Who Got It Right?

Photo Credit: The Wrap (www.thewrap.com)

At the end of each year (or the start of a new year), pundits and practitioners in various fields offer forecasts for the following 12 months. A search on Google for “Predictions for 2018” produces over 18,600,000 results, with the first page containing forecasts on economics, financial markets, science, technology, politics, sports, national security and much more.

How accurate are these predictions? How often do various commentators get things right (or, more often, wrong)?

The recently passed GOP tax plan will “revitalize” the US economy, according to the Heritage Foundation. The Center for Economic Policy and Research disagrees, warning that this proposal is “not reform, and does not benefit the middle class.” Who will be proven correct in the end?

Today, Elon Musk warns of the risks posed by artificial intelligence, while Mark Zuckerberg and  Ray Kurzweil are quite optimistic. The verdict will be issued in the coming decades.

Nate Silver, one of the most accurate American election forecasters of the modern era, gave Donald Trump just a 28% chance of winning the 2016 election. Silver was not as off as some other analysts, many of whom thought Jeb Bush would be the eventual Republican nominee.

In 2005, then-Federal Reserve chair Alan Greenspan argued that derivatives, financial instruments which played a starring role in the 2008 financial meltdown, were “key factors underlying the remarkable resilience of the banking system.” Even earlier, in 2002, Joseph Stiglitz, a prominent economist at Columbia University, who had recently won the Nobel Prize, declared that based on “millions of potential scenarios” the risk of collapse of government-sponsored mortgage giants Fannie Mae & Freddie Mac was miniscule. 6 years later, both institutions were on the brink of failure, and placed in conservatorship.

Yet, not everyone got it wrong. Other observers, including New York University economist Nouriel Roubini, Dean Baker, an economist with the Center for Economic and Policy Research, Nassim Taleb, an academic and investor, as well as hedge fund managers John Paulson, Michael Burry and Steve Eisman, foresaw the events of 2008.

In 2003, Thomas Friedman, a New York Times columnist and prominent Middle East analyst, wrote in the New York Times that the proposed US invasion of Iraq was appropriate, anticipating few consequences that would later follow. Around the same time, Brent Sowcroft, former National Security Advisor to President Ford and President George H.W. Bush, spoke out in the Wall Street Journal, warning against the war. Almost 15 years later, it’s clear Sowcroft got much more correct.

None of this is meant to confer blanket praise (or unfair condemnation) on any individual named above. Each offers unique intellectual and analytical merits, as well as shortcomings. The same is true of most who make predictions, in any field.

The world is a complex, interconnected, random place. Looking ahead, and correctly seeing what will happen, is inherently challenging. Over the long run, each person’s crystal ball becomes at least a little murky, no matter how talented one might be.

Yet, it is crucial to keep track of who gets what right, and how come, over a long period of time, when considering what someone sees in store for the future. Why?

First, such a metric allows us to assess whether a particular commentator or observer is worth listening to, when it comes to his or her forecast of future events. Someone who writes compellingly, but is consistently wrong when looking into the future, might be interesting to read, but shouldn’t be taken seriously. Style must be accompanied by measurable substance.

It is also worth noting what particular observers get right (or wrong). Let’s say your favorite newspaper’s opinion writer hit the bull’s eye, when analyzing how tax code changes impact economic growth, or how health care reforms will affect medical costs and access. Now, suppose this same commentator offers predictions on events in Syria, or the future of US-China trade relations. Our esteemed editorialist misses by a mile.

Should we categorically say this individual is a poor analyst of the future, and not worth listening to? Not at all. Rather, he or she has a stronger understanding of domestic matters, or economic matters, as compared to foreign affairs. Perhaps we should keep reading this writer’s pieces on American public policy, but skip to the cartoons, when musing on the likely fate of Nicolas Maduro’s government in Venezuela. Domain expertise is real.  

Lastly, it is also useful to consider how each observer reaches conclusions. I’ve written about the merits of probabilistic thinking, including Bayesian statistical analysis, whose most prominent champion is Nate Silver. Others have been critical of Silver’s assertion that Bayesian analysis is quite so effective.

Some analysts argue Marxist theory is a strong method of predicting future economic trends, while many economists advocate regression analysis. Others engage in a range of methods, including trend analysis, environmental scanning, simulations, and more. Some thinkers, most notably Nassim Taleb, have warned that most models of prediction are flawed, because they fail to take account  of “black swan” events, i.e. those with a low probability, but outsized impact.

It would be instructive to track various forecasts, over the short and long term, and classify them (when possible), according to the methods of prediction implemented. In many instances, forecasters don’t tell us how exactly they reached their conclusions. However, in other cases, they explicitly tell us why certain events are likely to occur. Over time, we might start to see patterns in terms of when (i.e. using which methods) those who predict, tend to get things right- or not.  

