On Morning Edition this morning, there was a story about the annual Conservative Political Action Conference which contained a line which made me guffaw:
Representative Paul Ryan: "[rant on spending in stimulus plan]...$400 million dollars to study sexually transmitted diseases!" [rant on about how his daughter is more responsible that President Obama]
Oh my! The horror. Actually spending money studying diseases that infect 65 million U.S. citizens. Yes Rep. Ryan, it would be a real shame if that money improved the lives of those 65 million people (and maybe it might even help, you know, those outside of the United States as well...I know, I know blasphemy.)
Now I'm all for the Republican's ranting on the stimulus bill and spending, but really guys, why do you keep picking on the scientific studies (Jindal's "something called volcano monitoring", McCain's Bear DNA)?
This guy doesn't care about health, government spending, or STDs. He just wants people to be punished for having sex, even if it means that 'innocent' people will be punished too, such as in the case of a cheating spouse, rape, or babies born to infected mothers. To Ryan, it really would be a shame to help 65 million Americans when he thinks they should be punished.
Jindal's "something called volcano monitoring"
Jindal's an utter laughingstock, but that's par for the course in the state that produced such winning politicians as David Duke, "Fat" Harry Lee, and Huey P. Long. At least Jindal isn't corrupt - yet (give it time).
Curing herpes alone would certainly be worth all the $400M and then some, independently of HIV and all other STDs.
I'm a long time fiscal conservative, I voted for Bush, and I have to say... that speech was atrocious. And yes, the modern GOP is a laughingstock. For the sake of the country, there should be at least some intelligent ideological opposition to Obama's plans and populist rhetoric. I certainly haven't heard it.
Apparently they don't want to cure STDs because they're *good* for babies born out of wedlock, because babies infected with STDs make the mother feel guilty for her "sin":
I think it has more to do with something that Milton Friedman once said, you can't do good with other people's money. That is, to use other people's money to try to do something good, you first must take that money away from the rightful owner. That is, by its very essence, a violently coercive action. Secondly, those who spend other people's money do a poorer job if it than a person who actually spend their own money (i.e., get more bang for the buck). The first negates the goodness of the result, as the means can never justify the means used to accomplish something. The second just reflects on the fact that when someone gets something for nothing, it turns out being wasted, to one degree or anther.
"... you can't do good with other people's money..."
I'll remember that the next time representatives from our city churches come by in their annual attempt to extort money from me.
Depends whether the GOP is following Dick Armey, or protecting girls against the Dick Army.
"Milton Friedman once said, you can't do good with other people's money." Hmmm ... isn't that the kind of catch-phrase that serves to inhibit thought, rather than stimulate it?
I had the instructive opportunity recently to spend considerable time in a society without money (actually, I was stuck in the Outer Islands of Micronesia, and couldn't get back).
Of course, there *is* an economy in the Outer Islands -- it is an economy of trust, exchange, and obligation, that is embedded in a fragile atoll-centric ecosystem in which many resources are scarce, and social collapse (Jared Diamond-style) is a very real possibility on any given atoll.
When you think about it, this same social foundation underlies today's global monetarian economies. Except that in the Outer Island, it is harder to hypnotize oneself with Friedman-esque libertarian delusions.
The Outer Islanders perceive Friedman-style economic analysis as being dangerously delusional, to the point of becoming "dark" comedy. They are right.
Here is a stone-age professor (me) and his son on their way to a high-level meeting of the Satawal Navigation Committee. The Satawal committee meetings differed from my University's favulty meetings mainly in the markedly higher level of competence, engagement, and foresight that was evident on Satawal.
Here is Satawal's arxiv server -- sailing instructions on how to navigate a sailed canoe to an (uninhabited) turtle-egg atoll about 100 nautical miles way, where vital protein can be obtained. Needless to say, this information is stored upon a medium far more imperishable than computer bytes.
To speak plainly, libertarian-style economic analysis utterly is useless on Satawal. IMHO, it is equally useless for understanding global economic issues.
Dave, the objection is not to funding STD research, but to including said funding in a "economic stimulus" bill that was so "urgent" that we had to bypass normal congressional debate to pass it.
I'm a supporter of public funding for basic scientific research, but such research hardly qualifies as "shovel-ready" stimulus. Most likely, it will be a year or so before any of that money is spent, and probably close to a decade before there are meaningful public health benefits. I'd wager the volcano-monitoring takes even longer to pay off.
