Game Theory, COVID Policy Failures, and Why Institutions Optimize for Blame Avoidance

Zvi Mowshowitz [00:00:00] Which means people will be waiting at eight weeks, which means people will be blamed at six weeks, which means people will be blaming four weeks, which means people will be going, doing weeks. This means you're going worthy now, so you better do something now, right?

Vance Crowe [00:00:11] I'm Nicholas Barlett, co-owner of the World's first Popcorn Board Game Cafe, living in Fulton, Missouri. And you're listening to the Vance Crow podcast. Welcome back to the podcast. I'm glad you're here. Today we interview V Mitz. This is a weird character. He's unusual in the way he thinks about things, but this is a rip roaring good time. V has been a hall of fame magic, the gathering player. He's been a professional gambler and bookkeeper. He's traded in crypto and he is a prolific writer putting things out about COVID and his thoughts on the Ukraine Russia conflict. It is a really, really good conversation. We're gonna go to the interview, but if you are somebody that loves reading books, you might still have time to get in one of the best books we have ever read for Book Club, which is the count of Monte Cristo. If you think you can get that book read by the last Sunday of June, you should join us because we love talking about it. If you wanna learn more, you can just message me on Twitter at Vance Crowe. Also, as you can see, we are in the brand new studios. We are doing Legacy Interviews where we record the stories of your loved one's life history. If you're interested in learning more, go to Legacy Interviews dot com. Alright, now on to my interview with this very unusual character, ZZV Mawi. Welcome to the podcast.

Zvi Mowshowitz [00:01:39] Thank you.

Vance Crowe [00:01:41] So you have a very interesting blog title called Don't Worry About the Vase. I think it's probably good just to start there. Why in the world Is that what you call your blog?

Zvi Mowshowitz [00:01:50] Yeah, so it's from the Matrix, the scene with the oracle where she said, then don't worry about the vase. And he says, what vase stumbles into the vase, the vase breaks and he gets this, Neo gets this puzzled look on his face and she says, what's really gonna cook your noodle later is, would you still have broken it if I hadn't said anything? And that always struck with me and also because I used to be a professional mad at the gathering player. And so when we say to break something, right, it's a very special term of art. It means to find a dominant strategy in a format of play based around a card to prove the card is too good, right? Not that it doesn't work, but that it works too well. And so my original column when I started a column writing about magic was called Don't Worry about the Vibe the Vase. 'cause the idea was that I would give people the idea for how they might break things and they would carry that forward. And I've enjoyed it for a while and it stuck and everyone needs a name. And so I've just sort of stuck with it for now my 20 years.

Vance Crowe [00:02:53] You are a prolific writer. So there's all sorts of topics that we wanna cover, but since you brought it up first, one of the, the things that I find interesting is that you are in the Hall of fame for Magic. The gathering for my audience, I, I don't know how familiar they are with this game. Can you just kind of describe it and then talk about how, how does one get to the Hall

Zvi Mowshowitz [00:03:11] Of Fame? Yes. We really don't know the game at all. It's been called a Cross Betweent Chess and poker kind of. So the idea is it's the first multiple card game, which is now a whole genre of games. So the idea is that these, it's sold in randomized booster packs, either physical or now digital. And you open up your packs and then you use those packs to form your own deck of cards. And then you shuffle your deck of cards and your point shuffles his deck that he built of his cards. And you each draw from your ducks and you play a game against each other. So primarily you play land that produce manana each turn that man is used to cast spells into summon creatures and then you, the cars do what they say they do. And eventually somebody reduces someone else's life total from 20 to zero.

Vance Crowe [00:03:52] And so like there's a lot of games where there's a host that actually decides how things play out. Is this one like rules and there's a clear winner and loser.

Zvi Mowshowitz [00:04:02] So it's, it is been, we set in a very dungeon dragons like universe and in fact it's had some crossover sets 'cause it's owned by the same company that makes Under the Dragons. And that was quite, quite a lot of fun. But no, the idea here is that it was a game designed in fact to be played quickly without an Dun master, right? In that same kind of vein, it was one of Theria of Richard Garfield who made the game. So there are, they're very complex set of rules for how all the cards work together and the cards can override the rules and you're always getting new cards. So it can be complicated, but you don't need Dungeon Master. It's a two player game. Or if you want to, you can play a multiplayer game and each player either plays to themselves and they play on teams.

Vance Crowe [00:04:38] And then as people are playing these games, do you become better if you keep investing more and more money into the game so that you can have the deck of cards that you want? So

Zvi Mowshowitz [00:04:47] Cross the word money in that sentence and right time, right, because it, it's important that you skill up that you understand what you're doing, that you're able to think about the game. And that includes developing reactions so that when new cards come out, you can figure out what's likely to be good and bad from that. And it also means being members are friends, but yes, you have to spend some amount of money because you have to have access to enough good cards to be able to assemble the decks that you want. But at the levels that I played, all the players always had access to all of the cards, like every time, right? So like occasionally you have to scramble and you spend the night before the tournament running around the room trading, buying cars, trying to get the exact cars you needed. But there was never a doubt that anybody at the highest levels would always have whatever they needed because it's not, there's not an unlimited amount of money that you can spend on the game. It's a very limited set amount of money. And the competitions were designed to make sure they didn't get too out of hand on top of that. So, you know, it's always a low playing field on that level. If you're playing like a local school at your local game club, then if, you know one person spends $20 and one player spends a hundred dollars, the hundred dollar player will have an advantage. But it's not an overwhelming advantage. And you can play competitively in those environments without paying much. You can also play what's called limited where the two players each just agree to open a fixed pool of cards and then you play from that pool. And you can even do that for weeks or months on end and slowly add cards to the pools or you know, do whatever you want. And so you can create a level playing field that's fun and interesting and new on remarkably little money.

Zvi Mowshowitz [00:06:20] So it's not a money dominated game. Occasionally they will make money dominated game. So like Theia Immortal came out last week and this is very much what's called the gotcha game. It's a game completely dominated by if you wanna get ahead, if spent a lot of money. But magic was completely not like that still isn't.

Vance Crowe [00:06:38] So how does somebody get into a game so much that they get to the highest levels where there is a hall of fame and that you get inducted into it.

Zvi Mowshowitz [00:06:46] So by accident, in my case, so like a lot of players are like we, I set out, I knew I was going gonna be a star. I set out to go to the pro tour, I worked really hard. I ground the pa, I pounded the pavement, I went to all the qualifiers and then I, I finally made it. And my story is not that. My story is I was in high school and they had junior tournaments and I played in those tournaments because that was what I was doing all day. I was doing that all the time anyway, I was studying for fun. And in the junior tournaments I did well, I qualified for the junior pro tour and then I spiked the junior Pro tour. I finished a second and got a $5,000 scholarship. And then they turned out to qualify me for a master's tour for the, for the adults the next year when they ended the junior pro tour. And then I had about 300 people. I finished 12th in that tournament. They turned out I was actually pretty good. And then once I had that proof right to myself that I could be good and the the right to play in a few more tournaments, then I started concentrating and focusing and, and trying hard at that level. And then when I was at risk of falling off, I would go to more qualifiers and I would, I would keep myself on, but mostly just, I loved the game, I loved playing the game and I played a lot because I liked playing and I got good. And then over time that shifted to a professional mindset, to a deliberate practice mindset to I wanna win at the highest levels. I need to train, I need to practice, I need to experiment, I need to former team, I need to figure this out.

Vance Crowe [00:08:05] And when you think about like playing a game and then getting to the professional level, what is it about the game that you understand that people that are just playing for fun or you know, as amateurs don't, don't know.

Zvi Mowshowitz [00:08:16] So there's a lot of different levels to it. When you see real amateurs play, they're just not thinking great strategically. They're not asking themselves like, what are the path to victory? You know, what are the things that would be most efficient to do? How would you arrange things? How do you make my deck reliable? How do I plan ahead? What's likely to be in their hand? What are they thinking based on what they're doing? Thinking four moves, 10 moves, 30 moves ahead the entire end of the game trying to, trying to solve all these different problems they don't have experience building decks at the higher levels, but, and drafting especially playing limited is, is even more complex. But it's something, to me, it's like an attitude of deliberate practice, of treating it as a skill to develop, which is something I didn't do my first few years of playing when there wasn't really a professional tour. And I wasn't thinking of it that way, but I was always the kind of person who's very competitive, who's always thinking like, okay, how do I make this better? How do I make this work? But it wasn't systematic, but like, it's also a continuum. Like there are players who have never been on the pro tour who could make it on the pro tour if they just gave it a shot. And the other player from the pro tour who like aren't very good or just got really lucky, they went into a tournament for fun and that that day, like the cards just loved them, right? They just got really lucky, they picked the right deck, they, you know, were sitting in the right seat for the draft. It did really well. Neither they're on the pro tour and maybe they, they kept going from there. But yeah, there isn't like a professional, it's not like baseball, right? Where there's like, okay, these professionals, well, every time just crush everybody was a professional.

