Six Ways From Sunday: Tucker vs NSA

 

Chuck Schumer: You take on the intelligence community, they have six ways from Sunday to get back at you.

 

Tucker Carlson has potential as a politician -- there is at least a small chance that someday he'll be POTUS. The intelligence services are, I am sure, very interested in any kompromat they can acquire on him for future use. You mean foreign intel services? No, I mean our intel services :-(

Clarification, from comments: 

The post is not primarily about Tucker. It's about intel services spying on American citizens. 

Most importantly, Tucker's story is credible: some whistleblower saw intercepted Tucker emails and contacted him to let him know he is under surveillance. But as anyone paying attention knows, we are ALL under surveillance due to "bulk collection" revealed many years ago, e.g., by Snowden. The Rogers saga and FISC report show that this bulk-collected data is not very well protected from intel agency types who want to have a peek at it...  

Re: bulk collection, non-denial denials ("not an intelligence target of the Agency" ha ha), see

Wikipedia: According to a report in The Washington Post in July 2014, relying on information furnished by Snowden, 90% of those placed under surveillance in the U.S. are ordinary Americans, and are not the intended targets. The newspaper said it had examined documents including emails, message texts, and online accounts, that support the claim.

See Twilight Struggles in a Wilderness of Mirrors: Admiral Mike Rogers, the NSA, and Obama-era Political Spying.

Below is a Rogers timeline covering illegal spying using NSA data. This illegal use of data is a matter of record -- undisputed, but also largely unreported. The FISC (FISA court) report on this illegal use of data appeared in April 2017; the author is Rosemary Collyer, the head FISA judge. The report was originally classified Top Secret but was later declassified and released with redactions. Collyer uses the phrase "institutional lack of candor" when referring to behavior of federal agencies in their dealings with FISC over this issue. ... 

The court learned in October 2016 that analysts ... were conducting prohibited database searches “with much greater frequency than had previously been disclosed to the court.” The forbidden queries were searches of Upstream Data using US-person identifiers. The report makes clear that as of early 2017 NSA Inspector General did not even have a good handle on all the ways that improper queries could be made to the system. ... 

March 2016 – NSA Director Rogers becomes aware of improper access to raw FISA data. 

April 2016 – Rogers orders the NSA compliance officer to run a full audit on 702 NSA compliance. 

April 18 2016 – Rogers shuts down FBI/NSD contractor access to the FISA Search System. 

Mid-October 2016 – DNI Clapper submits a recommendation to the White House that Director Rogers be removed from the NSA. 

October 20 2016 – Rogers is briefed by the NSA compliance officer on the Section 702 NSA compliance audit and “About” query violations. 

October 21 2016 – Rogers shuts down all “About" query activity. Rogers reports the activity to DOJ and prepares to go before the FISA Court. 

October 21 2016 – DOJ & FBI seek and receive a Title I FISA probable cause order authorizing electronic surveillance on Carter Page from the FISC. At this point, the FISA Court is unaware of the Section 702 violations. 

October 24 2016 – Rogers verbally informs the FISA Court of Section 702(17) violations. 

October 26 2016 – Rogers formally informs the FISA Court of 702(17) violations in writing. 

November 17 2016 (morning) – Rogers travels to meet President-Elect Trump and his Transition Team in Trump Tower. Rogers does not inform DNI James Clapper. 

November 17 2016 (evening) – Trump Transition Team announces they are moving all transition activity to Trump National Golf Club in New Jersey.

I was recently in a Zoom meeting on geopolitics that included Admiral Rogers. I wanted to ask him privately about the above. Perhaps someday I'll get the chance.

 

Caption: NSA Director Rogers describes to Congress how little privacy Americans have from government surveillance. 

Alternate Caption: NSA Director Rogers tells Congress how much legal oversight remains over the activities of intel services.

Adam Dynes on Noisy Retrospection: The Effect of Party Control on Policy Outcomes - Manifold #35

Steve and Corey talk to Adam Dynes of Brigham Young University about whether voting has an effect on policy outcomes. Adam’s work finds that control of state legislatures or governorships does not have an observable effect on macroscopic variables such as crime rates, the economy, etc. Possible explanations: parties push essentially the same policies, politicians don't keep promises, monied interest control everything. Are voting decisions just noisy mood affiliation? Perhaps time is better spent obsessing about sports teams, which at least generates pleasure.

1:22 - What is retrospective voting?
5:43 - Research findings on retrospective voting
14:02 - Uniparty/Monied interests?
17:23 - Martin Gilens' research
23:10 - Are people just voting based on noise or mood affiliation?
27:13 - Bryan Caplan - Myth of the Rational Voter
34:35 - Is time better spent obsessing about sports teams, which at least generates pleasure?
39:42 - After the fall of Athens, was democracy commonly referred to as irrational mob rule?
48:22 - Does this research translate to the national level?
52:19 - Super Nerdy Stuff: Statistical Analysis, Reproducibility & Null Results
56:40 - Reactions to the results

Transcript

Adam Dynes (Personal Website)

Adam Dynes (Faculty Profile)

Noisy Retrospection: The Effect of Party Control on Policy Outcomes

Related: 2016 blog post on Martin Gilens' work: American and Chinese Oligarchies.


man·i·fold /ˈmanəˌfōld/ many and various.