The right thing to do would have been to split the stimulus in to a package of truly stimulative short-term spending, and a separate longer-term spending bill. Only the former would have been deserving of extraordinary haste in passage.
The fact that you don't see this suggests to me that you're either blinded by partisanship, or have given very little thought to how stimulus spending is supposed to work.
The really surprising thing about the "stimulus" debate---insofar it engages the science and engineering community---is how *little* scientists and engineers are saying about their own professional role in addressing these challenges.
Between faith in god, faith in markets, faith in political ideology, faith in theorems, and faith in science ... well ... aren't most folks waiting and hoping for self-correcting mechanisms to kick-in?
These faiths are good ... but they are insufficient in themselves. As Martin Luther King famously put it: "God is on our side, but he is not going to do all the work."
"God is on our side, but he is not going to do all the work." Hmmm ... isn't that the kind of catch-phrase that serves to inhibit thought, rather than stimulate it?
The maxim "God is on our side, but he is not going to do all the work" translates into a question that is indeed thought-provoking: Toward what objectives should the science and technology community be working?
This is a tough question ... on a planet in urgent need of one billion family-supporting jobs, the creation of each new enterprise as large and prosperous as (say) IBM---which has 3.8x10^5 employees---carries us about 1/3000 of the way to the goal.
This motivates a question that we ask each of our incoming engineering students: "How would you create one billion jobs?" Their answers are varied, and often highly ingenious.
Paulina Borsook wrote a book about how the default political stance for Silicon Valley techies is Libertarian -- denying the role that Federal Government and California state government had had played in creating their industry and environment.
Paulina's parents wanted me (when I was a teenager at Caltech) to tutor her in Calculus, but she seems to have done just fine.
How do we create 10^9 jobs? Start by realizing that, though more than half the people in the world live in cities, roughly half of all jobs are still menial Primary Occupations -- fishing, farming, mining, logging, otherwise extracting raw materials from nature, as opposed to Secondary (processing them per the Industrial Revolution technologies), or Tertiary (motsly white collar jobs for for a Consumer Society) or Quarternary (science, art, government, education, ...)
So the issue is in shifting the distribution of jobs between these 4 levels of employment.
"I'm a supporter of public funding for basic scientific research, but such research hardly qualifies as "shovel-ready" stimulus. Most likely, it will be a year or so before any of that money is spent, and probably close to a decade before there are meaningful public health benefits. I'd wager the volcano-monitoring takes even longer to pay off."
I call balony on the volcano-monitoring not being stimulating: http://scienceblogs.com/greengabbro/2009/02/the_stimulating_effects_of_…
I also call balony on the STD work not being stimulating: "This initiative includes grants to communities for health promotion, immunization programs, health screenings and counseling, smoking-cessation programs, scholarships and loan repayment for health professionals, research, and evidence-based disease-prevention strategies,â Mr. Harkin said in touting his work." Do you really think that those who can get this pile of money aren't willing and able to rapidly spend it? Most professionals I know involved in this kind of work are eternally at the poverty line and to think that this won't be spent quickly seems to me a big assumption on your part.
As someone who actually spends the money in those science grants that you say are not "shovel ready" I call bullshit as well. Dude, trust me I can spend that money faster than you can say "STD".
And if you don't think the Republican's have a strong anti-science agenda you really haven't been playing much attention (I'd call you blind, but that doesn't seem nice.)
Oh, and I am happy to be a partisan these days! The alternative is to associate myself with a party which has left America in shambles. (Queue "but Democrats were in charge of Congress!", "Bill Clinton is at fault for sleeping with that woman!", "thay raising ur taxes!" in 3,2,1...)
To second Dave's comment ... but sounding a more moderate note ... the scientific community has always numbered among its members committed political conservatives like John von Neumann, whose 1956 essay Can We Survive Technology? is a classic of foresighted political analysis having strongly conservative foundations.
For some unknown reason, genuinely thoughtful conservative voices like von Neumann's have mostly fallen silent in recent decades ... while at the same time "the worst are full of passionate intensity."
Come on Dave--how fast do you think that money will actually get to scientists? The grant process is pretty damn slow. In a perfect world, that money would actually get to researchers quickly and at least some would get spent within the next 6 - 9 months, but I very much doubt that's the reality.
That is the real issue--anything that takes more than a year to get spent can't count as short-term stimulus.
I know for a fact that it is getting out very fast (at least at the NSF).
