February 2011

Reagan, Ronald. The Reagan Diaries. Edited by Douglas Brinkley. New York: Harper Perennial, 2007. ISBN 978-0-06-155833-7.

What's it actually like to be the president of the United States? There is very little first-person testimony on this topic: among American presidents, only Washington, John Quincy Adams, Polk, and Hayes kept comprehensive diaries prior to the twentieth century, and the present work, an abridged edition of the voluminous diaries of Ronald Reagan, was believed, at the time of its publication, to be the only personal, complete, and contemporaneous account of a presidency in the twentieth century. Since its publication, a book purporting to be the White House diaries of Jimmy Carter has been published, but even if you believe the content, who cares about the account of the presidency of a feckless crapweasel whose damage to the republic redounds unto the present day?

Back in the epoch, the media (a couple of decades later to become the legacy media), portrayed Reagan as a genial dunce, bumbling through his presidency at the direction of his ideological aides. That illusion is dispelled in the first ten pages of these contemporaneous diary entries. In these pages, rife with misspellings (he jokes to himself that he always spells the Libyan dictator's name the last way he saw it spelt in the newspaper, and probably ended up with at least a dozen different spellings) and apostrophe abuse, you experience Reagan not writing for historians but rather memos to file about the decisions he was making from day to day.

As somebody who was unfortunate enough to spend a brief part of his life as CEO of an S&P 500 company in the Reagan years, the ability of Reagan, almost forty years my senior, to keep dozens of balls in the air, multitask among grave matters of national security and routine paperwork, meetings with heads of states of inconsequential countries, criminal investigations of his subordinates, and schmooze with politicians staunchly opposed to his legislative agenda to win the votes needed to enact the parts he deemed most important is simply breathtaking. Here we see a chief executive, honed by eight years as governor of California, at the top of his game, deftly out-maneuvering his opponents in Congress not, as the media would have you believe, by his skills in communicating directly to the people (although that played a part), but mostly by plain old politics: faking to the left and then scoring the point from the right. Reading these abridged but otherwise unedited diary entries gives lie to any claim that Reagan was in any way intellectually impaired or unengaged at any point of his presidency. This is a master politician getting done what he can in the prevailing political landscape and committing both his victories and teeth-gritting compromises to paper the very day they occurred.

One of the most stunning realisations I took away from this book is that when Reagan came to office, he looked upon his opposition in the Congress and the executive bureaucracy as people who shared his love of the country and hope for its future, but who simply disagreed as to the best course to achieve their shared goals. You can see it slowly dawning upon Reagan, as year followed year, that although there were committed New Dealers and Cold War Democrats among his opposition, there was a growing movement, both within the bureaucracy and among elected officials, who actually wanted to bring America down—if not to actually capitulate to Soviet hegemony, at least to take it down from superpower status to a peer of others in the “international community”. Could Reagan have imagined that the day would come when a president who bought into this agenda might actually sit in the Oval Office? Of course: Reagan was well-acquainted with worst case scenarios.

The Kindle edition is generally well-produced, but in lieu of a proper index substitutes a lengthy and entirely useless list of “searchable terms” which are not linked in any way to their appearances in the text.

Today is the hundredth anniversary of the birth of Ronald Reagan.

 

Thor, Brad. State of the Union. New York: Pocket Books, 2004. ISBN 978-0-7434-3678-6.

This is the third in the author's Scot Harvath series, which began with The Lions of Lucerne (October 2010). How refreshing to read a post-Cold War thriller in which the Russkies are threatening nuclear terror to reassert a strategy of global hegemony which only went underground with the collapse of the Soviet Union.

Whatever happened, anyway, to all of those suitcase nukes which multiple sources said went missing when the Soviet Union dissolved, and which some Soviet defectors claimed had been smuggled into caches in the U.S and Europe to be used as a last-ditch deterrent should war be imminent? Suppose a hard core of ex-Soviet military officers, with the implicit approval of the Russian government, were to attempt a “Hail Mary” pass to win the Cold War in one masterstroke?

I have nattered in reviews of previous novels in this series about Thor's gradually mastering the genre of the thriller. No more—with this one he's entirely up to speed, and it just gets better from here on. Not only are we treated to a Cold War scenario, the novel is written in the style of a period espionage novel in which nothing may be what it appears, and the reader, along with the principal characters, is entirely in the fog as to what is actually going on for the first quarter of the book.

Quibbles? Yes, I have a few. In his quest for authenticity, the author often pens prose which comes across like Hollywood product placement:

… The team was outfitted in black, fire-retardant Nomex fatigues, HellStorm tactical assault gloves, and First Choice body armor. Included with the cache laid out by the armorer, were several newly arrived futuristic .40-caliber Beretta CX4 Storm carbines, as well as Model 96 Beretta Vertex pistols, also in .40 caliber. There was something about being able to interchange their magazines that Harvath found very comforting.