In mathematics, a manifold is a topological space that locally resembles Euclidean space near each point.

Steve Hsu and Corey Washington have been friends for almost 30 years, and between them hold PhDs in Neuroscience, Philosophy, and Theoretical Physics. Join them for wide ranging and unfiltered conversations with leading writers, scientists, technologists, academics, entrepreneurs, investors, and more.

Steve Hsu is VP for Research and Professor of Theoretical Physics at Michigan State University. He is also a researcher in computational genomics and founder of several Silicon Valley startups, ranging from information security to biotech. Educated at Caltech and Berkeley, he was a Harvard Junior Fellow and held faculty positions at Yale and the University of Oregon before joining MSU.

Corey Washington is Director of Analytics in the Office of Research and Innovation at Michigan State University. He was educated at Amherst College and MIT before receiving a PhD in Philosophy from Stanford and a PhD in a Neuroscience from Columbia. He held faculty positions at the University Washington and the University of Maryland. Prior to MSU, Corey worked as a biotech consultant and is founder of a medical diagnostics startup.

Rule Britannia

Dom has seized the controls, but now has to operate the giant robot.

This is a unique situation: someone who understands the power of modern technology, scientific decision-making, high cognitive ability, and high functioning organizations, has significant influence in the government of one of the great nations of the world.

Please consider applying for one of these positions. Dom is a special leader -- open to new ideas and to maverick personalities, loyal to his team, and a genuinely humble and good person.

This could be a once in a lifetime opportunity to make a positive impact in the world.

High skill immigration is one of the priorities for the new UK government. You do not need to be a UK citizen or permanent resident to be considered for these positions.

...we’re hiring data scientists, project managers, policy experts, assorted weirdos...

There are many brilliant people in the civil service and politics. Over the past five months the No10 political team has been lucky to work with some fantastic officials. But there are also some profound problems at the core of how the British state makes decisions. This was seen by pundit-world as a very eccentric view in 2014. It is no longer seen as eccentric. ...

Now there is a confluence of: a) Brexit requires many large changes in policy and in the structure of decision-making, b) some people in government are prepared to take risks to change things a lot, and c) a new government with a significant majority and little need to worry about short-term unpopularity while trying to make rapid progress with long-term problems.

There is a huge amount of low hanging fruit — trillion dollar bills lying on the street — in the intersection of:

the selection, education and training of people for high performance,

the frontiers of the science of prediction data science,

AI and cognitive technologies (e.g Seeing Rooms, `authoring tools designed for arguing from evidence’, Tetlock/IARPA prediction tournaments that could easily be extended to consider ‘clusters’ of issues around themes like Brexit to improve policy and project management)

communication (e.g. Cialdini)

decision-making institutions at the apex of government.

We want to hire an unusual set of people with different skills and backgrounds to work in Downing Street with the best officials, some as spads and perhaps some as officials. If you are already an official and you read this blog and think you fit one of these categories, get in touch.

The categories are roughly:

Data scientists and software developers
Economists
Policy experts
Project managers
Communication experts
Junior researchers one of whom will also be my personal assistant
Weirdos and misfits with odd skills

[ Please click through and read the whole post on Dom's blog ]

See also Now it can be told: Dominic Cummings and the Conservative victory 2019.

Note Added: Some of the media takes on Dom's job ad are extremely uncharitable. They (and the people they quote) assume Dom is entirely naive about when mathematical and computational methods might be useful, and when they might not. I suggest these people study his other writing carefully. For example:

More important than technology is the mindset – the hard discipline of obeying Richard Feynman’s advice: ‘The most important thing is not to fool yourself and you are the easiest person to fool.’ They [quant types] were a hard floor on ‘fooling yourself’ and I empowered them to challenge everybody including me. They [quant types] saved me from many bad decisions even though they had zero experience in politics and they forced me to change how I made important decisions like what got what money. We either operated scientifically or knew we were not, which is itself very useful knowledge.

Does this sound like a person who does not understand both the strengths and limitations of data science, statistics, careful epistemology, etc. in modern politics? Underestimate him at your peril...

Brexit: Down to the Wire

Get ready for the general election!

Over the summer I was at the Tallinn Digital Summit in Estonia. At dinner, sitting across from a UN official, I expressed to his initial incredulity that the victory of Vote Leave three years ago was a triumph of the human spirit: a small team of talented individuals defeated overwhelmingly powerful forces arrayed against them -- the UK government, the media, the elites. After some discussion, he came to understand my perspective.

This time the good guys are in Number 10 and the odds are in their favor in the coming election.

