Forward to next post: Rolling Jubilee
In a post I find myself wishing everyone would read immediately, actually-numerate scientist-blogger Chad Orzel gets exasperated over how frequently journalists credit finance people—like Mitt Romney, or the speculators who caused the housing collapse—with being “numbers guys.”
You would think that the 2008 economic meltdown, in which the financial industry broke the entire world when they were blindsided by the fact that housing prices can go down as well as up, might have cut into the idea of Wall Street bankers as geniuses, but evidently not. […] It’s not hard to see where it originates—Wall Street types can’t go twenty minutes without telling everybody how smart they are—but it’s hard to see why so many people accept such blatant propaganda without question.Yes, there are some genuinely data-driven traders, but as Orzel points out, they’re very much a minority in the actually-existing finance industry. The idea that Finance Guys (and they are, very much, mostly guys) have some kind of super-numerate insight into money and economics is, basically, a big con perpetrated by a privileged class that wants the rest of us to believe it’s far more essential than it actually is.
Look, Romney was an investment banker and corporate raider at Bain Capital. This is admittedly vastly more quantitative work than, say, being a journalist, but it doesn’t make him a “numbers guy.” The work that they do relies almost as much on luck and personal connections as it does on math—they’re closer to being professional gamblers than mathematical scientists. This is especially true of Bain and Romney, as was documented earlier this year—Bain made some bad bets before Romney got there, and was deep in the hole, and he got them out in large part by exploiting government connections and a sort of hostage-taking brinksmanship, creating a situation in which their well-deserved bankruptcy would’ve created a nightmare for the people they owed money, which bought them enough time for some other bets to pay off.
Orzel’s ultimate point is to those of us who’ve been boggled over the many reports that Romney and his team weren’t just faking last-minute confidence but, rather, genuinely expected to win—despite the fact that every single credible poll said that they probably wouldn’t. As Orzel says, no, this is precisely the common failure mode of guys like this:
They make “gut” decisions all the time, and slant their projections in a way that justifies what they want to do. When one of their bets come through, they rake in huge amounts of money; when it doesn’t, they chop up the company and sell the pieces to cut their losses. And when a disaster that thousands of other people see coming a mile off blows up in their faces (the housing crash, or last Tuesday’s election), they’re left utterly flabbergasted.I’m not sure how many more disasters it’s going to take before journalists get out of the habit of treating Wall Street types like they’re the super-geniuses they claim to be, but the sooner the better.