Critical thinking or ignorance

37 Percent of People Don’t Have a Clue About What’s Going on By Mark Morford, San Francisco Chronicle, March 20, 2013...about 37 percent of Americans are just are not very bright. Or rather, quite shockingly dumb…reading anything even remotely complex or analytical is something only 42 percent of the population enjoy doing on a regular basis, which is why most TV shows, all reality shows, many major media blogs and all of Fox News is scripted for a 5th-grade education/attention span…The smarter you are, the less rigid/more liberal you become…

The Decline of Critical Thinking, The Problem of Ignorance by Lawrence Davidson, CounterPunch Weekend Edition April 5–7, 2013the habit of asking critical questions can be taught. However, if you do not have a knowledge base from which to consider a situation, it is hard to think critically about it.  So ignorance often precludes effective critical thinking even if the technique is acquired… loyalty comes from myth-making and emotional bonds. In both cases, really effective critical thinking might well be incompatible with the desired end…The truth is that people who are consistently active as critical thinkers are not going to be popular, either with the government or their neighbors.…

Disrespect, Race and Obama By CHARLES M. BLOW, New York Times, November 15, 2013 …No one has ever accused [Rush] Limbaugh of being a complex thinker, but the intellectual deficiency required to achieve that level of arrogance and ignorance is staggering…simpletons have simple understandings of complex concepts…

Why We Need New Ways of Thinking by Barry Boyce, Shambhala Sun, September 2008 – The same old thing doesn’t work… because when it comes to complex, tough problems—global warming, food crises, civil war, terror, drugs, urban decay, persistent poverty—we have to go beyond the approaches that got us there in the first place…a loose but growing collection of thinkers, activists, academics, and social entrepreneurs who are searching for the “unthinkable”—the new ways that we can’t see because of our old ways of looking…they all firmly believe that the good old world we’ve come to know and love is coming apart at the seams. Systems of all kinds are breaking down and will continue to do so. In response, they champion ways of seeing and acting that acknowledge that the world is a chaotic, deeply interdependent place, a place that won’t yield to attempts to overpower it. We must come to understand, they argue, the nature of complexity, chaos, and interconnectedness—and to train ourselves in ways of acting that embrace this unmistakable reality.

Dark Ages Redux: American Politics and the End of the Enlightenment by John Atcheson, Com­mon Dreams, June 18, 2012 … Much of what has made the mod­ern world in gen­eral, and the United States in par­tic­u­lar, a free and pros­per­ous soci­ety comes directly from insights that arose dur­ing the Enlightenment. Too bad we’re chuck­ing it all out and return­ing to the Dark Ages. …Now, we seek to oper­ate by revealed truths, not real­ity.  Decrees from on high – often issued by an unholy alliance of reli­gious fun­da­men­tal­ists, self-interested cor­po­ra­tions, and greedy fat cats – are offered up as real­ity by rightwing politicians… Sec­ond, the Enlight­en­ment laid the ground­work for our form of gov­ern­ment. The Social Con­tract is the intel­lec­tual basis of all mod­ern demo­c­ra­tic republics, includ­ing ours… our founders used rea­son, empiri­cism and aca­d­e­mic schol­ar­ship to cob­ble together one of the most endur­ing and influ­en­tial doc­u­ments in human his­tory.  For all its flaws, it has steered us steadily toward a more per­fect union. Until recently…We are, indeed, at an epochal thresh­old.  We can con­tinue to dis­card the Enlight­en­ment val­ues which enabled both an untold increase in mate­r­ial wealth and a sys­tem of gov­ern­ment which turned serfs into cit­i­zens.  A sys­tem which – for all its flaws – often man­aged to pro­tect the rights of the many, against the preda­tory power of the few. Or we can con­tinue our abject sur­ren­der to myths, mag­i­cal think­ing, and self-delusion and the Medieval nation-state those forces are resurrecting. Repub­li­cans and Tea Partiers may be lead­ing this retreat from rea­son, but they are unop­posed by Democ­rats or the Press. And in the end, there is a spe­cial place in Hell for those who allow evil to pros­per by doing nothing.