For these reasons, I suggest creating a comprehensive searchable database. Let’s call it Prediction Scorecard. Prediction Scorecard will be a part-time project, staffed by data scientists, who categorize and analyze large volumes of data, as well as veteran journalists, who cover the fields where forecasts are being reviewed, and put matters into context.

Funding could come from one of the many foundations and projects dedicated to investigative journalism. Or, it could be a joint project of several newspapers or media entities. Prediction Scorecard keeps track of the predictions of commentators who have made written (or video) forecasts, in a variety of fields, including, but not limited to: domestic and international politics, science, technology, economics, and financial markets. For each observer, forecasts are offered in a declarative manner, with a link to applicable articles, books, and public pronouncements.

Let’s take the example of John Simpson, a (fictional) financial writer for the Financial Times: “Simpson believes the US banking system is managing risk effectively, so few major banks will suffer large losses within the next 5 years”, along with the reasons for this belief.  A reason could be something like “Simpson thinks banks have made lasting changes since the 2008 financial crisis, and are engaged in more conservative lending practices. Specifically, they have increased borrower credit and income requirements.”

If available, Prediction Scorecard will state how John reached conclusions, something like “John extrapolates from previous times in history, when banks maintained strong credit and income standards, and avoided financial losses.”  Of course, the dates of John’s predictions must be noted. In this case, let’s say, January 4, 2018.

Prediction Scorecard will track how John fared, by monitoring events, perhaps on a yearly basis, until 2023 (when his prediction expires). This requires examining large American banks, and considering whether any suffered notable losses. It also demands some degree of judgment. If a bank faced losses, were they, in context, “large?” Also, if this happened to multiple banks, how many would still count as “few?” And how do we decide if a bank is “major”?

Since these issues are both qualitative and quantitative, insightful journalists and savvy data scientists can put matters into context, helping us understand how correct (or wrong) someone was. We can categorize each commentator’s predictions by subject matter (to assess domain expertise). So, if Simpson’s theories regarding bank stability were correct, but he also wrote about oil prices (and was wildly wrong), that must be accounted for.

Also, within a given domain, we’ll be able to keep track of who gets things right (or not) more often. Let’s suppose in the field of bank and financial stability, Anna Chung (let’s say she writes for Bloomberg), over a 15-year period, gets more right than Simpson, or anyone else. We should make note of this, although, of course, past success in predictions, does not guarantee the same in the future.

We’ll gain a greater understanding of why and how noted commentators reach certain conclusions. Let’s say that when predicting scientific developments, extrapolating from current trends is a powerful means of seeing what happens in the future. Now, maybe in economics, this doesn’t work so well. By tracking the methods used to develop various forecasts, we will gain insight into which methods work most effectively under particular circumstances. We can develop a broad idea of how to think more clearly, and be less wrong.

Ultimately, forming accurate predictions is a tough line of work. What happens in the future, is influenced by many different factors, working in ways that are hard to anticipate. Even the very best forecasters, over the long run, are likely to get much wrong. We shouldn’t shun people for mistaken predictions.

Yet, we should know who gets what right, and who doesn’t, and why this is the case. This helps us develop deeper insights into what makes for effective (or flawed) predictions. It offers a stronger framework through which to analyze events. Ultimately, we can think more deeply, clearly and objectively, about the world we live in.

Charlottesville, The Constitution, & The Challenges Of Armed Free Speech

Armed militia members in Charlottesville, Virginia (photo credit: New York Times) 

                                   

August 11th and 12th, 2017. Charlottesville, Virginia.

In the preceding months, Jason Kessler, a prominent white nationalist, and his ideological compatriots, vocally opposed plans by the city’s leaders, to remove a statue of Confederate military leader Robert E. Lee, located in Charlottesville’s Emancipation Park. Kessler’s fellow white nationalist Richard Spencer, as well as members of the Ku Klux Klan, held events in support of the Lee statue, in May and July 2017.

Kessler, Spencer and others decided to host a larger rally, known as the Unite the Right rally, in in August. This gathering brought together hundreds of white nationalists, chanting slogans such as “Jews will not replace us”, and numerous racial slurs, while holding Nazi and Confederate flags.

Kessler and his were countered by protesters, both community members, as well as members of Antifa, a self described anti-fascist movement, which physically disrupts demonstrations and clashes with opponents. Fights between Antifa and white nationalists broke out during the event.

