As far as Silver is concerned, no one in a business or institution that relies on prediction can afford to accept their preconceived notions as fact. "There are different biases in all of these fields," he says, sometimes even within the same field. The implications can seem relatively inconsequential, as in the "wet bias" of meteorologists, who customarily overestimate the chance of rain because they won't lose face if they're incorrect. Of course, in certain situations, acting on the basis of forecasting can become a life-and-death issue, as in 2005, when 80,000 people in New Orleans did not evacuate despite data from the Hurricane Center that turned out to be relatively accurate, and 1,600 of them lost their lives as a result of this, as well as various logistical glitches.

Likewise, in the case of financial disasters like the crash of 2008, which Silver addresses in the first chapter, "A Catastrophic Failure of Prediction," the industry's failure to acknowledge that the housing bubble would someday burst reflected an unwillingness in certain crucial areas to pay attention to unwelcome data sets. Silver argues in the book that though "the housing bubble was discussed about 10 times per day in reputable newspapers and periodicals, the possibility of a housing bubble, and that it might burst . . . represented a threat to the ratings agencies' gravy train," and so they failed to downgrade the default rates on AAA-rated CDOs, hence the gigantic crash that nearly toppled the U.S. economy.

As an openly gay man and an Obama supporter (though he's not openly a Democrat), Silver's biases might seem obvious, but his greater love of pragmatism and number-crunching sometimes create false impressions themselves. "In 2010, when we had Republicans winning a lot of seats—correctly—people were asking, 'Why has Nate become a Republican?' Literally," he says. He sounds a bit wistful about the stir created by 2008's losing team—"Whatever you say about John McCain and Sarah Palin politically, they were interesting people"—and typically cautious about the 2012 presidential election, because people often mistake probability for prophecy.

"I'm a lot more worried about being wrong this year," he says, "because four years ago, there was nothing to lose. I know that even if I say Obama's a 75 percent to 25 percent favorite . . . that means there's a chance that Romney's going to win, and if that one in four occurs, I'll get endless shit for that."

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5 comments
TimSimms
TimSimms

He is so cute, I can't even stand it. Now I find out he's gay, and I'm totally in love. Smart, sexy... who could want more?!

99GR81
99GR81

@fivethirtyeight genius Nate Silver's 1st book is out: 'The Signal and the Noise' http://t.co/XzQ98z6b #yam via @cthoen

artved
artved

@timkastelle did you finish it already?

timkastelle
timkastelle

@artved yes I did. It's not perfect, but it's very good - definitely worth reading.

artved
artved

@timkastelle thanks, grabbed @kindle version

 

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