The Will­ful Igno­rance That Has Dragged the US to the Brink by Sarah Church­well, The Independent/UK, August 2, 2011  - The Tea Party version of the American Revolution is not just fundamentalist. It is also Disneyfied, sentimentalized, and whitewashed..In one sense, it is difficult to know what to say in response to the utter irrationality of the Tea Party’s self-destructive decision to sabotage the American political process – and thus its own country’s economy, and the global economy…the Tea Party has never let facts get in the way of its belief system, and now that belief system is genuinely threatening the well-being of the nation they claim to love…

The Politics of Lying and the Culture of Deceit in Obama’s America: The Rule of Damaged Politics  by Henry A. Giroux - Sep­tem­ber 21, 2009 — In the cur­rent Amer­i­can polit­i­cal land­scape, truth is not merely mis­rep­re­sented or fal­si­fied; it is overtly mocked… it becomes dif­fi­cult to dis­tin­guish between an opin­ion and an argument …At a time when edu­ca­tion is reduced to train­ing work­ers and is stripped of any civic ideals and crit­i­cal prac­tices, it becomes unfash­ion­able for the pub­lic to think crit­i­cally. Rather than intel­li­gence unit­ing us, a col­lec­tive igno­rance of pol­i­tics, cul­ture, the arts, his­tory and impor­tant social issues, as Mark Slouka points out, “gives us a sense of com­mu­nity, it con­fers citizenship.”…matters of judg­ment, thought­ful­ness, moral­ity and com­pas­sion seem to dis­ap­pear from pub­lic view. What is the social cost of such flight from real­ity, if not the death of demo­c­ra­tic pol­i­tics, crit­i­cal thought and civic agency? …Obama’s pres­ence on the national polit­i­cal scene gave lit­er­acy, lan­guage and crit­i­cal thought a new­found sense of dig­nity, inter­laced as they were with a vision of hope, jus­tice and pos­si­bil­ity — and rea­son­able argu­ments about the var­ied crises Amer­ica faced and civilized…The pol­i­tics of lying and the cul­ture of deceit are wrapped in the logic of absolute cer­taintyDemoc­racy is frag­ile, and its fate is always uncer­tain…We now find our­selves liv­ing in a soci­ety in which right-wing extrem­ists not only wage a war against the truth, but also seek to ren­der human beings less than fully human by tak­ing away their desire for jus­tice, spir­i­tual mean­ing, free­dom and individuality…

The Virus of GOP Ignorance: Why Don’t Media Protect Us From the Lies Spewed in the Republican Primary? November 23, 2011  …Gingrich…Cain and Bachmann…Pretending that these people might be president, and hence deserve to be treated as if what they say is true, is not merely unjustified…but akin to playing accessory to a kind of ongoing intellectually criminal activity….people like alleged “historian” David Barton… and psychologist James Dobson…proffer phony-baloney history lessons that distort almost everything professional historians know to be true about America’s founders. Reporters representing reliable media outlets are supposed to defend the discourse from the virus of this ignorance. But for a variety of reasons they no longer do so. Part of the explanation can be found in the foolish willingness of so many reporters to treat Fox News, Drudge and various talk-radio hosts as respectable voices in the debate without regard to their motives or qualifications. A second, no less significant problem is the tendency of even the most sophisticated political reporters to treat the entire process as a contest between rival teams and ignore the substance of their arguments and policies, as if politics were simply a spectator sportreformed right-winger David Frum writes that a “political movement that never took governing seriously was exploited by a succession of political entrepreneurs uninterested in governing—but all too interested in merchandising.…these tea-party champions provide a ghoulish type of news entertainment each time they reveal that they know nothing about public affairs and have never attempted to learn.”

