Taleb Says Fed Should Do 'Minimum Harm' [video]

https://www.bloomberg.com/news/videos/2019-05-09/taleb-says-fed-should-do-minimum-harm-and-expresses-his-concerns-about-deficits-video

by ryansmccoy • 7 years ago

26 39 7 years ago

bloomberg.com

User233• 7 years ago

I have great respect for Taleb, but the value of his work is pretty much a linear function of closeness to the statistical math he used to get rich trading derivatives. He has extremely interesting things to say about uncertainty, randomness, fat tails, dynamic systems, and more. And he offers theorems to support his assertions.

At the other extreme, the limit case so far is when he starts tweeting about anthropology: it's utterly cringe-worthy.

dwater• 7 years ago

He seems to have figured out that hot takes get him more visibility than measured discourse, and he's optimizing for that visibility. There's always value in his ideas, but the presentation seems to have veered toward clickbait.

m_sahaf• 7 years ago

And if you disagree with him, he'll reach for his ad homonym stash (mostly calling others "imbecile"), which is why I stopped following him in social media. Read his books, but stay away from everything else he produces.

ixtli4• 7 years ago

Being anti-fragile means that everyone who disagrees with you is fragile ;)

ixtli4• 7 years ago

Heh. Should be noted that basically every top comment here says the same thing in different ways about Taleb.

vowelless• 7 years ago

Tldw version?

xstockix• 7 years ago

I've never felt more conflicted over a public person than I am about Nassim Taleb. He's clearly brilliant, and makes bold statements that he stands behind- that takes guts and is to be applauded. On the other hand, he can be an outright prick and I don't understand some of the fights he picks. Dude is polarizing and fascinating.

formalsystem• 7 years ago

I used to be thrown off by the fights he picked but then I had a thought. The fact that's it's considered rude to criticize people with influence means it's difficult to gauge their performance. If anything public figures should be harshly criticized because they make tons of money when things go well and don't seem to be taking on any risk from their bad decisions.

7812• 7 years ago

One of the reasons for the replication crisis in science is the lack of more people like Taleb who are not afraid to say "this study is bullshit" instead of being ultra-polite and never daring to put into doubt the integrity of the authors (p-hacking, data falsification, ...)

I've read quite a number of blog posts about scientists who were certain a paper was p-hacked (and proven right later) but who said they would never dare raise their voice publicly because it would kill their career.

justin662• 7 years ago

I don't know what the equivalent to Taleb would be in the hard sciences, but it wouldn't be an antidote to bullshit research. The answer to a bad paper is generally a better paper, not loud whining.

vbuwivbiu• 7 years ago

boy do I feel the same. He recently tweeted something to the effect that 'all employees should worship entrepreneurs for taking the risk of starting a business'. Now apart from the fact that only a minority of people can afford to take such a risk, have the right personality for business, the right connections, education....just...what a condescending thing to say and coming from a man who has no 'skin in the game' himself. On the other hand his work on unveiling the myth of IQ is laudable. His writing is hard to read and his acrobatic algebraic manipulations are impossible to follow. He's a dick but I like him.

ixtli4• 7 years ago

I'm wary this might end up aggravating the subset of Taleb adherents on here but from what I've seen of him (segments of some of his books, tweets, essays) he cultivates a pretty brazenly idealistic / ideological (as opposed to materialistic) worldview that he repackages in academic language in order to bolster his authority.

To be clear this is not to imply that he isn't in control of his subject matter. Just that to say Ray Dalio is "mistaken" about his largely philosophical/ideological claims about capitalism fits into a pattern I observe from Taleb where he uses a deep and nuanced understanding of the status quo as a weapon to beat down normative arguments that the status quo should be changed. It's very similar to how Sam Harris uses his specialist authority to deliver regressive social critiques that he wraps in academic language.

We need to remember that expertise on a subject is a tool, but how you use that tool is always guided by ideologies. I challenge people to think critically about what those like Harris and Taleb's morality and ideological positions are.

povertyworld• 7 years ago

Weird interview. He starts out angry that someone insulted risk takers who lose money. Then by the end of the interview he says people should just get jobs and make super conservative investments like gold and short term bonds. Waste of 20 minutes.

ixtli4• 7 years ago

Honestly Taleb's cult is pretty disconcerting.

spenuke2• 7 years ago

Can somebody please ELI5 his whole phenomenon? I don't really understand who are the targets (other than Nate Silver) of all his polemic. From my limited exposure, he's basically making age-old conservative points, arguing that the Enlightenment ideal of human knowledge has strong (but unidentified) limits.

