Interesting Links: May 4, 2016

Here are links to a few interesting articles I came across recently. They are about all those “professional pundits”, “political operatives” and “credentialed experts” failed to see the rise and ultimate success of Donald Trump’s campaign for the republican presidential nomination.

Link 1: Beyond Schadenfreude, the Spectacular Pundit Failure on Trump is Worth Remembering

Trying to predict the future can be fun, which is why – from office sports pools to stock market speculation – many do it. Generally, though, people make such predictions with at least some humility: with the knowledge that they do not actually know what the future holds. But not America’s beloved political pundits. When they pronounce what the future has in store for us, it comes in the form of definitive decrees, shaped with the tone of authoritative certainty. With a few exceptions, those who purported to see the future of the 2016 GOP nomination process spent many months categorically assuring everyone that, polls notwithstanding, Donald Trump simply could not, would not, become the GOP nominee; one could spend all day posting humiliating examples, so a representative sampling will have to suffice.

Let’s acknowledge all the valid caveats: there’s nothing inherently wrong with making predictions, and everyone who tries it is going to be wrong sometimes. Moreover, though there were some exceptions, very few pundits predicted Trump’s success (though there’s a huge difference between (a) refraining from predicting or doing so with a tone of uncertainty and (b) hubristically and condescendingly “explaining” The Truth to the world about what will happen). Many factors, such as Trump’s celebrity status, made these circumstances unusual. And everyone makes mistakes in every realm.

Nonetheless, it becomes a much different type of error when one invokes one’s own claimed authority and expertise when issuing such embarrassingly wrong pronouncements, and, worse still, when the tone used is one of certainty and hubris as though the decrees are being passed down from Mount Sinai. At the very least, when a profession that touts its expertise, collectively, is this wildly wrong about something so significant, more needs to be done than a cursory, superficial acknowledgment of error – or casting blame on others – before quickly moving on, in the hope that it’s all forgotten. Some collective, introspective soul-searching is in order.

Link 2: One of the most painful lessons ever learned in finance has finally come to politics

The statistician George Box once wrote, “Essentially, all models are wrong, but some are useful.” This is true. The failure to predict of Trump’s rise to the nomination, then, is not the fault of the work done by folks like Silver, but a manifestation of the hubris involved in trusting the party over what was happening on the ground. Trump dominated Republican polls for months, but his place in the race as a self-funded outsider who was clearly not the choice of The Party seemed entirely untenable. The incoming data was doubted all the way. The model broke. In a great tweetstorm Wednesday, former Wall Street trader Chris Arnade — who was among the slick, model-wielding upstarts to hit finance in the 1990s — broke down the problem with models, with beliefs, and why Trump’s imminent nomination is, really, a pie in the face for everybody. The success of Silver in 2008 and 2012 at the time appeared to be the triumph of math over feeling or inspiration. The classic political pundit could — still can! — anecdotally outline their case for or against a certain candidate. Silver instead brought the data to back up his view. And he was very right.

But where a Silver-style model eventually broke down this cycle was in doing what all models do: using the past to predict the future. And this is ultimately why Box’s quote endures. All models — even those that are useful and correct for long stretches — will eventually reach a point at which the current inputs no longer yield results that look anything like the past. The model’s guiding light goes dark. The model breaks. Arnade argued Wednesday that this affirms the need for on-the-ground reporting, meeting voters in real life, getting a feel for just how serious the Trump thing is by talking to people who take it seriously. Maybe this is the answer. Maybe not. But Arnade’s point is that using the model as a backstop to affirm your priors — that Trump can’t win because he’s not the party’s choice, that he’s too unserious, too racist, too inconsistent, too everything — is exactly the point at which the model begins to fail. Long-Term Capital Management thought all arbitrage opportunities would eventually revert to some efficient equilibria. Then they incurred a revision of belief, and then they were out of business.

Link 3: The Trump-ocalypse is upon us: America can’t afford to misunderstand what his nomination means

Being so wrong is a professional hazard of the dumb game of covering politics like a sports match. But it’s worth exploring more specifically why. The immense power of conventional wisdom can swamp all but the most powerful contrary evidence—evidence like, say, Trump becoming the presumptive nominee yesterday. There were lots of clear messages that the rules of the game weren’t holding, such as when, last July, Trump insulted John McCain for being captured in Vietnam and suffered zero concrete consequences. Pundits weren’t listening. Trump’s rise should not have been incomprehensible. Much available evidence has long suggested that today’s Republican Party is capable of anything. In recent years, government shutdowns became the norm, a huge fan of Ayn Rand was elevated to House Speaker, and somewhere near half of all Republicans said they believe that Barack Obama is a Muslim. Meanwhile, everything hinted that Jeb Bush’s candidacy might prove to be the very nonstarter that it was. But no matter.

Wonks typically make predictions from big data sets that are in reality drawn from presidential elections—something that, in numerical terms, have happened a very small number of times. If journalists are only good at describing what passes for normal over a few decades, journalism is not very useful at understanding reality when things get interesting. And as things have gotten more interesting, journalists have played catch up every time, from the Tea Party and Occupy Wall Street to Donald Trump and Bernie Sanders. It’s been clear since the financial crisis that American politics are fragmenting under the stress of enormous income inequality — toward the socialist left and, on the white right, a toxic quasi-fascist stew that conflates middle-class decline with growing racial diversity.

What do you think? Comments?

  1. May 8, 2016 at 1:52 am

    dude,

    this sounds like they cut and pasted stuff from your blog…

    http://the-invisible-men.tumblr.com/

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