Shameless GOP Lies: Is There Any Limit to What Republicans Will Say — And What People Will Believe? By Ernest Partridge, The Crisis Papers, Alternet.org, April 20, 2011 — Is there any limit to the outrageousness of the GOP lies? Is there any limit to the capacity of a large number of our fellow citizens to accept these lies?…a long string of Republican lies thrown at the public by right-wing politicians and pundits and largely unchallenged by a compliant corporate media. Among them:…Barack Obama was born in Kenya and is a secret Muslim. Saddam Hussein possessed weapons of mass destruction and was involved in the attacks of September 11, 2001…Global warming is a gigantic hoax, perpetrated by thousands of deceitful scientists. Obama has raised taxes…These are not “matters of opinion,” they are flatly and demonstrably false. Clear and decisive refutation of all these claims are available to anyone who cares to examine the evidence. As Daniel Patrick Moynihan famously remarked, while we are entitled to our own opinions, we are not entitled to our own facts…finally, there is the “dogma” —  “Government is not the solution to our problem, government is the problem.” (Ronald Reagan). Market fundamentalism: “A free market [co-ordinates] the activity of millions of people, each seeking his own interest, in such a way as to make everyone better off.” (Milton Friedman) Privatization: “Whenever we find an approach to the extension of private property rights [in the natural environment,] we find superior results.” (Robert J. Smith). “There is no such thing as society.” (Margaret Thatcher) “There is no such entity as ‘the public.’” (Ayn Rand) These last two dogmas bear significant implications. For if there is no such thing as “society,” it follows that there are no social problems or “social injustice. Poverty is the fault of individuals who are sinful and lazy. And if there is no “public,” then there is no “public interest,” and thus no need for government to promote same. A large portion of the American public believes these lies, accepts these contradictions, and embraces these dogmas, not because of supporting evidence (there is none) or cogent arguments (there are none), but out of sheer unquestioned repetition in the corporate media. …as long as …millions accept uncritically the lies, myths and dogmas fed to them by the mega-corporations that own our government, there appears to be little hope of a return to economic justice and democratic government that we once enjoyed in the United States of America. But all is not lost…liars tend through time to lose their credibility. We should strive to accelerate this process as it applies to the corporate media by exposing the lies and boycotting the sponsors of those who tell the lies…The restoration of sanity in our public discourse is essential to the restoration of our democracy.

In Ignorance We Trust by Timothy Egan, New York Times, December 13, 2012history, the formal teaching and telling of it, has never been more troubled …we are raising a generation of Americans who are historically illiterate.…And today, in part by design, there’s a lot of know-nothingness throughout the land… in the great void between readable histories and snooze-fest treatises have stepped demagogues with agendas, from Glenn Beck and his paranoid writings on the perils of progressivism, to Oliver Stone and his highly selective retelling of the 20th century.…

The New Know Nothing Party and the High Price of Willful Ignorance by John Atcheson, February 19, 2013 by Common DreamsIgnorance: The condition of being uneducated, unaware, or uninformed.Here in the 21st Century the Republicans have become the new Know Nothing Party…  Just as the original Know Nothings employed fear, bigotry, ignorance and hate to motivate its base, so too does the Republican Party… one area of willful ignorance eclipses all others in terms of its denial of fact and the consequences of that denial:  Climate change. The scientific consensus is clear at this point, and it’s backed up by empirical evidence…We are trading away children’s future.…So we have a clear and present danger, a strong scientific consensus, and empirical evidence that we are on the verge – or well into – irrevocable global disasters of epic proportion. How does the Party of Willful Ignorance respond?  With intentional ignorance, of course. The question is why. And the answer is simple. They sell ignorance because it is in the interests of their true constituency – the uber wealthy and the corporate special interests.  While tackling climate change would avoid catastrophic costs and create jobs, it will hurt the coal, oil and gas interests. Austerity preserves the status quo on who has and who doesn’t.  Them that has would continue to get, them that doesn’t would lose even more. Hawking government as the problem lets them turn over trillions in retirement and health care profits to the private sector while increasing your individual debt.  It converts education from a public right to a private profit center. It allows them to justify cutting back on regulations so banks can once again screw you with impunity. It trashes your air, pollutes your water, and destroys your climate..We the people must seize control of the political process with our votes.  Progressive principles won the recent election, and a majority of Americans support progressive positions on a case-by-case basis. If we fail to translate these individual beliefs into broader political practices and votes, it’s due largely to the mainstream media, which regularly presents the “debate” about issues as opposed to the reality of the issues.  Thus, Rubio can still trot out the entire Republican playbook of lies and willful ignorance…As a result, our democracy is diminished; our children’s world is compromised; and our economy remains in service only to the uber rich.

