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Compute Pi to the Last Digit

July 21st, 2013 - 4:15 pm

One of the problems with assuming that government can regulate everything is that it can’t. Not very well at least. Take Dodd-Frank, which was touted as a way of bringing the banksters under control.

The Dodd–Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111–203, H.R. 4173) was signed into federal law by President Barack Obama on July 21, 2010 in the Ronald Reagan building. Passed as a response to the late-2000s recession, it brought the most significant changes to financial regulation in the United States since the regulatory reform that followed the Great Depression. It made changes in the American financial regulatory environment that affect all federal financial regulatory agencies and almost every part of the nation’s financial services industry.

As Jack Henneman points out what it actually threatens to do is create a thicket of rules so dense that only the banksters — and the biggest banksters at that — can navigate through it. He quotes a report:

Rules implementing the Dodd-Frank financial reform law could fill 28 copies of Leo Tolstoy’s War and Peace, according to a new analysis of the Wall Street overhaul.

The law firm Davis Polk, which closely tracks the Dodd-Frank rule-making process, released a graphic Friday that highlights the gargantuan size of the financial reform bill’s overhaul of regulations.

All told, regulators have written 13,789 pages and more than 15 million words to put the law in place, which is equal to 42 words of regulations for every single word of the already hefty law, spanning 848 pages itself.

And if that seems like a lot, keep in mind that by Davis Polk’s estimate, the work implementing the law is just 39 percent complete. (bold emphasis added)

Another estimate puts it more conservatively. There only need to be ten pages of regulation for each page of Dodd-Frank. Here’s the graphic showing that relationship:

But it probably doesn’t stop there. The number of textbooks and commentaries necessary to explain the regulations themselves will probably be longer still. From the POV of information the question that arises is how we can know that the resulting system is computationally correct. As Jack Henneman explains, there is no ready way to tell.

Not only does it require a great many bureaucrats to write, vet, review, revise, and sign off on so much regulation, but a vast army of lobbyists to argue for changes in same to benefit one sort of financial firm over another, and countless legions of lawyers to interpret, litigate, and detect loopholes in no doubt imperfect drafting after the regulations are implemented. Our banks will then spend billions restructuring to comply with the law, if they have not succeeded in limiting its effect by dint of the aforementioned lobbying. If the great and powerful Oz were able to confirm to a certainty that all this would prevent another financial crisis, it might be worth the dead-weight load on the economy, not to mention the further corruption of our republic. Unfortunately, no such assurances obtain.

The problem with regulation as an approach to managing risk it is creates risk in itself. The MIT Sloan School Management Review has an article which explains how more is not always safer.

Legal codes and agreements have also become increasingly complicated, often resulting in loopholes that others can exploit. …

As companies increase the complexity of their systems — products, processes, technologies, organizational structures, contracts and so on — they often fail to pay sufficient attention to the introduction and proliferation of loopholes and flaws. As a result, many firms are continually making fixes, which then adds to the total cost of ownership and often creates new problems. One estimate is that 20%–50% of all fixes to software bugs introduce new, unknown problems….

Build new applications on top of legacy systems, and errors creep in between the lines of code. Merge two companies, and weaknesses sprout between the organizational boundaries. Build Byzantine corporate structures and processes, and obscure pockets are created where bad behavior can hide. Furthermore, the enormous complexity of large systems like communications networks means that even tiny glitches can cascade into catastrophic events. In fact, catastrophic events are almost guaranteed to occur in many complex systems, much like big earthquakes are bound to happen.

Most programmers know this. Thank God for managers who don’t and order perpetual tweaks to the system thereby guaranteeing bugs and the continuous employment of said programmers. And after a while a strange thing happens. The bugs themselves acquire champions. The problems in the system become institutionalized and have to be maintained to protect jobs. The MIT paper continues:

Simplicity is not happening, and it’s not about to occur in any meaningful and sustainable way. Much of the reason for that is self-interest, not just the self-interest of software vendors looking to milk the newest release of a cash cow product but people’s own self-interest. Take, for example, the U.S. tax code. Although everyone agrees that it’s far too complex, the system represents so many interconnected vested interests that any significant simplification would create a public outcry, initiated by those affected negatively. Consequently, people can’t agree how best to simplify the tax code and the only direction is toward more complexity, not less, and that progression will continue unless war or revolution resets the entire system.