The brutal beating of counterprotestor DeAndre Harris, by white nationalists, gained widespread attention, as did a video of Richard Preston, a white nationalist, firing a gun at opponents. Heather Heyer, a 32 year old counterprotestor, was killed, and several others injured, when James Fields Jr., a known white supremacist, drove a car into a crowd of counterdemonstrators. Two Virginia police officers who were conducting helicopter surveillance on demonstrations also died, when their aircraft crashed.

Members of various militias also appeared at the rally, dressed in camouflage, and armed with rifles. Members of these groups lean conservative, and strongly oppose any perceived encroachment on constitutional freedoms. Militia members in Charlottesville stated they were present to protect the free speech rights of all, rather than to support any side. One of the militia leaders, Christian Yingling, condemned white nationalism, although some militia members displayed Confederate flags on their clothing. Members of Redneck Revolt, a group of mostly anti-capitalist white individuals, who advocate solidarity with people of color, also appeared, armed with rifles. Additionally, based on gunfire from Mr. Preston, as well as photos from Charlottesville, amongst those who openly carried firearms, were white nationalists, participants in Unite The Right.

The First Amendment states that “Congress shall make no law respecting....the right of the people peaceably to assemble...”. This clearly protects the rights of citizens to gather in a non violent fashion.

With public demonstrations, courts balance the rights of citizens to gather and express opinions, with the need for governments and law enforcement to maintain order. While governments can impose restrictions on the “time, place and manner” of protected speech, they cannot restrict speech based on content. Thus, a governmental body is allowed to require a permit for a public assembly, be obtained in advance, as long as such rules are not crafted to hamper a particular type of speech (i.e. what is being said).

Such restrictions must be “narrowly tailored to serve significant governmental interests”, like the preservation of order. Requiring demonstrators to obtain a permit, prior to assembling, is permissible (as long as permits are not issued based on content). Additionally, localities can restrict noise levels and marching routes of a demonstration (as long as “narrowly tailored.”)

In May 2017, Kessler applied for a permit with Charlottesville city officials, to hold a rally in Emancipation Park (at that time named Lee Park), to protest plans to remove the statue of Robert E. Lee. Kessler’s permit was granted on June 13. Then, on August 7, the city government revoked Kessler’s permit, ordering Kessler to move Unite The Right to another park, more than a mile from Emancipation Park.

Kessler countered by applying for an emergency injunction in federal court, to allow Unite The Right to proceed. Kessler, who was represented by attorneys from the ACLU’s Virginia chapter, as well as the Rutherford Institute, prevailed in court. Judge Glen Conrad found that the withdrawal of Kessler’s permit was motivated by “the content of his speech, rather than other neutral factors that would be equally applicable to Kessler, and those protesting against him.” Unite The Right went forward.

What about the Second Amendment? The Second Amendment states that “A well regulated militia, being neccessary for the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.” Despite the “militia” language, this provision has been interpreted by the Supreme Court to allow for an individual right to own guns, as stated by the Supreme Court, in DC v. Heller (2008) and further articulated in McDonald v. Chicago (2010).  

The vast majority of states allow individuals to carry concealed firearms, either without permits, or upon meeting basic requirements, such as completing gun safety courses, or passing background checks. Of course, locations where one may carry a firearm vary considerably, with many states restricting schools, bars, workplaces and government buildings.

Open carry of firearms (as seen in Charlottesville), is allowed in some form in 45 states, with variations in terms of permit rules. In Virginia, no permit is mandated for open carry of guns, including rifles. Also, few restrictions are placed on gun owners from outside the state (hence, militias from outside Virginia carried firearms without interference). What’s more, under Virginia law, cities like Charlottesville are forbidden from enacting gun restrictions of their own; similar rules exist in many states,

Charlottesville is hardly the first public gathering where observers or demonstrators carried guns. In 1967, members of the Black Panthers visited the California State Capitol (where California’s legislature and governor work) with pistols and shotguns, in protest of proposed gun restrictions. In recent years, members of the Oath Keepers militia patrolled with semiautomatic rifles, at demonstrations in Ferguson, Missouri, organized in response to the shooting death of Michael Brown, at the hands of local police. Last year, supporters and opponents of a mosque in Dallas faced off with loaded rifles. Around the same time, an Arizona campaign rally for Donald Trump attracted armed members of an anti-Trump organization, who indicated they were present to protect those demonstrating against Trump.

This raises the question: What should be done when the boundaries of the First Amendment and Second Amendment conflict? How do we balance the right to free speech, as guaranteed under the First Amendment, with Second Amendment protections for the right to bear arms?

