bad loans are made because of the competition.  Given the cheap credit, people reinvest in the real-estate, essentially refinancing themselves so it is never paid off.

In that environment, it was just a matter of time until bad loans creeped unacceptably high.  Even worse, naive interpretation of loan failure statistics gave a false sense of security.  When times are good, the bad loans look okay because they aren't failing.  As soon as the economy contracts, everything goes down like a house of cards.

The crazy bit is that the issuing of bad loans is incentivized.  It's a Loan Officer's job to make loans, under-producers are fired, banks compete, and the process of elimination wipes out any Loan Officers with restraint.  As the banks each try to get an edge, they find ways to creatively relax loan requirements.  When all is done, whoever loosened the loan requirements is at fault, leaving the investors in the bank, possibly the depositors, and the loan-holder picking up the pieces.

While it would be nice to point the finger at the Loan Officers, company boards, or some middle management, I bet that most of the time it wasn't even a single person, but a group of people working uncoordinated.  Sometimes it would have been a large investor who was overly pushy trying to squeeze out some more stock value.  Other times it would be a loan officer struggling to cram in a deal that was already borderline.  Maybe it was a bank manager trying not to come up on the bottom of the list.

As usual, the wisdom of the market can make major things happen, but it doesn't prevent abuse.  It's a raging inferno that's just as content to power our economic engine as it is to blow the engine apart.

At some point all of Wall Street was silently overrun with people who's predictions, worse-cases, and guarantees weren't based in reality.  They should have been the last line of defense.  Some auditors or fund managers should have raised a flag--and their management should have taken them seriously.  I have a hunch that nothing currently being considered can really address that--the human tendency to avoid bad news runs deep.

Preying On Youth?

Being fairly unconventional in my youth, I have some exciting stories.  One time I spent my birthday money on "Subliminal Tapes".  The theory was that they had hidden recordings that played directly into your subconscious.

That sounded like it made sense to me (being about 12), so I purchased a few.  Two that I recall were one to improve my bowling game (I was in a kid's league at the time), and one titled "Do It Now!".  Even at 12, I knew I was a procrastinator.  It was a harmless purchase, even if a naive one.

At that point I clearly had the idea that I was spending my money, and what it meant.  A few years earlier, not so much.  I had previously fallen victim to a much more insidious scheme. In the later case, "Subliminal Tapes" were intended to play upon the naivety or curiosity of adults--people who should know better.  People who would know to read the fine print.

Here's the scenario.  Being a 10-year-old, I heard a commercial on the radio for a phone number that would get me a message from Santa Claus.  How could I resist?  I mean, I wasn't so certain about his existence at the time, but I thought it sounded like it was worth calling.  Of course, there was some boilerplate about having your parents' permission, but it obviously didn't (and wouldn't) have a huge impact on a 10-year-old.  So I called this number.  I'll give you a hint, it started with 900.

That's right, instead of a 900 number being used as God intended, for audio porn and hookup lines, it was instead being used to drain the wallets of unsuspecting parents.  So, after about ten calls to a repeating automated message, my parents figured it out, talked to me about it, and I learned that I had been a party to their fleecing; and that Santa Claus doesn't have a phone.

Not cool.  In fact, later, these people were pretty much categorically sued into the ground by various States' Attorneys General.  It stands under the some very old, and very sound, legal reasoning--i.e. if you put a cookie in a bear trap in your front lawn, you are liable when a child gets caught in it.

These days, I'm a recent parent.  I think it's important to supervise my son and my step-daughter.  A kid can't raise itself.  Television is not a substitute for supervision.  That said, I don't need some greedy schmuck making parenting more difficult either.  As an analogy, just because I don't let my kids smoke doesn't mean that I'd be thrilled about Mickey-Mouse-themed cigarettes (note, Mickey Mouse is wholly owned by the Disney Military-Industrial Complex).

You can imagine my dismay when I saw a certain commercial on television.  Was what I saw an attractive nuisance?  No.  Was it designed to prey upon parents who raise their children with a television?  Yes, it was.  In fact, being shown on the "Teen Network" was direct, if brazen, targeting.

What was it, you ask?  It was so simple, and yet unoriginal, that it must be the work of some sort of greedy idiot savant.  Imagine the Magic 8-Ball accessed via a cellphone text message.  That's right, you text your "question" to "Ask The Phone", and you get cryptic, generic responses back.

If you read the fine print, it says you must be 18+, or 13+ with the "wireless subscriber's permission".  Oh, and it's $9 per month for 5 questions, plus $2 each additional question (with varying differences for different carriers).  Wow.

Should this be outlawed?  No.  Should these people be shut down?  Not directly.  Should it be possible for a small, determined group of parents to make these people suffer in court until they closed down?  Very probably.