Zvi Mowshowitz [00:09:46] It's embarrassing. And then basketball where it's like, okay, one professional and for, you know, teenagers or even 10 year olds up against like five reasonably good adults on the regular court and the the one guy just wins. He's passing the ball all the time, right? Like, it's not like that at all.

Vance Crowe [00:10:02] So what I saw as a connection between what you were doing and kind of the rest of the world was your conversation about how game theory applies to, to things like magic, the gathering for people that have no concept of game theory, what is it and, and how does it apply?

Zvi Mowshowitz [00:10:19] The game theory is this idea that if you can formalize, okay, what are the moves that this person can make in this interaction and one of the moves that this person could make in response or simultaneously with this action, you know, how much utility or or how, what high, how big a score, how much benefit do they get out of that positive or negative? And then you try to figure out, okay, given the, the, the series of possible actions and the possible outcomes and know that other people are gonna also know this and think ahead, like what's the right move? What should I do to get the best possible outcome? And what does that imply that other people are gonna do? And, and so on, including in iterated games where you play more than one round, including games with more than two players. And this can go anywhere from like the traditional examples of prisoners, Roland, where the two of us are questioned by the police. If either of us, if you know rats up the other guy, we get off scot-free. But if we both rat out the other guy, it's worse than if we had both stood firm, then we'd both be okay. And so that, that game is very hard to win when it's only done once. And so you have to try and introduce additional elements of various types or develop a very good decision, theory and relationship to the other player so that you can possibly win all the way up to like games like nuclear war, right? Like where you don't wanna make moves that result in a huge disaster. And so the question is like, well if I did this, what would I, how would they have to react based on this situation? How are you gonna make a miscalculation? And then it gets really, really complicated. But game theory is, is at the core of a lot of the things that you do in a game like magic because you are trying to anticipate several moves ahead of what other people might do and then figure out how to get yourself the, the best possible result.

Zvi Mowshowitz [00:11:55] But game theory is also both competitively and cooperatively a large part of how like, I think the proper model of the world is in general.

Vance Crowe [00:12:02] Oh, this is interesting because as I'm sitting here, so I studied game theory when I was in diplomacy school and I found it to be a grading over overly simplified way of looking at the world because you know, it's, it's not do we go to nuclear war or do we not go to nuclear war? There are an infinite number of choices that you could make and how you can play out the game. And I always found that the representations that reviewed game theory often oversimplified what options were made.

Zvi Mowshowitz [00:12:30] Oh God yes. I mean, have you, have you ever played the game diplomacy? Because I've played a decent amount of diplomacy, even if I haven't gone to diplomacy school,

Vance Crowe [00:12:37] It's probably very similar. I don't know that diplomacy school was any more valuable than

Zvi Mowshowitz [00:12:41] You played. Diplomacy is, it'll teach you a lot. Several presidents have played it. It it's, it's a dangerous game. It ruins friendships, but it's, it's very educational. So I would say you're absolutely right at that. If you read an academic paper and they include game theory on a situation, it is almost always gonna be ly simplified and really bad, right? And they're going to basically just sort of prove some sort of very simple relationship that like you didn't need the game theory to prove while had a bunch of stuff and then draw it overly broad conclusion. This is the most frustrating when I read like papers on AI safety and general like, well, you know, we can cooperate and do something safe or we could defend and do something dangerous. And what does this imply based on game theory? It's like, just go away. Like you're not, you're wasting my time. But like that's the real use of game theory is much more complex. It has much more levels to what's going on, especially when we're talking about what AI might do against each other, which I don't wanna get too much in the weeds because it's got too much necessary background that like just the readers would just not, you know, the listeners just won't have. But the idea of being, well if I'm an AI that can anticipate what this other AI is gonna do, and I they can read my source code and I can read their source code. Now the game theory gets really complicated and interesting. But I would say basically the failure, the failure of game theory to appeal to you is because it's being basically kind of botched and mishandled by the people who you've encountered it with.

Vance Crowe [00:14:07] Well, I mean, I I would say I was using it at a pretty high level, but I think about things like the Cuban Missile Crisis, right? There was no model that somebody could have said, ah, maybe what Kennedy will do is he will call up the Turkish government and get them to be a part of this. Like, because like the real world has an infinite number of options to it. And, and the, and the biggest challenge of game theory is that you have to, you know, have your little prisoners de dilemma punnet square where it's like defect, not defect, do they defect or not defect, and this is how many, but the, the possibilities seem seem infinite. So like there are very few situations in the real world that I think play out in the way that game theory would predict, and yet we keep using it to be a forward model.

Zvi Mowshowitz [00:14:51] I mean, for, for the cu missile crisis in particular, I feel like it's actually a situation in which like reasonably straightforward game theory is actually pretty good in the sense that you can model the cu missile crisis as probabilistic chicken effectively, right? With the possibility of negotiated settlement. And you don't need to know specifically about Turkey to know that like, you know, the two sides can reach an agreement whereby, you know, the Americans get what they want and they read something else. You could have different degrees of visible results versus, versus invisible results, again, without knowing directly about Turkey. So I, I think if you had a complex, a more complex version of the missile crisis where you abstracted various moves to some extent and like at various points in the crisis based on the situation there was like a probabilistic escalation, something very bad, then you could model it as well. You know, candidates choose to, you know, costly chose to risk, take some risk of nuclear war in order to some combination of get leverage on the, in the situation and communicate to the other side that he was willing to make moves at risk of nuclear war, which is also valuable in the context of playing this type of game, right? You reveal something about yourself and also you commit yourself to going down a road whereby Kennedy didn't really have an out, like if, if Khrushchev didn't withdraw the missiles in some way, didn't find a way to get them withdrawn, Kennedy made, it's called burning the bridge behind him, right? He made it very, very difficult for him to back down. Now that's another classic game theory moves. So like the, the, the Q prize is full of game theory moves, right?

Zvi Mowshowitz [00:16:24] You know, I a blockade,

Vance Crowe [00:16:27] I like this, I like the way you think about this, this is very good,

Zvi Mowshowitz [00:16:31] Right? And so like you could, you, I'm not necessarily full of praise for how anyone handled the cu missile crisis. I think it was like a huge unnecessary risk of nuclear work compared to many alternatives. And you could also think it as an iterative game, right? Like how do you, how do you act in Berlin thinking about the possibility of Cuba, right? So it goes all the way, and I think this is, this is kind of like the, like Howard Colin talks about cracking cultural codes, right? This is one of my cultural codes that I feel like I, I have a strong handle on that I like to use in lot situations.

Vance Crowe [00:16:59] So let's talk more about that. When you say say cracking the cultural code, what do you mean?

Zvi Mowshowitz [00:17:03] So what I mean is that like there's a lot of d like whenever I see, you know, when you see people working in different professions, they know a different set of things and they use a different set of terminology and they relate to them in a different type of way. And these different types of ways of relating to the world, like are better and worse at solving different problems. And the more than you have, the more perspectives you have, the more you can combine them and shift between them, the more you can understand what other people are doing and how they're working. And also you can choose the right tool or combination of tools for the right job. So I think a lot of the advantage that I have is that I have a relatively unique and broad set of these types of tools. Like not, not as broad as Tyler as maybe deep, maybe somewhat deeper in some places, like I have like the gamblers and traders tools, I have the standard economist tools, I have a set of mathematical game theoretical tools, I have the gamers tools, you know, and, and I, I now have them as a writer. The one thing I'm missing that I miss the most is I don't have a foreign language. I have a learning disability and I fortunately was unable to do that. But that's another example of like, if you can think in another language, right? It's not just English anymore, now it's English and French or English and Hebrew or, or you know, ideally English, Chinese and Russian and you know, Hindi and like all that other,

Vance Crowe [00:18:18] Yeah. I think the biggest benefit of learning a different language, at least for me was there are certain constructions of the English language that just funnel your thinking down one path and you don't even realize how much of your language is actually your culture reflected in the way that you think. And so like I had the chance to learn Swahili and all of a sudden you realize like the way that they construct concepts, like feeling sorry for someone, like, like somebody's going through a a sad time and spending time with them are, are concepts that are one and the same, but we don't really have that similar concept. It's almost impossible to explain in, in the English language, but you realize like how much of what you think is just all around you. But I, so, but I see your point about the being able to see other cultural contexts through your experience. How did you get all of these different things

Zvi Mowshowitz [00:19:12] Trading? I did not mainly clearly writing. Yeah. I started out, you know, I, I was in school and then I suddenly was playing games and I was playing games professionally and then I was gambling and then I was bookmaking and then I was trading. And I also founded, I was also a startup founder, so I got the chance to, to try and found a few companies and then I was a game designer and the whole time I was a blogger and a writer and you know, you, you are one by one by one and you, you just also, I'm just taking a natural interest in a lot of these things. And so, you know, the, the more different perspectives you can get and I try to read a variety of things and look at a variety of perspectives and I try to model everything I can. But yeah, again, I'm gonna involve in the rationalist community, which is own additional set of stuff. Like if you talk, you know, you go to a rationalist meetup, it is, it's interoperable like it's English, you can understand most of it. And like it's a similar, but in many ways it is a different dialect, right? You, you talk to people and they have this other set of concepts, this other way of relating to things. They have all of this jargon and it's, it's not so much the, the words as the way of using them and the way they connect to each other. And the concepts are just again, a different way. And it's not as different as it Swahili might be to English, but it serves a similar purpose.

