Doug Casey on economics, mathematics and philosophy

Economics is taught in colleges as if it were a subdivision of mathematics.  It’s not.  It has only a limited amount to do with mathematics.  Rather, it’s a division of philosophy.  It’s a moral study that looks at how people relate to one another in the material world.

~ Doug Casey, "How Economic Witch Doctors Convince Everyone They're Neurosurgeons," International Man, December 8, 2021

The Telegraph: "Neil Ferguson's Imperial model could be the most devastating software mistake of all time"

In the history of expensive software mistakes, Mariner 1 was probably the most notorious. The unmanned spacecraft was destroyed seconds after launch from Cape Canaveral in 1962 when it veered dangerously off-course due to a line of dodgy code.

But nobody died and the only hits were to Nasa’s budget and pride. Imperial College’s modelling of non-pharmaceutical interventions for Covid-19 which helped persuade the UK and other countries to bring in draconian lockdowns will supersede the failed Venus space probe and could go down in history as the most devastating software mistake of all time, in terms of economic costs and lives lost.

~ David Richards and Constantin Boudnik, "Neil Ferguson's Imperial model could be the most devastating software mistake of all time," The Telegraph, May 16, 2020

Tom Woods on the Covid-19 doom-and-gloom models

The IHME model has almost surely been the most influential one when it comes to estimating deaths from the coronavirus, and it was the basis of the claim by White House health officials that the United States could see well in excess of 200,000 deaths.

Since that time -- a mere week and a half ago -- the model has been revised downward twice. It's now saying about 60,000 deaths.

The response from the doomers has been twofold:

(1) "This is because we've been doing such a great job living like vegetables" -- er, "social distancing."

Nice try, but the model already assumed extreme social distancing: schools and businesses closed, and lockdown.

(2) Don't worry, everyone: the models aren't supposed to be right! And if you don't understand that, then you just don't know science, man!

Oh, sure! A model that the authorities explicitly rely on, and use to justify confining people in their homes, destroying their livelihoods, and putting their hopes, dreams, and aspirations on indefinite hold, isn't meant to be taken literally, you unscientific boob! We'll use it to scare the hell out of you, sure -- the model has to have some use -- but other than that, just roll with the punches when we make revisions downward of 25 percent in just two days. That's normal!

~ Tom Woods, April 9, 2020

Kevin Duffy: "The Covid-19 bubble is bursting"

The Covid-19 bubble is bursting as doomsayers backtrack on their death toll models.

The lesson: Do NOT trust self-proclaimed experts when a) dealing with complex phenomena, b) predicting doom, c) promoting massive government intervention, d) using simple narratives and e) gaining the attention of the crowd. At least 99 times out of 100 their fears will be way overblown and the response they're calling for far more damaging than the actual threat.

Now let's apply this logic to the climate change doom-and-gloomers ...

~ Kevin Duffy, April 9, 2020

"CDC Director Counters Media Narrative,
Predicts Covid-19 Death Toll Will Be 'Much Lower' Than Models"
The Western Journal

Tom Glass and Kevin Duffy discuss climate change computer models

Glass: As one trained in the sciences and one who worked in IT as a career, I know the difference between science and a computer model.

Before a computer model can be relied upon to take drastic action, denying people liberty and destroying their prosperity, good sense would demand that we check the model to see if it predicts reality well. (That is called science. You know, checking your hypothesis embodied in the computer model against reality to see if it matches observed results.)

To date, I am unaware of any climate computer model that has accurately predicted climate. Until we get one that does, I will oppose the destruction of our liberty and prosperity that ALWAYS seems to be the proposed "solution" to the hypothetical problem.

Duffy: Well said, Tom, but I'll go even further. Let's imagine some day the computer models prove accurate and that there's a serious problem. Are you ready to destroy liberty and prosperity to solve it? Or might that complex adaptive system called the free market have a better chance?

Glass: I agree!

~ Tom Glass and Kevin Duffy, Facebook exchange, February 5, 2020

Bethany McLean on mathematical modeling

Goldman also shook my faith in numbers, and I mean that in a good way. Numbers, especially in a beautifully put together presentation, masquerade as TRUTH. A discounted cash flow analysis seems oh-so-scientific. But many numbers are nothing more than the wobbly assumptions that go into them. There is nothing that will make you understand this better than having a vice president tell you to change the discount rate in that discounted cash flow analysis because he wants to see a different result. “Garbage in, garbage out,” I heard at Goldman. So true.

~ Bethany McLean, "My Goldman Sachs Post-Traumatic Stress Disorder (And Why I'm Grateful)," February 19, 2014

John Templeton on the limits of computer models in the investment process

Despite the development of neural networks, expert systems, and other forms of exotic anthromorphic computer systems, it is unlikely that the component of human wisdom will be replaced in the investment process. Machines can be used to process hard data, but not human qualities such as greed, fear, or creativity. If we reflect on the fact that companies are really groups of people who manage assets and work with each other to create wealth; that they are intimately affected by other complex groups, politicians, local citizens, belligerent militarists, and so on; then it is clear that machines cannot adequately capture the complexity of these human conditions.

~ John Templeton, Looking Forward: The Next Forty Years, 1993, pp. 8-9

Doug French on a Bill Bonner speech: "Mathematical modeling is based upon conceit and pretension"

Bill Bonner provided a clear analysis of how the current crisis was engendered in his speech played for the [Doug] Casey faithful during the Wednesday night banquet. When Richard Nixon closed the gold window, the US dollar was then "based upon a fraud," and with central bankers being human, from that point the dollar would be made worthless. The next villain in Bonner’s story is Eugene Fama, who formulated the "Efficient Market Hypothesis," or in other words, the market knows everything, prices just move randomly. Since Professor Fama’s work was published, securities prices became natural phenomena that are supposedly not influenced by human behavior. Thus, stock and bond price movements could be mathematically modeled, and that risk isn’t risk anymore, but volatility.

From this thinking came the derivatives industry that is based upon models devised on historical market statistics during time frames that didn’t include a fiat currency regime, let alone the presence of $500 trillion in derivatives. This mathematical modeling is based upon conceit and pretension, according to Bonner, and the turning of Level 3 assets into AAA-rated paper were "miracles that would stagger Jesus Christ."

~ Doug French, "V.I. Bernanke," LewRockwell.com, April 1, 2008