The net result is that Dodd Frank will simply expand to swallow up all the available space and computing power that can be assigned to it. And the more you fix it, the bigger the demands will be. It’s almost like an episode from Star Trek. And what it suggests is that for a certain class of problems, not only is a detailed regulatory approach impractical, it may actually be impossible.

And Dodd Frank is not alone. Wait until we get to Obamacare. If Dodd Frank is 28 times the length of “War and Peace”, the regs for Obamacare are two and a half times the length of the Bible — and growing.

How problems actually get solved through history is an interesting subject in itself. They are often damped down by something completely unexpected. For example the tons of horse manure which threatened to bury cities at the end of the 19th century disappeared with the invention of the automobile. It’s entirely possible that the current problems of the banking industry will be fixed by the disappearance or transformation of the current financial system itself, and not by armies of regulators. The endemic lack of telephones in the Third World was fixed by cellular communications.

The world works in strange ways. Mark Steyn observed that bureaucrats have a deep seated desire to make reality unconstitutional. But reality has a knack of winning out in the end, and of surprising us too.


Did you know that you can purchase some of these books and pamphlets by Richard Fernandez and share them with you friends? They will receive a link in their email and it will automatically give them access to a Kindle reader on their smartphone, computer or even as a web-readable document.

The War of the Words for $3.99, Understanding the crisis of the early 21st century in terms of information corruption in the financial, security and political spheres
Rebranding Christianity for $3.99, or why the truth shall make you free
The Three Conjectures at Amazon Kindle for $1.99, reflections on terrorism and the nuclear age
Storming the Castle at Amazon Kindle for $3.99, why government should get small
No Way In at Amazon Kindle $8.95, print $9.99
Storm Over the South China Sea $0.99, how China is restarting history in the Pacific
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Top Rated Comments   
re: "Even though I strongly suspect Obama was behind the IRS attack on the Tea Party it is entirely plausible it was just the system recognizing a threat to itself and reacting spontaneously. "

Obama was the chief executive under which all of these illegalities occurred, including the IRS, Benghazi, "fast and furious" gun running, refusal to enforce laws of congress (e.g. INS), posting a fraudulent birth certificate on a government web site - he's accountable for ALL OF THEM. When I hear Obama outraged about this, firing his A.G. and replacing him with an Elliot Ness type of crime fighter, when he demands and gets the IRS agents who broke the law in jail on long prison terms, THEN I'll absolve Obama of responsibility for the crimes.

However, even then, he'll still be accountable as the Chief Executive. If the IRS crimes were, as I suspect they were, directed from the offices of the NTEU, then Obama was responsible for clearing union activists to set policy and law enforcement priorities specifically target at Democrat and Obama political enemies.

Obama's best argument is that he is an incompetent President. Otherwise, he's a traitor and a crook, with the GOP House not far behind him in culpability for refusing to act promptly and either demand a special prosecutor for each case or impeach Obama on basis of refusing to perform his duty as required by the Constitution.

The GOP will have no legitimacy if they don't Impeach Obama regardless of whether the Senate convicts. You can't very well impeach a President for incompetence, treason, or at least dereliction of duty when you yourself have been sitting on your hands and eating cake at the party for five years.

Obama obfuscated, covered up, blamed his political enemies, and in generally done everything that a crook might do in response to being accused of the crime. Obama is guilty of treason, of "high crimes and misdemeanors", and the GOP must impeach him or ensure special counsels investigate each incident and provide Americans with the truth and justice. Otherwise, the GOP is at fault as well as the Democrats who birthed this charlatan.
38 weeks ago
38 weeks ago Link To Comment
"the tons of horse manure"

We had to pass it to know what is in it.

Actually, no we didn't. That is why character and reputation matter. Any sane person, even someone broadly sympathetic to the Democratic Party, had enough information by 2010 if not by 2008 to look at Nancy Pelosi and Harry Reid and Barrack Obama and their enablers and be able to say, "No good can come of this."

On Fox today the consensus was that with Mitch McConnel in charge of the Senate GOP efforts it does not matter what disasters happen. Obama will just "drive on through them."
38 weeks ago
38 weeks ago Link To Comment
The unexpected may intervene to save our bacon, but the odds are not favoring that black swan. More likely we'll have a prolonged recession driving more and more sheepish people into the arms of governmental programs. And Hayek will be proved right again, as serfdom becomes he norm in the U.S.

