Monthly Archives: January 2014
Originally published on The Huffington Post
I didn’t realize that Nate Silver’s The Signal and the Noise was one of the best books I read last year until about three weeks after I finished it. Why am I still thinking about this book? I would think, riding the bus, going over one of his examples in my head for the twelfth time.
It’s not that I’m so into baseball, or politics, or stock prices, or that I want to get better at predicting them. It’s that Silver’s book is an argument, and a challenge, for how I read stories in the future — and how I write them.
Silver’s core point is this:
Our predictions may be more prone to failure in the era of Big Data. As there is an exponential amount of available information, there is likewise an exponential increase in the number of hypotheses to investigate. For instance, the U.S. government now publishes data on about 45,000 economic statistics. If you want to test for a relationship between all combinations of two pairs of these statistics — is there a causal relationship between the bank prime loan rate and the unemployment rate in Alabama? — that gives you literally one billion hypotheses to test.
But the number of meaningful relationships in the data — those that speak to causality rather than correlation and testify to how the world really works — is orders of magnitude smaller. Nor is it likely to be increasing at nearly so fast a rate as the information itself; there isn’t any more truth in the world that there was before the Internet or the printing press. Most of the data is just noise, as most of the universe is filled with empty space.
This is not just a problem for Big Data. We’re not just surrounded by more quantitative information, more numbers, than ever before. We’re also surrounded by qualitative data too. From Longreads to UpWorthy, we’re have access to more stories, more characters, more anecdotes, more illustrations and examples than ever before. But just as more numbers don’t inherently produce more truth, more stories don’t inherently provide more lessons necessitating them.
Silver’s book reminded me of one of the worst books I read last year, Malcolm Gladwell’s David and Goliath: Underdogs, Misfits, and the Art of Battling Giants.
In his most talked-about chapter, Gladwell profiles superlawyer David Boies, the dude who represented Gore against Bush at the Supreme Court, gay marriage against the Mormons in California.
Boies is dyslexic. It takes him hours to read a legal brief, and he foundered in odd jobs until his mid-20s, when he went to NYU Law School, then worked his way up through government and law firms to become a legal goliath.
Boies’s dyslexia, as Gladwell tells it, is a ‘desirable difficulty’. Being bad at reading volumes of case law made Boies focus on being good at listening and arguing, skills other lawyers neglected. Hollywood producer Brian Grazer, also at the top of his field, also dyslexic, became a great negotiator to compensate for his difficulty reading. Goldman Sachs CEO Gary Cohn grew up dyslexic and found that it made him an outsider, gave him the skill of presenting a persona. He used that skill to blag his way into his first job in finance.
“You wouldn’t wish dyslexia on your child,” Gladwell ominously concludes, “Or would you?” You can almost hear the music cue: Bum bum BUMMMM.
If all this sounds a bit too easy, that’s because it is. When Gladwell’s book came out, critics (most prominently Christopher F. Chablis in the Wall Street Journal) pointed out that dyslexia is, rather obviously, not a magic formula for success, decidedly not something you would give to your child if you had the choice.
Gladwell says “an extraordinarily high percentage of entrepreneurs are dyslexic.” A dyslexia researcher points out that this claim is based on a survey of 102 entrepreneurs and 37 corporate managers (out of 2,000 people contacted) and that it wasn’t even designed to detect dyslexia, only dyslexia-like traits such as difficulty with spelling.
Gladwell admits that dyslexics are over-represented in the prison population; Chablis, like a high school English teacher, says ‘develop this further’: It’s kinda sorta a major counterpoint to your argument. Gladwell points to a study where people did better on an intelligence test when it was in hard-to-read font (Lesson: difficulty makes you concentrate harder). Chablis says this test was on just 40 people, all Princeton students, and hasn’t been replicated on a larger scale.
The perennial critique of Gladwell is that his conclusions do not offer any new insights, only reformulations of what we already know. This seems unfair. As Silver says, there is only so much truth in the world, only so many insights to be pointed out and illustrated. Most people go their whole lives without coming up with a profound insight into anything. Gladwell can hardly be faulted for pointing out and reformulating the insights we already know.