Having some insight into what is happening in UK politics, I can assure you that most of what is reported in the media is junk. Sometimes the story is deliberately distorted, sometimes it's just stupidity at work. But you are foolish if you trust the media, in the UK or US. Just as we know that ~50% of published results in biomedical or social psychology journals fails to replicate, it is easy to do a simple look back to see that information from the media is highly unreliable.

I was struck by this photo today in the NYTimes:

A Brexit meeting of European Union ministers on Tuesday in Luxembourg

Compare to Kubrick's Dr. Strangelove :-)

Houellebecq on Tocqueville, Democracy, and Nietzsche

I prefer good literary criticism.




But this is not it:



Beyond some trivialities, the discussants make no progress toward the question that fascinates all of them: what is Michel Houellebecq really thinking? But they cannot conceive it because their conditioning is so strong that the thoughts cannot enter their minds. (Note that, in its favor, the panel includes Soumission translator Lorin Stein.)

Much better, and shorter, this video of Houellebecq on Tocqueville, Democracy, and Nietzsche.

Tocqueville (Democracy in America, chapter 6): ... It would seem that if despotism were to be established among the democratic nations of our days, it might assume a different character; it would be more extensive and more mild; it would degrade men without tormenting them. I do not question that, in an age of instruction and equality like our own, sovereigns might more easily succeed in collecting all political power into their own hands and might interfere more habitually and decidedly with the circle of private interests than any sovereign of antiquity could ever do. But this same principle of equality which facilitates despotism tempers its rigor. ...

Democratic governments may become violent and even cruel at certain periods of extreme effervescence or of great danger, but these crises will be rare and brief. ... I have no fear that they will meet with tyrants in their rulers, but rather with guardians.1

I think, then, that the species of oppression by which democratic nations are menaced is unlike anything that ever before existed in the world; our contemporaries will find no prototype of it in their memories. I seek in vain for an expression that will accurately convey the whole of the idea I have formed of it; the old words despotism and tyranny are inappropriate: the thing itself is new, and since I cannot name, I must attempt to define it.

I seek to trace the novel features under which despotism may appear in the world. The first thing that strikes the observation is an innumerable multitude of men, all equal and alike, incessantly endeavoring to procure the petty and paltry pleasures with which they glut their lives. Each of them, living apart, is as a stranger to the fate of all the rest; his children and his private friends constitute to him the whole of mankind. As for the rest of his fellow citizens, he is close to them, but he does not see them; he touches them, but he does not feel them; he exists only in himself and for himself alone; and if his kindred still remain to him, he may be said at any rate to have lost his country.

Above this race of men stands an immense and tutelary power, which takes upon itself alone to secure their gratifications and to watch over their fate. That power is absolute, minute, regular, provident, and mild. It would be like the authority of a parent if, like that authority, its object was to prepare men for manhood; but it seeks, on the contrary, to keep them in perpetual childhood: it is well content that the people should rejoice, provided they think of nothing but rejoicing. For their happiness such a government willingly labors, but it chooses to be the sole agent and the only arbiter of that happiness; it provides for their security, foresees and supplies their necessities, facilitates their pleasures, manages their principal concerns, directs their industry, regulates the descent of property, and subdivides their inheritances: what remains, but to spare them all the care of thinking and all the trouble of living? ...

After having thus successively taken each member of the community in its powerful grasp and fashioned him at will, the supreme power then extends its arm over the whole community. It covers the surface of society with a network of small complicated rules, minute and uniform, through which the most original minds and the most energetic characters cannot penetrate, to rise above the crowd. The will of man is not shattered, but softened, bent, and guided; men are seldom forced by it to act, but they are constantly restrained from acting. Such a power does not destroy, but it prevents existence; it does not tyrannize, but it compresses, enervates, extinguishes, and stupefies a people, till each nation is reduced to nothing better than a flock of timid and industrious animals, of which the government is the shepherd.

I have always thought that servitude of the regular, quiet, and gentle kind which I have just described might be combined more easily than is commonly believed with some of the outward forms of freedom, and that it might even establish itself under the wing of the sovereignty of the people.

Our contemporaries are constantly excited by two conflicting passions: they want to be led, and they wish to remain free. As they cannot destroy either the one or the other of these contrary propensities, they strive to satisfy them both at once. They devise a sole, tutelary, and all-powerful form of government, but elected by the people. They combine the principle of centralization and that of popular sovereignty; this gives them a respite: they console themselves for being in tutelage by the reflection that they have chosen their own guardians. Every man allows himself to be put in leading-strings, because he sees that it is not a person or a class of persons, but the people at large who hold the end of his chain.

By this system the people shake off their state of dependence just long enough to select their master and then relapse into it again. ...

See also Neoreaction and the Dark Enlightenment.

Update: Kudos to Ross Douthat of the NYTimes, who is way ahead of the NYU panelists.