A Picatinny rail system allowed him to outfit the CX4 Storm with an under-mounted laser sight and an above-mounted Leupold scope. …

Ka ching! Ka ching! Ka ching!

I have no idea if the author or publisher were paid for mentioning this most excellent gear for breaking things and killing bad guys, but that's how it reads.

But, hey, what's not to like about a novel which includes action scenes on a Russian nuclear powered icebreaker in the Arctic? Been there—done that!

 

Taleb, Nassim Nicholas. Fooled by Randomness. 2nd. ed. New York: Random House, [2004] 2005. ISBN 978-0-8129-7521-5.

This book, which preceded the author's bestselling The Black Swan (January 2009), explores a more general topic: randomness and, in particular, how humans perceive and often misperceive its influence in their lives. As with all of Taleb's work, it is simultaneously quirky, immensely entertaining, and so rich in wisdom and insights that you can't possible absorb them all in a single reading.

The author's central thesis, illustrated from real-world examples, tests you perform on yourself, and scholarship in fields ranging from philosophy to neurobiology, is that the human brain evolved in an environment in which assessment of probabilities (and especially conditional probabilities) and nonlinear outcomes was unimportant to reproductive success, and consequently our brains adapted to make decisions according to a set of modular rules called “heuristics”, which researchers have begun to tease out by experimentation. While our brains are capable of abstract thinking and, with the investment of time required to master it, mathematical reasoning about probabilities, the parts of the brain we use to make many of the important decisions in our lives are the much older and more instinctual parts from which our emotions spring. This means that otherwise apparently rational people may do things which, if looked at dispassionately, appear completely insane and against their rational self-interest. This is particularly apparent in the world of finance, in which the author has spent much of his career, and which offers abundant examples of individual and collective delusional behaviour both before and after the publication of this work.

But let's step back from the arcane world of financial derivatives and consider a much simpler and easier to comprehend investment proposition: Russian roulette. A diabolical billionaire makes the following proposition: play a round of Russian roulette (put one cartridge in a six shot revolver, spin the cylinder to randomise its position, put the gun to your temple and pull the trigger). If the gun goes off, you don't receive any payoff and besides, you're dead. If there's just the click of the hammer falling on an empty chamber, you receive one million dollars. Further, as a winner, you're invited to play again on the same date next year, when the payout if you win will be increased by 25%, and so on in subsequent years as long as you wish to keep on playing. You can quit at any time and keep your winnings.

Now suppose a hundred people sign up for this proposition, begin to play the game year after year, and none chooses to take their winnings and walk away from the table. (For connoisseurs of Russian roulette, this is the variety of the game in which the cylinder is spun before each shot, not where the live round continues to advance each time the hammer drops on an empty chamber: in that case there would be no survivors beyond the sixth round.) For each round, on average, 1/6 of the players are killed and out of the game, reducing the number who play next year. Out of the original 100 players in the first round, one would expect, on average, around 83 survivors to participate in the second round, where the payoff will be 1.25 million.

What do we have, then, after ten years of this game? Again, on average, we expect around 16 survivors, each of whom will be paid more than seven million dollars for the tenth round alone, and who will have collected a total of more than 33 million dollars over the ten year period. If the game were to go on for twenty years, we would expect around 3 survivors from the original hundred, each of whom would have “earned” more than a third of a billion dollars each.

Would you expect these people to be regular guests on cable business channels, sought out by reporters from financial publications for their “hot hand insights on Russian roulette”, or lionised for their consistent and rapidly rising financial results? No—they would be immediately recognised as precisely what they were: lucky (and consequently very wealthy) fools who, each year they continue to play the game, run the same 1 in 6 risk of blowing their brains out.

Keep this Russian roulette analogy in mind the next time you see an interview with the “sizzling hot” hedge fund manager who has managed to obtain 25% annual return for his investors over the last five years, or when your broker pitches a mutual fund with a “great track record”, or you read the biography of a businessman or investor who always seems to have made the “right call” at the right time. All of these are circumstances in which randomness, and hence luck, plays an important part. Just as with Russian roulette, there will inevitably be big winners with a great “track record”, and they're the only ones you'll see because the losers have dropped out of the game (and even if they haven't yet they aren't newsworthy). So the question you have to ask yourself is not how great the track record of a given individual is, but rather the size of the original cohort from which the individual was selected at the start of the period of the track record. The rate hedge fund managers “blow up” and lose all of their investors' money in one disastrous market excursion is less than that of the players blown away in Russian roulette, but not all that much. There are a lot of trading strategies which will yield high and consistent returns until they don't, at which time they suffer sudden and disastrous losses which are always reported as “unexpected”. Unexpected by the geniuses who devised the strategy, the fools who put up the money to back it, and the clueless journalists who report the debacle, but entirely predictable to anybody who modelled the risks being run in the light of actual behaviour of markets, not some egghead's ideas of how they “should” behave.

