quote:
Well, if we use the Department of Transportation’s high-end rate for allowable expenditures — $3 million per life — then $10 billion should save 3,333 lives. Has PRISM provided such a service?
The answer is no....Harvard researchers termed inefficiency of this sort “statistical murder,” since if the funds had been used in a more cost-effective manner, many thousands of additional lives might have been saved.
comment:
The expenditure of vast sums of money does not necessarily lead to good outcomes. But that is what Congress typically tries to assert as truth.
The FOMC lives in a fantasy world. The economy is not improving materially and deflationary pressures are rising as the bulk of the globe is in recession or worse. The problem is that the current proposed policy is an exercise in wishful thinking. While the Fed blamed fiscal policy out of Washington; the reality is that monetary policy does not work in reducing real unemployment. However, what monetary policy does do is promote asset bubbles that are dangerous; particularly when they are concentrated in riskiest of assets from stocks to junk bonds. However, if you want to see the efficiency of the Federal Reserve in action it is important to view their own forecasts for accuracy. The reality is that Fed may have finally found the limits of their effectiveness as earnings growth slows, economic data weakens and real unemployment remains high. Reminiscent of the choices of Goldilocks - it is likely the Fed's estimates for economic growth in 2013 are too hot, employment is too cold and inflation estimates may be just about right. The real unspoken concern should be the continued threat of deflation and the next recession. One thing is for certain; the Fed faces an uphill battle from here.
Survivorship bias helps us understand why success stories are not what actually helps us succeed. We know that we learn from mistakes and failures, yet the study of failure is never recorded or saved unless the company or individual "came back from the dead," for example, Apple after Steve Jobs returned to lead the company from the abyss in 1996. Survivorship bias is a profound insight into how we confuse the known unknowns and the unknown unknowns.