The more generous critique of David and Goliath is, why didn’t Gladwell tell us all this himself? Why is his chapter, his book, written with this false certitude, these capitalized lessons? Boies’s story would be no less interesting, no less well-told, if it was juxtaposed with the story of one of those dyslexic prisoners. I might have actually enjoyed that chapter more if it was fortified with the contradictions and arguments in the academic literature, with bright orange caveats highlighting the places where Boies’s story is not typical, not indicative of something larger. Lay it on me, Gladwell, I can handle it.
Gladwell is a talented writer, a diligent researcher and interviewer, a monster intellect. If anyone could present the contradictions and paradoxes of the idea of ‘desirable difficulty,’ it’s him. Gladwell is too smart, too curious, too skeptical, to genuinely believe that parents should be giving their kids dyslexia because it is a surefire way to end up a Hollywood produces or a finance CEO.
Hedging against the challenge of ‘more information, same amount of truth,’ says Silver, requires giving predictions and conclusions with confidence intervals. We’re not certain that this hurricane will make landfall in Tampa, but there’s a 60 percent chance. Obama is not a surefire bet to beat Romney, but he has more plausible paths to victory. These statements don’t remove certainty, but they reduce it.
Gladwell’s cardinal sin, to me, is not crediting his readers with enough intelligence to disclose his confidence intervals. Does he really think that the ‘desirable difficulty’ of dyslexia explains 100 percent of Boies’s success? Probably not. If Gladwell is making the argument that dyslexia explains 5 percent of his success, or 20 percent, why not just tell us? It’s as if Gladwell is trying to avoid the unfair criticism of his work — these insights are profound, I swear! — and in doing so steps right into the more compelling criticism. There’s nothing highbrow hates more than middlebrow, and nothing says middlebrow like massaging complicated phenomena into chicken soups for the soul.
In 2012, when Jonah Lehrer was caught fabricating quotes and misrepresenting scientific findings in his book Imagine: How Creativity Works, Ta-Nehisi Coates, (one of the best working practitioners of journalistic uncertainty — I mean that in a good way) wrote:
Great long-form journalism comes from the author’s irrepressible need to answer a question. Fictional long-form journalism comes from the writer’s irrepressible need to be hailed as an oracle. In the former fabulism isn’t just wrong because it cheats the reader, it’s wrong because it cheats the writer. Manufactured evidence tends not to satiate an aching curiosity. But it does wonders for those most interested in oraculism.
I’m not implying that Gladwell fabricated anything. His sense of curiosity is palpable in everything he writes, and a major component of what makes his best work so interesting.
But Silver’s book is a justified, albeit indirect, criticism of Gladwell’s approach. Silver is arguing for more curiosity and less certitude, not just for people who predict events, but for those who explain them afterwards.
Ultimately, the fault may be ours. Gladwell is under pressure from publishers, from readers, to write books of big ideas, to deliver conclusions, to expand stories into insights that make us feel like we are reaching them ourselves. Book buyers and magazine readers may not tolerate an investigation into adversity, or creativity, or decision-making that finds them too complicated for capitalized lessons, one that concludes there is nothing to conclude.
But maybe that is changing. In the same way Silver has changed what we expect from political forecasts, maybe next generation’s Malcolm Gladwell will be someone who dips into subjects, guides us through contradictory evidence and leaves us with no certitude, with more questions than when we arrived. I’m ready to read that kind of journalism. I hope someone out there is ready to write it.
Here’s a section that got cut from my New Republic story about the use of the US dollar in Zimbabwe
Wait, so a country can just adopt the United States’s currency without our permission?
“The U.S. government has never taken any overt position on dollarization, formal or informal.” This is Benjamin Cohen, a political economy processor at the University of California Santa Barbara, former Fed employee and the author of some articles I’ve been reading to try to understand how one country just gets up one morning and starts using another country’s money.
Ninety percent of the world’s $100 bills, Dr. Cohen says, are in circulation outside of the United States. Dozens of countries are considered to be “highly dollarized,” meaning more than 30 percent of their money supply is in dollars.