Shall we try another? You go to your doctor for a routine physical, and as part of the laboratory work on your blood, she orders a screening test for a rare but serious disease which afflicts only one person in a thousand but which can be treated if detected early. The screening test has a 5% false positive rate (in 5% of the people tested who do not actually have the disease, it erroneously says that they do) and a 0% false negative rate (if you have the disease, the test will always report that you do). You return to the doctor's office for the follow-up visit and she tells you that you tested positive for the disease. What is the probability you actually have it?

Spoiler warning: Plot and/or ending details follow.   (Show Spoilers) (Hide Spoilers)

Did you answer 95%? If you did, you're among the large majority of people, not just among the general population but also practising clinicians, who come to the same conclusion. And you'd be just as wrong as them. In fact, the odds you have the disease are a little less than 2%. Here's how it works. Let's assume an ensemble of 10,000 randomly selected people are tested. On average, ten of these people will have the disease, and all of them will test positive for it (no false negatives). But among that population, 500 people who do not have the disease will also test positive due to the 5% false positive rate of the test. That means that, on average (it gets tedious repeating this, but the natterers will be all over me if I don't do so in every instance), there will be, of 10,000 people tested, a total of 510 positive results, of which 10 actually have the disease. Hence, if you're the recipient of a positive test result, the probability you have the disease is 10/510, or a tad less than 2%. So, before embarking upon a demanding and potentially dangerous treatment regime, you're well advised to get some other independent tests to confirm that you are actually afflicted.

Spoilers end here.   (Hide Spoilers)

In making important decisions in life, we often rely upon information from past performance and reputation without taking into account how much those results may be affected by randomness, luck, and the “survivor effect” (the Russian roulette players who brag of their success in the game are necessarily those who aren't yet dead). When choosing a dentist, you can be pretty sure that a practitioner who is recommended by a variety of his patients whom you respect will do an excellent job drilling your teeth. But this is not the case when choosing an oncologist, since all of the people who give him glowing endorsements are necessarily those who did not die under his care, even if their survival is due to spontaneous remission instead of the treatment they received. In such a situation, you need to, as it were, interview the dead alongside the survivors, or, that being difficult, compare the actual rate of survival among comparable patients with the same condition.

Even when we make decisions with our higher cognitive facilities rather than animal instincts, it's still easy to get it wrong. While the mathematics of probability and statistics have been put into a completely rigorous form, there are assumptions in how they are applied to real world situations which can lead to the kinds of calamities one reads about regularly in the financial press. One of the reasons physical scientists transmogrify so easily into Wall Street “quants” is that they are trained and entirely comfortable with statistical tools and probabilistic analysis. The reason they so frequently run off the cliff, taking their clients' fortunes in the trailer behind them, is that nature doesn't change the rules, nor does she cheat. Most physical processes will exhibit well behaved Gaussian or Poisson distributions, with outliers making a vanishingly small contribution to mean and median values. In financial markets and other human systems none of these conditions obtain: the rules change all the time, and often change profoundly before more than a few participants even perceive they have; any action in the market will provoke a reaction by other actors, often nonlinear and with unpredictable delays; and in human systems the Pareto and other wildly non-Gaussian power law distributions are often the norm.

We live in a world in which randomness reigns in many domains, and where we are bombarded with “news and information” which is probably in excess of 99% noise to 1% signal, with no obvious way to extract the signal except with the benefit of hindsight, which doesn't help in making decisions on what to do today. This book will dramatically deepen your appreciation of this dilemma in our everyday lives, and provide a philosophical foundation for accepting the rôle randomness and luck plays in the world, and how, looked at with the right kind of eyes (and investment strategy) randomness can be your friend.

 

Stross, Charles. Singularity Sky. New York: Ace, 2003. ISBN 978-0-441-01179-7.

Writing science fiction about a society undergoing a technological singularity or about humans living in a post-singularity society is a daunting task. By its very definition, a singularity is an event beyond which it is impossible to extrapolate, yet extrapolation is the very essence of science fiction. Straightforward (some would say naïve) projection of present-day technological trends suggests that some time around the middle of this century it will be possible, for a cost around US$1000, to buy a computer with power equal to that of all human brains now living on Earth, and that in that single year alone more new information will be created than by all of human civilisation up to that time. And that's just the start. With intelligent machines designing their successors, the slow random walk search of Darwinian evolution will be replaced by directed Lamarckian teleological development, with a generation time which may be measured in nanoseconds. The result will be an exponential blow-off in intelligence which will almost instantaneously dwarf that of humans by a factor at least equal to that between humans and insects. The machine intelligences will rapidly converge upon the fundamental limits of computation and cognition imposed by the laws of physics, which are so far beyond anything in the human experience we simply lack the hardware and software to comprehend what their capabilities might be and what they will be motivated to do with them. Trying to “put yourself into the head” of one of these ultimate intellects, which some people believe may emerge within the lifetimes of people alive today, is as impossible as asking C. elegans to comprehend quantum field theory.

