Door To Hell

A contribution by JTT:

This article states that the unconscious mind is a better decision maker than it's been given credit for.  The discussion of rational conscious decision making versus unconscious decision making (for these purposes I'll refer to as intuition) has always intrigued me.  Lately it's implications in the baseball world has really drawn my attention.

Within the last 8 or so years, with the advent of the book Moneyball, the area of baseball statistics called Sabermetrics has really grown in popularity and legitimacy.  Sabermetrics aren't new, in fact the Godfather of them, Bill James, has been publishing for 20+ years.  With the rise in legitimacy, they are now being used by many as the foundation for determining awards, salary, playing time, promotions/demotions, signings, etc.  It's hard not to read a baseball article without some mention of OBP or VORP.  The Sabermetrics proponents will claim that these statistics that are surpassing the older statistics, such as RBI's, Wins and Batting Average, are in fact much more accurate and more of a reflection of a player's true value.  The use of the older statistics has fooled us, and moreso that decisions not based on the results of sabermetrics (ie intuition) are not optimal.  For example, a manager's decision to pinch hit or not and with whom is almost always second guessed using a metric claimed by Sabermetricians to be rational measurement.  I have two main points:

1)  First, when comparing Sabermetric stats vs. traditional stats the sabermetric stats do bring a great insights that traditional statistics failed to do.  In general, however the proponents of the Sabermetric stats fail to admit that stats, in general, have to based on a certain premise that can't be statistically proven, so it's a reduction to eventually making an intuitive claim.  See this post for more info.

2)  When making a decision in baseball there are a multitude of factors and variables that statistics can only measure in the broadest sense.  For example, it's the 8th inning the Yankees are down by 1 with 2 outs, runner on 2nd.  They have A-Rod on the bench and Melky Cabrera to pinch hit.  It's sprinkling slightly, the pitcher is lefty, A-Rod is slightly hung over, Cabrera is 2-20 in his last 20 AB's, but 12-30 in his last 30 AB's, and I could go on and and on adding variable after variable.  The statistics can tell you which batter hits better average, obp, slugging, and it can probably even reduce it to vs. lefty/righty, home/away etc.  However, at a certain point there is not a stat that can take in every single factor of this situation and give you a best probability.  That is when the manager uses his intuition to make a decision.  Often this is mocked by "rational thinkers", however those people must consider the fact that the unconscious mind is a better aggregator and decision maker on certain subjects with lots of random info.  Sometimes it's better to trust your gut.  The assumption I am making, though, is that the person making the decision is well experienced and has a base of conscious and sub conscious information to draw from.  For example, Joe Torre's gut about baseball decisions should be relied on more than say Bill Clinton's.  Torre has a lifetime of baseball experience.

I am not laying claim that statistics and sabermetrics should be thrown to the side in favor of intuition.  I'm just making the claim that some decisions aren't best served by using flawed data such as sabermetrics, and in lieu of better information one should use their intuition if they have the experience to draw from.

This is another enlightening read considering the times we are in.  Prior to reading The Case Against the Fed, I was convinced that the economic crisis we are currently in was caused by the actions of the Fed and its "solution", TARP, was going to benefit only the bankers.  After reading this book, my thoughts are cemented.

Rothbard belongs the Austrian School of Economics, proponents of the free market who despise central banking.  Rothbard makes a compelling case and in a very readable, laymen way.  Rothbard explains the ideas behind central banking and how they create inflation, though purporting to control inflation.  Beyond explaining the Federal Reserve, Rothbard shows how it was implemented in the US and the drivers behind it.  It's incredible to believe how much power JP Morgan and Rockefeller had in the early 1900's.

Rothbard describes an almost ominous and conspiratorial implementation of the Federal Reserve.  Even if I believed this to be true, which I may, what I find lacking was an analysis or description of how they justified the needs or benefits of a central banking system.  Furthermore, I would like Rothbard to counter more ideas from proponents of central banking.  Not necessarily from bankers but from economists.

I look forward to reading more of Rothbard's work.  I can't say yet I'm a follower of his ideas but I find many compelling, enough to want me to read more.