Vance Crowe [00:20:23] So let's talk about your experience in gambling. That's one that I think most people can relate to on some level, right? They've been around, they've been able to make bets, but when you open up the hood, it's gotta be a little bit different than what a, just like with the magic, the gathering, the amateurs play a different game than the pros.

Zvi Mowshowitz [00:20:39] Very much so I have a hard time relating to the game that the amateurs play. It never appeals to me in the same way. It's interesting because a lot of professionals are the opposite, right? Like Billy Walters says, like in in interviews one of the most famous gamblers of all time, he had to be good at gambling, otherwise he'd lose all his money gambling. And it's a lot of 'em, a lot of them, like I turned out, I found out as a bookmaker, you know, they have giant leaks in their game. They will constantly be gambling. If they're not gambling to win, they'll gamble to lose, right? Regardless of what they think of it as. And so it's their defense, it's their way of both getting gambling money and making so they don't waste the gambling money. Now I wasn't like that, I was always terrified of gambling, but then I discovered an opportunity and so I was always an advantage better meaning I would only bet when I thought I had an itch. And so my betting was on mainly I did some poker that was mainly kind of a pay the bills, grind it out type of thing. Like I enjoyed it and then it got boring pretty quickly. But it was still like a very clearly easy way to like go get any casino because I was, I was at a startup and I wasn't earning a paycheck and I grind out on the weekend, you know, or go in the afternoon after I was done with work and I, I'd make enough money to pay the rent on my studio apartment because I was, you know, young and starting out. But I really got going with sports betting. So in sports betting I used a variety of techniques, but the main thing I did was I understood the math and the cystics behind it really well. Especially the way that different odds are related to each other. So like one of the things like in a baseball game, if I know how often the home team wins the game and I know how often there are more than eight and a half runs scored in this game, how does that translate to the chance that the home team wins by at least one and a half runs, right?

Zvi Mowshowitz [00:22:20] Like two or more runs. How does that relate to whether they score five or more runs during the course of the game, right? Other questions like that. And so the specialty we would have is we would, you know, me and my partner at this is that I would create very, very clear systems for figuring out questions like that and more sophisticated questions that were harder to answer. Including questions like with the scores visit halftime of a football game, which are the odds be the second half or a basketball game or you know, even during a live game or you know, if the, if the game last week had this, had these odds, the game for this two teams had these odds and you combine all of 'em together, what does that imply next week's games should look like, right? You can create complicated math equations that tell you, okay, this is what the gambling odds imply is how good each of these teams is and then how good these pitchers are. And then what does that mean about next, the next game with this picture against this pitcher in this field, right? And this person is left-handed and we know this thing about this team, this thing about this team. And then eventually you run program, you handicap it and you figure out what the real odds are or what the odds should be in some sense. And then you look at the odds of the, the market, you ask what does the market know that I don't know? Do I have an opportunity here? And then you try to bet at the right times. And also I also specialize in what's called steam chasing. And that's where you have a variety of different markets. It's like you have like these 10 book you, you know, the world has hundreds of books that all each take your bet and they don't have the same line, the same gambling odds. They have their own unique gambling knots.

Zvi Mowshowitz [00:23:52] So what you can do is you can use the consensus of different gambling odds and exactly how they move to form a feeling of where the line is going to be in the future and what the fair odds actually are. Wait for somebody to make a mistake somewhere. Combine this with the ability to translate the math between different odds that are actually the same thing, but in different ways. Find the odds that are mispriced and without even knowing who the teams are, finding good math.

Vance Crowe [00:24:15] So if you can figure out how to, how to beat the book making or the, the book, why do

Zvi Mowshowitz [00:24:20] Now I don't, I give

Vance Crowe [00:24:21] It now. I mean this would seem

Zvi Mowshowitz [00:24:22] Like so one, it gets harder every year. So I was doing it. I talked to somebody who, who joined a friend of mine who turned out to have started it several years before me. And he told me stories about how easy it was for him, just like my jaw is on the floor. I was like, I can't believe they let you do that. And even so I found giant gaping holes. You look now the holes are not as big. There's still opportunity. I could definitely still win. But so the reason I stopped initially was because I got a chance to get on the other side of it, right? I got a chance to book the bets. And by booking the bets you get have more leverage you get to play for as the house, which means, you know, instead of paying the the juice, you, you get the juice's always good and you get more information because you see all the bets coming in. And then you had to use your intelligence to play on a much bigger scale. 'cause you're doing what's called other people's money, right? And, and also like you just have a lot more. So that was a, that match my skillset even more like I, I got, I used all the information, I synthesized all of what I knew to figure out what was happening and then I played a strategy game against my, against, against the gamblers out there, right? And I tried to get the best possible outcome and that was great. And then, but after I left I said, you know what, I could try this again, but there's two problems. One of which is at the time I was a little bit liquidity constrained. I didn't have the ability to have that big a bank where I just had a new son who come out of the world and like my, my equities from various things hadn't matured yet and so on. So like I didn't have anybody to put a, a large amount of money at risk I did before. And, and one, one mistake a lot of gamblers make is they'll be like, I have this $10,000 and so to make sure to bet only 1% of my bank wealth, I never go bankrupt, but they forget they have rent.

Zvi Mowshowitz [00:25:56] And so like if you don't make enough money to get out from the rent trap and the food trap where you have expenses, then you never win because a lot of these families, what they do is they, they, they'd win, right? They, they go 55% for the season and they do really, really well after working roro hard because they didn't bet enough, they didn't actually come out that far ahead after paying their expenses. And so eventually they had a bad year and their debt. So like what we, one of the things that we did, right, me and my partner was we're gonna bet reasonably big while we have a small bank roll compared to the size of our bank roll. And if we lose, well we think we got unlucky, we're more likely, we just weren't that good at this. And what we get bigger lot more responsibly. And so slowly as we got bigger, we acted more and more responsibly, but much better to have other people's money and you can just act really, really responsibly and also like bet lots of money and have the advantage. So, but after I left I said, you know what, I don't want my life to be about this. I don't wanna be thinking about sports every day. I don't wanna be asking the same questions every day. I wanna move on to something else that's more interesting. And if I don't move on, I'm never gonna be in another mode, right? I I wanna be, and also my wife can't, can't relate to sports betting, right? It's not something she's interested in. And I actually really value being able to talk about what I've done at the end of the day, right? It is actually a really important thing in life. I don't really want my kids to like just see a guy who's been on sports all day for the next 20 years. It's like, who, who needs that? So instead I get a job at gain street capital right after, after I, my start didn't work out and I traded on, you know, a trading desk and I traded stocks and ETFs and futures and so on.

Zvi Mowshowitz [00:27:39] I did that for two and a half years and then I realized that wasn't a great fit either. And then I traded crypto briefly and again I had position, okay, I can make money trading crypto, there's no question I can make money training crypto, but if I do this, my head are gonna be in crypto mode every day all the time. I cannot do this. And so I said, no, I'm not doing this anymore. I'm gonna build something. And so I decided to build a game and I decided to keep walking. And so that's where I'm right now.

Vance Crowe [00:28:01] Well, let's go back. Like, it's interesting that you have the foresight to be able to say, oh, like I don't want my children to, to watch their dad be a sports betting guy for all these years. Do you find that you are like totally engrossed in whatever it is that you're doing? I mean, it sounds like you, they becomes consuming because of how much intellectual horsepower you'd have to put behind in order to

Zvi Mowshowitz [00:28:21] Win.

Vance Crowe [00:28:21] Yeah,

Zvi Mowshowitz [00:28:21] I I'm very much competitor, a game player, a strategist, an analyst. That's what I enjoy of solving problems, solving puzzles, optimizing systems. So I'm definitely gonna be all out in whatever it is that I'm looking to do. If it's a combination of things, I'm gonna be switching modes between them, but I'm definitely gonna be all out. But yeah, it's, so like when you're doing something like trading or gambling, it's very, very important that you give it your all and you really dialed in because marginal improvements in your game are a huge difference, right? Like this, the difference between like just sort of being there and getting, okay, I think I have a vague idea of what I should be doing and really being dialed in and noticing every little thing is huge. And so like when you're really dialed in, something happens, you can just instantly know what to do and you get a much better price than if you had to take a minute to figure it out.