Unlike Zimbabwe, which has formally adopted the dollar, most countries use the U.S. dollar informally, in parallel with the local currency. A few years ago I was in Cambodia for work, and found that the local currency, the riel, was only used for small stuff like meals, transport and entertainment. Anything major—a TV, a plane ticket, an iPhone—prices were quoted and paid in U.S. dollars.
It’s not just Cambodia. These sorts of arrangements are commonplace throughout the Middle East, Latin America and Southeast Asia. People use the local currency, but keep U.S. dollars as a hedge against inflation, like Tea Partiers hoarding gold.
According to Cohen, the United States has no reason to prevent these arrangements. Not only does the U.S. dollar provide a quarry of monetary calm for citizens of inflating nations, the U.S. actually makes money every time our money leaves our borders. “Seniorage,” as the economists call it, is the profit the U.S. earns every time a foreigner ‘buys’ a dollar for a dollar (It costs 6 cents to print a $1 bill. If you print one, then use it to buy something that costs a dollar, you’ve just earned 94 cents profit. That’s seniorage.).
This sounds like it shouldn’t be a real thing, but the US earns $20 billion per year from all those $100 bills held internationally. Not a huge proportion of GDP, but hey, free money, right?
The other upsides are obvious. Every time another country uses our currency, it reinforces the U.S. dollar as world’s preferred international currency, just like every time someone drinks a Coke or eats a Big Mac it reinforces the status of those brands.
Foreign countries using our currency even gives us diplomatic power. Panama, one of the first countries to formally adopt the U.S. dollar, froze in its tracks when the U.S. cut off access to hard currency in the late 1980s to put pressure on Noriega.
The only real downside of foreign countries dollarizing, for the U.S. at least, is that it creates a headache for the Fed. The more countries dollarize, the more the Fed has to take them into account when making monetary policy. A million calculations go into the decision to raise or lower interest rates, and the last thing the Fed needs is to add the interests of Cambodian iPod salesmen into the mix.
One of the more significant downsides is if a dollarized country suddenly reintroduced their domestic currency, it might flood the market with millions of now-unneeded U.S. dollars, reducing the value of all of them. It doesn’t even have to be a whole country. If the dollar was used widely enough, huge purchases of dollars by foreigners could significantly affect its value.
This is why, Cohen says, the U.S. takes a policy of “benign neglect” toward foreign countries that want to formally or informally dollarize. You want to buy a bunch of dollars and give them to your citizens in exchange for your old currency? Fine. You want to encourage your banks to offer accounts denominated in U.S. dollars? Have a blast. The U.S. isn’t going to be particularly helpful in helping you set this up, but they’re not going to stop you either.
Ten countries (East Timor, Ecuador, El Salvador, Panama and a bunch of small island nations) are formally dollarized, meaning the U.S. dollar is their official currency (most of them have their own coins though).
Zimbabwe is formally dollarized in that all government spending is in U.S. dollars, but it also recognizes the euro, the British pound, the Botswanan pula and the South African rand (why the Mozambican metical got left out, I have no idea). Stores accept payment in whatever currency you have handy, and sometimes give you change in a different currency than you paid.
One of the things that always surprised me about Zimbabwe was how it just switched to U.S. dollars one day, without any relationship to the U.S. Federal Reserve. It was even under sanctions at the time. Can it just do that?
“It’s totally normal to switch to the U.S. dollar without any relationship to the Fed,” Cohen says. “It doesn’t require an application. Anyone can buy paper money, and anyone can get a dollar bank account. Their own country may restrict those things, but the U.S. doesn’t.”
When Ecuador officially adopted the U.S. dollar in 2000, it carried out a mass currency conversion. The central bank sold their U.S. treasury bonds to the U.S. for cash, brought the cash back to Ecuador and gave Ecuadoreans a window in which to exchange their sucres for U.S. dollars. The U.S. didn’t orchestrate, nor condemn, this process.
Like an introduced species, the U.S. dollar tends to take over an increasingly large percentage of the economy. The only country Cohen knows of that has de-dollarized is Israel, which introduced the U.S. dollar in the late 1970s as a parallel currency, and only managed to get rid of it after a series of economic reforms reinstated confidence in the shekel. Lots of informally dollarized countries, like Argentina, go through waves of increasing, then decreasing dollarization in line with citizens’ confidence in the local currency.
