Kahneman is a noble prize laureat, and developped prospect theory with Amos Tversky. Mandatory subject for policy makers, but it requires the capacity to self-reflect.
Roger, in a bullet you said, “Covid-19 has so far resulted in an estimated 25 million excess deaths.” I followed the link. There is a lot of data there and I had problems looking at it while only on my phone. After poking around, the cumulative Covid 19 number looked to me to be around 7. The US recorded over 1 million, China reported rounding error. That leaves a lot of missing millions.
I may have looked at the wrong data. Could you please point me to the right headline and link?
That is a staggering number which I assume includes vaccine related deaths, which, although significant, I could not find.
I believe that the ultra low interest rate response to 9/11 to forestall economic shock was the biggest driver in the financial crisis. With the cost of borrowing almost nil the engine of the housing bubble was set into motion
Now we may pay an extended price in inflation as the zero interest rate phenomenon is having the floor drop out of it. If we do ultimately pay for the low interest rates with inflation instead of recession I think we will find that it was an ok trade
I find the analysis lacking in recognizing that in both instances, it was factually the case that government action brought about the catastrophes in 2008 and 2020.
Pretend expertise combined with hand wringing by the political class absolutely led to upheaval of incredible force. Barney Frank and Tony Fauci more than any other single actors in each event represented the face of failure and were girded by an army of politicians and corporate interests.
Even a cursory review of the great Mississippi flood in the early 1900s will enforce these point. Two competing engineers that privately came to the same conclusions about flood control, but which one publicly changed his position to win out. The disaster was foreseen by all but human decisions created it.
It is interesting to note that a small but profitable segment of DuPont's business is selling "safety" to other companies. When I joined in 1974, the saying was "If you work for a chemical company, you were six times safer than the average person on the job. If you worked for DuPont, you were six times safer than working for the average chemical company." Their philosophy is that every accident is preventable. Accidents do happen, but DuPont's experience indicates that by learning what went wrong in the past we can guarantee a safer future..
You leave open doubt about the origins of Covid-19, but tell me, what are the odds that by coincidence the pandemic originated in Wuhan, the home of the most important center for studying this disease as opposed to any other place on the surface of the planet Earth? I contend that the odds that this was a random coincidence is very very close to zero.
You mention the Libyan floods. As an Englishman it pains me to read the BBC focusing on the most extreme interpretation of the causation of the floods - that they were made 50 times more likely by climate change - https://www.bbc.com/news/science-environment-66854670.
I know you often push back against such framing, but this seems particularly egregious - if such events were generally being made 50 times more likely, you would at least expect to see at least a measurable increase in flooding...
Excellent article. One quibble: The disaster at Fukushima was not the meltdown but the decision to evacuate. There was only one death from radiation but 2,202 from the evacuation.
“With hindsight, we can say the evacuation was a mistake. We would have recommended that nobody be evacuated.” --Philip Thomas, professor of risk management at the University of Bristol
Yes. Naming Fukushima, a minor incident that itself killed one person, in the same article as COVID, which killed millions, is ridiculous. The cleanup was expensive but more so than necessary because of completely overkill evacuations.
I'm sure with a few minutes of googling I could find industrial disasters in the last year that killed more. I recall there was one in China this month where a gas explosion killed a few people.
And the REAL disaster was shutting down all the nuclear plants in the country, which by my math kiled around 15000 people (comparing pre and post Fukushima energy mix)
It is becoming clearer by the day that Covid came out of the laboratory and that the American military intelligence establishment were involved. Though I agree that it might be a little early to share that insight with an audience of risk assessors.
Interesting. Have you read a classic analysis of a special kind of disaster - military disasters? Norman Dixon's "On The Psychology of Military Incompetence". Institutions can indeed act incoherently in the face of a potential disaster - but typically there are particular individuals acting competently or incompetently - which is Dixon's compelling thesis.
If the action (error, chance, deliberate, neglect) of a solitary human can set off a catastrophe, then it would seem rational to record each "near miss" within specified systems.
As long as there is no connection between decision-making and negative consequences for the decision makers, you will NEVER get 'good' (in the sense of better for the global economy or better for the world's population) decisions by policy/decision makers, and you are deluding yourself if you think so.
When there are no consequences for poor decision making, then decisions will be made in such a way as to maximize power/money for the decision makers. So they aren't 'poor' decisions at all - they are 'good' decisions (assuming you don't mind a few $thousand/million/billion/trillion in losses for others or a few thousand/million/billion lives lost) from the POV of the decision makers.
Politicians and 'Elites' are psychopathic - they have NO feelings and NO moral compass. As long as they don't have to fear actual consequences, they will only do what benefits them the most.
It should be a simple policy change that any public servant who is proven after retirement to have acted negligently should have his fat pension stripped away.
Facts should rule. Alas fantasies often do, Exhibit A being the Green New Deal. The fact is that this has and will lead to a huge mis-allocation of resources and will likely produce disaster as and when our power grids become dysfunctional.
Many years ago someone told me that you never build a house in a bowl. Obviously that is because during severe rain storm the house might be inundated with flood water. Despite that, some people build their homes in an area that can be flooded during a severe rainstorm. Maybe the land was cheap (for a now obvious reason). I am sure this issue has unfortunately occurred on a larger scale in government choices that were pushed on people to solve lack housing issues or for less ethical reasons.
Read Daniel Kahneman: Thinking, fast and slow.
Kahneman is a noble prize laureat, and developped prospect theory with Amos Tversky. Mandatory subject for policy makers, but it requires the capacity to self-reflect.
Roger, in a bullet you said, “Covid-19 has so far resulted in an estimated 25 million excess deaths.” I followed the link. There is a lot of data there and I had problems looking at it while only on my phone. After poking around, the cumulative Covid 19 number looked to me to be around 7. The US recorded over 1 million, China reported rounding error. That leaves a lot of missing millions.