There are always (a) pending grants, many of which do not normally get funded (20 percent grant funding rate, you know...For example I continuously have a proposal pending at the NSF), (b) supplemental proposals to get money into current grants. In fact my understanding is that it is a requirement that the money be spent quickly. So think about it this way: either it does get spent quickly or it won't get spent. Don't you think nearly every experimental physicists you known could spend money on equipment right out of the door (time to get myself a Ti-Saphire laser :) )
The biggest problem I see is not getting the money in the coffers and spent, but how the universities are going to deal with this. For example more grant money means less graduate TAs which, combined with severe state funding cuts, will lead to a real problem on the teaching side of the equation for public schools. (Note that in many ways this represents a transfer of wealth from the federal level to state level.)
Further I would argue that the focus on "one year" or less is prefaced on those who believe that this will be a shallow recession. But if this isn't the case, does spending *now* really matter as opposed to spending *next year*? My reading of the historical record of the great depression was that it was short sighted of FDR to think his initial foray into "stimulus" would be enough, and his deficit reduction greatly prolonged the great depression.
I agree that, to the extent that this actually gets out quickly and goes to high-quality grant proposals, it does count as short term stimulus. I'm also open to the idea that we'll need longer-term stimulus (I agree this won't be a shallow recession).
The issue is this:
1) Much (probably most) of the stimulus is actually long-term spending.
2) It's inappropriate to use extraordinary measures (e.g., suspension of normal congressional rules and debate) for something that isn't a time-sensitive short-term stimulus plan.
As for the first point, I suggest that you look at the following letter on the Congressional Budget Office's site (pages 7-11):
While STD funding isn't called out directly, you can see that the majority of NIH stimulus funding won't be spent until 2011 or later. For the NSF, less than 12% of its allotted funds will be spent in 2009. (By the way, it's also worth reading the first part of the letter, on the short-term and long-term effects of the stimulus plan, although not directly relevant to my argument.)
On the second point, my position is that it is underhanded to ram through long-term spending under the guise of an emergency stimulus bill. I'm not naive--both parties do these kinds of things, and the Republicans did something similarly underhanded (in principle, if not in scale) when they got the REAL ID Act passed as a rider to an emergency supplemental defense appropriations bill.
Given this, Jindal was not wrong in denouncing a lot of the spending in the stimulus bill as being inappropriate in that context. Depending on whether he supported tacking Real ID onto the defense bill, Jindal may be a hypocrite, but I presently lack the information to make a judgement about that. (I know he voted for the defense appropriations act, but that doesn't mean he was happy about the included Real ID provisions.)
Dave, I'd love for you to get a new Ti-Saph laser out of all this (that would probably be a better use of funds than 98% of the stimulus will be used for), but I doubt it's gonna happen this year.
What bugs me is all the reflexive Republican-bashing on an issue where they actually do have a very good point (i.e., the "stimulus" bill has been misrepresented). There are plenty of blogs out there for blind Bush-bashing; I expect more from the Pontiff.
Travis, isn't the stimulus bill only partly about money ... and mainly about building confidence?
It was Warren Buffett who said (from imperfect memory) "Confidence in institutions is like oxygen. If you've got it, you never think about it. If you don't have it, within five minutes it's all you think about."
What you call "Republican bashing" is, mainly, a well-justified assignment of blame not to a party, but to an ideology---the grotesquely thoughtless Limbaugh-esque ideology of the far-right---an utterly disastrous ideology that has severely corroded America's confidence in its own institutions.
At the end of the Bush administration, how much confidence did Americans repose in vital institutions like banking, finance, health-care, manufacturing, military security? Mighty little confidence was left; this loss was an utter disaster.
With specific regard to mathematics, science, and engineering, how many people reading this blog, at the end of the Bush administration, still had confidence that the technological sectors of our society were in good shape? Mighty few mathematicians, scientists, and engineers still had that confidence; this loss too was an utter disaster.
How many people's confidence is restored by listening to Rush Limbaugh? IMHO, no thinking person's confidence is restored by Mr. Limbaugh's far-right rhetoric.
"There are plenty of blogs out there for blind Bush-bashing; I expect more from the Pontiff."
Ha that's funny. I rarely expect much out of this blog besides a good place to waste time :) And it's not blind Bush bashing, it's "I saw what that jerk did with my own two eyes" bashing! And don't worry, there are already things I want to bash about Obama.
Thanks to the CBO document: that's a fun read.
But to your main points:
"1) Much (probably most) of the stimulus is actually long-term spending."