Vance Crowe [00:29:13] What, what do you think is the difference or similarity between gambling and trading stocks? Trading

Zvi Mowshowitz [00:29:19] Stocks is harder. Like it's, so gambling is more expensive in the sense that like if you just do things at random, you'll lose money a lot faster. So like if you, you can trade stocks as an amateur and still win, right? If you just like, just go buy the s and b 500 or just go buy, throw dark to the board and just buy stuff. But as long as you're not constantly buying and selling, you're gonna be okay. But gambling like no, you have to be good. You lose, right? There's no baseline alpha until you find it, but your opposition in gambling is much, much weaker. So gambling, it's a combination of all of the really smart guys who really know how to do this. They figured out they bigger, bigger pons to plan, right? They move on to trading bigger things where they can make more money. A lot of them. But also like there's just so many amateurs who are in it not to make money but to have fun and just aren't very good at this or some combination they're up. So there's always gonna be a balance between what the price should be in some sense, like what the fair price is and what the sort of naive price is for like just a guy who's watching PN. And so, you know, even if you're not particularly good, you can always use that difference to get ahead, right? So like, one thing I like to say is if you just wanna make money in sports, one of the easiest ways to do it is you find a sports bar where everybody is an NBA fan on a day in the day in the life of the NBA and you walk in, you take the, take the lines out, right? The odds you show them to the, the old guys having a drink at the bar, right? You say, who do you like?

Zvi Mowshowitz [00:30:51] And you hear, you hear their opinions and everybody likes the same team and it's not the home team in the town. You have the bar you bet against that team. And if you did that reliably, right? And then if they have a pattern and everybody, everybody involved just happens to like the Milwaukee Bucks and like you're in Denver, doesn't mean that you should bet against Milwaukee every day. But if they, if the line seems too good to be true on a, on a side and everybody who doesn't know what they're doing wants to bet on it, it means that's the wrong side. You wanna be on the other side. And if you do that and you combine it with like getting reasonably good odds, you're all set. That's one of the big differences is in the, in the stock market, there's one price, right? If I wanna buy Apple stock, there's one price I can try to like, give an exact order to try and get a few extra pennies out of it. But like, I'm gonna pay whatever I'm gonna pay. Whereas if I go to bet on the Washington Nationals tonight, there's a hundred different books and making sure I get the right price on that proposition. There's a lot of determines whether I'm gonna be a winner or a loser in the long run.

Vance Crowe [00:31:55] When you were studying stocks, what information did you take in that you thought, like, gave you the, the edge in the game? So

Zvi Mowshowitz [00:32:02] I was trading on behalf of the trading desk at Jane Street, so we were all in it together. So it wasn't that I was doing individual things and now occasionally find a strategy that, like I found that I said, okay, I think we should do this, but mostly I executed the strategies that we had developed over the years at the desk. And I don't wanna get into them because you know, they're still doing them at firm. It wouldn't be fair. But the basic answer is that we, we learned to think about how things related to each other and how the patterns in the markets repeated themselves. And we learned how to do studies of various types to find out whether things were predictable and repeatable. And also like we learned the best way to execute various things. So like we learned, okay, so if I was on the international ET TF desk, so we were trading various countries and what both countries ahead was Poland, for example. So the question of like, you know, if if whatever reason the people who were trading the international ETFs we're selling a lot of the emerging market ETFs in general, that would mean we'd be short Poland, right? We'd be, we'd be selling a lot of Polish stocks. So I would be tasked potentially with, okay, you need to find a way to buy a bunch of Poland, right? And there's a very few different ways you can buy Polish stocks or get, you know, get long Poland so that we don't have this liability in case these people know something or these have to be right. And so it'd be my job to figure out what's the cheapest way to express that and to hedge our risk.

Vance Crowe [00:33:20] It's, this is so interesting to hear you describe it this way because in my time in corporate America, when I would meet with investor relations people, whether it was the company I was working for or other companies, it struck me that one, there's no way they could possibly compile the information about these giant companies. You know, you're talking about a company that's generating billions of dollars worth of revenue and they're writing them down so that they can go into booklets and be sent off. And it, it just struck me that it seemed like the information the companies provided about themselves was virtually worthless. But I could be totally wrong. It's

Zvi Mowshowitz [00:33:57] Not worth, right, they pro so they have to provide true information and you know, you know that it's reliable. So you can use that, but you can't rely on it by itself blind without thinking about it. So one thing you can do is you can figure out, okay, figure out this is what they're telling me. Their goal is to have their stock price be as high as possible when they gimme this information, right? If they could have given me better information, they would've looked better than me, they would've given me that instead. But instead they're giving me the best possible information as the law tells 'em they're allowed to give. So based on that, how do I interpret the information that they're actually giving me? What did it tell me? Right? And that tells you a lot.

Vance Crowe [00:34:38] Well, so that leads into an excellent section that you know a lot about but has kind of fallen out of favor for what people talk about, which is COVID. You know, you give a regular updates about what the numbers are and how it looks in the world and what's going on. And so what is your motivation for doing that and why is what you're providing different than what people see when they look at Twitter and there's COVID numbers and they changed, they check out their local news. That's changed

Zvi Mowshowitz [00:35:03] A bunch over the course of the two years that I've done it. So when I first did it, I first wrote a post about COVID just because I was like, wow, I see this is about to happen. I wanna warn my friends and anybody else who's listening to get ready to take preparations before everyone else is taking preparations. And it gets to be a mad house, right? That's better for everyone. If if you go, if you make all the preparations while things aren't crazy, then you're not making things worse. You're making things better. Because now when everyone else is scrambling, you're already prepared. And I also wanted my friends to be okay. So I wrote about that and then after that I was thinking to myself, okay, I need to work through this. I need to figure out what's going on. How should I think about my risks? How should I think about my future? When am I gonna go back to the city? Because I was, I moved with my fa my family out to a town called Warwick, New York in order to have a, a yard and enough space so that we didn't go crazy basically during the pandemic. 'cause we could have locked down. I was prepared to lock down. And then my wife, like two weeks before things were about to happen, said, oh my God, we'll go crazy in this apartment. I was like, oh yeah, you're right. So we, we moved, but I was trying to figure it out for myself, what's going on, what's likely to happen for many reasons. And the best way I know to figure things out is to write, right? Like I first, I was writing essentially for myself. I was saying, I'm running this and like if you read it, you get value out of it, that's great. I want you to do that and I want you to give me your responses to that, how you feel about that. But the most important thing is that I need to write this for my own sanity because I'm doom scrolling through Twitter like everybody else. I am updating all of the news websites, I am looking at this stuff and I want to analyze it anyway.

Zvi Mowshowitz [00:36:38] And writing potentially for an audience, but mainly for myself. And then after a while it was clear that people were relying on this and like I was allowing people to not go crazy themselves, doom scroll on Twitter and worrying about this because they could just rely on me to a large extent to know that if something really big happened that I would pick up on it. And so that made me feel a lot better about putting in the work and it made me feel a lot better, like about my ability to execute and do the work. And I think the difference between what I was doing and what other people else were doing was I was actually trying to model what was happening and figure out like the underlying mechanisms, the gears in the physical world, and then ask, okay, so what's gonna happen next? Why did these things happen? What might we do both individually and as a society to try and mitigate the situation and do the best we can? And how you build up a model of how this has happened and what has happened, which might apply to things beyond COVID. And so I made predictions week to week and I said how I thought things were playing out and why they were playing out and what was likely to happen. I evaluated scientific data and over time you get better and better at these things. You work out routines, you figure out good sources from bad sources. And after a while, you know, at some point, and once the vaccine came, I was okay, it's winding down, but there were so many people relying on me at that point. I said, okay, you know what, it's public service. I have thousands of people who are counting on this do not have to worry about themselves and nobody else is doing anything like this on basically any subject. And so it's in demand.

Zvi Mowshowitz [00:38:10] I should try and keep this up. It's not useless for me. I'm still gonna be doing something out of this, scrolling myself anyway. And it helps me concentrate my thoughts. And it, it is definitely been a very good investment both in terms of helping other people, but also I had so many opportunities come to me because people say, I read your COVID pieces and, and I love your ability to analyze things and let's talk and let's talk about something else, you know, or what do you think about this? And, and that's, that's been great.

Vance Crowe [00:38:38] So what is your analysis about COVID revealed that you think most people haven't, haven't realized yet?

Zvi Mowshowitz [00:38:45] So I think that a lot of the things that like I realized earlier have now been realized, right? Like by many people. But like the main thing is sort of like what are people, what are our systems optimizing for, right? What do our systems care about? What are they trying to do? And so I like to say that people like in power and politics, in, in the medical, in the medical ethics fields, in the public health, they're primarily optimizing for blame avoidance on a two week time horizon is one of my biggest principles.

