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Experts from a world that no longer exists

collaborativefund.com

181–190 of 267 posts

Re: Experts from a world that no longer exists

#181
post #123

Earlier quoted context omitted.

The problem is we're all now dependent on stock market performance to make retirement feasible. Employer guaranteed defined-benefit pension schemes are dead. My uncles pension scheme was structured to pay out 1.5% of his final salary, inflation adjusted for the rest of his life, for each year he'd worked. He worked at one company his whole career, from age 18 to age 55, when he retired. Factoring in his mortgage, whi…

> The problem is we're all now dependent on stock market performance to make retirement feasible. Which seems a bit convenient for the wealthy. I think it was intentional, to align the interests of pensioners with the wealthy. It seems to me that pensions are one thing governments can do a good job at, because companies may fail but the government is much less likely to be unable to pay retirement benefits. They may…

>It seems to me that pensions are one thing governments can do a good job at, because companies may fail but the government is much less likely to be unable to pay retirement benefits.

Illinois and New Jersey beg to differ. Granted checks haven't bounced yet but it's pretty clear weird stuff is gonna happen and either pensioners or taxpayers will get screwed bad.

Re: Experts from a world that no longer exists

#182
post #123

Earlier quoted context omitted.

The problem is we're all now dependent on stock market performance to make retirement feasible. Employer guaranteed defined-benefit pension schemes are dead. My uncles pension scheme was structured to pay out 1.5% of his final salary, inflation adjusted for the rest of his life, for each year he'd worked. He worked at one company his whole career, from age 18 to age 55, when he retired. Factoring in his mortgage, whi…

> The problem is we're all now dependent on stock market performance to make retirement feasible. Which seems a bit convenient for the wealthy. I think it was intentional, to align the interests of pensioners with the wealthy. It seems to me that pensions are one thing governments can do a good job at, because companies may fail but the government is much less likely to be unable to pay retirement benefits. They may…

People who can retire are wealthy. They have a claim on [10, 20, 30] years of an income stream in the future. This can either be a claim on future tax revenues (public pensions) or on return to capital previously invested (private pensions). Most people have always worked til they died and it seems unlikely that the system where people work for 30-40 years and then get 30-40 years of pension will last.

Re: Experts from a world that no longer exists

#183

> “Don’t buy stocks when the P/E ratio is over 20” was a good lesson to learn from the 1970s when interest rates were 7%, the Fed hadn’t yet learned what it’s capable of, and most businesses were cyclical manufacturing companies vs. asset-light digital services. Is it relevant today? At a broad, philosophical level, yes. In practical terms, probably not. In the same sense, buying stocks at all seemed like nothing but…

The 2000 and 2008 blowups were pretty bad but back then there were still things that could be done like running deficits or lowering interest rates. We now have huge deficits and almost zero interest already during the boom. What can the Fed or government do during the next downturn? I don’t see them having any tools left to reinflate the bubble.

UBI

Really. Just give people money. It generates more benefit than it costs. Look how well billionaires did when unemployment benefits were buffed up. Now imagine if they were taxed reasonably to capture some of that toward covering the cost. People still looked for work, but they could afford to hold out for better jobs.

Re: Experts from a world that no longer exists

#184

> “Don’t buy stocks when the P/E ratio is over 20” was a good lesson to learn from the 1970s when interest rates were 7%, the Fed hadn’t yet learned what it’s capable of, and most businesses were cyclical manufacturing companies vs. asset-light digital services. Is it relevant today? At a broad, philosophical level, yes. In practical terms, probably not. In the same sense, buying stocks at all seemed like nothing but…

> They simply can't do it and rather extrapolate current conditions to infinity. This is what I think more people should be paying attention to. I keep seeing the FIRE(financially independent; retire early) people talk about the returns they have gotten the past 100 years, not taking into account that the first 50 of those years saw tremendous growth, and the last of those 50 years saw tremendous stagnation and debt…

> What happens when interest rates are unable to fall further? Are we already at the end of the ball? How much higher can it go?

One interesting option is different policy rates for different sectors of the economy. Last year during the COVID markets crisis the ECB used[1] this type of mechanism to keep a wide availability of credit.

[1] https://www.ecb.europa.eu/mopo/implement/omo/tltro/html/inde...

> How do they work?

The TLTROs are targeted operations, as the amount that banks can borrow is linked to their loans to non-financial corporations and households.

In TLTRO III, similarly to TLTRO II, the interest rate to be applied is linked to the participating banks’ lending patterns. The more loans participating banks issue to non-financial corporations and households (except loans to households for house purchases), the more attractive the interest rate on their TLTRO III borrowings becomes.

Re: Experts from a world that no longer exists

#185

Earlier quoted context omitted.

I read a while back that scientific ideas usually take about 50 years to be accepted. Which means essentially that they never are accepted, the people who disagree with them just die and the next generation embrace them. Einstein pretty much hated quantum mechanics and ended up making a bunch of discoveries while making every effort to disprove it. So if that’s how scientists do it - who should be the most amenable p…

I mean.. Einstein did prove himself wrong a bunch he just hated it. Its not like the work was flawed, or not performed. Its hard to find the sort of fault in that you seem to be implying.

I’m not really implying ‘fault’. Who the hell has the right to criticise Einstein! Certainly not me and probably not any other mere human.

Just pointing out that he fought hard against a new idea (that did turn out to be right) - with, as you say some really helpful consequences!