I have no idea what any of this means for Zimbabwe. As I say in the New Republic story, bringing back the Zimbabwe dollar is seen by economists (including the head of the Reserve Bank of Zimbabwe) as a bad idea, but that doesn’t mean it won’t happen.
Dr. Cohen’s written a bunch of interesting, easy to read articles on dollarization from the US perspective
- U.S. Policy on Dollarisation: A Political Analysis (my favorite)
- Dollarization: Pros and Cons
- Is A Dollarized Hemisphere in the U.S. interest?
- Dollarization, Rest in Peace
Thanks for the interview!
I have an essay in The New Republic about my trip to Zimbabwe last year, and my weird obsession with how expensive everything was there.
One of the things they tell nonfiction writers is ’employ holy shit details’, and in Zimbabwe there is almost no other kind. A lot of insane statistics ended up in the piece, but even more ended up on the cutting room floor. Here are some of them:
- In 2003, Zimbabwe was out of foreign reserves to import paper and ink to print more money, and had to switch to ‘bearer checks’, thin pieces of paper in increasingly outlandish denominations. Banks limited withdrawals, and anti-riot police had to be dispatched to prevent bank run.
- Fleeing the cratering economy, Zimbabweans almost singlehandedly raised retail sales in South Africa by 10 percent between 2006 and 2007. Emigrants in South Africa paid bus drivers 20 percent commission to take envelopes of cash, sacks of groceries, back home.
- In 2007 a government order required shops to reduce the prices on basic goods by 50 percent. Instead of stabilizing the economy, it simply reversed the direction of the arbitrage. People bought milk in Mutare for 33,000 Zimbabwe dollars, drove it across the border to Mozambique and sold it for the equivalent of 350,000 Zimbabwe dollars.
- All this time, the government maintained an ‘official’ exchange rate that was orders of magnitude lower than the black market rate. If you wanted to do anything legally—import goods, change money at the banks—you had to use the government rates. ‘I know a guy who worked at a luxury car dealership,’ my friend Colin told me. ‘These generals would come in and say “I’ll buy this car” and he would have to give it to them for the official exchange rate. He was selling cars for $8, $9.’
- Between 2006 and 2009, the government slashed 25 zeroes off the currency. I ask Zimbabweans the prices they last remember at the supermarket and they tell me that a loaf of bread was 22 billion dollars. Which doesn’t actually matter, because you had to be connected to secure one anyway.
- Bank teller wages rose with inflation, and they were partly paid in fuel coupons. They could also ‘burn money’—buy US dollars at the official exchange rate, then sell them at the black market rates. Bank employees were flying to Dubai, buying electronics and coming back to Zimbabwe to sell them on.
- These days, Zimbabwean banks are the opposite of too big to fail, they’re too small to succeed. As of January 2013, the entire banking sector held just $3.8 billion in assets, more than half of which were short-term deposits. While the banks are lending out more than they used to, the loans are riskier, since no one has quite figured out how to run a business profitably here. In March 2010, 2 percent of bank loans didn’t get paid back. By December 2012, it was 14 percent .
- A 2013 survey of 150 store owners in a suburb of Harare found that 47 percent of them were using their own savings to raise capital and 13 percent were using their relatives and friends. Only 3 percent were using the banking system.
- What Zimbabwe has gone through in the last 14 years is maybe the greatest loss of productive capacity and personal wealth in modern history. Per capita GDP fell from $644 in 1990 to $376 in 2011. South Africa’s GDP was 17 times larger than Zimbabwe’s in 1996. It was 58 times larger in 2012.
- Almost 70 percent of Zimbabwe’s government budget goes to government salaries alone.
- In 2009 Zimbabwe still had the highest 15-24-year-old literacy rates in Africa, but the aftershocks of the crisis are set to drag that down. As of 2012, only 67 percent of kids finished school, and only 50 percent made it from primary to secondary school.
