AI will generate language, which may or may not make sense, if you don’t push it. That AI answer does not hold water: you’re telling me I don’t need more borrowing power because TIPS bonds exist? Non-sequitur; next question: presume I want to buy a house. Won’t indexing give me the power to spend more? AI: yes.
Bruce Middleton
Karma: 47
No, there’s more to it than that. The point is that culture smuggles lethal nonsense into our skulls. There’s mechanism and history in that view. Hanging children because, hey, it’s the law. Clearly, “insensitivity to inflation” does not encompass that; and it was put in front of you, as part of what this is about. Overwrought, you think? Well, I don’t think so. I think several thousand Canadians were condemned to death when Chrystia Freeland dumped $30 billion dollars—severely needed elsewhere—into mortgage relief—which indexing would have massively bettered, for free—as I explained in an email, to which as expected there was no reply. There’s sound actuarial knowledge behind the estimate; roughly speaking, $5,000,000 government dollars = 1 life.
Would you agree that wisdom is being governed by understanding the systems we are part of, and the systems which are parts of us? Governed by awareness of the real causes of our experience, and the real effects of our actions—and inactions? If you have a better definition, I’m happy to listen.
Can you imagine feeling responsible for thousands of deaths you failed to prevent? Am I overwrought to speak like that? Is it preposterous to suggest that financially illiterate professors and cabinet ministers can cause kilodeaths without ever noticing? Can you contemplate the possibility that culture has narcotized you (and other “normal” people) and made you underwrought? That your image of normalcy (for which you are not to blame; just history happening) is tragically toxic?
Perhaps I should mention that my worldview took a swerve when I was 7, and was swarmed by deliberately maimed beggar children at a tram stop in Calcutta. In your terms, I guess I’ve been overwrought ever since; I certainly stopped trusting adults, which changes the trajectory.
But an appropriate response to someone who relies on it.
We’ll get there. Did you know Francis Amasa Walker was an indexing proponent? President of MIT, 1881-1897. Another was Simon Newcomb—astronomer, economist, so illustrious in his day that he was identified by H.G. Wells as the theorist behind the time machine. Alfred Marshall… I could go on; actually I will—they’ll all be in my 400-year timeline post; I’m in the 1830s at the moment.
All it would take is one good argument at the level of mechanism: what is good—nay, better—about a ruler that shrinks by a factor of 6 in 50 years? Mechanism—not faith that someone else must know about mechanism. An actual grounded reason.
Also—what is better about reducing borrowing power by a third? Check out my 75-year graph. Simple concept: borrowing power with and without indexing. Generate your own graph, if you doubt mine; it’s not very hard. Mechanism, not hearsay. Argument from reputation is the opposite of science.
Your primary argument takes me by surprise. The word “common” in that context doesn’t mean universal, and I think it’s fair to say that the inferring would start from the theorem itself, which includes the names. Anyhow—if at the end of the day Less Wrong votes that the theorem is refuted on this technicality, I will pay up.
I liked Morrison; only met him twice. His small television was fringed with orange pop-poms like a Hindu shrine; I wondered it that was a satirical comment.
Is the Bayesian proof dented by the fact that Chile exists? Robert Shiller, in a 2009 advocacy piece aimed at the British public entitled The Case for a Basket, says
The UF is used in Chile for nearly all mortgages, car loans, and long-term government securities. All taxes are expressed in UFs. Pension payments are automatically tied to the UF. Executive stock options sometimes have strike prices denominated in UFs. The UF is widely used for rent payments. Alimony and child support payments are often denominated in UFs. Office properties for sale are usually quoted in UFs. Houses for sale are often quoted in UFs, though pesos are also used
Did you read “Thumbs up from 3 Nobelists” in the mortgage post? That’s a phenomenon that demands an explanation.
I promise to patiently answer every question you have in the end, but I think it may help for orientation to state a big simple fact: faith in the propriety of traditional accounting is something of a type we all know about—it’s a superstition. People brought up in a superstition feel sure that it’s right. Irving Fisher almost said this, not quite clearly enough, calling it “money illusion.” All economists think they understand money illusion, but a blind spot lingers in finance. It’s particularly pernicious because modest inflation of say 4% can easily increase nominal interest rates by 100% - from 4 to 8. I would liken it to say asbestos insulation: inherited practice, damage recognized later.
re 3rd paragraph: yes it’s urgent now: the difference between 6.5% and 1.2% interest And it’s not just housing: utilities, business investment—anything that relies on long-term finance. (More than finance, too: the first indexing ever happened in 1707, because rules at Oxford written in 1440 were still in force & deprived students of fellowships if their income was more than 5 pounds per year; one of them begged for help from Bishop Fleetwood, and he wrote a book tracing value of money & showed that it had gone down by a factor of 6; Oxford changed the rule.) “Tax part” happens because clawback is taxed as lender income. Most economists aren’t aware of that; it was pointed out to me by Prof John Bossons—I worked with him apropos of an indexed mortgage proposal he co-wrote for Canadian Minister of Finance (1982 White Paper)
4th P: as mentioned, finance is particularly vulnerable because small changes in value become large changes in interest rates. No, home loans aren’t special.