Neoreaction and the Dark Enlightenment

An essay on neoreaction and the dark enlightenment from The Awl.

See also Fukuyama and Zhang on the China Model , Is there a China model? and Power and paranoia in Silicon Valley.

The Darkness Before the Right

A right-wing politics for the coming century is taking shape. And it’s not slowing down.

... Land’s case for democratic dysfunction is simply stated. Democracy is structurally incapable of rational leadership due to perverse incentive structures. It is trapped in short-termism by the electoral cycle, hard decisions become political suicide, and social catastrophe is acceptable as long as it can be blamed on the other team. Moreover, inter-party competition to “buy votes” leads to a ratchet effect of ever-greater state intervention in the economy—and even if this is periodically reversed, in the long-run it only moves in one direction. ... Rather than accept creeping democratic socialism (which leads to “zombie apocalypse”), Land would prefer to simply abolish democracy and appoint a national CEO. This capitalist Leviathan would be, at a bare minimum, capable of rational long-term planning and aligning individual incentive structures with social well-being (CEO-as-Tiger-Mom). Individuals would have no say in government, but would be generally left alone, and free to leave. This right of “exit” is, for Land, the only meaningful right, and it’s opposed to democratic “voice,” where everyone gets a say, but is bound by the decisions of the majority—the fear being that the majority will decide to self-immolate.

Anti-democratic sentiment is uncommon in the West, so Land’s conclusions appear as shocking, deliberate provocations, which they partly are. ... Pointing to Singapore, Hong Kong, and Shanghai, it argues that economically and socially effective government legitimizes itself, with no need for elections. And this view isn’t limited to the internet right. ...

This brand of authoritarian capitalism has a certain fascist sheen, but in truth it’s closer to a rigidly formalized capitalist technocracy. There’s no mass mobilization, totalitarian social reorganization, or cult of violence here; governing will be done by the governors, and popular sovereignty replaced by the market Mandate of Heaven. There is a strange sort of disillusioned cultural conservatism here as well, albeit one absolutely stripped of moralism. In fact, what’s genuinely creepy about it is the near-sociopathic lack of emotional attachment; it’s a sort of pure incentive-based functionalism, as if from the perspective of a computer or alien. If a person doesn’t produce quantifiable value, they are, objectively, not valuable. Everything else is sentimentality.

...

Capitalism, in this view, is less something we do than something done to us. Contra business-class bromides about the market as the site of creative expression, for Land, as for Marx, capitalism is a fundamentally alien institution in which “the means of production socially impose themselves as an effective imperative.” This means simply that the competitive dynamics of capitalism drive technical progress as an iron law. If one capitalist doesn’t want to build smarter, better machines, he’ll be out-competed by one who does. If Apple doesn’t make you an asshole, Google will. If America doesn’t breed genetically modified super-babies, China will. The market doesn’t run on “greed,” or any intentionality at all. Its beauty—or horror—is its impersonality. Either you adapt, or you die.

Accelerating technological growth, then, is written into capitalism’s DNA. Smart machines make us smarter allowing us to make smarter machines, in a positive feedback loop that quickly begins to approach infinity, better known in this context as “singularity.” ...

Somehow I ended up on this "map of neoreaction" -- without my consent, of course. Who are all these people? ;-)

Fukuyama and Zhang on the China Model

This is an interesting discussion between Francis Fukuyama and Zhang Wei Wei on the so-called China Model. Zhang is an apologist but overall the discussion is enlightening. Fukuyama's perspective is the familiar liberal democratic one so I excerpt Zhang below.

ZHANG | ... In his presentation, Dr. Fukuyama raised four issues concerning the China Model, namely, accountability, rule of law, the “bad emperor” and sustainability. I would like to respond to Dr. Fukuyama’s view. I think what China has been doing is very interesting. China is now perhaps the world’s largest laboratory of political, economic, social and legal reforms in the world. What Dr. Fukuyama said reminds me of my conversation with the editor-in-chief of the German magazine Die Zeit last February. The topic was also the China Model. After a recent visit to Shanghai, he felt that there were more and more similarities between Shanghai and New York. In his eyes, China seems to follow the US model. “Does it mean there is no China Model but only the US model?” he asked. I counseled him to look at Shanghai more carefully and know the city well. A careful observer will find that Shanghai has overtaken New York in many respects.

Shanghai outperforms New York in terms of “hardware” such as high-speed trains, subways, airports, harbors and many commercial facilities, but also in terms of “software.” For instance, life expectancy in Shanghai is three to four years longer than New York, and the infant mortality rate in Shanghai is lower than New York. Shanghai is a much safer place where girls can stroll the streets at midnight. My message to this German scholar is that we’ve learned a lot from the West; we’re still learning from the West, and will continue to do so in the future, but it’s also true that we have indeed looked beyond the Western model or the US model. To a certain extent, we are exploring the political, economic, social and legal systems of the next generation. In this process, the more developed regions of China like Shanghai are taking the lead. ...