But even that's not the end ... That can only continue for so long until the spending/printing of money by the government brings the whole contrivance down on top of itself. Then we'll be a nation of Detroits ...

Finally, when the federal system is well busted, look to the break-up of the U.S. into independent regions ... Igor Panarin got his timing wrong, but in many other ways he has it right ...
38 weeks ago
38 weeks ago Link To Comment
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All Comments   (50)
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Interesting, the following got a "failed to post" alert. Am I now on a list?

Whiskey Tango Foxtrot? The comments are wiped out again?

Yes, definitely getting "There was an error in saving your submission."

They did not load for over 5 minutes, and then while I composed this they floated in. If the sniggering propeller heads at Google or other Lefty strongholds decided to play with us what would it look like?

"Mr Bond, they have a saying in Chicago: 'Once is happenstance. Twice is coincidence. The third time it's enemy action'."
- Ian Fleming: "Goldfinger"

It did not allow me to log in for a while. Let us see if this works now, for the Science.
38 weeks ago
38 weeks ago Link To Comment
I have been having serial problems with opening BC. I resorted to looking at it from a proxy server. Was locked out by chrome and another browser. Been having more success with FiFox. I could log onto anywhere on the WWW but got 'peer resets' on BC. Sometime I could sneak through PJM, columnists.

Yes.... I have begun to take it personally. Maybe Microsoft, Google, and PJM are preparing to do a China on firewalls and political dissidents. Ya know, limit their ability to communicate before the firing squads and organ harvesting starts in earnest. No body anywhere is doing anything to placate my concerns. It is enemy action.
38 weeks ago
38 weeks ago Link To Comment
Once again, the triumph of process over results.

Human vanity is a major contributing factor in this narcissistic age. "I want you to implement this because it will advance my career." "You, OTOH, will be burned out from meeting my useless demands, but you are replaceable."
38 weeks ago
38 weeks ago Link To Comment
Illegal irse a casa: "In the day, engineers 'knew' what the answer had to look like before running the numbers. It was how we checked our work. "

That was an unavoidable consequence of using a slide rule, which could usually be read to 3 digits (eg 876) but gave no indication of where to put the decimal point. The engineer had to do a separate back of the envelope calculation to determine if the answer should be approximately 0.01 or 1 or 1,000. But even the guys who learned on slide rules now tend to punch the numbers in to the calculator and accept the result.

Maybe this is really a training issue. For a while, there was a fascinating "barefoot doctor" program running in some African countries. Guys could be trained quite quickly to handle many routine health matters -- and also trained to recognize when a condiition might not be routine and should be referred to the doctor with shoes. Perhaps something analogous could be done in technical education, to train us to recognize situations where the assumptions in the software require independent checking.

Hey! Maybe someone could write an algorithm to do that?
38 weeks ago
38 weeks ago Link To Comment
Pythagorean Theorem......................................24 words.
Lords Prayer......................................................66 words.
Archimedes Principle.........................................67 words.
Ten Commandments.......................................179 words.
Gettysburg Address.........................................286 words.
US Declaration of Independence................1,300 words.
US Constitution with 27 Amendments........7,818 words.
EU Regulation on the sale of cabbages......26,911 words.
38 weeks ago
38 weeks ago Link To Comment
Well, selling cabbages can get pretty complicated.
38 weeks ago
38 weeks ago Link To Comment
OT
I can reach pjmedia.com/richardfernandez and I can reach pjmedia.com/instapundit and I can reach the Tatler and the columnists each by the links above us. What I cannot reach is pjmedia.com. It redirects to http://pjmedia.com/cgi-bin/redirect.ha and gives a 404 Not Found error. Is this a problem with the pjmedia code or is it something in FFox for the Mac or is it Earthlink blocking the site?
38 weeks ago
38 weeks ago Link To Comment
pjmedia.com worked just fine for me just 17 minutes after your post.
38 weeks ago
38 weeks ago Link To Comment
"And after a while a strange thing happens. The bugs themselves acquire champions."

My first job, I was told to reimplement an algorithm in a new language, from the specification. I did, and then we compared the output to the existing implementation.

Mostly, they matched. Where they didn't, well, it was because the existing implementation didn't match the specification.

