Saturday, April 29, 2017

Bret Stephens' skepticism will spread from NYT to other mainstream sources

Bill Z. has sent me a link to the New York Times op-ed
Climate of Complete Certainty
by Bret Stephens, recently taken away from WSJ. The New York Times have promoted this first op-ed by the new guy as a "top story" and lots of readers have reacted.

The content of the op-ed is simple. Stephens – who looks like a classic lukewarmer to me here, not too much more skeptical than Andy Revkin – says that it's wrong to expect that one is 100% certain. Only fanatics do so, sane people know that they're 65% right if they're really good, and the climate alarmists claiming certainty should be ashamed.

OK, that's a simple message. Everything else are redundant decorations and fancy language. I do see that Stephens' writing resembles that of some true masters of literature as an art but I am not quite sure whether I am the kind of guy who fully appreciates this aspect of someone's writing. Clarity, efficiency, and especially accuracy of the content are way more important for me.

Fine. Do I agree with Stephens that really skillful people may only expect to be right 65% of the time in their predictions? Yes and no. It depends how you choose the ensemble of the predictions.

If the ensemble contains too many things that are obvious to everybody, e.g. "the Sun will rise tomorrow", the success rate may be far greater than 65%. If the ensemble contains too many things that are not obvious to everybody but that are still calculable according to a reliably tested template, the success rate may still be far higher than 65%. NASA surely needs more reliable – and more accurate – predictions of things in order to send the rockets and spaceships to various places.

These subtleties aren't really discussed by Stephens. Let's implicitly assume that he talks about the "truly difficult, unprecedented" predictions that are done for the first time and where seemingly reasonable arguments exist in both directions. Whether the global mean temperature will increase by 2100 is one example, whether the change will be dangerous globally is another. I am 65% certain that the answer to the first question is Yes, the temperature will be higher, and much more than 99% certain that the answer to the second question is No, it can't be dangerous.

The devil is in the details but yes, these are the difficult to predict questions and people claiming complete certainty on such questions are pure fanatics. If you're not interested in Forex, skip the example below:
For a month, I could test my – and other people's – own predictions concerning such a hard, unprecedented question, the behavior of the Czech currency exchange rate after the peg was lifted on April 6th. Well, I would say that I was 65% right so far – and much more right than the average analyst – but what I predicted incorrectly was still substantial and sufficient to make the profits modest (as of now).

I said that there would be a smooth evolution of the EURCZK exchange rate without multi-percent changes a day. Lots of people had predicted 10% changes in a day or hours. I was right, they were wrong – the exchange rate was as stable and free of volatility as other exchange rates because "everyone knew almost the same" and the market was mostly averaging the opinions of many players (mostly speculators). I said that the rate wouldn't substantially return above the 27.02 intervention level – it returned twice (Thursday two days ago and the previous Thursday) to levels up to 27.05 (the middle rate) but that's it. (The reasons that contributed to the weakness of the crown on the two days were the fear from the looming 1st round of French elections; and a somewhat hawkish ECB message in between the lines, respectively.) So I was basically also right, so far. And I predicted that the rate could easily see far enough below 27 within hours – it was right to the extent to which 26.5 is a good enough deviation (it's almost 2%) for you.

But otherwise the strengthening of the Czech currency was disappointing – by a factor of 2 when it comes to the achieved extremum and a factor of 3 when it comes to the rate of strengthening (the Euro is now 26.83 or so). OK, clearly the people who were saying that the impatient speculators will affect the rate were right to some extent, too. The crown is "leaking". There are lots of speculators who know that the fair rate is some 25 per Euro but who still behave as if it were 27 per Euro because they bought the crowns at 27 in unlimited amounts (sometimes whatever they could afford). So they make profit even if they sell the crowns at the rate 26.98 and many obviously did make this tiny profit. So these impatient people have to disappear before the truly fundamental game of the market makers who know what they have and who play a long-term game will dominate.

Well, if I were in charge of the crowns at a big bank playing this game, like ING, I would be buying all the crowns even at 26.80 and just cancelled this ludicrous game of maximally delaying the convergence towards a fair rate. But what's important: They think differently.
Let me return to Stephens. The declared certainty about the future climate change and its causes is obviously bogus but I could disagree with Stephens if he argued that "almost certainty is impossible" in other situations.

Fine. People have reacted. On Twitter, Gavin Schmidt and a few other fanatics have claimed that Stephens is fighting a straw man. I don't think it is the case. The fanatical claims about the certainty of destruction by man-made climate change are omnipresent – and you may find lots of them written by the brainwashed or activist commenters under Stephens' article, too.

But I found many comments that agreed with Stephens in the New York Times, many reasonable comments (these two sets are overlapping but not identical), and I do believe that Stephens' first op-ed made the New York Times more attractive.

So my prediction – and I may be right in about 65% of similar predictions – is that his writing will help the New York Times financially (dozens of Gavin-Schmidt-like fanatics will disappear but hundreds of thousands of readers will be added) and the New York Times will see that it's a good thing to have a measured guy who nevertheless doesn't parrot the left-wing activists' boring lines all the time.

Because of this success, I predict, other newspapers will follow suit and they will be hiring people similar to Bret Stephens who will write lots of similar articles. The atmosphere in the mainstream commercial media will change and every manager will ask: Why didn't we invent this cure for our problems 3 years ago or 10 years ago?

Well, you failed to invent them because you were mindlessly confined in the group think. It was a generally believed wisdom that if you want to prosper, you only allow the boring advocates of the climate certainty and consensus to repeat their lines for the 10,000th time. Well, it's actually not the case. Almost no one wants to read this garbage anymore. Almost everyone has been bored and tired by this stuff for many, many years.

You should have figured out that the conventional wisdom is rubbish, dear newspaper managers, many years ago. But behaving just like all the other mediocre managers elsewhere looked like a good enough and comfortable enough strategy to you. It was easier than to do your job well, wasn't it?

Just to be sure, I am bored by the articles saying that "certainty is politically incorrect" (such as this Stephens' op-ed), too. To make me intrigued, The New York Times would have to publish something much more original and brilliant.

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