Vance Crowe [00:39:20] Say that again. They're optimizing for time horizon blame avoidance in short term,

Zvi Mowshowitz [00:39:26] But it seems about right. So the idea being, you know, if they can see forwards two weeks from now, they're blamed for something, they want no part of that. And if they see something and they won't be blamed for it two weeks from now, okay? Right? That's not the entire thing that's going on. That's a lot of it. And so the way that you get something to happen that isn't a short term thing is you backward chain. You say, oh, you, you point out that people will be blamed in 10 weeks, which means people will be blamed in eight weeks, which means people will be blamed in six weeks, which means people will be blamed in four weeks, which means people will be blamed in two weeks, which means you're blameworthy now, so you better do something now, right? And so can sometimes construct this, this pathway and that can be a theory of change to get something to happen. And it's very, very hard to do without this happening. The other thing is that you have to realize that like a lot of our COVID prevention and COVID action has nothing to do with preventing COVID and never did right? That it was about what I call sacrifices to the gods. So it's the idea of the way that you are blame are not blame worthy. The way that you have done your job against COVID, the way that you are a good person is that you sacrifice and the way that you make sure that the society is good, you make the society sacrifice, you make you destroy something, right? You burn the, the sacrificial lamb at the altar and that shows your piety. And like, it's important, you always have to differentiate when are we sacrificing to the gods and when are we doing something that's physically real, right?

Zvi Mowshowitz [00:41:02] Like when are we just doing the symbolic thing

Vance Crowe [00:41:06] Because

Zvi Mowshowitz [00:41:07] We're doing the real thing? And over time it became clear that more and more of it was both always symbolic and becoming symbolic as opposed to being real. And people weren't interested in the real very much in particular when the real didn't involve sacrifice, people weren't interested. But this is my theory of paxlovid, right? The problem with paxlovid is there aren't any side effects and it doesn't have any downsides, it just cures COVID. But if it just cures COVID, then what's even the point? There's, there's a sense in which like, okay, I don't care.

Vance Crowe [00:41:51] What did we give all this up for?

Zvi Mowshowitz [00:41:52] Why do all this years a 99.9 something percent chance of being perfectly okay? And they say, oh, you don't need it. Well then why was I being told to uproot my wife and not get it this entire time? Right? And the answer is because then it was a moral issue, right? It was about like being responsible and, and doing the right thing and worrying about the impact on the broader society and the, the, the, the idea of controlling the pandemic so everyone didn't get it at once was obviously very real. And of course before the vaccine the COVID was lot more dangerous. Before Omicron, COVID was a lot more dangerous. But it's a real sense in which, you know, the concern was never really about what it was supposed to be about to arctic extent. And simultaneously the people who were against all these restrictions were also just symbolically against the restrictions to arctic extent, right? They were against because know these people say we should, we should do these things because it's symbolically the right thing. Other people are, this is symbolically the wrong thing. And they didn't stop to think whether or not it was worth it on the merits either for the most part, right? Some people did on both sides.

Vance Crowe [00:42:54] Yeah, that's interesting because once it becomes a symbol, then all you're doing is fighting over whether your symbols are the right symbols or my symbols are the right symbols as opposed to, you know, right. Like

Zvi Mowshowitz [00:43:04] I got

Vance Crowe [00:43:04] What is misleading us to,

Zvi Mowshowitz [00:43:06] You know, I've got my mask and you've got your no mask and neither of us is doing it for the right reason necessarily. Right? Like, like some people actually in a calculation, like there's a period where it's like, okay, if you think symbolic, you're supposed to not wear a mask. You don't wear a mask symbolically, you think you're supposed to wear a mask, you are wearing a cloth mask. If you're actually trying to COVID, you're wearing N95. Like this is a period in 2020. Or the people who like, who understood, they actually were trying to prevent COVID had moved on to n 90 fives, right? In fact, doctors weren't n 90 fives, but the people who didn't know were just like playing a symbolic game where either they felt like it was important to do prevention and they were a clock mask, they didn't do very much, or they thought it was important to not do prevention, to not let the man keep you down. And they were explicit, you know, try not to wear masks.

Vance Crowe [00:43:47] I I mean I, we could stay in the COVID area, but I'm actually very intensely interested in another subject right now and I'd love to get your thoughts on it. I didn't know I was gonna ask you about this, but I am, inflation seems to be something that everybody, you know, three months ago said, no, a trans story. No, it's not gonna be that bad. Nobody has a crystal ball. Your

Zvi Mowshowitz [00:44:08] Twitter feed is not my Twitter feed.

Vance Crowe [00:44:10] Excuse me,

Zvi Mowshowitz [00:44:11] Three months ago, everyone I was watching, like they knew like, not the, not, maybe not the full extent of the, you know, it's definitely been a, a rocky three months in terms of actual news, right? But certainly after the Russian invade Ukraine, like nobody in my feeds that I paid attention to was thinking it wasn't gonna be big inflation problem.

Vance Crowe [00:44:33] Fair enough. The, the, the timeline might not be right on that. Like I would say, you know, I'm in the business community, so whether I'm sitting on a board or I'm consulting the business community did not want to face a reality about inflation. So there was definitely this like, ah, we don't know that it's not necessarily gonna happen. Let's not make those choices. But any case now, I think people looking in, in Missouri, if gas is at $4 90 cents, which wherever you're at might be a lot higher than that, but it is a big deal here. Where is inflation going and how will people react in predictable ways?

Zvi Mowshowitz [00:45:07] So I am on, you know, team both, right? Like I have, I was never on team transitory fully, but I'm also not in like team. It's all because we printed a bunch of money and now it's a horrible wage price spiral or anything. So I, I'm somewhere in the middle. Like there's definitely been my, my, my model is, you know, supply chain, it's been a huge deal. Disruptions have been a huge deal. COVID like actually causing real problems has been a huge deal, right? Lack, you know, too much money. Changing too few goods is of course a lot of the core of this, right? We gave people a bunch of money, we expanded the money supply, but we're not producing as much in many ways because people have done less work for a while because in some ways we're less productive because we've got these disruptions to global supply. You know, these are real, you know, everybody wanted to ship from services into goods at the same time, right? And so you don't save that much money on services because people aren't going to work for that much less money just because people don't want services. But the goods shoot through the roof. And so, you know, that's gonna be a continuing problem. But also the Fed would just wait too slow that, right? Like we don't have an A GDP level targeting regime. We don't look at predicted future inflation or predicted future GDP and react to it. The Fed just sort of like, Powell tries to figure it out and then says, okay, this is what I'm gonna do based on my dissipation. And also they kind of had a loose commitment to a level target a, a sort of targeting regime where they were gonna keep things loose for a while, but they didn't really mean it.

Zvi Mowshowitz [00:46:40] And that's the worst of both worlds, right? If you're gonna do that kinda thing, you gotta stick to your guns. But predictably, they weren't gonna stick to their guns the way they had in mind. They're gonna bend in various ways. And that's something the market did a reasonable job of understanding wasn't real in some ways and that was a problem. But fundamentally speaking, I think a lot of people, yeah, just fooled themselves. They're like, well all these prices are going up. Look at core inflation, but also due to these disruption. But like, yo, come on, you can't count lumber going up 200% or whatever it was. Or like used cars going up like, you know, another 200% or that's gonna come down. That's not real, you know? But a lot of the that up I didn't use to have, we didn't used to re rewind new shortage every week. This is new. This is a serious set of problems. And like what's gonna happen predictably, well first of all, people are gonna blame whoever's in charge, right? That's the first thing they're gonna do. And if things aren't gonna get better in the next few months, then November is quite possibly gonna be white path because they'll look at the people in charge, they're gonna say, well, Biden, you had both houses. This happened to you. We don't really have a model as to why it happened exactly. But we know that it costs a lot to fill up our gas tank. We know that it costs a lot to buy a place to live. We know it costs a lot to put food on the table and this is unacceptable. So like, let's try something else, right? Like, we don't know why you failed, but you failed us. And you know, that's kind of how democracy works a lot of the times is, you know, you, you're counting on throwing the bums out when things aren't good.

Zvi Mowshowitz [00:48:14] Much more so than you're counting on these people to know why things aren't good or what could have been done instead. That's the first thing that's gonna happen. Second good thing is people are gonna call for very counterproductive solutions and we're gonna see if people do the least stupid stuff, right? So we're talking about windfall taxes and price controls and price gouging concerns and you know, all these other types of things that people do when they say, you know, oh the market's broken, we need to break the market. And so, you know, it's gonna be very important to see what, how much of that, you know, we, we end up doing hopefully almost none or even none of it. But it's definitely something to worry about. And then the other question is, will we in fact do the things that would be useful in the situation? Like there are still whispers, but there are whispers we might be talking about the Jones Act, right? Like that's the very embodiment of an obviously correct thing to do, right? Right, right. Now you can't take your spices in one port in America, chip them to another port. It's not a lot. Right? You could do it on an American chip, an American crew built in America, owned in America, flagged in America. But that there's basically no, you know what? But almost

Vance Crowe [00:49:20] Know ships are blacked in America. Too expensive. They try and avoid their taxes. Yeah. So,

Zvi Mowshowitz [00:49:24] You know, obviously it would be a great load off our backs to get rid of this stupid rule. And there's a number of other similar stupid rules. You know, a bunch of tariffs, a bunch of trade restrictions. Get ourselves off the ground, put a big, put a significant dent in the problem. You know, we could do a number of other things that would be helpful. But that goes against the nature of politicians these days, right? The, the American public one theory I I I've been subscribing to lately, the American public in some ways has a much closer eye than it used to on what politicians are doing. And so like American people have always been against trade on some fundamental level. Like they've been very suspicious of trade and especially foreign trade. And so we've lost our ability to not demagogue on it in some important sense. And this is leading to much worse sets of rules and much worse outcomes in ways that are directly affecting inflation. And that could be like a few points, which is a big deal. But like keep in mind also like inflation's high in Europe too, right? It's high all over because everyone's got the same too much money chasing too few goods, fundamentally speaking, even if you didn't overspend. And also we just spent so much money, right? And so that's a one time shop. Like if we don't keep doing it, that will calm things back down. So my guess is the market is not being crazy when it predicts inflation's gonna go down like this is, you know, it's probably peaking now-ish is my guess. And it's not going to keep doing 10% a year for years. It's not gonna go just up and up and up and up. We're not gonna lose everything. It's not gonna be a huge disaster at the seventies, but it's gonna be a while before we get two, right?