Why is he so popular? And how did he get so rich on Wall Street if he just thinks randomness blows all the statistical experts out of the water? I know I'm missing something.

User233• 7 years ago

Especially since gold is only actually a conservative "investment" if you store it yourself and that is expensive if you want low risk. Otherwise you don't have a safe asset at all due to counter-party risk on your notional gold holdings.

robbrit• 7 years ago

I think you're comparing apples and oranges here, and leaving out details. He says the entrepreneurs as risk takers are important, because they are doing something that benefits the economy if they win and don't really impact anything but themselves if they lose.

That's completely different from what he's talking about in the second half, which is the focus on financial markets. He's advising that people who don't know how to hedge themselves should stay out of the financial markets. He didn't specifically say it, but I think the rationale for that perspective is that the risk taking in the financial markets takes a very different form than the risk that an entrepreneur faces; the risk taking in financial markets can fail spectacularly and cause a lot more problems than bankrupting a single person. The best example is the LTCM crisis, where a single company's failure was so impactful and sudden that it threatened destabilizing the entire market.

temac• 7 years ago

I question that kind of opinion talk, which boils down to (often implicitly) debating the definition of words in a boring way and/or trying to attribute meaningless merits and demerits to whole arbitrary idealized "class" of people.

There is so little information and it is so caricatural and simplistic to come and state in a kind of absolute tone that "entrepreneurs" are good and they build "value" (while basically the "others" are all of the inverse?)

I do not expect to get any insight from somebody with that kind of point of view. I already know that some people have that kind of point of view, and I already know that some people have radically different one, and the philosophical framework in both cases has some validity, with idealistic components and realistic ones, of which both intuitively and descriptively we should strive to get a balance from.

On top of that, postmodern capitalism has taken a turn that very few academics would found merits in (and even fewer have called for), yet it managed to influence the policies in way that are not even widely debated (at least as widely as they should) by the media and the public. So the ever increasing amount of discretionary power that a defacto class (real this time, because having 100000 times more wealth than your "neighbor" is a criteria vastly more useful than being e.g. an Uber driver vs. being salaried in a taxi company) of people already have achieved and are continuing to amass is extremely concerning, even more so given the choice that have been made, the impact that this yield, and the quasi complete lack of action that could show we could have some confidence in their infinite wisdom.

I do not buy that the only thing that is needed is some kind of natural regulation by (re-?)allowing "failure". "Risk takers" can still have a shitload amount of money after they loose some.

If some attempts of political organization in other forms failed, my guess is that postmodern capitalism in the form of unbridled individualism and deathmatch to grab control and dispend resources will fail harder.

And I'm not sold on the concept on "not true capitalism", because of the principle of realism, that I refuses to apply only when it suits my narrative. A far better and hopefully far more actionable way to present things is to state that model X tends to degenerate into concrete situation Y, while model T tends to yield Z. So of course there will be some corrections to give. AND I do not believe we should primarily listen to people who do not recognize some extraordinary value brought by some people in the society (e.g. nurses, they could be on the "sideline collecting their salary"?), to decide of those corrections. I believe that individualism and hubris is a big component in those deviations, regardless of the original ideal.

On the other hand, trying to attribute merit or demerit on abstract mythical "entrepreneurship" without the details is an activity I consider having absolutely no meaning: I'll be more happy that some projects fail so I could consider people achieving success in horrible projects even "worse" than people failing at such projects, and on another dimension failures (on both horrible and wonderful projects) can be attributed on their leaders while other on other factors.

Animats3• 7 years ago

"The job of the Federal Reserve is to take away the punch bowl just as the party gets going." - William McChesney Martin, head of the Fed in the 1960s.

His point was that if you don't want a crash, steps have to be taken to stop a boom before it's too late. Politicians hate that, because it means deliberately stopping a boom. But that's the Fed's job, and it's why they have some independence from administration policy.

rfrey• 7 years ago

Any discussion about Taleb always leads to questions about why he picks such public fights. I've said this before:

The most salient anecdote Taleb tells about himself is the one where he's going onstage to debate an opponent. He asks his publisher if punching the other guy in the face would be against his contract, and his publisher notes that it would be very good for book sales.

All Taleb does is punch people in the face nowadays. It's probably very good for book sales. He notes elsewhere, rightly I think, that the goal of anybody seeking PR should be to get the attention of somebody more famous then them: since it's much easier to pick fights than make friendships, and either will do, he picks fights with anybody he thinks has prominence. I believe it's a persona, and he's a very good method actor.

Taleb Says Fed Should Do 'Minimum Harm' [video]

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