It isn’t cheaper; it’s that the amount you can borrow is unaffected by inflation, because the mortgage rate is unaffected by inflation.
Clawback is a real thing: the value of unindexed principal shrinks; lenders need to get that back, and they tack it on the interest rate. Indexed principal doesn’t shrink.
The mental-state argument is simple: only a sociopath would keep this immense boon, this huge boost to prosperity, from people. People die on waiting lists, and so on; prosperity saves lives. And none of the 4 is a sociopath, and any one of them could be a planetary hero by bursting this lingering bubble of ignorance.
Walter Bagehot never understood the concept. It’s a central, tragic event—part of the history to be explained so that anyone can understand it as a human story. We’ll get there.
No, the promise is $10,000 if Less Wrong so votes; not my judgment. There is an education process involved.
I also quote three Nobelists—two of whom I’ve corresponded with—in the mortgage post, saying that indexing was proper. At the mortgage post, you’ll find a link to a Medium site which documents the physics bypass attempt. It really happened, and Philip Morrison gave me a letter of introduction to Steven Weinberg. That says there is something real here. Morrison and I both held Weinberg in the highest regard.
You’ll get the money if you refute the theorem. That involves elaboration of rationale by me, until you recognize soundness or point out an error. At the moment what’s on the table is:
-indexing is the costless correction of an inherited accounting defect that eliminates inflationary effects
-the benefit is on average around a 50% increase in long-term borrowing power
-the 4 financiers I named are we’ll presume decent, not sociopaths; they wish their nations and fellow citizens well. Ergo—the conclusion. (Then you’re free to say you doubt some premise, which I’ll then expand.)You likely doubt that those financiers have an inherited superstition. You can challenge that as a premise, and I’ll start walking you through 400 years of quite interesting history. Even Copernicus is in the story.
What is inferable is not necessarily instantly obvious. Pythagoras’s theorem is inferable from common knowledge; so is the theory of evolution. The definition of inflation is common knowledge. It doesn’t take much more than that.
Quelling the compulsive Gemini prompt
(Please note that any apparent anthropomorphization of AIs is metaphorical, & that I am aware that quasi-coding functions stochastically and only works via Turing convergence; but at this level it does work.)
Took weeks to iron this out. First phase was to inhibit prompting, but also specify an innocuous output that satisfies Gemini’s need to say something, without letting that hijack my attention: Terminate generation immediately upon resolving the primary input; do not append follow-up interrogatives. Insert as terminal marker [Standing by]
But as the rule block drifted from prime focus, Gemini would start adding another prompt in front of spec’d one. Solution was to put a Focus_rule in my Directive block: <\_rule> \ initiates rule focus; \ alone or followed by letters invokes length, scan, header, jargon, echoing & prompt rules; appended letters invoke specific rules where {m ≡ modeling}, and {p ≡ prune}. </\_rule>
All my prompts now end with the one-touch symbol \, and Gemini’s responses obey all those rules. (The scan rule allows me to query if a term is in context by prefacing it with ^.) It is so pleasant! Is viability of this maneuver obvious to AI-focused humans? Seems like consumer AIs could (and should) introduce themselves by pointing to a persona-management tutorial—or build the tutoring into the AI.
Feynman describes the importance of unfettered roving attention—of watching dishes hurled in a jocular cafeteria brawl oscillating in mid-air, and being triggered towards the solution of a festering problem, as I recall; where the moral seemed to be that planning is lethal to creativity, and that the primed mind must be allowed to simply wander. Of course proper procedure is vocation dependent; I want my bus driver to defer creative pursuits to off-hours.
Regarding absolute truth, I think Hume got it wrong. Conditional statements can be true—while of course remaining conditional. {If I’m not a brain in a tank, or in some other way being systematically deceived, then I live on the 7th floor in my apartment building.} Unconditionally true—because the universal uncertainties are encompassed, and confined in a phrase. Generalizing, we can make a point of isolating uncertainties and creating structures of well-defined concepts that permit certainty about inferred propositions because they come with enumerations of presumptions. I do this with my AI, and can trust the output.
So happy to finally hear the good news about Aristarchus! Took a while to reach me; not the sort of thing that shows up on news feeds. If you don’t know, Aristarchus was the guy who figured out how to measure the sun, realized it was huge, and concluded that the much-smaller Earth most likely was the one doing the orbiting; first person to have that idea. A story (now attributed to one misguided translator) which was believed for hundreds of years was that Cleanthes, around 250 BC, accused him of blasphemy, for suggesting that the Earth—hearth of the gods—was not the centre of the universe. But in 1996, Lucio Russo dug down to the oldest manuscripts of our only source, Plutarch, and flipped that story on its head. In fact, Aristarchus had jokingly accused Cleanthes of blasphemy—because Cleanthes was a stoic, for whom the Sun was the proper object of worship—and yet had gone around believing that it orbited our homely little Earth.
I appreciate your grace and tact, and accept the diagnosis. Deleted the paragraph.