Guess who had to change?

I spent a month writing bugs to match the bugs in someone else's code.
38 weeks ago
38 weeks ago Link To Comment
Lol!. I've been a government software contractor before, too!
38 weeks ago
38 weeks ago Link To Comment
It seems to me that IT, generally, may be reaching a point of diminishing returns. I can list several cases where the computer was a detriment to good thinking and timely response. In many cases playing with the machine/ system has become and excuse for doing nothing.

Embedded computing like automobile control modules, seem to be the best ongoing use of chip technology. Trying to remove human thought from the do-loop seems to be the least useful application of computing tools.

Deus ex Machina.
38 weeks ago
38 weeks ago Link To Comment
" Embedded computing like automobile control modules, seem to be the best ongoing use of chip technology."

A not unmixed blessiing:

http://www.newscientist.com/article/mg21929266.500-25-gadget-lets-ha%E2%80%8Bckers-seize-control-of-a-car.html#.Ue6xZaxCrPe

http://www.newscientist.com/article/mg21929266.500-25-gadget-lets-ha%E2%80%8Bckers-seize-control-of-a-car.html#.Ue6xZaxCrPe

But very handy for the removal of politically inconvenient people.

Subotai Bahadur
38 weeks ago
38 weeks ago Link To Comment
OH BUGGER! Accidentally put in the link twice instead of putting a second link in. I miss "preview".

http://www.caranddriver.com/features/can-your-car-be-hacked-feature

Subotai Bahadur
38 weeks ago
38 weeks ago Link To Comment
Speaking as someone who has worked on projects that have saved millions in unnecessary labor costs AND maintained service levels AND will improve the quality of the product we deliver to our customers...

I think you're mistaken.

There certainly are projects that don't make sense, but most of them do.
38 weeks ago
38 weeks ago Link To Comment
I said 'approaching" diminishing returns. The easy and obvious stuff is near completion. But, in the process of automating things we are also masking lots of stuff and creating errors, as alluded by W.

An example. Mechanical engineers have good software packages to perform Pipe Stress Analysis. But as in all engineering, starting assumptions have to be made. The best pipe stress programs default assumptions cover about 80% of the cases. Young believers frequently fail to check assumptions before using the package. OOOPSes occur. Sometime at high cost and subject to causing injury.

In the day, engineers 'knew' what the answer had to look like before running the numbers. It was how we checked our work. Computers helped us compute. Now, it seems, engineers are trained to let the computer do the thinking as well.

So, we can agree to disagree.
38 weeks ago
38 weeks ago Link To Comment
The main problem with the explosion of cheap computers was the change in attitude it caused in the ranks of management in a lot of businesses. If the systems are used to replace an existing paper system used for keeping records its usually a great improvement. The effort needed to maintain the record system shrinks dramatically and it becomes much more efficient.

But in practice management often developed an addiction to data and metrics. Things that would never have been recorded in a paper system were now entered and kept, and over time more and more information was required to be kept with the net result being the total amount of man hours used for data entry actually surpassed that used for maintaining the old paper systems. And for what? Often just to have metrics that would find correlations between sets of data which were often assumed to reflect cause and effect, but which didn't at all.

When I worked for a semi-conductor company upper management decided that they needed to install a new system on the manufacturing floor that would provide them with an incredibly detailed picture of what was going on. They wanted to know where each and every lot was at any given time along with many other things, all the better to manage with.

The system was put in place. Production fell dramatically. The reason? The fab workers were having to spend an inordinate amount of time entering all this information into the system, time that they had previously spent actually manufacturing the product. But the lure of the pie charts was too great. Management concluded that **sigh** the problem was that they weren't collecting enough data.

And this relates to government as well. When laws fail to produce sparkling wonderful results it never occurs that the law was a bad idea to begin with, its just that it needs to be expanded to fill in those nasty loopholes that people keep escaping through.

They never learn.
38 weeks ago
38 weeks ago Link To Comment
What TCobb said+
Or the CAD drawing that needs a simple hand note clarification or dimension correction....
Not to mention that CAD operators are not taught to draw first (too old fashion) and have thus lost the mental vision required to execute a good drawing, remembering that the purpose of the drawing is to communicate.
38 weeks ago
38 weeks ago Link To Comment
"...an excuse" not "and"
Edit function please!
38 weeks ago
38 weeks ago Link To Comment
I have to laugh. My 86 year old father became a Navy Computer tech (then called Machine Accountants) in 1947, yes, '47. It launched his career to a commission and a good post retirement job.