... I have visited the US on many occasions and found that the definition of corruption matters a lot. In my new book, I put forward a concept of “corruption 2.0,” as the financial crisis has exposed many serious “corruption 2.0” issues. For instance, rating agencies gain profits through regulatory arbitrage by granting triple A’s to dubious financial products or institutions. I think this is corruption. But these issues are called “moral hazards” in the American legal system. I think the financial crisis can be better tackled if these problems are treated as corruption.

We can also make horizontal comparisons. I have visited more than one hundred countries. The reality is that no matter how much Chinese complain about corruption at home, it is much worse in other nations of comparable size, say, those with a population of 50 million and above, and at similar stage of development such as India, Ukraine, Pakistan, Brazil, Egypt and Russia. The evaluation of Transparency International echoes my view.

Furthermore, it’s necessary to look at such a large country as China in terms of regions. China’s developed regions are more immune to corruption. I once stayed in Italy as a visiting professor and visited Greece several times, and I think Shanghai is definitely less corrupt than Italy and Greece. ... Indeed, whatever political system, be it a one party system, a multi-party system, or a no party system, it must all boil down to good governance and what you can deliver to your people. Therefore, good governance matters most, rather than western-style democratization.

This brings me to Prof. Fukuyama’s “end of history” thesis. I have not published my point of view yet. But mine is exactly the opposite to Prof. Fukuyama’s. I take the view that it is not the end of history, but the end of the end of history.

The Western democratic system might be only transitory in the long history of mankind. Why do I think so? Two thousand and five hundred years ago, some Greek city states like Athens, practiced democracy among its male citizens and later were defeated by Sparta. From then on, for over two thousand years, the word “democracy” basically carried the negative connotation, often equivalent to “mob politics.” ...

But today, this kind of democratic system cannot solve the following big problems. First, there is no culture of “talent first.” Anyone who is elected can rule the country. This has become too costly and unaffordable even for a country like the US. Second, the welfare package can only go up, not down. Therefore it is impossible to launch such reforms as China did in its banking sector and state-owned enterprises. Thirdly, it is getting harder and harder to build social consensus within democratic countries. In the past, the winning party with 51% of votes could unite the whole society in the developed countries. Today American society is deeply divided and polarized. The losing party, instead of conceding defeat, continues to obstruct. Fourth, there is an issue of simple-minded populism which means that little consideration can be given to the long-term interest of a nation and society. Even countries like the US are running this risk.

In 1793, King George III of the UK sent his envoy to China to open bilateral trade. But Emperor Qianlong was so arrogant that he believed that China was the best country in the world. Therefore China did not need to learn anything from others. This is what defined the “end of history” then, and ever since China lagged behind. Now I observe a similar mindset in the West.

It is necessary to come to China and see with one’s own eyes how China has reformed itself over the past three decades. Small is each step, yet the journey is non-stop. The West still has strong faith in its own system, but it is the same system that has become more and more problematic. Greece, the cradle of Western democracy, has gone bankrupt. The British fiscal debt is as high as 90% of its GDP.

What about the US? I did a simple calculation. The 9/11 attack cost the US about $1 trillion, the two not-so-smart wars cost US about $3 trillion and the financial crisis about $8 trillion. Now the fiscal debts of the US are somewhere between $10 to 20 trillion. In other words, if the US dollar was not the main international reserve currency—this status may not last forever—the US would be bankrupt already. ...

See also Zhang's NYTimes editorial Meritocracy Versus Democracy.

... Virtually all the candidates for the Standing Committee of the Party, China’s highest decision-making body, have served at least twice as a party secretary of a Chinese province or at similar managerial positions. It takes extraordinary talent and skills to govern a typical Chinese province, which is on average the size of four to five European states.

Indeed, with the Chinese system of meritocracy in place, it is inconceivable that people as weak and incompetent as George W. Bush or Yoshihiko Noda of Japan could ever get to the top leadership position.

Take the incoming leader, Xi Jinping, as an example. Xi served as the governor of Fujian Province, a region known for its dynamic economy, and as party secretary of Zhejiang province, which is renowned for its thriving private sector, and Shanghai, China’s financial and business hub with a powerful state-sector.

In other words, prior to taking his current position as the heir apparent to President Hu Jintao, Xi had in fact managed areas with total population of over 120 million and an economy larger than India’s. He was then given another five years to serve as vice president to get familiar with running state and military affairs at the national level.

China’s meritocracy challenges the stereotypical dichotomy of democracy v. autocracy. From Beijing’s point of view, the nature of a state, including its legitimacy, has to be defined by its substance: good governance, competent leadership and success in satisfying the citizenry. ...

Related posts: Is there a China Model? , China 3.0 and China 1793.

The Hollow Men: video and audio

Highly recommended talk by Dominic Cummings at the UK Institute for Public Policy Research. See also The Hollow Men (original essay).

