More on the Skills Crisis: Probabilities

Along with math and science, throw in another field in which American skills have declined: probability.  

I read somewhere this morning (can't find it right now) that Americans envision two states of being: dead-shot certainty and "toss-up."  No nuance, nothing in between.  

From my experience trying to teach (in a desultory way) probabilities to law students, I'd sign on to that.  Even when you remind them of roulette wheels and such, they don't seem to get the idea of "odds," and that you may--or may not--beat the odds.

So, for example, if Mitt Romney wins tomorrow (or next month, whenever the election ends), it won't necessarily prove that the pollsters were wrong; it may prove no more than the fact that Romney beat the odds: that the odds were 5-1 against, and he pulled the one.

But note: I'm not saying merely that Americans are bad at odds.  My point is that they are much worse than they used to be.  I blame it on the decline in horse racing.  When I was 11-12, my parents wasted money on paid for me to take trumpet lessons.  I would trundle upstairs to the music studio on the (I think) third floor at Bridge and Elm in Manchester, NH, where the musicians held forth.

Except it wasn't really a music store.  It is a bookie joint, with music as a loss leader front.  I doubt they sold as much as a single saxophone for every 1,000 $2 bets processed through the shop.  In fairness, I'm not 100 percent sure that the boss man  was the processor of all this cash: at the least he had plenty of help from the assorted loafers and layabouts who idled their days away there.

And believe me, those guys understood probabilities.  They probably also understood, along with Damon Runyon, that  life is six to five against.

Lottery Arbitrage

Here's another one that may be old news to everyone but me: apparently Baltimore has traditionally nurtured a healthy numbers racket.  Along came a legalized lottery-- but it it did not destroy the numbers game.  Evidently the numbers guys continued as before, only using the lottery numbers and paying bigger prizes.  I assume the point would be that the numbers guys aren't burdened with all that nonsense about public purpose, support the schools, whatever.  For them, it's only money.  

Illinois Bets on a Sure Thing

Does anybody have any idea what Governor Rod Blagojevich of Illinois means to accomplish by privatizing the state lottery (link)? I almost said “anybody but the governor himself, but of course, there is no necessity that he know either, even though he is the proponent, and even though he thinks he does. Nor does apparently, does the New York Times, linked above, which surveys the inevitable range of possible opinions on the topic without introducing anything that you couldn’t have guessed on your own.

Lots of people oppose privatization on principle. Not me. I think the chances are there are plenty of resources that might well be managed as well or better in private hands. And if there are buyers queueing up to pay for them, why then I say take 'em for all they're worth.

The trouble with most privatizations is not the principle of the thing; it is the fact that they are too often just ripoffs. The no-privatizers just take it for granted that the government will sell out too cheap, and they are right just often enough to make the point plausible. On this theme, the Times does fall into one tantalizing byway of confusion that may help to clarify matters. The Times says:

The sale … would not be the first privatization of public property (duh!—Buce) — both Chicago and Indiana have recently earned billions of dollars by signing long-term leases with private companies to run toll roads (emphasis added).

The Times missed it, but there’s a critical distinction here. A lease may be a privatization of sorts, but a lease is not a sale. Howard Hughes’ father did not get rich by selling drill bits; he leased them. Same with IBM and mainframes, same with Ma Bell and telephones. Same, pretty much, with Tony Soprano and the towel concession at the restaurant: if the lottery is so great, give yourself a chance to share in someone else’s success. Carpers will say this sounds suspiciously like some kind of a sales tax; the answer is sure, but so what?

The proponents of the sale say the point is that revenues will never be as healthy again, and that they are getting out at the top. Well they would say that, wouldn’t they?—I mean, because that is the only condition on which the deal makes any sense. But they’ve also made it clear that an argument for getting out is that they don’t understand the business. Uh, and the prospective buyers are likely to know less about it, and are likely to queue up for the chance to be taken to the cleaners? Lands sakes, they might even read the New York Times. Illinois’ governor needs a little lapel pin saying “Hi, I’m Rod, Take All the Money You Want.”