- The Zimbabwe stock exchange fell 20 percent after Mugabe’s victory was announced , and some estimates say $800 million in investment has left the country since then.
If you want to get a more full view of what Zimbabwe went through during hyperinflation and the challenges it faces now, here’s some publications that give a fuller picture than I was able to, written by people who know more about economics, about Zimbabwe, than me.
- Here’s the Consultancy Africa Intelligence report, written by Tapiwa Mhute, who I spoke to a few times, on the causes and consequences of Zimbabwe’s dollarization.
- Here’s a terrific overview of the path to hyperinflation written, rather randomly, by a graduate student in Japan.
- Here’s a pretty devastating World Bank report on the problems with Zimbabwe’s infrastructure.
- Here’s the report on remittance strategies by families in one neighborhood in Harare.
- Here’s an anthology of articles about the hyperinflation. ‘Negotiating the Zimbabwe–Mozambique Border’ is a complete fucking stunner
- The debate about what ‘really’ saved the Zimbabwean economy is ongoing and, like everything else in Zimbabwe, is totally politicised. Here’s an overview of some of the arguments.
- Here’s an African Development Bank report from 2009, telling Zimbabwe how to fix the crisis. Most of it’s boring technocratic stuff but, like most of these reports, the ‘context’ section gives a great overview of the challenges.
- Here’s the same sort of thing from the IMF and from the World Bank four years later, in 2013. They’re basically giving the same overview I am, only with less Grindr.
- Here’s a Cato Institute (I know, I know) report from 2013: Why Is One of the World’s Least-Free Economies Growing So Fast?
- Here’s Tapiwa Chagonda’s fascinating survey of bank tellers and teachers during hyperinflation.
- Here’s Beyond the Enclave, Godfrey Kanyenze’s searing account of the political factors behind hyperinflation and dollarization.
- And here’s Vince Musewe’s angry, moving columns for The Zimbabwean, giving a more up to date picture of the conditions in Zimbabwe
I mostly worked on the piece in August and September, and I’m sure more reports and statistics have come out since then, so apologies if anything in the story is outdated.
I’m not a journalist, I’m a human rights guy. One thing I’ve realized over the last 18 months, as I’ve spent more and more of my weekday mornings and Sunday nights working on these little longforms, is how dependent journalists are on the generosity and patience of their sources. For this story, I basically cold-called a dozen or so Zimbabwean economists, told them I didn’t know anything about their country or their field and asked if they could, slowly and monosyllabically, walk me through everything they knew.
Amazingly, all of them obliged, and they were super patient with all of my follow ups and hang-on-explain-that-agains. Colin and Lovemore took a risk telling a foreigner about their economic tribulations the last five years, and trusted that I would represent them honestly and wouldn’t publish any details that identified them. Everyone I interviewed, I have nothing to offer them for their time and their trust except my sincere gratitude—and my crushing anxiety that I may have misunderstood or misrepresented them.
I don’t know if I’ll ever be good at this whole journalism thing, or feel like I have the right to be doing it. I tried really hard to fact-check this story, to avoid giving the impression that my experience was definitive. I arrived in Zimbabwe as an outsider, a tourist. No matter how many people I met, no matter how many reports I read or statistics I double-checked, I departed as one. There is a lot of complicated information out there about Zimbabwe, a lot of conflicting narratives. Mine is just one of them.
Originally posted on The Billfold
When we write the history of how technology has made us happier, I hope there’s a whole chapter about headphones. Life in the pre-headphones era was a dystopia of un-entertained silences, un-podcasted public transport. Bus rides without TED Talks, old magazines in waiting rooms, flights spent deflecting extroverted strangers. Going for a jog meant listening to yourself breathe.
Me, I have my headphones on basically always, and my life is objectively the better for it. I know the internet is the place where we’re supposed to complain how we’re cut off from each other, how we hide between earbuds instead of interacting, how we soundtrack our lives rather than experiencing them.
But really, how much solitary reflection do we actually need? And isn’t it better with Robyn singing over it anyway? I still take long, lonely winter walks, but now I listen to a MOOC about the Civil War on the way! The un-examined life isn’t may not be worth living, but the un-distracted one goes by a lot slower.
