Digest 10: a tiny ripple of hope; why ‘expected value’ isn’t always a good argument; 1968: the year that shaped a generation
RFK: a tiny ripple of hope
I begin this week’s digest with two paragraphs from Bobby Kennedy in 1966…
Few will have the greatness to bend history itself, but each of us can work to change a small portion of events, and in the total of all those acts will be written the history of this generation. It is from numberless diverse acts of courage and belief that human history is shaped. Each time a man stands up for an ideal, or acts to improve the lot of others, or strikes out against injustice, he sends forth a tiny ripple of hope, and crossing each other from a million different centers of energy and daring, those ripples build a current that can sweep down the mightiest walls of oppression and resistance.
For the fortunate among us, there is the temptation to follow the easy and familiar paths of personal ambition and financial success so grandly spread... But that is not the road history has marked out for us. Like it or not, we live in times of danger and uncertainty... All of us will ultimately be judged, and as the years pass we will surely judge ourselves, on the effort we have contributed to building a new world society and the extent to which our ideals and goals have shaped that effort.
Wow. Inspiring.
Ask My Book
Assuming you the reader are now familiar with, and have had a play around with, ChatGPT…
How could this change the format of books?
Listen below for 30 seconds, skip to 40:32 – then listen to 44.
Give it a go… https://askmybook.com/
The conversation picks up again for a few minutes on books here (worth listening).
Ask My Book is an early (quickly put together) prototype. There will be new formats. Whether OpenAI takes this on themselves is (to me as a non-expert) unclear. What Sahil and Steve discuss seems a big company idea, and would change the way people learn and conduct research. I’m surprised Sahil didn’t seem further interested in building this himself!
Why ‘expected value’ isn’t always a good argument: Optimal foraging theory
In the past year I’ve had several debates with people who’ve argued the ‘expected value’ of something means it’s worth pursuing.
I’ve countered that expected value isn’t the right way of thinking about the issue (because of downside risk), but couldn’t always properly articulate my argument.
Now I can: optimal foraging theory. Geoffrey Miller for 1 minute:
Minimising risk of starvation, not maximising calories. ‘Avoid ruin, not maximising expected value.’
(Steve Hsu’s Manifold podcast is the most intellectually broad and stimulating podcast I have come across. And Steve is a great, calm, patient interviewer.)
The cold, hard American interest undergirding Ukraine
This from David Sacks I found striking (2 minutes):
I think this (Europe not being dependent on Russia for energy) is likely a good thing for the world.
Despite not being a MAGA-hat wearer, I’m willing to be unpopular with a reminder that the person who had the foresight to say this in 2018, uncomfortably calling out the NATO Secretary General, was Trump.
In efforts to support Ukraine now, we should not be blind to this U.S. incentive.
‘Europe is now completely dependent on American natural gas… The cold, hard American interest undergirding our position in this war.’
The NYT piece mentioned: https://www.nytimes.com/2023/01/03/business/europe-natural-gas-prices.html
Why inflation is likely to come back in waves
Greg Jensen:
Recessions last longer during high inflation periods. Double the normal length (a long grind; a couple-year down cycle).
And China re-opening (and increased competition again for raw materials in the U.S. and Europe) will likely revive inflation.
Stanley Druckermiller:
I was led to looking at him by David Friedberg (30 seconds):
Druckermiller’s latest interview (4 minutes):
‘A little complacent about what long-term means… It’s my central forecast the Dow won’t be much higher in 10 years than it is today.’
Interesting too that in Druckermiller’s next point (15:00), he effectively says entitlement spending is clearly bankrupting America, but this is sufficiently uncomfortable the CNBC moderator just laughs and changes topic.
Let’s take a closer look at what happened in the 1970s. Remember, the “great inflation” of that decade happened in three waves, each bigger than the one before. The first peaked in February 1970 (consumer price inflation 6.4%); the second peaked in November 1974 (12.2%); the third peaked in March 1980 (14.6%). Between the first and second peaks there was an attempt — at first apparently successful — at bringing down inflation. It simply failed. And the same happened again between the second and third peaks.
The combination of higher interest rates and higher oil prices caused the worst US recession since the 1930s, which lasted from November 1973 until March 1975. Real output fell 4.9%, industrial production 15%. The S&P index plunged 40%, wiping out all the nominal gains investors had made since 1963. It did not regain its January 1973 level until 1980.
This feels reminiscent to Covid, coming in predictable waves we underestimate and get complacent about.
And Michael Burry concurring:
1968: The year that shaped a generation
In 1967 it was assumed that LBJ would contest the 1968 election. [As it is now Biden in 2024.] Eugene McCarthy started an insurgency. The country was wracked with riots over the failure in Vietnam and racial tensions, civil rights etc. McCarthy captured the imagination of progressives. Then Bobby Kennedy launched his campaign. The energy was extraordinary. A Presidential candidate quoting Aeschylus to crowds on the brink of riots — actually really talking to voters about serious issues. No campaign since has looked anything like it, partly because his assassination led to Secret Service rule changes that make it impossible to do what he did (imagine if a candidate partly rejected these constraints and actually re-engaged with crowds and unlike 1968 the energy is broadcast clearly into homes and across social media…). It’s probably not coincidental that RFK’s funeral saw public emotions unlike anything seen for another politician since. Before long, LBJ bowed out.
This for a minute (on the burial) nearly brought me to tears.
‘A year in which we could have accomplished great things, working together... Something less than the people we could be... After that we became might-have-beens.’
Song used in the clip: People Get Ready, The Chamber Brothers
Though seeing how bad things got with rioting at the 1968 Democratic Convention (for ~4 minutes):
…Makes me slightly more optimistic about the future today. (We have been here before; we got through it.)
Good to develop a better sense of how bad things have been in the recent past.
Caution on Crimea
If Zelensky succeeds in his current objective to liberate every square inch of Ukraine seized by Russia, including Crimea, this decisive defeat of Putin’s armies would not pose an existential threat to Russia. It would, however, pose an existential threat to Putin’s rule. If he is forced to choose between a humiliating loss and conducting a nuclear strike, I am prepared to give odds that he will choose the latter.
…having successfully led the U.S. through the most dangerous crisis in recorded history—the Cuban Missile Crisis of 1962–President John F. Kennedy came away from that searing experience with a major lesson that he passed to his successors. As he said in his most important foreign policy speech delivered just five months before he was assassinated: “Above all, while defending our own vital interests, nuclear powers must avert those confrontations that bring that force an adversary to choice of either a humiliating retreat or a nuclear war.”
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