Optimism Bias: Good for Us, Bad for Humanity

The Optimism Bias is “a mistaken belief that our chances of experiencing negative events are lower and our chances of experiencing positive events are higher than those of our peers.” This bias makes us do wonderful things, like get married, have kids, and pursue goals. The flip side is we overestimate how good our life will turn out. A betting man would hedge his marriage with a prenuptial agreement. After all, if some 40% of marriages end in divorce, doesn’t a prenup make sense? But we don’t see ourselves as subject to the statistical laws that apply to everyone and everything else. I won’t get divorced.

While the personal pitfalls of the optimism bias worry me, I’m most concerned with how the optimism bias works against global civilization. The flip side of the optimism bias is that we are less optimistic about others, society and the world. After a terrible event the world tends to regress toward the mean just like everything else. If there’s a mass shooting–utterly unnecessary and always tragic–we forget that these are outliers as murder rates are at historic lows. We’re subject to the availability heuristic–what we see is all there is, and what we see is the news, not the stats.

But the big story is the opposite of the optimism bias: I should be more cautious–buy life insurance, drive safely, make a prenup, exercise, keep my will up to date–but the world is probably better than I think it is. And if I’m not sure I shouldn’t look at the news; I should check out Max Roser’s Our World in Data, Hans Rosling’s Gapminder, or Cato Institute’s Human Progress. These troves of data demonstrate the positive trends in agriculture, crime, education, human rights, democracy, health and safety that define our age much more than terrorism and other front page stories.

Optimism is great. It probably kept us alive in lean times on the savanna. But today’s world is complex, and if we misread reality–that things actually are progressing for most of humanity–and see a need to rejigger our economy and civilization, we may unwittingly dismantle the institutions that have brought the advances in agriculture, crime, education, human rights, democracy, health and safety that we have won since the end of World War II and the Fall of the Wall.

Cheap Gas, Peak Oil and Poor Predictors

It’s mid February and I just bought gas for $1.61 a gallon. The stock market is not doing particularly well at the moment. Here’s what Reuters has to say: “Only six weeks ago cheap oil prices were still expected to cushion the global economy, and the Federal Reserve’s decision in December to raise interest rates for the first time since the end of the financial crisis in 2008 was widely seen as a vote of confidence in the world’s largest economy.”

And from Newsworks.org: “Three years ago, when the average gallon of gas was spiking north of $4, Republicans said it was Obama’s fault. Yet today, with the average gallon falling south of $2.40, and reportedly going lower, Republicans are predictably mute.” Ha! today I wouldn’t pay more than $2 for gas!

So gas was too expensive a few years back, and now it’s too cheap? I can see why Harry Truman wanted a one-armed economist (one who can’t say “on the other hand”).

I think we need a dose of perspective.

Ten years ago–I think I was at an Iraq War protest–I bought a DVD movie titled The End of Suburbia: Oil Depletion and the Collapse of the American Dream. As I still held to moralistic beliefs about consumption and capitalism, I thought that the collapse of fossil fuels would be the karmic reward for our spiritually empty, consumption obsessed society. I have since come around and realized that my Calvinistic view of societal karma was not based on evidence. In the past few hundred years, humans have always found technology to get more out of finite resources. Fracking was not a household word in 2005. And just before humankind killed all the cetaceans Edwin Drake and John Rockefeller saved them with the petroleum boom.

This is not a post about oil or politics or economics. I’m concerned about the human addiction to predicting complex, open-ended events. While I am no fan of Nasim Taleb the man–he deemed me an “idiot” on Twitter before blocking me from his account–he is spot on about how poor humans are about predicting the future, especially devastating fat tail events like Spanish Flu pandemics and WWIIs. Yet we persist at predicting the doom of small things. Many Americans think that the world is getting more violent, less peaceful, more cancerous, less smart, more polluted, and less equal. They’re wrong. But this doomsday narrative persists.

My mission, and the reason for this blog, is to keep an eye on the big picture. Enjoy your cheap gas, and God only knows what the stock market will do. Could the low price of oil force the Saudi Arabias, Russias and Irans of the world to be more democratic as their oilocracic governments teeter? Democracy has been trending! Or will there be chaos? We don’t know, but the world is much more democratic, and oil does not appear to have a big future. In the medium term countries will be content to use natural gas as a cleaner carbon than coal. Long term, renewables are on the way (and I hope that nuclear–proven safe and CO2 free–makes a comeback). Pandemics may come and WWIIIs may too. The former we can’t control. And when I was a child the Warsaw Pact and NATO were the two great powers. Today Russia cuts the figure of a paper bear, despite Putin’s strutting. The big threats today are rogue states like North Korea, which can cause a mess but can’t conquer Europe or end life as we know it. It’s a reminder that these past 25 years since the fall of the Wall have been pretty good.

Enjoy your cheap gas while it lasts!

