Gelman on crypto cheerleaders; Schmelzing on long-term interest rates; Tedeschi-Trucks; very briefly noted; & Kuper on Britain, Kambhampati on LLMs, the FT-Booth economists panel, Yglesias on how...
On crypto: it was even worse than Andrew Gelman says it was. The real outside experts in crypto were the banks, who had been running cooperative (if not distributed) ledgers for decades. And the journos never seemed to talk to them. Or maybe they talked to the banks, but didn't like what the experts said. Or maybe their little journo brains said "aha, conflict of interest! Dinosaurs of the past!! I don't have to listen to these guys."
The banks were intrigued by crypto for about 3-4 years after it came out. By then, they grokked that crypto was either Ponzi or money laundering. (Libra/Diem was not really crypto.) That would be 2013 or so? The banks were willing to sell support to the scamsters and chumps, such as deposits or clearing facilities or the like. But they otherwise stayed out of the crypto game.
Financial journalists such as Weisenthal & Alloway (Odd Lots) devoted a vast attention to crypto, much of it uncritical. At least Matt Levine drew out the absurdity of SBF. I guess crypto journalism increases enthused traffic, sort of like Trump.
Now Tyler Cowen is euphoric over AI, which should give us pause given his crypto history. Which is not to say that LLM's won't be valuable tools (and trash), but it is too early to figure out how, and how well the technology is implemented. If we look at other new technologies, from railroads to radio to Internet, we see the wreckage of fraud and malinvestment. Cowen is much smarter than me, but what is in crypto or AI for him? Is he merely captured by the interest and investments of the tech bros such as Thiel?
So, did you read Dave Karpf's substack today? The 1st item was on LLMs.
"There’s something darkly funny in Ethan Mollick’s latest post about the bright business-future of generative AI ..."
"Ethan Mollick teaches entrepreneurship at Wharton. It shows. He produces serious, methodologically-sound research. And he never comes within a mile of examining the social assumptions that his research is grounded in ..."
"Mollick and his coauthors find that GPT-4 improves consultant productivity and work quality on all these tasks. The gains were strongest for the low-performers [...]To Mollick, this means that (1) the business opportunities are phenomenal and (2) the people who get rich will be the first-movers who really develop their skills in this grand new landscape."
"And, I mean… sure? One could read the findings that way.
But an alternate reading would be something like “hey! I hear you think A.I. is a bullshit generator. Well, we gave a whole profession of bullshit generators access to A.I., and you’ll never believe how much more productive they became at generating bullshit! ..."
Kara Swisher: ‘It was indeed not at accident that the Toxic Twins [Trump and Musk] attacked Yoel Roth—it was a coordinated assault by the goon squad. Read…
Blumenthal: Government benefits ought not to have a time tax (beyond combatting fraud cost effectively) and Progressives should have had enough confidence that the tax could be minimized to accept the (unnecessary but politically convenient) work requirement for the RCTC.
Gellman: This may conflate opinions abut the possibilities of blockchain with crypto currency. Maybe I'm being too generous, but I don't recall Tyler Cowen being particularly optimistic about purchasing bitcoin.
The biggest tell to me about crypto was Paul Krugman's early-on 2-part question that went something like this, "what exactly is it replacing and why does that thing need replacing?" I never, ever read a good answer to that. But as an academic I was already skeptical because for years I kept hearing how blockchain was going to solve this or that food distribution problem but no academic could ever reconcile how blockchain "solved" a garbage in-garbage out problem. Make it more efficient, yes, but the food safety issue doesn't go away just because you do a better job tracking if you cannot correctly register the vector at the outset. It helps you locate the node of the problem, but so does record keeping. It doesn't change that somebody somehow has to swab a machine correctly. Carbon credits face the same problem. It's possibly surmountable but at the end of the day, you have to certify what carbon is sequestered initially, and I don't see that blockchain is greatly better than any other certification program. So, what is it replacing and why does it need replacing?
The idea of a world-accessible database into which you can write stuff about yourself that anyone who needs the information can then read, and that that database is then independent—not controlled by any particular potentially gate-keeping entity—is not crazy.
The idea that the most important things to write in this database are transfers of NFTs is crazy.
The idea of a world-accessible database not controlled by any particular potentially gate-keeping entity is indeed crazy. Somebody has to build the database. That's control. Somebody likely has to modify the database. That's also control. The pure crypto idea is a pure libertarian constitutionalist idea--that the rules are laid down by God (or deus ex machina), and never ever change. That's crazy.
I don't disagree. Buuuuut...my point is at the end of the day you still have to certify the NFT or DeLong post is really what it says it is. Just like there really is wheat in a silo in Garden City, carbon on a farm near Des Moines, methane on a dairy farm in Tulare, and organic grapes in Lodi. We've been doing that part forever and Blockchain cannot change the initial certification. The ledger for the nodes after that certification is a marginal improvement over the current supply chain certification, not a transformative one IMHO.