Zvi Mowshowitz [00:51:02] And if we want to and after, we're a lot harder than we work it.

Vance Crowe [00:51:05] Yeah. I mean it strikes me that as you see things like diesel prices going just like the highest that they've ever been when we're, when we're getting it out of the east coast, that that people don't really have a sense if you've never really seen how agriculture works, how our transportation systems work, just how much the increase in those prices impact every other thing. So even if the inflation doesn't stay at 8%, the the, the prices I I believe are maybe not, I feel like they're likely permanent, but if not permanent, definitely longer lasting. They,

Zvi Mowshowitz [00:51:41] That's not story

Vance Crowe [00:51:42] The next

Zvi Mowshowitz [00:51:42] Couple of years. 'cause if your story is, the problem is there isn't enough diesel, there isn't enough gasoline and these pricess are going through, you know, because the price of oil is effectively going through to everything else, then price of oil goes up. But it can come down and it probably will eventually almost certainly come down. You look at the trading, the futures trading, right? They, it's expected to slowly come down on average over time. And one of the policies I support is that when we're selling oil from the strategic oil reserve, we should be buying that oil back. But five years out, right? Some, some huge amount of time out to raise the price of the future is to encourage production and also to ensure the United States against a rising prices. 'cause we all bought the oil now, right? So it's doubly useful. And if we end up losing money on this horrible trade, oh no, whatever shall we do, but be happy, right? It's very low risk council, expand the size of the reserves so we could buy a lot more and then maybe we don't even take delivery, right? We just sell it back because we don't necessarily need it anymore depending on what the situation is, where we need it in the market, where than we need it. We buy more futures and we have all these different things we can do. But you know, in commodity, the only cure for high prices is like prices, right? So like we're building electric cars literally as thousand, we can get our hands on lithium and we're, oh, you know, we're not opening up new but we're not drilling for new oil. The prices in sometimes aren't high enough, right? A combination of the administration isn't that interested in doing what it takes to get oil and gas production going. And there's no expectation that prices will remain high for long enough.

Zvi Mowshowitz [00:53:16] But if you talk about like, you know, five years from now, if the prices have been, you know, 150, $200 a barrel for real money terms for five years, I have to assume like there's plenty of capacity we run online and all we have to do is be willing to like guarantee purchases basically at some reasonable level to justify production. There's plenty of spare capacity. And over time we're gonna get more energy efficient and over time we're gonna transition to electric. And also like we're being a push for nuclear power throughout the world now, right? We're seeing Europeans turn the nuclear pads back on. We're seeing South Korea, but more nuclear seeing India commit to nuclear plants. Even Japan is thinking about more nuclear plants. So, you know, over time we're going transition, like, you know, solar's gonna be a bigger portion of everyone's energy. Wind is gonna be a bigger portion of everyone's energy. Like, and there's a lot of nos we have in turn, right? We haven't even waived the Jones Act. Like literally we've got, we're putting diesel into trucks to drive things from port to port over land during a gas shortage when there are plenty of shifts that can do this on, you know, tiny fractions of the amount. And when you say the word, you take the substantial pressure off of the market and off of the traffic, you just don't do it. So I would say it's a very optimistic story to me, even though that's counterintuitive in some ways because the solvable problem and a problem that probably will be solved, which is if you have an energy crisis, well they pass, it's an important sense and we had to solve it anyway, right? We couldn't be rooting off this diesel forever to climate change.

Vance Crowe [00:54:44] Well I they you are more optimistic than I expected. I was imagining, well, I mean just 'cause from my own view at least, which is probably like a, a shorter time horizon than the one that you're talking about to me, that the amount of pressure that we've seen on regular people's lives is not anywhere near where it could get. But you know, like Coinbase today, for example, laid off 1100 workers and my sense is there's a lot of corporations that are gonna be hurting because the amount of the cost goods, well

Zvi Mowshowitz [00:55:15] The cost, its

Vance Crowe [00:55:16] A lot higher than it was before

Zvi Mowshowitz [00:55:17] Bitcoin 22,000 instead of 65,000.

Vance Crowe [00:55:20] Yeah, that's true. And that particular,

Zvi Mowshowitz [00:55:22] It makes sense that like everybody in crypto, right, is gonna, and like I, I'm making a game, right? Emergence on the Tesla blockchain that is based in crypto and it's one of the discussions we're having. We're about to go to a, a sale of our cards for our game and well, if we charge the same price in Tezos that we were gonna charge, you know, last year we're getting a quarter of the price in dollars. But that's, you know, the Tezos community only has so much tes so it's a huge problem and it makes perfect sense that Coinbase would've to lay off people. But so one of the problems in America in 2022 is that at some sense we're really spoiled by our expectation that like we shouldn't have to deal with shortages, that we shouldn't have to deal with substitution of consumption. And so our demand is very inelastic in many ways, much more so than before. We're also overregulated compared to what we used to be, right? We're told what we have to do in so many ways the rules are set of what we must do. And so like a hundred, 200 years ago, right? Like if, if like you, a lot of your audience is farmers, like farmers would learn, okay, if this is too expensive right now, what do I do instead? If this, you know, if there's more demand for this crop instead of this crop, I'm gonna adjust what I do. They were business people who were used to the idea that everything has prices, right? You have to like adjust what you're doing and you don't just get to eat whatever it is you're used to eating when different prices go up and down. Because we have a problem in Ukraine where there isn't, you know, there's a grain problem and now a lot of supply got disrupted and all these prices are changing and diesel got expensive and so you have to buy more local because of the ation costs went up and all of these problems that a temporary, it's sometimes it's temporary because, you know, I'm not gonna move for a temporary change in the price of gas for a few months almost no matter how big it is.

Zvi Mowshowitz [00:57:12] But if this happens for years, well maybe my house from the summer doesn't make sense anymore, right? Maybe I have to figure out something else they have to work from home. Maybe I have to move to one of these cities that's like kind of run down but has walkable areas where I can live and go to the grocery store and I can find another job. 'cause there's actually plenty of dimensional labor in various ways, right? Or maybe I can repurpose some of these office buildings that are now vacant to be new apartments so they can like, again be in the business district, you can walk to work, there's a lot of things you can do in time, right? You can figure out how to substitute different consumption patterns and make due with less goods than you would expect with the same income endowment. Where

Vance Crowe [00:57:53] Do you, you mentioned the labor shortage. Where do you think that came from and why did it come from?

Zvi Mowshowitz [00:57:58] So I think it came from

Vance Crowe [00:57:59] Suddenly came

Zvi Mowshowitz [00:58:00] From, we paid a lot of people not to work because of COVID conditions and the desire to be politically in a good place during those COVID conditions because every politician wants to be popular. So we threw money at people and a lot of people no longer had to work. I don't know any type of crypto had anything to do with it, but like among people I know it had a lot to do with it. And it wasn't potentially a significant amount of money. It was like technically paper welfare and in general like stocks were up, real estate was up. So like everybody's feeling wealthy and work sort of is much more, much less appealing and doesn't feel like it's necessary. And also I think there's a thing that's being underappreciated, which is that especially young people, but also people in general have stopped believing in the future in the same way that they used to. They don't feel it as real, they like part by like the, it's thing that climate change gonna kill everybody. And that like, you know, the world isn't gonna exist in 20, 30 years. Like a lot of people, especially young people like, kind of have in their brains, even if they don't really have a causal mechanism whereby that could actually happen, right? It's a real problem. But like the chance of this kind of scenario, it's van small, but like if you have this just emotional felt sense that there is no future, right? Like you're never gonna be able to afford a family, you're not gonna have kids. Like, there's nothing to look forward to. Well then why shouldn't I sit at home and play Xbox? Like what's the downside if I don't develop my career?