Podcast version here and below.

The Hollow Men: What's wrong with Westminster and Whitehall, and what to do about it by Ippr on Mixcloud

US basic research down 25% in GDP terms (10 years)

Earlier this week I was in DC for a Council on Competitiveness meeting of CTOs and university VPRs. The figure below, from this report card, really scared me:

My rough guess is that US funding of physics research has been at best flat in real dollars over most of my career, but probably down significantly overall. This does not end well ...

The Hollow Men

I highly recommend The Hollow Men II: Some reflections on Westminster and Whitehall dysfunction by Dominic Cummings. It is full of insights into the failings of bureaucracies, government by crisis and news cycle, and hollow leadership.

The essay is long, but the excerpts below give some of the flavor.

... Most of our politics is still conducted with the morality and the language of the simple primitive hunter-gatherer tribe: ‘which chief shall we shout for to solve our problems?’ Our ‘chimp politics’ has an evolutionary logic: our powerful evolved instinct to conform to a group view is a flip-side of our evolved in-group solidarity and hostility to out-groups (and keeping in with the chief could lead to many payoffs, while making enemies could lead to death, so going along with leaders’ plans was incentivised). This partly explains the persistent popularity of collectivist policies and why ‘groupthink’ is a recurring disaster. Such instincts, which evolved in relatively simple prehistoric environments involving relatively small numbers of known people and relatively simple problems (like a few dozen enemies a few miles away), cause disaster when the problem is something like ‘how to approach an astronomically complex system such as health provision for millions.’

... students leave university for politics and the civil service with degrees that reward verbal fluency, some fragments of philosophy, little knowledge of maths or science, and confidence in a sort of arrogant bluffing combined with ignorance about how to get anything done. They think they are prepared to ‘run the country’ but many cannot run their own diaries.

... Often watching MPs one sees a group of people looking at their phones listening only for a chance to interrupt, dreaming of the stage and applause. They are often persuasive in meetings (with combinations of verbal ability, psychological cunning, and ‘chimp politics’) and can form gangs. Parliaments seem to select for such people despite the obvious dangers. This basic aspect inevitably repels a large fraction of entrepreneurs and scientists who are externally oriented – that is, focused on building things, not social networking and approval.

... It is the startups who, generally, make breakthroughs and solve hard problems – not bureaucrats – but it is the bureaucrats who dominate the upper echelons of large public companies, politics, and public service HR systems. Civil service bureaucracies at senior levels generally select for the worst aspects of chimp politics and against those skills seen in rare successful organisations (e.g the ability to simplify, focus, and admit errors). They recruit ‘people who won’t rock the boat’ but of course the world advances exactly because of the efforts of people who do ‘rock the boat’. They recruit a lot of lawyers, who are trained to focus on process rather than outcome, reinforcing one of the worst aspects of bureaucracies.

... Warren Buffett has proposed institutionalising Red Teams to limit damage done by egomaniac CEOs pursuing flawed mergers and acquisitions: ‘it appears to me that there is only one way to get a rational and balanced discussion. Directors should hire a second advisor to make the case against the proposed acquisition, with its fee contingent on the deal not going through’. This seems to me to be a great idea and MPs and Permanent Secretaries should think hard about how to operationalise it in Whitehall.

... most senior MPs in all three parties are locked into a game in which they spend most of their time on a) launching gimmicks, and b) coping with crises. These two forms of activity are closely related. The only widely understood model of activity in Westminster (and one which fits well psychologically with the desire for publicity) is a string of gimmicks aimed to manipulate the media (given the label ‘strategy’ to make it sound impressive) which are announced between, and in response to, media crises, some of which are trivial and some of which reflect structural problems. Many, drawing perhaps only on the bluffing skills rewarded by PPE, have no idea what else to do.

Powerful people rush from meetings about the latest gimmick they are to announce, to meetings about the latest cockup for which they need to try to dodge the blame


... Cameron is superficially suitable for the job in the way that ‘experts’ often judge such things – i.e. basic chimp politics skills, height, glibness etc, so we can ‘shove him out to give a statement on X’. That’s it. In a dysfunctional institutional structure, someone without the skills we need in a prime minister can easily get the job with a few breaks like that.

... Our leaders are like 19th Century Germans who had lost religion of whom Nietzsche said, ‘they merely register their existence in the world with a kind of dumb amazement’. They get up every day and react to the media without questioning why: sometimes they are lauded, usually they are trashed, but they carry on in a state of ‘dumb amazement’ without realising how absurd their situation is. Meanwhile, the institutions within which they operate continue with their own momentum and dynamics, and they pretend to themselves that they are, in the phrase they love, ‘running the country’.

SEC senior-level positions

For junior level positions, see previous post.