Two grandchildren are silicon valley engineers.

From my college days in the late '60s to date he has preached that computers not used for actual computation, Create Work at an increasing rate.

He seems to be correct.

(FWIW. Only very recently has he stopped writing his own code, in binary. "Programming Languages are for people who are not IT professionals, and should never take more than two weeks to learn." His cleaned up laptop is quick, to say the least. To mangle an old cliche, out of the mouths of Old Men....Love ya Dad!)
38 weeks ago
38 weeks ago Link To Comment
Exponential growth curves like the complexity curve shown above by Wretchard can't go on forever. Another such curve is GDP per capita doubling every 50 years since 1750. Except for the past 50 when it quadrupled. Neither curve can go on like that and someday we will probably be able to understand exactly how these two examples are related. At this stage it seems to me that some regulation produced that double double growth over the past 50 years and that government, being in the regulation business, has gotten it into its piggy little head that more of the same is going to produce more growth. Obama's faith in this regard is touching. Instead it is pretty clear that is going to produce more regulatory gridlock. Sarbanes Oxley is another example of counter productive regulation. So both parties are in the government business - unsurprisingly. No wonder the Tea Party scared them. Even though I strongly suspect Obama was behind the IRS attack on the Tea Party it is entirely plausible it was just the system recognizing a threat to itself and reacting spontaneously.
38 weeks ago
38 weeks ago Link To Comment
RE: "At this stage it seems to me that some regulation produced that double double growth over the past 50 years"

From where I sit, the growth has been due to technology, and globalization. Technology allows the economy to temporarily burst out from under the great wet blanket of regulation, and globalization acts as a check on regulation, by causing nations to compete with each other for investment.
38 weeks ago
38 weeks ago Link To Comment
re: "Even though I strongly suspect Obama was behind the IRS attack on the Tea Party it is entirely plausible it was just the system recognizing a threat to itself and reacting spontaneously. "

Obama was the chief executive under which all of these illegalities occurred, including the IRS, Benghazi, "fast and furious" gun running, refusal to enforce laws of congress (e.g. INS), posting a fraudulent birth certificate on a government web site - he's accountable for ALL OF THEM. When I hear Obama outraged about this, firing his A.G. and replacing him with an Elliot Ness type of crime fighter, when he demands and gets the IRS agents who broke the law in jail on long prison terms, THEN I'll absolve Obama of responsibility for the crimes.

However, even then, he'll still be accountable as the Chief Executive. If the IRS crimes were, as I suspect they were, directed from the offices of the NTEU, then Obama was responsible for clearing union activists to set policy and law enforcement priorities specifically target at Democrat and Obama political enemies.

Obama's best argument is that he is an incompetent President. Otherwise, he's a traitor and a crook, with the GOP House not far behind him in culpability for refusing to act promptly and either demand a special prosecutor for each case or impeach Obama on basis of refusing to perform his duty as required by the Constitution.

The GOP will have no legitimacy if they don't Impeach Obama regardless of whether the Senate convicts. You can't very well impeach a President for incompetence, treason, or at least dereliction of duty when you yourself have been sitting on your hands and eating cake at the party for five years.

Obama obfuscated, covered up, blamed his political enemies, and in generally done everything that a crook might do in response to being accused of the crime. Obama is guilty of treason, of "high crimes and misdemeanors", and the GOP must impeach him or ensure special counsels investigate each incident and provide Americans with the truth and justice. Otherwise, the GOP is at fault as well as the Democrats who birthed this charlatan.
38 weeks ago
38 weeks ago Link To Comment
Not only did US oil production peak in 1970 but thorium reactor research also peaked.
The USA took a massive wrong turn back in the 1970's when thorium reactors were abandoned. Both Russia and India also had big thorium reactor programs --which they abandoned when the USA abandoned its program.

This process is now going into reverse as more players around the world get back into thorium energy production as shown in these two videos.
https://www.youtube.com/watch?v=jsloZyRqn-o
http://www.youtube.com/watch?v=4brIE0zlKWU

38 weeks ago
38 weeks ago Link To Comment
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