Yes. One of my favorite quotes from Vernor Vinge: '“Say what?” General Coldhaven’s voice cut through whatever his former boss had been about to say. “Autologs from the ships themselves. I’m trying to get through to their captains right now, sir—we’re still bidding each other’s crypto.” Dugway pounced on the report. “And until we talk to them direct, I don’t believe anything. I know those commanders. Something strange is going on here.” “We have real launches and real targets, sir.” The technician tapped the crosses and circles. Dugway: “You have nothing but pretty lights!”...
Exactly! And "flies around" is the key. I attend many meetings on carbon. There is hope that satellites will eventually spot things like methane leaks and carbon loss and if that happens it makes things like Blockchain more efficient but until then "flies around" is the issue and no amount of electronic ledgerdemain (see what I did there?) substitutes for physical measurement. But you wouldn't know that from the conferences and sales pitches where
"blockchain solves this" just gets put out there with nobody in the room (sauf que moi) saying, "What exactly is it improving" Take a look at that RMI link, they wrote that in November 2022 and were still positively comparing it to NFTs at a time when, again IMHO, they should have known better.
The idea of "a" (i.e. one) "world-accessible database" into which important claims are written is not only crazy, it is unnecessary to provide the desired benefits of claim verification, sequencing, and provenance. What is not crazy, but necessary, is defining mechanisms by which verifiable claims can be encoded, verified, etc. whether or not a Blockchain or single database exists or is used. The work to define such non-crazy mechanisms is, and has been for a long time, underway within the W3C Verifiable Credentials process and elsewhere. See, for example: https://en.wikipedia.org/wiki/Verifiable_credentials
As others have noted, I think it is actually crazy. Someone has to write it, and maintain it, and pay for it, and that gives control. Even if that control is turned over to some foundation or suchlike, there is still control. Further, if it is doing something like guaranteeing accuracy (presumably you want to know that the stuff that you put there is actually put there by you, etc.), then someone is responsible, and that means some level of authority, or control.
Doing this is a distributed way just makes everything less efficient, harder, and more expensive than in a centralized way. Addiitonally, unless one is one of the tiny fraction of people who are sufficently knowledgeable about coding and security, then you end up having to trust someone - and you have no way of determining if this 'someone' is more trustworthy than government (or government-adjacent) agents.
On crypto: it was even worse than Andrew Gelman says it was. The real outside experts in crypto were the banks, who had been running cooperative (if not distributed) ledgers for decades. And the journos never seemed to talk to them. Or maybe they talked to the banks, but didn't like what the experts said. Or maybe their little journo brains said "aha, conflict of interest! Dinosaurs of the past!! I don't have to listen to these guys."
The banks were intrigued by crypto for about 3-4 years after it came out. By then, they grokked that crypto was either Ponzi or money laundering. (Libra/Diem was not really crypto.) That would be 2013 or so? The banks were willing to sell support to the scamsters and chumps, such as deposits or clearing facilities or the like. But they otherwise stayed out of the crypto game.
Financial journalists such as Weisenthal & Alloway (Odd Lots) devoted a vast attention to crypto, much of it uncritical. At least Matt Levine drew out the absurdity of SBF. I guess crypto journalism increases enthused traffic, sort of like Trump.
Now Tyler Cowen is euphoric over AI, which should give us pause given his crypto history. Which is not to say that LLM's won't be valuable tools (and trash), but it is too early to figure out how, and how well the technology is implemented. If we look at other new technologies, from railroads to radio to Internet, we see the wreckage of fraud and malinvestment. Cowen is much smarter than me, but what is in crypto or AI for him? Is he merely captured by the interest and investments of the tech bros such as Thiel?
9/20: Resisting (actual) cancel culture
https://www.dailyprincetonian.com/article/2023/09/princeton-news-adpol-eisgruber-gottheimer-right-to-maim-book-academic-freedom
So, did you read Dave Karpf's substack today? The 1st item was on LLMs.
"There’s something darkly funny in Ethan Mollick’s latest post about the bright business-future of generative AI ..."
"Ethan Mollick teaches entrepreneurship at Wharton. It shows. He produces serious, methodologically-sound research. And he never comes within a mile of examining the social assumptions that his research is grounded in ..."
"Mollick and his coauthors find that GPT-4 improves consultant productivity and work quality on all these tasks. The gains were strongest for the low-performers [...]To Mollick, this means that (1) the business opportunities are phenomenal and (2) the people who get rich will be the first-movers who really develop their skills in this grand new landscape."
"And, I mean… sure? One could read the findings that way.
But an alternate reading would be something like “hey! I hear you think A.I. is a bullshit generator. Well, we gave a whole profession of bullshit generators access to A.I., and you’ll never believe how much more productive they became at generating bullshit! ..."
No. I did not. URL?
Here you go: https://davekarpf.substack.com/p/bullet-points-oh-just-shut-up-edition
Kara Swisher: ‘It was indeed not at accident that the Toxic Twins [Trump and Musk] attacked Yoel Roth—it was a coordinated assault by the goon squad. Read…
Has a bad link.
https://substack.com/redirect/5edc5168-0bc3-491e-b9a4-29dcdb14252f?j=eyJ1IjoiZXpleCJ9.RIu61PjvUdzO2erfJvbXoPJkGNZIIN2MvmfjYuekkD8
I suspect substack is helping you too much.