The U.S. Securities and Exchange Commission is seeking financial professionals at all levels of experience who strive to make a difference in capital markets to join its newly-formed Division of Risk, Strategy, and Financial Innovation

The Securities and Exchange Commission’s Division of Risk, Strategy, and Financial Innovation (“Risk Fin”) was created in the fall of 2009 with a broad mandate to support the Commission across a wide variety of economic, financial, and legal issues using a collaborative, multi-disciplinary approach. Risk Fin staff includes economists, financial engineers, lawyers, statisticians, and capital markets practitioners.

The Division consists of an Office of Policy and Development, an Office of the Chief Counsel, and five specialized Offices each supporting the Division’s goals with respect to analyses in the following areas:

Office of the Sell Side:
broker-dealers, prime brokers, rating agencies, and banks

Office of the Buy Side:
asset managers, hedge funds, and mutual funds

Office of Markets:
exchanges, clearinghouses, and market structure

Office of Litigation Support:
enforcement, damages, and distributions

Office of Data and Data Analytics:
financial data processing and analysis


The activities of each office as a whole include:
-
providing detailed, high-quality economic and other analyses, specific subject-matter expertise, and general guidance to the Commission and other Divisions/Offices
-
identifying and analyzing issues, trends, and innovations in the marketplace
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where consistent with the Commission’s mission, writing internal white papers and thought-leadership pieces, and keeping abreast of, and contributing to, external peer-reviewed research on pertinent issues
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developing analytical approaches, methods and models in order to identify trends, risks or potential securities law violations in the capital markets
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working with outside experts in academia and industry to strengthen the Commission’s foundation of market knowledge
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managing and analyzing public and private data to support relevant initiatives and projects
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collaborating with other Offices in the Division, as well as other Divisions and Offices across the Commission
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participating in, and contributing to, industry conferences


Risk Fin is currently hiring for each of its five specialized Offices. Qualified candidates should possess advanced quantitative and/or financial skills similar to those found in degrees such as: Masters of Finance or Financial Engineering, Masters of Business Administration (with a quantitative/finance concentration), or a Ph.D. in finance, economics, or statistics.

Work experience is not required. However, direct market knowledge gained through positions held at banks, exchanges, asset managers, broker-dealers, hedge funds, mutual funds, or related financial institutions would be helpful.


In addition to subject-matter expertise, candidates should demonstrate that they can:
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effectively communicate (orally and in written form)
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interact effectively, professionally, and courteously with a variety of personnel inside and outside of the Commission
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exercise independent judgment, manage priorities and complete complex projects
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collaborate with others and foster a productive and enjoyable team environment


Terms
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Candidates will be hired with an initial appointment of two years, extendable to a maximum of four years in total.
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All positions are located at the SEC’s headquarters in Washington, DC.
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Salaries are competitive and based on education and relevant work experience.
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Positions are open to US citizens and non-US citizens* from any treaty-allied nation (see http://www.state.gov/s/l/treaty/collectivedefense/). To apply, please send a cover letter and resume to riskfinrecruiting@sec.gov

*Please include your country of citizenship in either your resume or cover letter.

SEC jobs

I received the following from the SEC. If you are interested, let me know. There may be more senior positions available with the possibility of real input into future reform. If you are a math / science student or postdoc, and have ethical qualms about working on Wall Street, this might be something to consider.

Quantitative Risk Analyst at US Securities and Exchange Commission

Location: Washington, DC (Washington D.C. Metro Area)
Compensation: $80,000 - $130,000 Per Year


Job Description


The SEC's new Division of Risk, Strategy and Financial Innovation is looking for junior quantitative risk analysts. This division is of great importance given proposed legislation, which may increase the SEC’s responsibility for derivatives, hedge funds and credit agencies, as well as give the SEC a seat at the systemic Risk Council. Although the division is only a few months old and is quite small, it already has high visibility both within and outside the SEC.

The pay scale obviously is less than that in private industry; it will be between $80K and $130K depending on your experience and training. Another important difference in the government is that we hire full-time, permanent employees through an open competition - which means a significant process. We can also bring employees on board relatively more quickly if employment is limited to a period of a few years. For those who are interested in public service or making an important contribution to the markets, there will be the opportunity to be involved in any number of efforts that will affect the investment regulatory environment for many years to come.


Skills


Here is the kind of person we are looking for:

# Strong undergraduate training in math, computer science and statistics.
# An ability to program and code. This will include areas like:
Database knowledge, because a lot of what you do will require that you manage or pull in the data you use.
Developing prototype systems and models. In our case, not models for trading but for targeting where to focus our examinations and investigations.

Do analytical work, such as regressions and factor analysis. Part of this will be to contribute to the broad agenda on systemic risk.
# Two or more years of experience in the financial industry.
However, we can look at people fresh out of school if you are very strong technically and are willing to work at the lower pay scale.
# A masters degree in financial engineering or similar field is valuable but not necessary.
# The work will be in DC, and we would like to have a two year commitment on your part.


Company Description


The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.

