You Don’t Say – “Peter Eavis… highlighted a statement… by… William Dudley (formerly of Goldman Sachs, then a top lieutenant to Tim Geithner): There is evidence of deep-seated cultural and ethical failures at many large financial institutions…. In 2008… people probably thought that our largest banks were just guilty of shoddy risk management, dubious sales practices, and excessive risk-taking… we’ve had to add price fixing, money laundering, bribery, and systematic fraud on the judicial system…. Framing the problem as a ‘trust issue’—customers no longer see banks as trustworthy institutions—is beside the point. Wall Street’s main defense is that its clients already realize that investment banks do not have their buy-side clients’ best interests at heart, and clients who don’t realize that are chumps. And in the wake of the financial crisis, I suspect there are few individuals out there who believe that their banks are there to help them. The banking industry has discovered that it can thrive without trust, which is not surprising; retail depositors trust the FDIC, and bond investors know that trust isn’t part of the equation…”
The Programmed Prospect Before Us – Robert Skidelsky reviews Mindless: Why Smarter Machines Are Making Dumber Humans by Simon Head. ”The philosopher Hubert Dreyfus famously argued that artificial intelligence cannot mimic higher mental functions. No activity that requires intelligent behavior can be done by computers, he wrote, because algorithms cannot adequately structure the complex situations that are addressed by intelligent thinking. However, in most of the business activities described in this book, no intelligent behavior is required of most workers: the intelligence is provided by the managers; the workers only have to follow the rules of highly simplified situations. I see no reason in principle why the rules of behavior for such situations cannot be followed by machines… Recently, Michael Scherer, a Time magazine bureau chief, received a phone call from a young lady, Samantha West, asking him if he wanted a deal on health insurance. After she responded to a number of his queries in what sounded like prerecorded fashion, he asked her point-blank whether she was a robot, to which he got the reply “I am human.” When he repeated the question, the connection was cut off. Samantha West turned out to be a system of recorded messages that were part of a computer program created by the brokers for health insurance The point is not that humans were not involved, but that the experts had worked out that far fewer of them needed to be involved to sell a given quantity of health insurance. Orthodox economics tells us that automating such transactions, by lowering the cost of health insurance, will enable many more policies to be sold, or release money for other kinds of spending, thus replacing the jobs lost. But orthodox economics never had to deal with competition between humans and machines.
Einstein’s Lost Theory Discovered … And It’s Wrong – “Faced with evidence the universe was growing, Einstein apparently wanted to figure out why it wasn’t filling up with empty space. His proposed solution is in this newly discovered paper. As the universe expanded, he suggested, new matter showed up to fill the gaps. New stars and galaxies would just pop up, according to Einstein’s model, so that even as the universe grew, it would look the same. Just to be clear, this theory is totally wrong. But for a little while Einstein thought it was right. The numbers made sense, because he had made a mathematical mistake. In the middle of a complicated calculation, he wrote a minus sign where he should have written a plus.”