Vance Crowe [00:59:23] I, I think what you're saying is real in the, my executive producer Ben Anderson is a really neat guy. He dropped outta college, started up a company, has been, you know, prolifically pushing forward in his scientific career. But one of the things that he does with kids that are his counterpart, which would've just graduated this fall if he had stayed in school, is ask him, Hey, what are you excited about in the future? And he is like running at about 100% that everybody he has asked, that's his age, is like nothing. I think unionization is increasing or you know, you know, like they have, they have very few things. There's, there's, you know, nothing about families, nothing about, you know, the potential of jobs and the opportunity that middle management is gonna

Zvi Mowshowitz [01:00:06] Right. Pull them up. They've been raised on

Vance Crowe [01:00:09] This culture opportunities,

Zvi Mowshowitz [01:00:10] Well they're, that everything is terrible. There are all these social problems that are so bad and they should be so, so worried about these things. And they should be worried about like various problems in their worlds and their experiences and they're not told and they don't have this experience, this felt social culture that what matters is their future and their financial future and their careers and their future families and you know, all of these things. And so a person, you think a person who is approached in that way, yeah, they're not gonna be very excited to go into this world that's like so terrible in so many ways and then take a terrible job, right? Because like most of the jobs you can get are not the jobs you want. And like I had that problem too, right? Like when I was starting out after college, like I had the great fortune to have been playing games for a living and earning enough money to keep doing that wasn't enough to raise family or anything, but it was enough to like be a kid in his twenties and, and have a lot of fun and, and develop some actually trajectory to be valuable skills 2001

Vance Crowe [01:01:15] And when did you graduate?

Zvi Mowshowitz [01:01:17] Yeah. And so like, but like in terms of like,

Vance Crowe [01:01:19] Okay, you and I are almost exactly the same

Zvi Mowshowitz [01:01:20] In a regular job job, right? I, I wasn't excited about anything either. I just happened to have a great skill that turned out to be good enough that let me go down the other roads and develop these unique, unique places. But for a while, I, I smart people like in the two thousands would ask me, you know, what should I do to make money? I would say, well if you have anything great going on, you can always just say poker. Like it's not that hard. Like that's not a society solution, right? At all. Like, they have to like be willing to go out there and, and get excited by something or like just decide to toil at something for a long time. Work your way up and like, yeah, just, it's the revolution of writing the expectations, right? We've been taught that like humans don't deserve that. They're too good for that. Life needs to be better than that. And like that's a great aspiration, but it leads to people not wanting to enter the labor force and have those crappy jobs. I don't blame them one bit. I don't blame these kids at all. I think that they are right. Yeah. That's a crappy way to be, right?

Vance Crowe [01:02:22] You know, I, when I was in diplomacy school, I had this professor who was from China and he used to lament, he used to say, oh man, if I had only stayed in China, all of the people that I went to school with that had those crappy jobs for 20 years are now at the top of the party. And if I had just stayed there. And so his advice to me was, you should do the same thing. And I remember when I was in corporate America and I'm sitting there, you know, watching the, the fact that like for a while there, middle management just didn't move. And I think this was true in a lot of companies. And then when COVID happened, middle management said, Hey, we're, we've got lots of cash. Look at our stock portfolio, we're jumping out and now the people that were in corporate America with me, they aren't just moving up one level or two levels. You're watching people jump three levels, sometimes four levels. And I actually think the most under reported part of the supply chain crisis is that most people don't realize that it's not an org chart doesn't make you competent at your job when you move up in levels. Typically it's because you have the networks and the relationships and you understand how to fix things when they get broken and who actually you can trust and how do you make things work. And when, when middle management all left, the succession planning wasn't there and so you moved people up that it's gonna take them five years, 10 years to get caught up with that level of knowledge. They will eventually. But I think that is a major contributor to the supply chain problem was that know management inventory

Zvi Mowshowitz [01:03:51] That was just in time

Vance Crowe [01:03:51] Too, too and exploded. And now we trying

Zvi Mowshowitz [01:03:53] Weren't the next generation the same way. I mean look at all of our, our leaders and politicians, right? They're all super old. Nobody's letting go. We're not transitioning and

Vance Crowe [01:04:03] Yeah, yeah. I mean just yeah, that's exactly right. Speaker of the house president, like they're so old. You cannot possibly imagine that these are people that are waking up

Zvi Mowshowitz [01:04:11] Every day. Yeah. Dying with,

Vance Crowe [01:04:13] They're

Zvi Mowshowitz [01:04:13] Willing

Vance Crowe [01:04:14] To try new things. Like

Zvi Mowshowitz [01:04:16] It's ridiculous. So it, it's,

Vance Crowe [01:04:19] Yeah.

Zvi Mowshowitz [01:04:19] The key is also that it turns out that like I I I did a sequence called Imal Maes, which I'm hoping someday turn into a book and like it points out that like being in these middle management positions, like dedicating yourself to these companies, kind of put yourself in a life that you don't really want. Like you can work your way up, you can get the brass ring and the gold watch and make a bunch of money, but is that really what you want do with your life, right? Do you want to have to live in that environment and adapt yourself to that environment over that time? And I reached the conclusion basically, you don't, right? Like you don't wanna try and like, you know, the the inner ring and all that, right? You don't, you don't want any part of playing these games where people are checking

Vance Crowe [01:05:06] Well, 'cause the only way to get to the inner ring is to give up things that you, you, you know, there's no chance of getting back, right? If you really wanna get in there, you don't get to watch your 1-year-old learn to walk. You don't get to be around for all of the things that that that make life enriched. You have to give them up in order to be a part of that corporate America. And there's no going back with time. And that's something

Zvi Mowshowitz [01:05:29] That's hard I

Vance Crowe [01:05:31] To grapple with.

Zvi Mowshowitz [01:05:32] So it's just, it's again, they're not wrong, right? Like these people, people have been given this kind of crappy deal for 10,000 years in various forms and it's been slowly getting less crappy in general in many ways. I think what happened was people's expectations of how crappy it should be imp you know, we're moving faster than the reality. And also in some ways like things stopped getting better than like at the same, certainly at the same pace, right? We had a rapid improvement until some point in the late 20th century. And then we had, you know, some form of a great stagnation where things really weren't improving as much and we're like, we're just giving young people a relatively raw deal and they're just not going to take it the way people used to. And you know, some ways seems to be easier if they were willing to take it and they'd kind of turn out all right. But also the deal is really crappy and I don't really blame them for not taking it.

Vance Crowe [01:06:26] But there's a real danger in a culture to having your middle class young people believe that the world isn't getting better. You know, one of the best books I ever read about social movements was the true believer by Eric Hoffer. And he made the observation that when you have these mass movements, these big political will, that it's generated, it's not done by people that are all the way at the bottom. They don't have the time or the energy or the resources or anything to, to make upheaval. And it's not the people at the top obviously 'cause they're at the top. They don't wanna risk it. It's the people in the middle that believe like, hey, if I shake this snow globe up, then there's a chance I might be on the top. Right? You don't,

Zvi Mowshowitz [01:07:05] You don't get a revolution. Things

Vance Crowe [01:07:06] Aren't getting better anyway. Why not do it

Zvi Mowshowitz [01:07:08] Be terrible?

Vance Crowe [01:07:08] And so the thing that you're describing is you get

Zvi Mowshowitz [01:07:10] Illusion because everyone's life used to be terrible and now it's less terrible and then it got slightly more terrible and they're not putting up with that. Right? You make it better and then it's slightly worse or like not better enough and then you're in trouble.

Vance Crowe [01:07:26] Well, and that's like, I mean, you look at China for example, the, the, the professor I was talking about earlier, he used to talk about how one of the ways that the Chinese people knew that their lives were getting better was they went from eating meat maybe three or four times a year to eating it once a month to eating it once a week to then having it available to you every single day. And so when you talk about the things that could prompt some sort of revolution in China, it's likely not over some sort of civil issue. It's over am I no longer able to, you know, have meat ev every single day of the week? And I think that that's emblematic of exactly what you're saying, right? It's that that standard of living has gone up and if it starts to go down, it doesn't have to get to the fact that we're all going to be

Zvi Mowshowitz [01:08:09] Coal

Vance Crowe [01:08:09] Miners again,

Zvi Mowshowitz [01:08:10] Standard of living.

Vance Crowe [01:08:11] It just has to not as good as it once was. People

Zvi Mowshowitz [01:08:13] Will not be having it. And luckily we live in a democracy and therefore like they'll try to express themselves by voting for the other party depending on who happens to be in charge at the time. And hopefully we can turn it around. But no, we are not built to survive negative growth or like reduced real life experience in ways people feel. And so we're instead sacrificing other things to try and maintain that. But that's unsustainable. Like one of the, a lot of it is we're just sacrificing children, right? Like people are just not having the kids they want to have because they look at the lifestyle they have that they had those kids, the way our society is structured and they say I can't do it. The problem being biology is what it is.

Vance Crowe [01:08:58] Yeah. Or they wait, wait so long, right? They, they right.

Zvi Mowshowitz [01:09:01] They want, they, they would've wanted to have 2, 3, 4 kids. But by the time they get around to having them, they, you know, they get one, they get two and they, that's all they can get.

