Nobrainer’s Think Tank

What has gotten into me? I’ve finished 4 books within the last 2 weeks, if not the last 8 days. The good news is that I have fewer unread books lying around. Also, because I’m going to review those books, you’ll get to benefit from my experience. The bad news is that 2 of the books were received in the mail just this week, which means that my pile of unread books is still not much reduced. I’ll try to keep the reviews short and concise, because one thing worse than overly-long, boring book is an overly-long, poorly-written, boring review.

Today I’ll review my favorite of the 4, Bryan Caplan’s The Myth of the Rational Voter: Why Democracies Choose Bad Policies. Caplan basically argues that, taken as a whole, people are biased, people are irrational when voting (which contradicts most modern theories), and that human irrationality is a function of cost. This seems like it should be common sense, but it is not. It then follows that since there is practically no cost to voting any given way, that democracies make bad decisions. Caplan compares the situation, to that of Oedipus; people want both programs that will lead to bad results as well as good results, which means that politicians are damned if they do and damned if they don’t. From this, among other things, it comes out that it’s a really bad idea to let encourage stupid people to vote.

All in all, I liked this book the most of the 4 because I feel it taught me the most. It has given me some things to think about. The book is somewhat dense which makes for slow and thoughtful reading. If your not just a nerd, but a nerd like me, then I recommend that you get your hands on the it, and quickly. Otherwise, I definitely don’t recommend buying a copy and warn you that you might just fall asleep reading it if you find it in your possession.

These books are hot off the presses! If you pay the shipping, I’ll send it to you for free!

• Windows 95 for Dummies
• The Lotus Guide to 1-2-3 Release 2.3
• Using WordPerfect 5.1
• 1-2-3 Financial Macros

You know you want one!

I do actually have these books in my possession, and they’re in great shape. BARELY USED! And if 20 year-old computer manuals aren’t your thing, you can always use them for fuel!

Right now, I’m about halfway through the Black Swan, written by Nassim Nicholas Taleb the same author wrote one of my other favorite books, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets.

The combination of reading this book, and recent world events are leading me to become much more contrarian. Translated, that means I’ll probably be more of an asshole in the future, so I’ll just go ahead and apologize now.

In general, I find myself questioning much of the conventional wisdom upon which I have relied in the semi-recent past. I consider that which is founded upon a grain of truth, will become less correct as more people believe.

Among that conventional wisdom is the idea that homes are good investments. Obviously this is proving false for many people at the moment. I suspect many people who are now hurting are the ones who bought into the conventional wisdom (a conventional wisdom sold, in part by President Bush (although I suspect many others from all political spectra did the same)).

I also find myself having less trust in the stock market. Yes it has had a good run for a long time. But you never know when something horrible is going to happen, not just in the market, but in the world or to the country: a president can be assassinated, a military coup can begin, a nuclear accident or natural disaster can happen.

Along the same lines, I put less faith in privatized social security (not that I have more faith in the current system), or whichever plans would let people invest more of their own money. The problem, I think, would be of supply and demand. The supply of good stocks would remain relatively stable while the demand for them and for other stocks would go up greatly. In other words, a lot of people (at the government’s recommendation) would be putting a lot of money into a lot of bad investments.

I’m also less impressed with free markets. It isn’t because they don’t work. It’s because they don’t work as well as advertised. Part of it is overselling by economists. Most of it is because whenever proponents do manage to carve out a free market in bureaucratic mountain, the free market is quickly limited by its surroundings. Electricity markets, of which I know a thing or two, are prime examples. The markets do an exceptional job of pinpointing where investment should be made. The ability, however, to actually make those investments is extremely limited. To build a power plant or transmission lines is a red-tape nightmare that I fortunately do not have to deal with.