The new division of Risk, Strategy and Financial Innovation combines the Office of Economic Analysis, the Office of Risk Assessment, and other functions to provide the Commission with sophisticated analysis that integrates economic, financial, and legal disciplines. The division’s responsibilities cover three broad areas: risk and economic analysis; strategic research; and financial innovation. With the creation of the new division, the SEC now has five divisions, including the Division of Corporation Finance, the Division of Enforcement, the Division of Investment Management, and the Division of Trading and Markets. This is the first new division at the SEC since 1972.

The new division will perform all of the functions previously performed by the Office of Economic Analysis and the Office of Risk Analysis, along with the following: (1) strategic and long-term analysis; (2) identifying new developments and trends in financial markets and systemic risk; (3) making recommendations as to how these new developments and trends affect the Commission's regulatory activities; (4) conducting research and analysis in furtherance and support of the functions of the Commission and its divisions and offices; and (5) providing training on new developments and trends and other matters.

Contested Modernity

This talk is a nice summary of Martin Jacques' recent book When China Rules the World. Jacques is insightful and his opinions are worthy of consideration. He combines the depth of an academic (he's a Cambridge PhD) with the willingness of a journalist and public intellectual (his job over the last 20+ years) to take chances and make broad statements. His late wife was an ethnic-Indian who worked as a barrister in Hong Kong. From her he developed a certain insight into aspects of Chinese society (specifically, attitudes toward race, ethnicity and cultures from the developing world) that would tend to elude a European intellectual. Jacques, who used to edit the journal Marxism Today, and was a strong critic of Thatcherism, nevertheless acknowledges the ascendancy of global capitalism ("is there any other game in town?"). Rather than hold his previous politics against him, it signals to me a certain mental flexibility. I'm more likely to trust the judgement of a thinker that has changed some of his fundamental assumptions in the face of facts. (Posterior probabilities should not equal prior probabilities after a nontrivial encounter with data -- if they do that is a clear warning sign; see some of the Chicago School interviews I linked to in the previous post ;-)

The audio is also available via iTunes as a podcast, and includes some Q&A at the end which challenges some of Jacques' assumptions. The Q&A is not included in the video below.

Synopsis:

For over two hundred years we have lived in a western-made world, one where the very notion of being modern was synonymous with being western. The book argues that the twenty-first century will be different: with the rise of increasingly powerful non-Western countries, the west will no longer be dominant and there will be many ways of being modern. In this new era of ‘contested modernity’ the central player will be China.

Martin Jacques argues that far from becoming a western-style society, China will remain highly distinctive. It is already having a far-reaching and much-discussed economic impact, but its political and cultural influence, which has hitherto been greatly neglected, will be at least as significant. Continental in size and mentality, and accounting for one fifth of humanity, China is not even a conventional nation-state but a ‘civilization-state’ whose imperatives, priorities and values are quite different. As it rapidly reassumes its traditional place at the centre of East Asia, the old tributary system will resurface in a modern form, contemporary ideas of racial hierarchy will be redrawn and China’s ages-old sense of superiority will reassert itself. China’s rise signals the end of the global dominance of the west and the emergence of a world which it will come to shape in a host of different ways and which will become increasingly disconcerting and unfamiliar to those who live in the west.

See also Is there a China model?, which discusses the concept of performance legitimacy (a modern analog of the Mandate of Heaven?) as opposed to democracy.

More: Worst case scenarios and governance in China, and links here.

Our brilliant leaders

In case you haven't followed, Greenspan has made a number of controversial comments in his new book and in related press interviews. I agree with his criticisms of the Bush administration for fiscal profligacy, but like everyone else I find his argument for the necessity of the Iraq war to be nutty. I like the following comments from ParaPundit, found via Steve Sailer.

ParaPundit: ...I try to be polite about individuals. But the invasion of Iraq was a huge mistake and any prominent figure who makes lame arguments about the invasion must not go unchallenged. Saddam was moving towards control of the Strait of Hormuz? I'd be embarrassed to say something so obviously wrong. One doesn't need to do fancy calculations or read tons of history books or follow complex theories to know that Saddam was not moving toward control of the Strait of Hormuz. That's nuts. But where is this coming from? If Greenspan had this view 20 years ago then one can't blame it on senility. So what is going on? Can someone explain this? Is Greenspan overrated in general? Or is he only good at some narrow specialty and foolish about much else?

Greenspan is another example of a general problem we face: We are poorly led. We give our elites - especially our political elites - far too much respect and deference. These people are nowhere near as competent as they make themselves out to be. The really talented people in America are in investment banks and Silicon Valley start-ups. [OK, this is an exaggeration, and I hope he means I-banks broadly defined.] They aren't in Washington DC in high government positions. Though I bet there are some smart people on K Street manipulating the yahoos in government.

We mostly are better off if the sharpest people are in venture capital-funded start-ups and investment banks. The private sector generates the wealth. But we need some small handful of sharpies in key positions of power who can recognize when nonsense is being spoken and say no to stupid policies.