The Right’s Stupidity Spreads, Enabled by a Too-Polite Left by George Monbiot, The Guardian/UK, February 7, 2012 – …we have been too polite to mention the Canadian study published last month in the journal Psychological Science, which revealed that people with conservative beliefs are likely to be of low intelligence.…There is plenty of research showing that low general intelligence in childhood predicts greater prejudice towards people of different ethnicity or sexuality in adulthood. Open-mindedness, flexibility, trust in other people: all these require certain cognitive abilities. Understanding and accepting others – particularly “different” others – requires an enhanced capacity for abstract thinking.… tends not to arise directly from low intelligence but from the conservative ideologies to which people of low intelligence are drawn. Conservative ideology is the “critical pathway” from low intelligence to racism.…This is not to suggest that all conservatives are stupid. There are some very clever people in government, advising politicians, running think tanks and writing for newspapers, who have acquired power and influence by promoting rightwing ideologies…they now appeal to the basest, stupidest impulses..former Republican ideologues, David Frum warns that “conservatives have built a whole alternative knowledge system, with its own facts, its own history, its own laws of economics”. The result is a “shift to ever more extreme, ever more fantasy-based ideology” which has “ominous real-world consequences for American society”… Confronted with mass discontent, the once-progressive major parties… triangulate and accommodate, hesitate and prevaricate… They fail to produce a coherent analysis of what has gone wrong and why, or to make an uncluttered case for social justice, redistribution and regulation. The conceptual stupidities of conservatism are matched by the strategic stupidities of liberalism. Yes, conservatism thrives on low intelligence and poor information. But the liberals in politics on both sides of the Atlantic continue to back off, yielding to the supremacy of the stupid…


Why don’t bad ideas ever die?

By Barry Ritholtz, Washington Post, December 15, 2012

“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” — Joan Robinson

This time of year is filled with retrospectives and “best of” lists. I’d prefer a more enlightened discussion about bad ideas. Or rather, zombie ideas: the memes, theories and policies that refuse to die, despite their obvious failings. Why do we embrace the terrible, fall in love with the wrong, bet money on the fictitious? Nowhere is this truer than in the fields of economics and investing. Together they have produced a long list of thoroughly debunked ideas. Despite this, many of these zombie ideas still have a vice grip on amateurs and professionals alike. What is it about us and this intellectual voodoo? We keep repeating the same mistakes over and over. It is maddening. Let’s count the ways:

1 Shareholder value: Since the early 1980s, this theory had claimed that corporate management should concentrate primarily on increasing share prices. In practice, it is fraught with problems: Short-term focus on quarterly earnings leads to a decline in long-term research and development, typically to the detriment of a company’s long-term prospects. Short-termism and stock-option compensation causes management to focus on immediate quarterly returns. It has also led to earnings “management,” accounting fraud and a raft of management scandals. Shareholders derive much less value than the name implies.

2 Homo economicus: A primary principle underlying classical economics, it states that humans are rational, self-interested actors possessing an ability to make objective, intelligent judgments about matters of investing and money. This turns out to be hilariously wrong. We are all too often irrational, frequently emotional and regularly engage in behaviors that work against our self-interest. Homo economicus? Try Nogo economicus.

3 Economics as a science: Consider how wrong the economics profession has been about, well, nearly everything: They misunderstood the risks of derivatives; economists developed models that assumed home prices would not fall (!). They misunderstood why the recovery from the 2001 recession produced so few jobs or why the current recovery was worse in so many ways. Oh, and despite myriad signs, they missed the worst recession since the Great Depression even as it was on top of them. The sooner they admit that their field is not a hard science, the better off we all will be.

4 Austerity: Conceived from the puritanical idea that we must pay a penance for our sins, the Austerians (as we like to call them) insist that a post-bubble economy can be cured with spending cuts and tax increases, producing a balanced budget. When the United States tried this in 1938, it helped send the nation back into recession. More recently, Greece was forced to adopt austerity measures as part of its financial-rescue terms. It pushed the country into a depression. Austerity measures in Britain and Ireland and Spain — indeed, everywhere they have been imposed in Europe — have all led to recessions. Despite the wealth of evidence showing that this is a terrible idea, it refuses to die.

5 Tax cuts pay for themselves (supply-side economics): Sometimes bad ideas start as good ones. When tax rates are so high as to cause all manner of tax avoidance strategies — think confiscatory rates of 75 to 90 percent — reducing them makes sense and can change investor behavior for the better. Where we run into trouble is when this concept gets extrapolated to an absurd degree. Claiming that any tax cut will pay for itself by producing greater economic activity has now reached that point. No, Virginia, cutting taxes 3 percent does not lead to more revenue. Get over it.