Maybe he will still turn out to be right in the end though and some grand unification theory is eventually found that is beautiful and simple!

Re: Experts from a world that no longer exists

#186

Earlier quoted context omitted.

Exactly, the point of the comment being that generous defined benefit pension schemes probably aren’t some paneceal solution that capital is now withholding, but that they were at best a burden and at worst a lie.

How are individuals supposed to have it any easier, though? Should people just be forced to work until they drop? Or does everybody now need to be some kind of financial genius in order to make retirement work?

Tax the zillionaires, pay the individuals more, and the executives less. "Robber baron" used to be an insult and a sign of disapproval. It was a popular term.

Re: Experts from a world that no longer exists

#187

>“Expertise is great, but it has a bad side effect. It tends to create an inability to accept new ideas.” Doesn't being an expert already contain the idea of continuous learning? Is expertise something static?

Experts are overfitting to the territory. It is the territory which changes (or expands), not their knowledge of it. There is a necessary reason to the decay in pheromone trails: adaptivity.

Compare an army scout on a Starcraft map. First they make visible the entire map. Then they start tracking details. They detect patterns: if it rained last week, this area will be flooded, and other routes are faster.

The army scout operationalized their expertise, made it valuable to others, and hence has something of value to exchange. Anything which attacks their operationalized expertise thus attacks their livelihood. They invested all this energy into materialization, and are prone to sunk-cost fallacy and economically motivated thinking. Don't patch their exploit!

If the hive has enough energy for another scout, then too much communication and history of failure of the current expert may negatively effect their own diverse map constructions. There are multiple ways to victory and it is better to know all of these in case one way is flooded. But it is very risky for one agent to explore all these roads.

Imagine any time the new scout wants to veer of the map, or when it has rained, the expert loudly exclaims: I already checked that road last year, you can not veer of the map there. Also, take these roads, they are always shorter when it rains. Now last month, the roads stopped flooding after rain, but the expert did not waste a failed exploration on that, and the new scout never gets to try (they also do not want to waste energy on failures, but now contribute to enforcing the wasted/stale energy materialization of the outdated expert.

For the expert to admit their ideas are outdated, is to admit their own loss of value. Retiring a fighter who practiced a defense against a kick people stopped using in the 90s. Hardly, if ever, they themselves step down. They want to keep "continuous learning" and adding even more detail to their expert map. When the hive veers off the map, the expert knows they are at a disadvantage, their value no more than a newby scout. Ossification is in their best interest (but not in the interest of the hive).

https://www.pnas.org/content/118/41/e2021636118

The size of scientific fields may impede the rise of new ideas. Examining 1.8 billion citations among 90 million papers across 241 subjects, we find a deluge of papers does not lead to turnover of central ideas in a field, but rather to ossification of canon. Scholars in fields where many papers are published annually face difficulty getting published, read, and cited unless their work references already widely cited articles. New papers containing potentially important contributions cannot garner field-wide attention through gradual processes of diffusion. These findings suggest fundamental progress may be stymied if quantitative growth of scientific endeavors—in number of scientists, institutes, and papers—is not balanced by structures fostering disruptive scholarship and focusing attention on novel ideas.

A crafts teacher divvied up his class in two parts. One part he taught his expertise at vase making, down to the level of detail, in context of art history. They were to be graded on a single vase, so failure was frustrating and a frightening loss of energy/hurt ego. The other part of the class was to be graded on the number of vases they made. The crafts teacher focused on teaching them to learn from mistakes, cut losses and start over, how to get better at the mechanics instead of the art. In the end, the part of the class graded for most vases made, also created the highest-graded single vases. Failure was a necessary part of the initial exploration phase, allowing them to exploit unclaimed ground, instead of trial-error-mimicking already-existing expertise. There is a lesson there, I think. Deep Learning comes to mind, before and after its hype. Where the statisticians correctly calculated flooded roads of overparametrization, engineers still charged ahead, and some actually came out alive on the other side, establishing a shortcut/conquered obstacle. Some statisticians still don't want to get their feet wet. And this ok too! There may be more elegant ways, which keeps dry boots with similar outcomes. Let them find these.

Re: Experts from a world that no longer exists

#188
post #148

Earlier quoted context omitted.

In the UK the law was changed such that people were given the freedom to transfer out of their defined benefit schemes, and most were paid handsome lump sums for doing so because the schemes were desperately underfunded and wanted people out

How does paying a handsome lump sum to leavers help make them less underfunded? If the handsome amount is less than the value of the pension, rational people would leave it in there. If it’s more than the current value of the pension, rational people would take it out and the pension fund is thereby left worse off, right?

Rationality is in the eyes of the beholder.

Re: Experts from a world that no longer exists

#190
post #81

Earlier quoted context omitted.

I can't help but wonder how much better our governments would operate if the median age of their workers were somewhat lower (IIRC that's around 45).

This doesn't make any sense. Aging is certainly a problem that needs to be solved, but the idea that you expressed here seems to be that younger people are better at their jobs - which is very wrong. This line of thinking is akin to "If less of the postmen had diabetes, I would get more of my mail faster!" Don't fall for these ageist logical inconsistencies

It's less that I think they'd be individually better at their jobs and more that I wonder (without evidence fwiw) if a slightly younger organization would have more diversity of thought because they're coming to things with objectively fresher eyes.
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