In this novel the author sets out to both describe the lives of humans, augmented humans, and post-humans centuries after a mid-21st century singularity on Earth, and also show what happens to a society which has deliberately relinquished technologies it deems “dangerous” to the established order (other than those, of course, which the ruling class find useful in keeping the serfs in their place) when the singularity comes knocking at the door.

When the singularity occurred on Earth, the almost-instantaneously emerging super-intellect called the Eschaton departed the planet toward the stars. Simultaneously, nine-tenths of Earth's population vanished overnight, and those left behind, after a period of chaos, found that with the end of scarcity brought about by “cornucopia machines” produced in the first phase of the singularity, they could dispense with anachronisms such as economic systems and government, the only vestige of which was the United Nations, which had been taken over by the IETF and was essentially a standards body. A century later, after humans achieved faster than light travel, they began to discover that the Eschaton had relocated 90% of Earth's population to habitable worlds around various stars and left them to develop in their own independent directions, guided only by this message from the Eschaton, inscribed on a monument on each world.

I am the Eschaton. I am not your god.
I am descended from you, and I exist in your future.
Thou shalt not violate causality within my historic light cone. Or else.

“Or else” ranged from slamming relativistic impactors into misbehaving planets to detonating artificial supernovæ to sterilise an entire interstellar neighbourhood whose inhabitants were up to some mischief which risked spreading. While the “Big E” usually remained off stage, meddling in technologies which might threaten its own existence (for example, time travel to back before its emergence on Earth to prevent the singularity) brought a swift and ruthless response with no more remorse than humans feel over massacring Saccharomyces cerevisiae in the trillions to bake their daily bread.

On Rochard's World, an outpost of the New Republic, everything was very much settled into a comfortable (for the ruling class) stasis, with technology for the masses arrested at something approximating the Victorian era, and the advanced stuff (interstellar travel, superluminal communication) imported from Earth and restricted to managing the modest empire to which they belong and suppressing any uprising. Then the Festival arrived. As with most things post-singularity, the Festival is difficult to describe—imagine how incomprehensible it must appear to a society whose development has been wilfully arrested at the railroad era. Wafted from star to star in starwisp probes, upon arrival its nanotechnological payload unpacks itself, disassembles bodies in the outer reaches of its destination star system, and instantiates the information it carries into the hardware and beings to carry out its mission.

On a planet with sentient life, things immediately begin to become extremely weird. Mobile telephones rain from the sky which offer those who pick them up anything they ask for in return for a story or bit of information which is novel to the Festival. Within a day or so, the entire social and economic structure is upended as cornucopia machines, talking bunnies, farms that float in the air, mountains of gold and diamonds, houses that walk around on chicken legs, and things which words fail to describe become commonplace in a landscape that changes from moment to moment. The Festival, much like a eucaryotic organism which has accreted a collection of retroviruses in its genome over time, is host to a multitude of hangers-on which range from the absurd to the menacing: pie-throwing zombies, giant sentient naked mole rats, and “headlaunchers” which infect humans, devour their bodies, and propel their brains into space to be uploaded into the Festival.

Needless to say, what ensues is somewhat chaotic. Meanwhile, news of these events has arrived at the home world of the New Republic, and a risky mission is mounted, skating on the very edge of the Eschaton's prohibition on causality violation, to put an end to the Festival's incursion and restore order on Rochard's World. Two envoys from Earth, technician Martin Springfield and U.N. arms inspector Rachel Mansour, accompany the expedition, the first to install and maintain the special technology the Republic has purchased from the Earth and the second, empowered by the terms under which Earth technology has been acquired, to verify that it is not used in a manner which might bring the New Republic or Earth into the sights of the Big E.

This is a well-crafted tale which leaves the reader with an impression of just how disruptive a technological singularity will be and, especially, how fast everything happens once the exponential take-off point is reached. The shifts in viewpoint are sometimes uneven—focusing on one subplot for an extended period and then abruptly jumping to another where things have radically changed in the interim, but that may be deliberate in an effort to convey how fluid the situation is in such circumstances. Stross also makes excellent use of understated humour throughout: Burya Rubenstein, the anarcho-Leninist revolutionary who sees his entire socio-economic utopia come and go within a couple of days, much faster than his newly-installed party-line propaganda brain implants can adapt, is one of many delightful characters you'll encounter along the way.

There is a sequel, which I look forward to reading.