Wrong numbers and why they survive, with Aaron Brown

Patrick McKenzie (patio11) is joined by Aaron Brown, author of Wrong Number, to examine why institutions that produce bad statistics face so few consequences for doing so. They trace the pattern from Aaron's 1975 summer job, where two credentialed experts confidently produced opposite conclusions about whether American tractors ran on diesel or gasoline, through decades of case studies involving the NTSB, COVID-era research, and the eviction moratorium. Along the way they discuss why financial markets are unusually good at error-correction, why "wanna bet?" functions as a tax on bullshit, and what it means that every senior economist Aaron told about the tractor problem simply laughed and topped it with a worse story.

–
Full transcript available here: https://www.complexsystemspodcast.com/aaron-brown/

–
Presenting Sponsors: Mercury & Granola

Complex Systems is presented by Mercury—radically better banking for founders. Mercury offers the best wire experience anywhere: fast, reliable, and free for domestic U.S. wires, so you can stay focused on growing your business. Apply online in minutes at mercury.com.

If meetings consistently leave you with hazy action items and lost context, Granola handles the transcription so you can actually participate and gives you searchable notes afterward. Try it free at granola.ai/complexsystems with code COMPLEXSYSTEMS

–

Links:

• Wrong Number (book): https://www.amazon.com/Wrong-Number-Blizzard-Quantitative-Disinformation/dp/1394379781
• Wrong Number with Aaron Brown (video series): https://www.youtube.com/playlist?list=PLBuns9Evn1w_SLGfUY5i__wzUF5f8e7ec

–
Timestamps:

(00:00) Intro
(01:12) The agricultural demand curve discrepancy
(04:06) Why experts prioritize teaching over learning
(05:17) Institutional indifference to error
(06:26) The brand halo of high-status institutions
(08:34) Lessons from COVID-era decision making
(10:19) Financial statements versus scientific rigor
(14:53) Sponsors: Mercury | Granola
(18:19) The difficulty of auditing and replicating research
(22:12) The CDC eviction moratorium and its justification
(23:34) The NTSB curbside carrier safety study
(26:41) Conspiracy versus incompetence in data manipulation
(30:05) Error correction in financial markets
(32:52) The culture of the advantage gambler versus the academic
(35:28) Betting as a tax on bullshit
(38:44) Using market pricing to evaluate risks
(41:04) The track record of scary predictions
(43:34) Environmental success stories and technological optimism
(48:21) Energy efficiency and the path to global wealth
(54:10) Wrap and where to find Wrong Number