Under ancient Jewish law, if a suspect on trial was unanimously found guilty by all judges, then the suspect was acquitted. This reasoning sounds counterintuitive, but the legislators of the time had noticed that unanimous agreement often indicates the presence of systemic error in the judicial process, even if the exact nature of the error is yet to be discovered. They intuitively reasoned that when something seems too good to be true, most likely a mistake was made.
In a new paper to be published in The Proceedings of The Royal Society A, a team of researchers, Lachlan J. Gunn, et al., from Australia and France has further investigated this idea, which they call the "paradox of unanimity."
"If many independent witnesses unanimously testify to the identity of a suspect of a crime, we assume they cannot all be wrong," coauthor Derek Abbott, a physicist and electronic engineer at The University of Adelaide, Australia, told Phys.org. "Unanimity is often assumed to be reliable. However, it turns out that the probability of a large number of people all agreeing is small, so our confidence in unanimity is ill-founded. This 'paradox of unanimity' shows that often we are far less certain than we think."
The researchers demonstrated the paradox in the case of a modern-day police line-up, in which witnesses try to identify the suspect out of a line-up of several people. The researchers showed that, as the group of unanimously agreeing witnesses increases, the chance of them being correct decreases until it is no better than a random guess.
This is an important point, and a paradox. If someone tells you that scientists are unanimous about global warming, vaccine policy, cosmic inflation, or Donald Trump, you should be suspicious.
Of course the textbooks are unanimous on many things, such as energy conservation. So we should not reject all that textbook knowledge. But most of those things only got into the textbooks after some healthy debate about the pros and cons.
Just look at how much "cosmic inflation" has hit the housing market (prices up 40%, payments up 20%) while homeownership is at 48-year lows, even though jobs growth improved. They still keep printing and no historical or contemporary evidence supports their theories about a constant need for exponential 2% inflation. Economic historians even found that inflation was more associated with depression. The BOJ, BOC, BOE and Fed are unanimous while trade volumes and global growth have stagnated for a decade according to the World Bank and IMF. Meanwhile, the S&P is trading at 24x and China is building ghost cities. Banks have merged to become larger than ever and half of the community banks have closed up. The Fed loves understated measures like PCE and even the CPI has no basis in rational analysis. Post-Volker CPI included “substitution effects,” which measures relative rather than absolute inflation and is based upon questionable knowledge of demand elasticity, which presents a basic normalization problem. In addition, "hedonic adjustments" for quality are not performed with a Von Neumann-Morganstern preference lottery. True innovation reduces prices but only masks inflation. They also use a completely idiotic non-market rent measurement called OER and an inaccurate and underweighted health care component. David Stockman's Flyover CPI shows inflation at over 3% per annum. Even the empirical literature on multipliers have refuting anything over 1. John Nash couldn't even get them to talk about the flaws in their monetary theories. Policy makers are in a bubble.
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I had the misfortune to work in a credit union for over eleven years over three refinance booms. Every lending rule was pretty much bent and broken over and over again to the point no one was taking PMI, Equity down, past credit history, bankruptcies, or federal lending rules seriously.
ReplyDeletePresident Bill Clinton wanted everyone to get into a house because he sumised that responsible people had homes, so getting a home would make one responsible by his logic. All it did was prove that lending rules are there for a reason, and that government subsidized lending is a disaster to honest market valuations of anything.