The business of psychics

My high school buddy James Grimmelmann unleashes on Newsweek:

Tony Dokoupil manages to write 1,200 words in Newsweek about professional psychics without once telling his readers the single most relevant fact: Psychic powers don’t exist. Would Newsweek run an interview with the Easter Bunny? Would it let Jane Bryant Quinn suggest investing in perpetual motion machine startups? Would it print travel tips for hitching a ride on a flying saucer to Neptune? But here it is, an article whose sum and substance is that hiring a psychic could do wonders for your business.

This article is professional malpractice. No competent journalist would ever write something this brazenly, obviously, mendaciously misleading. If Dokoupil’s editors are responsible for the credulity, he should have taken his byline off of the article. By putting his name to it, he told the world, I, Tony Dokoupil, am unfit to commit acts of journalism. If this is what passes for professional reporting, what right does anyone have to complain about the quality of blog-based reporting?

The disturbing thing about this is that reporters are supposed to be naturally skeptical, and usually pride themselves on that personality trait. Editors pride themselves on the notion that they'd tell reporters: "If your mother says she loves you, check it out." But how often do they really do so.

Dokoupil certainly deserves some blame here. But his editor should bear blame, too. The story that businesses are willing to shell out big bucks to hire a psychic is legitimate news, so the failure wasn't in commissioning the story. It may be that the editor chose the wrong reporter, or failed to edit the story in a serious way.

For instance, this passage should never have been put on paper in a serious news outlet:

It's impossible to objectively judge psychic powers. Are psychics just good listeners who pick up enough clues from their clients to provide seemingly insightful answers? Are they making lucky guesses?

The first sentence is simply false. Ask Ms. Day where Osama bin Laden is, or what tomorrow's winning lotto numbers will be, or how many dollars I have in my wallet right now. Have her do some standard task 100 times (predict the results of a dice roll), and see how often she's right, relative to the chances that she'd be right by random chance. Objective evaluation of psychic powers.

The thing is, based on the way psychics actually work, there often is no way to objectively measure accuracy. They deal in one-off-events, like selecting a jury, or greenlighting a movie. In other cases, they are dealing with experts who have a gut instinct that she may be able to echo back at them, for instance in picking models to represent or making stock market choices. For instance, here is what Dokoupil describes as "a typical call" from a client:

a prominent Wall Street money manager asked whether he should pull out of a risky, multimillion-dollar energy deal or let his money ride. "My gut," Day recalls saying, "is that you're not going to get your return." The money manager listened and yanked his investment, she says, just before the deal nose-dived.

It's one thing to present Day with a list of 100 stocks, and ask her to mark which ones she thinks will tank in the next week. That would be an objective test. But that's not what happened in this case; the high-roller wanted Day's advice because he had some reason to get hinky about the deal. She heard it in his voice that he wanted out of the deal, and told him so. He was saved, and credited her for the success.

She could be wrong a dozen other times, but that miraculous save would stick with the guy for years, and she'd keep earning, just for telling him what he already knows.

The ultimate irony, which Dokoupil buries on the second page of the web story, is this: Day turned to a career as a psychic because "Her marriage had ended." Given that she's sure that she can "see what [her teenaged son] did with that girl until 2 a.m.," one presumes she could also have predicted that her marriage wouldn't work out, and either call off the wedding, or at least get her finances in order first, so the divorce wouldn't "leav[e] her strapped for cash." If this irony struck Dokoupil or his editor, there's no evidence of that in the piece, nor any sense that there's more to it than prejudice when a Hollywood executive worries that "'The hedge funds would freak out'" if they knew he consulted a psychic." If I were relying on his decisions, I'd freak out, too.

Below the fold, my handy-dandy replacement for psychics (if it works for you, please send $10,000/month to me via the PayPal link in the sidebar):

A quarter is the perfect tool for making decisions. If you have to decide whether, for instance, to pull out of an elaborate energy deal, begin by deciding that you'll sell if the coin comes up heads, and that you'll stick with it if it comes up tales. Or vice versa, it doesn't matter.

Then flip the coin in the air, catch it in one hand, and flip in over onto the back of your other hand. Take a deep breath, and look at the coin.

Now you have a new choice. You can decide that the coin toss got it right, and do what the magic coin told you, or you can decide that maybe you should have made it best-of-five. In which case, you probably should do the opposite of what the coin told you. Flip it a few more times if it makes you feel better.

What this reveals is not the power of random chance, but the power of random chance to reveal underlying preferences. If you wanted to pull out of the deal, and the coin says you should do that, you'll accept the toss. If the coin told you to stick with it, you'd resist that, which would tell you something useful about yourself. Since you're smarter than a coin, you ought to override its bad advice.

And if you really don't know and don't care what you do, flipping a coin is as good a way as any to make a decision. It also costs a lot less than a psychic, since you get to keep the quarter.