I am a longstanding supporter of the Second Amendment. I support the rights of individuals to own a range of firearms, including rifles like the AR-15. I believe that states should issue concealed carry permits to those who complete gun safety courses, and pass background checks. Some restrictions on where one can carry guns  (such as bars, schools, or government buildings), seem reasonable. I am also not opposed to restrictions on “bump stock” modifications to rifles, to prevent them from being turned into automatic weapons.

Yet, it is clear to me that openly carrying firearms, particularly shotguns and rifles, at a  demonstration or political rally, poses intolerable risks.  Enforcing order and ensuring public safety at a demonstration, becomes far tougher. First Amendment rights are weakened through intimidation, while the roles of law enforcement and private citizens become increasingly blurred.  

As mentioned earlier, during the anti-mosque demonstration in Dallas, demonstrators from each side carried shotguns and rifles. Police officers stood between the two groups, as well as on nearby rooftops. Although violence was averted, it isn’t hard to imagine how quickly this situation could have escalated. The only spark needed is for a single individual, in a fit of anger or bravado, to fire a weapon, (or shout an insult, which leads to someone else opening fire), and a wave of bloodshed could be unleashed, putting demonstrators, law enforcement, and bystanders in grave danger.

Heavily armed demonstrators can have a negative impact on free speech. As a piece by David Frum in The Atlantic noted, the presence of openly armed individuals in places like Charlottesville “sent a chilling message of warning to lawful protestors.”  This dynamic was vividly illustrated in Arlington, Texas, when heavily armed open carry advocates walked by a meeting of anti-gun advocates (mainly mothers, some of whom were were with their children), generating considerable fear and intimidation.

The presence of someone carrying large firearms at a gathering or demonstration, understandably conjures up fears of violence (especially when individuals on the other side are unarmed). While public displays of weapons have become more common, as open carry laws have spread, those exercising their right to speak, gather, and protest, could reasonably feel intimidated, and decide to steer clear of such events. By their very presence, openly carried firearms can dampen the exercise of First Amendment freedoms.

Another issue, seen in Charlottesville, was that militia members wore military-style uniforms, and carried rifles, rendering them almost indistinguishable from members of the National Guard, who were called to Charlottesville. In the event of any disturbance, people might be uncertain as to who they should seek help from.

Confusion could erupt between members of the National Guard, or other law enforcement agencies, and militias, potentially leading to tragedy. This became an issue in the July 2016 murders of five police officers in Dallas, at a demonstration against the killings of black men by police. Some marchers were armed with AR-15 rifles. Since the shooter wasn’t visible, until he was caught, police viewed armed demonstrators as potential suspects.

Yet another issue, is how armed observers (i.e. militia members), or demonstrators, react to provocations. What if an (unarmed) demonstrator throws objects or shouts insults at a short-tempered, armed militia member? What if unarmed protestors yell insults or threats, at armed demonstrators who hold an opposing viewpoint? Things could get very bad, very fast.

Finally, a private citizen’s role isn’t to ensure order at public demonstrations. That’s the job of local and state police, and, if needed, the National Guard. Militia members, whether Christian Yingling’s colleagues, members of Redneck Revolt, or any other group, should not play any role in defending the rights of demonstrators. By allowing members of these groups to effectively deputize themselves as members of law enforcement, the primacy of the police and National Guard in maintaining order, is effectively undermined.

Here’s a compromise: No matter what open carry laws a state may have, no one, outside of law enforcement officers, may openly carry or display a firearm, within 1,000 feet of a public gathering or demonstration, for which a permit was issued. Such restrictions would not, however, apply to concealed firearms, whether carried by demonstrators or observers (i.e. militias), assuming those carrying such weapons, are in compliance with state law.

This rule would pass constitutional muster. As Justice Scalia noted in Heller, “the right secured by the Second Amendment is not unlimited....not a right to keep and carry any weapon whatsoever in any manner whatsoever, and for whatever purpose....” Restrictions on what types of guns can be carried in certain public settings, is likely to be found constitutional.  

While I prefer that no one at a demonstration (outside of law enforcement) be armed with any kind of weapon, such laws are logistically difficult to enforce. Thus, restricting open carry (easily enforceable) makes sense. Since guns won’t be visible, it reduces many risks mentioned earlier, including intimidation of peaceful protestors, confusion between police and armed demonstrators, as well as private armed groups playing a role in law enforcement. The potential for carnage, posed by high-caliber weapons in public, will also decrease.

The First Amendment and Second Amendment are vital components of our framework of rights. For me, it is hard to imagine our nation without the right to speak our minds, or the right to bear arms. Yet, balancing these rights will require some compromises. At the next Charlottesville, individuals must still have the right to say things that I believe are incredibly hateful and patently wrong. But this time, guns should not be visible.