Vance Crowe [01:09:09] So what do you think's gonna happen with Russia and Ukraine? Is is, is Putin a madman that can't be stopped and we'll just keep going if we don't stop him? What do you think here? So

Zvi Mowshowitz [01:09:19] Words like bad are just like not helpful in figuring out what's going on. I would say Putin really, really believes Ukraine belongs to mother Russia and is part of mother Russia. And if some, if nobody stops him from doing so, he will take over Ukraine. So, you know, we wanna strongly consider doing that. And if he was allowed to take over Ukraine, I think there's a large probability that he will not stop there. I think that he wants everything that has ever belongs to Russia and everything that has ever been claimed by Russia belongs to Russia in his mind. And Ukraine is, and having taken Ukraine, he will feel like he now has a mandate to, you know, revive the Russian s in all of his glory in some form. And I think he's laid this out to us very carefully. He's talked about like his grudges with Lithuania and Sweden and Poland over things that happened centuries ago and how the breakup of the Soviet Union was a colossal tragedy. And I don't see any reason to expect him to stop unless he believes that he's being opposed by sufficient force. And so yeah, I don't, I don't see what the alternative is in that sense.

Vance Crowe [01:10:35] Interesting. You know, the thing that's been the biggest struggle for me, and actually if COVID didn't tell you that the government of the United States will, you know, propagandize its people then I think the Ukraine, Russia situation should in the sense that we for some reason completely accepted that YouTube and all the other channels would take off all of the communication that came out of Russia. So if you used to say, Hey, every once in a while I turn on Russia today and I see what they're saying, you just can't get that information anymore. And when I started seeing that, like I, I have no idea what his intents are. I think there has been, you know, any bloodshed among civilians is a terrible thing. But I am deeply suspicious of a culture that allows itself to be cut off from information from the other side when they will freely give you, at least no matter,

Zvi Mowshowitz [01:11:27] Matter how hard you think we're gonna have

Vance Crowe [01:11:28] Information Russia off so much the way we handle it,

Zvi Mowshowitz [01:11:31] Right? Like they are like outright just cutting off anything that disagrees with them. They're arresting people for expressing, posing views, right? Like, this is not a subtle thing. Second of all, we're not cutting it off that hard, right? We, we may be cutting it, you know, taking it down from YouTube, but if you wanna see what Russia today is saying, it's not that difficult. I see extensive clips on Twitter of what they're seeing on Russian, on, on Russian television all the time. Pretty scary stuff. Plenty of Russians are expressing what they see coming outta Russia. What they say is going outta Russia. The official Russian propaganda lines are absolutely shared with the West. We know what they are. You know, they, yes, I very much wish we weren't censoring. I think it's a very, very bad sign in censoring how much we are. However, we also have a history of not being so great for this first Amendment thing. Everyone remembers World War I for example, right? Like in Woodrow Wilson, this is not a new problem. But basically I don't just like me actively just suspended for,

Vance Crowe [01:12:29] I couldn't, I couldn't tell you what you mean by that. Tell me more rest people

Zvi Mowshowitz [01:12:33] In the street. Like we were just like, no, we're not doing this.

Vance Crowe [01:12:36] Okay. And

Zvi Mowshowitz [01:12:36] Like our World War pre propaganda was, you know, pure propaganda. I mean for good cause I believe, but you know, was what it was. We're, we're not none, none. This is new. And I, I feel like we're, we're actually in a pretty good epistemic environment in that sense because we have Twitter and we have these other information sources that are so much richer than we had in the past. So I feel so much better informed despite all the restrictions than I would in a fully open 1993 or whatever it would be. But when I was watching the Gulf War, I didn't feel like anyone was restricting information, but I also felt like I had to rely upon the New York Times and CNN for my information on what was happening in the way I don't now. And so effectively the propaganda was so much more effective at selecting for what I was gonna see about what was going on in the Iraq war than it is for this war, right? And so now I actually do see alternate perspectives. I do see alternate opinions, but also like you can look at often, like you ask yourself, okay, what is the other side saying? Right? And that's the best thing they could choose to say from their perspective. Why did they choose to say that? And so you see the Russians making, you know, claims that don't make any sense on a physical basis that are obvious, you know, that are obvious lies. And in fact, part of my model of Putin is that, and Russia is that they are doing the thing where they make, they state obvious lies and the show of strength to show that they're willing to say obvious lies, right? They know that you don't believe and it's intentional in many cases this explains some obvious like otherwise stupid mistakes by someone who used to have the kgb, right?

Zvi Mowshowitz [01:14:08] But it makes perfect sense if you think that he is trying to his, he believes that this represents the power of Russia. If you can't even lie, if you're not willing to lie, you, you, you must be weak, right? In some sense. And so, but the Russians, like the Russian stories just don't hold up. The Russian stories make no sense. Like, and I do think we're getting enough of 'em to tell that. And it doesn't mean that our story is real, right? It doesn't mean that their story has no truth. Surely they're, they occasionally, they occasionally tell the truth. Every good liar does. And we are not being fully honest, but we have a relatively open information environment. And I feel like I, I wrote a series of posts on Ukraine, right? I think I wrote like 11 of them or something back when it was starting out. I thought that a pretty good idea of what was going on. I felt like I had a pretty, pretty confident, I knew where the battle lines were, what the strategies were, what the balance of power was, what was happening, what was like, you know, and I was like out in front in that sense of no Ukraine's doing much better than it looks like Ukraine is doing at this point. And meticulous, I was the hit the curve on that and so on. And then after, after they withdrew from the key upfront and things were settling in for the Don bass fight, I said, okay, this is not really useful for me to be paring this information anymore, right? I'm not gonna learn things that like actually inform my life and my decisions or those in my readers. I should focus on something else. And so I haven't been following as much, I don't know the attempt to which the Russian progress in that area is real or is being compensated for by gains in other areas, by the Ukrainians. I haven't looked at my lists of sources for weeks basically, but I do feel like these problems are solvable because of its Scott Alexander called it bound to distrust is idea that everybody has rules for sort of in what ways they are and aren't going to misrepresent reality.

Zvi Mowshowitz [01:15:49] In what ways they're willing to lie, in what ways that they insist on telling the truth. And so you assume that within their rules they're doing the best they can to support their positions and you work out what's really going on. And if you're good at this, you can actually tell a lot of the times, most the situation. And I think what's some of the most unclear stuff is like what's happening in the Russian economy is Russia is Russia's war efforts sustainable. And that's a place where I feel like I would need to investigate much more carefully than I have been to have a strong opinion.

Vance Crowe [01:16:19] Well, this has been an entirely fascinating conversation for my last question. I'd be interested, let's go totally far afield. What was the best fiction book you've read recently?

Zvi Mowshowitz [01:16:33] Probably Hyperion, it's a science fiction novel, but I, I have unfortunately been so focused on web reading and blogs and a handful of nonfiction books. I read Talent by Tyler Coen, which is a nonfiction book very recently. I thought that was excellent. I I wrote a long review of it.

Vance Crowe [01:16:55] Yeah. I was reading your, your commentary back and forth with about the, the commentary on the Rationalist society or the C community and kind of that, that was an interesting thing. It's worth checking out on your, I have not, I am reading right now the Count of Monte Cristo, I don't know if you've ever read that book, but that holy cow, that has to be the most wild. That's, that's a book I consider to be one of like a once in a lifetime book. Like you, you are only gonna get a chance to have, this is

Zvi Mowshowitz [01:17:23] A lot of books. Well yes you have.

Vance Crowe [01:17:26] It is an amazing, amazing, amazing book. Get

Zvi Mowshowitz [01:17:28] First Once, but like you're trying to read it a lot more than once. Right? People like, you know, the famous book, you don't read Ulysses, you re read Ulysses. And so like my personal book of this type that I've come back the most times to is, is the Illuminous trilogy actually by Robert Abraham Wilson. And I, I've read that a large number of times and you get a different, I got a different thing out of it each time that I've read it.

Vance Crowe [01:17:51] Interesting. I'm certain you would get a lot more out of the a second read of the Count Monte Cristo because there's so much hidden, you know, even if you know the general story as you as it unfolds, you just can't even believe that this thing happened and then this thing happened and it's, it's, so anyway, we read it for a book club right now that we're in called the, the the as the Crow Flies Book club and it is the best book we've read so far in there I think. Alright, well ZV this has been a fantastic conversation and people wanted to read your blog or find out more about what you do word,

Zvi Mowshowitz [01:18:25] What would they WordPress we're substack.com. So I have moved my primary, I consider it over to Substack, but for SEO reasons and because a lot of people are used to going to WordPress, I, I cross post everything to WordPress anyway, so everything gets two versions just slightly annoying when I have to edit something. But otherwise it's fine. Technically there's three versions less wrong auto posts, everything as well. But you can find myself there or you can find links to most of it at I'm that's V on Twitter as well.

Vance Crowe [01:18:52] Well thanks so much for coming on and if you will ever come back on, I'll have you, this is a blast.