6 The efficient-market hypothesis: This is the mother of all academic zombie ideas. The concept is that markets are “informationally efficient.” That lots of self-interested investors hunt down every last data point about any given asset class or stock. And pricing perfectly represents all of the given information available at the time. Therefore, no one can outperform the markets for long.

Except they have. Fund managers such as Peter Lynch, Warren Buffett, Ray Dalio and Jim Simons have consistently beaten markets over such long stretches that it cannot be merely by chance. Perhaps the even bigger anomaly that this concept runs into are the all-too-regular booms and busts — the massive mispricings of assets — that economic bubbles and crashes produce.

7 Markets can self-regulate: Another example of an idea that started out reasonably enough but soon after went off the rails. After 30 years of postwar economic growth, there was a credible argument that government regulations had become too costly, time-consuming and complex. With inefficiencies holding back small businesses, paring the worst of the regulatory burden should be productive.

As so often occurs, this good idea was taken to an illogical extreme. Instead of removing onerous, expensive regulations, zealots such as then-Sen. Phil Gramm (R-Tex.) argued against all regulations. Markets can regulate themselves much better than some bureaucrat or lawyer. Besides, the self-interest of companies and the efficient market would more effectively police behavior than any government agency ever could. We know how that turned out.

8 Gurus, shamans and prognosticators: Wall Street produces market wizards at a prodigious pace. It may be NYC’s single-biggest export. We love experts to tell us what is going to happen in the future. Never mind that their track record is awful, we prefer the mysticism of the television guru to actual thought.

The data about these experts should give us pause: The more confident an expert sounds, the more likely he is to be believed by TV viewers. Unfortunately, the more self-confident an expert appears, the worse his/her track record is likely to be. And forecasters who get one single big outlier correct are more likely to underperform the rest of the time.

Why is it that we are ensnared by bad ideas? A lot of the reasons have to do with our own makeup and the structure of our society.

● Fooled by randomness (a.k.a. luck): Just because something is a bad idea does not mean it cannot, through pure chance, lead to a winning investment. (It is very difficult for people to acknowledge just how lucky they got once money is made by a bad idea).

● Greed and sloth: There is a ready supply of dupes waiting to be robbed, dreaming of enormous rewards for little or no work. Bernie Madoff was no different than Charles Ponzi, and yet people lined up to hand him money by the billions.

● Institutional mandates: In academia, whatever the dominant paradigm of the moment is tends to drive jobs, tenure, even entire careers. Publish or perish leads to a repetition of “accepted” ideas, while outside-the-box research often finds getting published to be a challenge.

● Status quo: Powerful forces are comfortable with how profitable things are, and they exert tremendous force to keep them that way. Think tanks, academia and corporate consultants create a ready constituency for old, bad ideas on their behalf.

● Narratives persuade more than data: A good story is far more persuasive than data. Zombie ideas are modern fairy tales. Comprehending a data series is challenging, requiring skill, intelligence and hard work. A compelling story, on the other hand, can be understood by a child.

● Incompetency: Skilled people have a greater understanding of their limitations for a given task; unskilled people do not. This is called the Dunning-Kruger effect, and it tells us that the worse we are at any given talent, the weaker our own meta-cognition about it is.

● Bias: Bad ideas often conform to our erroneous world views. Consider the impact of selective perception and confirmation bias — they assuage our egos and are made to fit our prejudices. Bad ideas hang around in part because we seek them out and embrace them.

●Darwinism works slowly: As a reader suggested, it often takes a while for reality to catch up with bad ideas. Consider the divine right of kings, communism and the designated hitter as bad ideas that took centuries to fall.

These zombie ideas remain a stable of academia, economics and investing. We should not be surprised at this. Recall what Max Planck — who won a Nobel Prize for physics in 1918 for originating quantum theory — famously said: “Truth never triumphs — its opponents just die out. Science advances one funeral at a time.”

Investing and economics should be so lucky . . .

Ritholtz is chief executive of FusionIQ, a quantitative research firm. He is the author of “Bailout Nation” and runs a finance blog, the Big Picture. On Twitter: @Ritholtz.

 

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