To answer that we have to figure out what we mean by "short term!" First of all most of the "spending" occurs in the first three years, peaking in 2010. (Note that these are fiscal years, so 2009 is really, up to the summer, i.e. immediately out the door.) The tax impact (which is a significant portion of the bill) peaks in 2010, and is vastly weighted to the first two years. The impact on the deficit is 2009: 185B, 2010: 399B, 2011: 134B, which means 91 percent of the total impact is in the first three years. Note that I certainly agree that the stimulus has been sold as "short term=tomorrow", but this is most obviously never true of any government spending. To me having the stimulus peaking in f.y. 2010 seems reasonable in terms of timing.
Another interesting point is that I don't believe that short term spending can't be towards long term goals. Indeed I would probably argue that the best stimulus spending is exactly that which is pushed into the economy as quickly as possible, but has the greatest public good in the long term. The role for government, in my socialist world, is exactly along these lines, and is why, for example, I really don't like the auto industry "bailout."
"2) It's inappropriate to use extraordinary measures (e.g., suspension of normal congressional rules and debate) for something that isn't a time-sensitive short-term stimulus plan."
I don't see how this is consistent with your insistence of "short term" impact. Suppose you wait for the next budget to provide stimulus. This means the 2009 numbers are zero, 2010 is spread out into 2011, etc. I certainly agree that the suspension of normal congressional rules and debate isn't "fair." But I don't see what "fair" has to do with politics. (Both sides can rant and rave about being shut out over the course of many, many years. I disagree that it is the point of government to be "fair": the whole point of representation is exactly that there will be a side which is getting it's towel handed to it.)
Finally I would point out that changes favored by "the other side", major tax cuts, are exactly those which the CBO estimates have the lowest "multiplier." Did you see the monstrosity of a bill that the Republican's tried to introduce as their "stimulus" plan. Personally I find that bill treasonous as it would have led to the destruction of the US government as we know it (for the record, that's a joke peoples.)
"While STD funding isn't called out directly, you can see that the majority of NIH stimulus funding won't be spent until 2011 or later."
I think the STD funding actually isn't under the NIH spending (and I agree those damn doctors and biologists are slower than us physicists and computer scientists in spend their money. Come on Nancy, give the NSF more...they're also the top rate agency in terms of actual efficiency of use of funds (just don't mention the NSF pornogate.)) as the funding is for the CDC. The majority of that money is spent in the first two years, 2009 and 2010.
This http://www.nsf.gov/recovery/ may be of interest.
Dave, as the NSF says (in the link you provided) the Recovery Act is "an extraordinary response to a crisis unlike any since the Great Depression."
Folks justly criticize the Republican Party for their lack of "extraordinary" ideas. And it's pretty obvious that there's nothing all that "extraordinary" about the party line of the Democrats either.
But it seems to me that mathematicians, scientists, and engineers have very little standing to complain -- since (collectively) we too have mighty few "extraordinary ideas."
On thing is clear -- business-as-usual likely won't work for anyone -- whether Republicans, Democrats, mathematicians, scientists, or engineers.
" Suppose you wait for the next budget to provide stimulus. This means the 2009 numbers are zero, 2010 is spread out into 2011, etc."
Dave, that's a straw man. Here's what I think should have happened:
1) A truly short-term (2009 and some 2010) stimulus bill is rushed through Congress.
2) A longer term bill is carefully considered and passed via normal procedures.
Now, (2) would have taken an extra month or two to pass, but that time would have gotten us a much better bill that might have actually been read by someone before it was passed. Since (2) would only pertain to 2011 spending, it wouldn't matter that it was a few months later.
"I certainly agree that the suspension of normal congressional rules and debate isn't 'fair.'"
I think the point is to produce the best possible outcome for the country, "fair" be damned. That said, even if it was just the Democrats alone (plus the few token Republicans who also voted for the stimulus), they could have produced a much better bill given more time and public scrutiny.
Notice that my argument and my proposed solution have nothing to do with the content of the stimulus, the morality of the Republican party, or the wisdom of tax cuts. All I'm saying is that Jindal wasn't wrong to denounce the ramming-through of the stimulus bill as inappropriate. Unless you can find some evidence that shows, despite the CBO letter, that STD research will get the bulk of its funding in 2009 or early 2010, I think you should agree with both the overall point and the specific example.
Dave, you raise all sorts of other interesting points I would love to discuss, but if we can't come to agreement on the aforementioned issue, I think we're wasting our time.
John: your points about confidence are well taken, but look at where the Dow is now versus on Inauguration Day. People are becoming less and less confiden, despite the Democrats having a lock on power. I fear we've gone from bad to worse. Perhaps it's just that--fear--but it seems to be the prevailing sentiment these days.