Anyway, here are all the ways I retreated from the world this year:
Julianna Barwick – ‘Forever’
It’s weird to pick one track off this album, since all the songs are basically the same wavy, overlapping vowel crescendoes. Still, if you want to feel like you’re attending a Methodist Easter service at the bottom of the Mariana Trench, Barwick’s got you covered.
Kanye West – The last minute and a half of ‘New Slaves’
Most of the tracks on Yeezus would be noticeably better without Kanye West rapping on them. ‘New Slaves’ is the only song where wishing ugh Kanye just shut the fuck up for a second actually pays off. Two minutes and 45 seconds in, he finally does, and for 90 seconds gives us the album’s only glimpse (‘I can’t lose, I can’t lose’) of the vulnerability behind all that Versace.
M.I.A. – ‘Y.A.L.A.’
Just because your politics are daft and your lyrics are incoherent doesn’t mean you can’t make a bangin’-ass club jam. The only way to enjoy this song is to resist the temptation to get all Pitchfork about it (Julianne Moore?) and just enjoy the swagger.
Azealia Banks – ‘No Problems’
Azaelia Banks has built a career out of being the girl who beat you up in middle school, and this song (‘you’re a ham in the pig shack’) is the bullyingest three minutes of the year.
Phosphorescent – ‘Ride On / Right On’ & ‘Song for Zola’
The world needs more alt-country. Haha I’m obviously kidding, but this band exists, and by now they’ve established that they have a right to.
Kavinsky ft. The Weeknd – ‘Odd Look’
Because the Drive soundtrack needed more R. Kelly.
Dan Deacon – ‘Why Am I On This Cloud?’
You know that theme that plays in Kill Bill whenever Uma Thurman is about to murder someone? That is what this song is for.
James Blake – ‘Retrograde’
Sometimes I think James Blake only releases albums to see what genre music critics will assign to them. Is this Electro-folk? Emo-step? Why are the lyrics so tender when the music around them is so mean? I’d better play it again to find out.
Lubomyr Melnyk – ‘Pockets of Light’
If I hadn’ta seen Melnyk play this song live earlier this year, I’d think he was using some sort of software to hit the keys this fast. But no, it’s just him, analog, plinking like a court stenographer and reminding you that your talents are generic and unworthy. Like most of the others on this list, this song defies explanation (just when it’s getting boring it’s like hang on, lyrics what?!), but it’s great for making you feel like whatever you’re doing is in slow motion.
Daft Punk – ‘Contact’
After we all got sick of ‘Get Lucky’ and started listening to the rest of the album, it turns out Daft Punk still has a few climaxes left in them. The rest of the album might take place in the 1970s, but these four minutes toward the end are a little reminder that it’s still 2013 somewhere out there.
Tyler Fedchuk – ‘White Light Mix’
The whole point of listening to headphones is to make you feel like whatever you’re doing is epic and spectacular. Fedchuk, who has been making crackerjack electro mixes at Radiozero for years, created an hour that evokes the feeling of driving through downtown LA, looking for prostitutes to kill.
Clap Your Hands Say Yeah – ‘Little Moments’
You know how when we talk about economic development, it starts with poor countries attracting a bunch of low-wage sweatshops, then ‘moving up the value chain’ to stuff like design, processing, consulting, etc? The indie-band equivalent is the transition from cheap acoustics to fancy synthesizers, and Clap Your Hands Say Yeah finally did the equivalent of joining the WTO this year.
Hunters & Collectors – ‘Talking To A Stranger (Avalanches Remix)’ & The Avalanches (feat. David Berman) – ‘A Cowboy Overflow of the Heart’
So in 2000, The Avalanches put out one of the best albums ever, (Since I Left You), then some of the best mixtapes ever, then disappeared into oblivion (Australia) for more than a decade. Now they are back with a remix of an off-brand Mumford & Sons-a-like and a … poem?
Neither of these should work, but somehow they do. Like the best songs on Since, ‘Talking to a Stranger’ bears almost no relationship to its source material. And this fucking poem. Jesus, if you didn’t already feel alone listening to your headphones around other people, well, now you do.