I may have looked at the wrong data. Could you please point me to the right headline and link?
That is a staggering number which I assume includes vaccine related deaths, which, although significant, I could not find.
Sure
That figure comes from Our World in Data
https://ourworldindata.org/covid-deaths
I believe that the ultra low interest rate response to 9/11 to forestall economic shock was the biggest driver in the financial crisis. With the cost of borrowing almost nil the engine of the housing bubble was set into motion
Now we may pay an extended price in inflation as the zero interest rate phenomenon is having the floor drop out of it. If we do ultimately pay for the low interest rates with inflation instead of recession I think we will find that it was an ok trade
I find the analysis lacking in recognizing that in both instances, it was factually the case that government action brought about the catastrophes in 2008 and 2020.
Pretend expertise combined with hand wringing by the political class absolutely led to upheaval of incredible force. Barney Frank and Tony Fauci more than any other single actors in each event represented the face of failure and were girded by an army of politicians and corporate interests.
I would include the drug overdose crisis in the US on the list of the largest global catastrophes in the 21st Century - over 100,000 deaths per year.
Global traffic accidents: 1,35 million deaths a year.
Cost of alcohol abuse, fat and sugar or tobaco to society?
Yes, agreed
Even a cursory review of the great Mississippi flood in the early 1900s will enforce these point. Two competing engineers that privately came to the same conclusions about flood control, but which one publicly changed his position to win out. The disaster was foreseen by all but human decisions created it.
It is interesting to note that a small but profitable segment of DuPont's business is selling "safety" to other companies. When I joined in 1974, the saying was "If you work for a chemical company, you were six times safer than the average person on the job. If you worked for DuPont, you were six times safer than working for the average chemical company." Their philosophy is that every accident is preventable. Accidents do happen, but DuPont's experience indicates that by learning what went wrong in the past we can guarantee a safer future..
You leave open doubt about the origins of Covid-19, but tell me, what are the odds that by coincidence the pandemic originated in Wuhan, the home of the most important center for studying this disease as opposed to any other place on the surface of the planet Earth? I contend that the odds that this was a random coincidence is very very close to zero.
I think it was quite obviously a research/related incident. >95%
But that assessment is not relevant to the argument of this post 👍🙏
You mention the Libyan floods. As an Englishman it pains me to read the BBC focusing on the most extreme interpretation of the causation of the floods - that they were made 50 times more likely by climate change - https://www.bbc.com/news/science-environment-66854670.
I know you often push back against such framing, but this seems particularly egregious - if such events were generally being made 50 times more likely, you would at least expect to see at least a measurable increase in flooding...
Good post as usual btw.
Excellent article. One quibble: The disaster at Fukushima was not the meltdown but the decision to evacuate. There was only one death from radiation but 2,202 from the evacuation.
“With hindsight, we can say the evacuation was a mistake. We would have recommended that nobody be evacuated.” --Philip Thomas, professor of risk management at the University of Bristol
https://www.ft.com/content/000f864e-22ba-11e8-add1-0e8958b189ea
Yes. Naming Fukushima, a minor incident that itself killed one person, in the same article as COVID, which killed millions, is ridiculous. The cleanup was expensive but more so than necessary because of completely overkill evacuations.
I'm sure with a few minutes of googling I could find industrial disasters in the last year that killed more. I recall there was one in China this month where a gas explosion killed a few people.
And the REAL disaster was shutting down all the nuclear plants in the country, which by my math kiled around 15000 people (comparing pre and post Fukushima energy mix)
It is becoming clearer by the day that Covid came out of the laboratory and that the American military intelligence establishment were involved. Though I agree that it might be a little early to share that insight with an audience of risk assessors.
Interesting. Have you read a classic analysis of a special kind of disaster - military disasters? Norman Dixon's "On The Psychology of Military Incompetence". Institutions can indeed act incoherently in the face of a potential disaster - but typically there are particular individuals acting competently or incompetently - which is Dixon's compelling thesis.
If the action (error, chance, deliberate, neglect) of a solitary human can set off a catastrophe, then it would seem rational to record each "near miss" within specified systems.
The subprime financial crisis and the Covid financial crisis were both caused by stupid government policy.
But I repeat myself.
Covid itself was at least 99% likely due to govt policy, just need to prevent Fauci from destroying all the documentation.
As long as there is no connection between decision-making and negative consequences for the decision makers, you will NEVER get 'good' (in the sense of better for the global economy or better for the world's population) decisions by policy/decision makers, and you are deluding yourself if you think so.
When there are no consequences for poor decision making, then decisions will be made in such a way as to maximize power/money for the decision makers. So they aren't 'poor' decisions at all - they are 'good' decisions (assuming you don't mind a few $thousand/million/billion/trillion in losses for others or a few thousand/million/billion lives lost) from the POV of the decision makers.
Politicians and 'Elites' are psychopathic - they have NO feelings and NO moral compass. As long as they don't have to fear actual consequences, they will only do what benefits them the most.
It should be a simple policy change that any public servant who is proven after retirement to have acted negligently should have his fat pension stripped away.
Facts should rule. Alas fantasies often do, Exhibit A being the Green New Deal. The fact is that this has and will lead to a huge mis-allocation of resources and will likely produce disaster as and when our power grids become dysfunctional.
Many years ago someone told me that you never build a house in a bowl. Obviously that is because during severe rain storm the house might be inundated with flood water. Despite that, some people build their homes in an area that can be flooded during a severe rainstorm. Maybe the land was cheap (for a now obvious reason). I am sure this issue has unfortunately occurred on a larger scale in government choices that were pushed on people to solve lack housing issues or for less ethical reasons.