Travis says: People are becoming less and less confident, despite the Democrats having a lock on power.
I would say the reverse---the American public is (as yet) only partially awakened to the seriousness of the multiple strategic train-wrecks that occurred during the previous administration.
And this public awakening is far from complete: some mighty unsettling truths about the previous administration's demented embrace of Limbaugh-esque ideology have not yet been confronted. Most notably, the foolish strain of scientific denialism that has become pervasive on the far-right is an ongoing disaster for America.
Neither has the full story of the previous administration's malfeasance, short-sightedness, greed, corruption, and dereliction of duty been told. That this full story will be appalling, I think everyone recognizes.
The overall lesson-learned is pretty simple: too-simplistic ideologies (whether of the far-right or the far-left) are irresistibly attractive to simpletons, demagogues, carpetbaggers, and out-right crooks. And the combined political power of this coalition is disastrous for everyone.
"John: your points about confidence are well taken, but look at where the Dow is now versus on Inauguration Day. People are becoming less and less confiden, despite the Democrats having a lock on power. I fear we've gone from bad to worse. Perhaps it's just that--fear--but it seems to be the prevailing sentiment these days."
Man I wish I knew why the market was doing what it was doing like you do. Do you really know that things wouldn't be worse off had we taken a different path? That's a though question, and one I admit I don't have a clue about, but if you can really pull that off you should be able to make mucho bucks!
Travis: I thought I did show that the STD spending was majority in 2009 and 2010 (it's not under the NIH!)
I don't think getting spending in 2009 under your plan is at all realistic. Maybe I'm wrong, but I'd like to see evidence that the government can use 4 or 5 months to get the stimulus money flowing in large amounts. Note that the previous administration was strongly opposed to a stimlus package of the form passed, but happy to give rebates which went straight from people's mailboxes to their savings account (the bump in the savings rate graph is really cool.) So can I at least blame the last administration (including the congress) for not acting quickly enough? :)
I do agree that there are large chunks of the stimulus which are really long term spending. But one point which bothers me about this is the idea that only money spent today is what is necessary to be effective. I don't get that. For instance, if I knew that I could keep my job for one year and it would be gone after that, I wouldn't spend my money, I'd put it in the bank. Similarly I would think that job creating stimulus *must* be spread out over a few years in order to actually make a dent.
I'd also note that the CBO projections are based upon historic data and differ markedly from what the legislation said would be the time line. It's not clear whether I should believe the CBO's projections.
Finally back to the main topic of the post, the STD research. First of all the number given by the representative is exaggerated (its 335 million). That's a very very small fraction of the 700+ billion in the stimulus. In my opinion, there are much bigger things to complain about in the stimulus package (like for instance the time scale for spending) than this one point, and at least to me it's clear that the representative is using this because it plays well with his fellow Republicans: my God..they spend it on "evidence based" STD prevention (that's in the text of the Bill, by the way.)
Oh, and I do appreciate your posting here, by the way. Don't think just because I strongly disagree I don't think this is fun. And....of course we are wasting our time (see my previous comment about the purpose of this blog)
Dave says: Man I wish I knew why the market was doing what it was doing!
Dave, this is an area where, over several decades, the mathematical economists have displayed a hubris that is (in its own way) as notably self-deluded---and disastrous in its global consequences---as Rush Limbaugh's.
Isn't it similarly commonplace (and misguided) among mathematicians and economists, to mistake rigor for practical utility, as it is commonplace among politicians to mistake far-right (or far-left) ideological purity for excellence in governance?
It was John von Neumann's view that excellence in governance consisted not in embrace of ideology, but rather in the pursuit of "day-to-day---or perhaps year-to-year---opportunistic measures; a long sequence of small, correct decisions."
Von Neumann's approach doesn't sound too exciting: it leads to a political philosophy of prudent checks and balances, well-regulated markets, thoughtful analysis, and reasoned public debate.
But now that Americans are now seeing the fruits of eight years of abandonment of prudent checks and balances, abandonment of market regulation, and abandonment of thoughtful analysis and reasoned public debate ... well, don't moderate non-ideological approaches look pretty good now?
"I thought I did show that the STD spending was majority in 2009 and 2010 (it's not under the NIH!)"
Maybe I missed that--did you identify a specific line item in the CBO letter that contains the STD spending?
"Similarly I would think that job creating stimulus *must* be spread out over a few years in order to actually make a dent."