Blumenthal: Government benefits ought not to have a time tax (beyond combatting fraud cost effectively) and Progressives should have had enough confidence that the tax could be minimized to accept the (unnecessary but politically convenient) work requirement for the RCTC.
Gellman: This may conflate opinions abut the possibilities of blockchain with crypto currency. Maybe I'm being too generous, but I don't recall Tyler Cowen being particularly optimistic about purchasing bitcoin.
The biggest tell to me about crypto was Paul Krugman's early-on 2-part question that went something like this, "what exactly is it replacing and why does that thing need replacing?" I never, ever read a good answer to that. But as an academic I was already skeptical because for years I kept hearing how blockchain was going to solve this or that food distribution problem but no academic could ever reconcile how blockchain "solved" a garbage in-garbage out problem. Make it more efficient, yes, but the food safety issue doesn't go away just because you do a better job tracking if you cannot correctly register the vector at the outset. It helps you locate the node of the problem, but so does record keeping. It doesn't change that somebody somehow has to swab a machine correctly. Carbon credits face the same problem. It's possibly surmountable but at the end of the day, you have to certify what carbon is sequestered initially, and I don't see that blockchain is greatly better than any other certification program. So, what is it replacing and why does it need replacing?
The idea of a world-accessible database into which you can write stuff about yourself that anyone who needs the information can then read, and that that database is then independent—not controlled by any particular potentially gate-keeping entity—is not crazy.
The idea that the most important things to write in this database are transfers of NFTs is crazy.
The idea of a world-accessible database not controlled by any particular potentially gate-keeping entity is indeed crazy. Somebody has to build the database. That's control. Somebody likely has to modify the database. That's also control. The pure crypto idea is a pure libertarian constitutionalist idea--that the rules are laid down by God (or deus ex machina), and never ever change. That's crazy.
I don't disagree. Buuuuut...my point is at the end of the day you still have to certify the NFT or DeLong post is really what it says it is. Just like there really is wheat in a silo in Garden City, carbon on a farm near Des Moines, methane on a dairy farm in Tulare, and organic grapes in Lodi. We've been doing that part forever and Blockchain cannot change the initial certification. The ledger for the nodes after that certification is a marginal improvement over the current supply chain certification, not a transformative one IMHO.
Yes. One of my favorite quotes from Vernor Vinge: '“Say what?” General Coldhaven’s voice cut through whatever his former boss had been about to say. “Autologs from the ships themselves. I’m trying to get through to their captains right now, sir—we’re still bidding each other’s crypto.” Dugway pounced on the report. “And until we talk to them direct, I don’t believe anything. I know those commanders. Something strange is going on here.” “We have real launches and real targets, sir.” The technician tapped the crosses and circles. Dugway: “You have nothing but pretty lights!”...
nothing but pretty lights? https://rmi.org/what-can-blockchain-do-for-carbon-markets/
Was talking yesterday to a woman one of whose coauthors flies around trying to establish ground truth about methane leaks...
Exactly! And "flies around" is the key. I attend many meetings on carbon. There is hope that satellites will eventually spot things like methane leaks and carbon loss and if that happens it makes things like Blockchain more efficient but until then "flies around" is the issue and no amount of electronic ledgerdemain (see what I did there?) substitutes for physical measurement. But you wouldn't know that from the conferences and sales pitches where
"blockchain solves this" just gets put out there with nobody in the room (sauf que moi) saying, "What exactly is it improving" Take a look at that RMI link, they wrote that in November 2022 and were still positively comparing it to NFTs at a time when, again IMHO, they should have known better.
The idea of "a" (i.e. one) "world-accessible database" into which important claims are written is not only crazy, it is unnecessary to provide the desired benefits of claim verification, sequencing, and provenance. What is not crazy, but necessary, is defining mechanisms by which verifiable claims can be encoded, verified, etc. whether or not a Blockchain or single database exists or is used. The work to define such non-crazy mechanisms is, and has been for a long time, underway within the W3C Verifiable Credentials process and elsewhere. See, for example: https://en.wikipedia.org/wiki/Verifiable_credentials
As others have noted, I think it is actually crazy. Someone has to write it, and maintain it, and pay for it, and that gives control. Even if that control is turned over to some foundation or suchlike, there is still control. Further, if it is doing something like guaranteeing accuracy (presumably you want to know that the stuff that you put there is actually put there by you, etc.), then someone is responsible, and that means some level of authority, or control.
Doing this is a distributed way just makes everything less efficient, harder, and more expensive than in a centralized way. Addiitonally, unless one is one of the tiny fraction of people who are sufficently knowledgeable about coding and security, then you end up having to trust someone - and you have no way of determining if this 'someone' is more trustworthy than government (or government-adjacent) agents.
In other words, it sounds nice, but if one thinks about trying to implement it, it is crazy.