An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
That the cover story for Fortune is dreadful is not surprising. That the author doesn't even understand marginal tax rates beggars belief. She says the tax rate in Manhattan is 50%. You can't make this stuff up.
Salmon completely ignores the fact that the difference between poor and comfortable boils down to behavior patterns such as single vs married, drug taker vs clean, indolent vs ambition. This is regardless of IQ.
There are two primary determinants of individual behavior - nature, such as IQ, and nurture, such as early imprinting and upbringing, and environment. There are a number of factors influencing individual behavior in society in addition to individual influences of nature and nurture, such as cultural and institutional factors.
The idea that some are successful and other not because (make something up), is silly. This is highly complex and it has been the subject of psychological and sociological study for some time.
While Salmon's post is partial, Nina Easton’s is moronic.
While Salmon means well and manages to score a few good points, he made a fundamental mistake: he accepted the conflation between financial literacy, financial market participation and intelligence.
He cites two papers.
The first one is of dubious value ("IQ and Stock Market Participation", by Grinblatt, Keloharju and Linnainmaa). Without going further: it literally starts with this piece of crap: "Only about 50% of US households invest in stocks, either directly or indirectly (via mutual funds in retirement and nonretirement accounts), and participation in Europe is even lower".
If financial literacy, intelligence and financial market participation are tied, then this paper identified the master race: the Yanks, who, as it happens, score lower than Europeans in pretty much all other subjects.
Bottom of the heap, I guess, are the Africans. I can confidently bet my sweet ass not many people earning a couple of bucks a day have any money left to put in shares.
The other paper ("Financial Decision Making and Cognition in a Family Context", by Smith, McArdle and Willis), whose results Salmon finds astounding (the three “simple mathematical questions” paper) does not say what those three damned questions were but, to the authors' credit, never identified their correct answer with intelligence but with cognition, as its title clearly says.
Think of it this way: imagine one asks a reborn Pythagoras, in perfect and very intelligible English, with our best pronunciation, what the Pythagorean theorem is. Are we sure Pythagoras would have answered correctly? If we asked Archimedes to perform a simple sum: 10+8. Are we sure he would have been able to understand it? Ancient Greeks did not use Arabic numerals, nor did they use 0.
And, on top, the paper clearly says: "The type of unabashedly exploratory and descriptive analysis in this paper cannot establish causal pathways for these associations".
To close this comment: a simpler explanation accounts for inequality. Too bad that Occam's razor has been forgotten. Check Gambler's Ruin in the Wikipedia. Or this blog post for a simple example, with charts and Mathematica code snippets: http://semanticsofmoney.blogspot.com.au/
8 comments:
http://www.opednews.com/articles/The-Myth-That-Japan-Is-Bro-by-Ellen-Brown-120906-92.html
Ellen Brown's take on Japan's Debt..
It is MMTesq.
That the cover story for Fortune is dreadful is not surprising. That the author doesn't even understand marginal tax rates beggars belief. She says the tax rate in Manhattan is 50%. You can't make this stuff up.
Salmon completely ignores the fact that the difference between poor and comfortable boils down to behavior patterns such as single vs married, drug taker vs clean, indolent vs ambition. This is regardless of IQ.
There are two primary determinants of individual behavior - nature, such as IQ, and nurture, such as early imprinting and upbringing, and environment. There are a number of factors influencing individual behavior in society in addition to individual influences of nature and nurture, such as cultural and institutional factors.
The idea that some are successful and other not because (make something up), is silly. This is highly complex and it has been the subject of psychological and sociological study for some time.
While Salmon's post is partial, Nina Easton’s is moronic.
trixie kicking ass! you got more balls than all the dumbfucks in dc.
While Salmon means well and manages to score a few good points, he made a fundamental mistake: he accepted the conflation between financial literacy, financial market participation and intelligence.
He cites two papers.
The first one is of dubious value ("IQ and Stock Market Participation", by Grinblatt, Keloharju and Linnainmaa). Without going further: it literally starts with this piece of crap:
"Only about 50% of US households invest in stocks, either directly or indirectly (via mutual funds in retirement and nonretirement accounts), and participation in Europe is even lower".
If financial literacy, intelligence and financial market participation are tied, then this paper identified the master race: the Yanks, who, as it happens, score lower than Europeans in pretty much all other subjects.
Bottom of the heap, I guess, are the Africans. I can confidently bet my sweet ass not many people earning a couple of bucks a day have any money left to put in shares.
The other paper ("Financial Decision Making and Cognition in a Family Context", by Smith, McArdle and Willis), whose results Salmon finds astounding (the three “simple mathematical questions” paper) does not say what those three damned questions were but, to the authors' credit, never identified their correct answer with intelligence but with cognition, as its title clearly says.
Think of it this way: imagine one asks a reborn Pythagoras, in perfect and very intelligible English, with our best pronunciation, what the Pythagorean theorem is. Are we sure Pythagoras would have answered correctly? If we asked Archimedes to perform a simple sum: 10+8. Are we sure he would have been able to understand it? Ancient Greeks did not use Arabic numerals, nor did they use 0.
And, on top, the paper clearly says:
"The type of unabashedly exploratory and descriptive analysis in this paper cannot establish causal pathways for these associations".
To close this comment: a simpler explanation accounts for inequality. Too bad that Occam's razor has been forgotten. Check Gambler's Ruin in the Wikipedia. Or this blog post for a simple example, with charts and Mathematica code snippets:
http://semanticsofmoney.blogspot.com.au/
Yes, I agree that Felix wrote a sloppy article. I wish it were simply a rebuke of the Fortune piece which is jawdroppingly stupid.
I agree with him that neither party cares about the bottom 40% but not sure what that has to do with IQ or financial literacy.
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