Welcome to the bloggy home of Noah Brier. I'm the co-founder of Percolate and general internet tinkerer. This site is about media, culture, technology, and randomness. It's been around since 2004 (I'm pretty sure). Feel free to get in touch. Get in touch.

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Really Understanding

I really like what Ezra Klein has to say about the documentary ‘Inside Job’ and the genre of crisis-explanation journalism we’re experiencing:

There’s a lot to dislike about Wall Street. The pay. The culture. In many cases, the people. But that doesn’t explain what happened in 2007 and 2008. A lot of observers understood we had a housing bubble — Dean Baker, for instance, had been sounding the alarm for years — but few of the housing skeptics saw everything going on behind the bubble: That the subprime mortgages had been packaged into bonds, that the bonds had been sliced into tranches, that the formulas being used to price and rate the tranches got the variable expressing correlation wrong, that an extraordinary number of banks had purchased an extraordinary amount of insurance against getting that correlation wrong from AIG, that AIG had also priced the correlation wrong and would be unable to pay its debts in the event of a meltdown, that a meltdown would freeze the mostly unregulated shadow market that major financial institutions and players used to fund themselves, that the modern financial system was so fragile that an uptick in delinquent subprime mortgages could effectively crash the global economy.

I’ve been thinking about this in other contexts recently. When we search for understanding of anything new (whether it’s a piece of technology or a fundamental shift in the world financial system) we tend to grab on to the answers that reinforce the things we believe. Confirmation bias I think they call it. The problem is things happen for incredibly complex reasons. This is what makes it so hard to understand something like the financial crisis, how influence works on the web or why people are buying so many iPads. While I certainly don’t believe in sticking your head in the sand and ignoring what’s going on in the world, I do think every answer needs to be approached with the proper level of skepticism: Are we believing this because it reinforces the things we believe or is it really the answer.

As much as it may pain our self-confidence, the reality is that almost anything that involves lots of people doing something is too complex to explain in a sentence. Apple is not successful because of design, MySpace didn’t disappear because they covered their site in ads and the financial crisis didn’t happen because bankers were greedy. Sure, all those things were factors, but Apple spends around three-quarters of a billion dollars on advertising, MySpace was originally built on ColdFusion for simplicity’s sake and many of us bought things we couldn’t afford.

We should never stop searching for the answers, but if we really want to try and understand we must try to place the answers we find in the larger context.

June 25, 2011