Agreed, but I'm saying that we should have taken a little more time on figuring out how to spend the longer-term stuff. The first "emergency" stimulus bill should just have been the downpayment.
"Note that the previous administration was strongly opposed to a stimlus package of the form passed, but happy to give rebates which went straight from people's mailboxes to their savings account (the bump in the savings rate graph is really cool.) So can I at least blame the last administration (including the congress) for not acting quickly enough?:"
There's whole 'nother debate we could get into on how much and what kind of stimulus we should have. I've been avoiding it so far because we're talking about how the stimulus should be passed, and what criticism of it is or isn't legitimate. I do agree that lump sum payments that go straight to savings have a low multiplier effect, but it's hard to see how they could be worse than direct payments to banks (i.e., TARP), since that's where the money is ending up anyway.
"That's a though question, and one I admit I don't have a clue about, but if you can really pull that off you should be able to make mucho bucks!"
Lack of foresight is not the problem--it's lack of capital. The few thousand bucks I was able to scrape up and invest back in 2005 (while I was a grad student) have nearly doubled.
I looked up where the STD funding was in the stimulus bill and it was given to the Center for Disease Control. My understanding is that the CDC isn't under the NIH, but IANABiologist. I then made the assumption it went under the "other category" for the Health and Human services line. Godamnit Obama I want my transparency and give it to me now with a nice web 2.0 interface.
Oh, and dude Travis tell me your secret for stock success :) Actually you won't find me believing that it isn't possible to "beat the market" or have some ability to predict future movements (it's interesting to me that the people who have done well lately seem to have been in the big macroeconomic bet people) I have a person theory about the markets right now that has little to do with the stimulus and a lot to do with Obama.
As they teach in medicine "The plural of anecdote is not data."
This caveat applies to commonplace anecdotal claims (commonly deployed by both the far-right and the far-left) which include: (1) "I smoke cigarettes and have not gotten lung cancer", (2) "I went to Vegas and won", (2) "I beat the market in a down cycle", (3) "I believe that global warming is not real."
John, while not pertaining to Travis's statement at all, however, I don't find compelling most "evidence" given to the idea that you can't "beat" the market. Most of this evidence consists of showing that doing a particular thing (like investing in non-index funds) does not outperform the market, and that there is no correlation year to year in these results. But this is totally consistent with other "methods" for beating the market.
Dave, I definitely believe that one person can beat the market... Claude Shannon is a well-documented example!
Conversely, it's obviously not true that everyone can beat the market ... any more than all the children in Garrison Keillor's town of Lake Woebegone can be "above average."
Basically, if we (as a species) do a good job of creating new resources, then markets all over the globe will do well---even for average investors. Otherwise, not.
John Sidles is correct that Claude Shannon beat the market. Beyond the Communications Theory that you know, and his maze-running robot, and his rocket-powered frisbee, and his mathematics of juggling, he was the inventor of modern Portfolio Theory. I spoke to him about that, too complicated to go into here.
When I've made my first billion dollars from Applied Mathematical Disinformation Theory, you can say that you remember when I was just an eccentric blogger.
Dave, your assumptions make sense. It's not quite proof, but I admit it does look like Paul Ryan chose a bad example, which is pretty sloppy. I agree he probably did it to pander to people who think STDs are 'punishment from God' or something like that. Glad to see we're finally getting to agreement (even if I'm not "winning"). Anyone have similar data on Jindal's claim about volcano monitoring?
On beating the market, I think it's impossible to consistently beat the market if the following conditions hold true:
1) You do not possess knowledge unknown to the market
2) You do not possess analytical methods unknown to the market
3) The market is rational
These three assumptions imply three ways to beat the market:
1) Have insider knowledge. (Illegal)
2) Constantly develop new analytical techniques. (Hard to do and even harder to stay ahead)
3) Stay rational at a time when the market is irrational.
I'm too lazy to do (2), so I'd like to think I'm making money because of (3), although it could also just be luck.
On a slightly tangential note, I saw a really interesting study tracking daily testosterone and cortisol levels and risk aversion in male traders. It seems that there's a feedback loop where testosterone drives traders to make aggressive trades, which make lots of money, which pushes up testosterone, which makes them even more aggressive, until they eventually go too far and lose money. At that point, cortisol spikes, and they become overly risk-averse. The testers were able to predict a trader's stock market success for the day based on his morning testosterone test results.
I've now created a beautiful set-up for someone to argue that the stock market collapse was caused by lack of diversity on Wall Street...