Cheap Gas



Letter to a Friend about Free Trade, Unions, and the “Rise of the Rest”

A friend asked me what I thought about an email from MoveOn featuring Robert Reich. He shares his views on “the worst trade deal you’ve never heard of—the Trans-Pacific Partnership (TPP).” Here are the first two paragraphs:

Dear fellow MoveOn member,

Recently, award-winning director Jake Kornbluth and I worked with MoveOn to put together a video about the worst trade deal you’ve never heard of—the Trans-Pacific Partnership (TPP), often called “NAFTA on steroids.”

If the TPP doesn’t sound familiar, that’s no accident: This giant story has been almost totally ignored by mainstream TV networks. (Interestingly, most TV networks are owned by corporations that would rake in profits if the deal goes through.)

Here’s what I thought, and I’d like to hear your thoughts. I expect I’ll get some blowback as I’ve made some sweeping generalizations, but it should be fun to discuss these issues and defend my beliefs about these important issues:


Interesting you should ask. I like a lot of what Robert Reich says and thinks, but I am for free trade. I’m definitely a non-professional economist, but I do believe that most of the “rise of the rest”–the rise of more than a billion of people out of poverty as well as the expansion of the middle class in BRIC (Brazil, Russia, India, China) and other countries–is because people in developing countries can participate in the global economy more easily.

NAFTA was mostly good but bad for people with high-paying industrial jobs who were out-competed by lower wage folks in the developing world. …I don’t put American jobs ahead of Mexican or Chinese jobs; I’m a utilitarian in this regard: “most good for the most people.” Nearly all forms of protectionism are bad, IMO. Even though I’m married to a highly paid union worker, I think unions are mostly bad nowadays except in low-paying industries where workers need protection. Nowadays “Old Labor” protects the already entrenched (not the neediest). The rights that unions fought for in the 20th century have mostly been granted by law.

There’s undoubtedly a squeeze on the middle and working class right now in the US. I’m all for tax increases on wealthier folks (like me, frankly, though I’d like to believe I’m middle middle class) and public health insurance, and a decrease in all the gov’t welfare the RICH get in this country. (I have no qualms with helping the poor with gov’t money, but not the rich!) That said, much of the squeeze on the middle and working classes is because the world is more fair. We in the US had huge advantages, and globalization is taking those away…which is fair! All the more reason to invest in infrastructure and education right now!

Thanks for asking and I hope you have a good week (despite much snow).



As I said, I made some sweeping statements (as did Robert Reich), but I’m happy to dig into them. Do you agree or disagree about unions, free trade, “The Rise of the Rest,” etc.?

More People, Fewer Famines

As I’ve written in earlier posts, the Malthusian Trap–known in recent decades as “The Population Bomb”–is not a trap…and if it’s a bomb, the bomb’s a dud. Max Roser’s graph shows how famine has declined in recent decades.




“One of the many reasons for declining food crises is increasing food trade – shocks to local food markets (due to weather or plant diseases) are thereby absorbed.

“As these shocks to food markets will be reflected in price changes (volatility) one can study the increasing resilience by looking at the decreasing volatility over time.” 

In a recent online argument with an anti-GMer, we sparred regarding whether or not GM foods have a bigger yield than organic or permaculture foods. He argued that yield wasn’t important because we have enough food, it’s just a distribution problem. I countered that this was because food has become so abundant in most places that people can afford to let it rot. Additionally, as people become wealthier they’ll eat more meat. That’s what’s happened as affluence has spread. I’m a vegetarian so I’m not even in favor of more meat consumption. It’s an economic inevitable barring some major change in norms regarding eating meat.

Now I don’t like it if a single piece of food to rot, but this problem of abundance is a higher class of problems. Modern famines are caused more by governments not allowing its citizens access to food more than anything else. And yes, there are distribution problems, caused (again) by oppressive or incompetent governments. Freer markets and better governance are important trends that mean famines are becoming less and less common. 

Extra! Mainstream Media Downplays Hysteria!

I was happily shocked to see yesterday’s cover story in Parade Magazine, “What Are We Afraid Of?”


What surprised me was that a mainstream, read-by-millions, middle-of-the-road, USofA kinda magazine was talking Americans out of their panic room mentalities toward a crazy thesis: You’re pretty darn safe.

Well, the article didn’t say that exactly, but nowadays we worry more about highly unlikely things like ebola and terrorism than real dangers (like texting while driving and the flu). People who should know better, like Joint Chiefs Chairman General Martin Dempsey*, think we live in a dangerous time despite the fact that death by tuberculosis, murder, natural disaster, smoking, fire, war, polio–even heart disease and stroke–are becoming less and less likely.

The Parade article breaks down in simple ways how we evolved for threats on the East African savanna–dangers that don’t exist for us anymore–not for our current threats, most of which are self-made (like obesity, being inside moving automobiles, and suicide). But if we don’t use the rational part of our mind, fear can rule us, especially with a media environment that can report every bit of bad (though rare) news in gory detail.

So remember that flu, not ebola, might kill you. Gluten won’t cause you health problems (barring celiac disease), but make sure you get enough fiber. And for heaven’s (and my family’s) sake please get all your shots. No one gets autism from vaccines.

*”I can’t impress upon you [enough] that in my personal military judgment, formed over 38 years, we are living in the most dangerous time in my lifetime, right now.” from Cato Institute website