It could be libertarian bias, but I think almost all financial advice would turn into a horrible grotesque if someone turned it into binding law. Politicians are financial idiots, and they will legislate based on what their financial idiot constituents will approve of, not what will make people financially secure in the long term. What politician ever has even the incentive, let alone the knowledge, to do the latter?

Take Social Security for example. It's basically a Ponzi scheme that can only be sustained long-term by doing things that harm everybody, like excess inflation or excluding the people who paid for it (high earners) from receiving it. How is that different from an average financial idiot person taking on credit card debt and then making suboptimal life choices to keep the interest payments at bay? The difference is only in the national scale of the stupidity.

People make bad choices all the time when it comes to money, food and romance. But when politicians jump into those areas they make terrible laws, and those are much worse than mere bad choices.

The standard answer is that intellectually active people have higher IQs and higher openness to experience (which corresponds with the usual demographics of this community).

The organization sponsoring the project is going from the current situation where they can at least lie and pretend that the possibility exists that they'll come in underbudget, to one where they're guaranteed to burn >=100% of the budget if only because they've got to give away the leftovers at the end.

This is a feature, not a bug. We prefer the world where the project never gets funded in the first place to the world where it gets funded based on lies and then runs 150% of the budget and provides only 50% of the benefit.

Middle managers on the project could now easily benefit financially by shorting the equities and sabotaging the project.

Management can do this now in regular companies, and it isn't a problem: it mostly doesn't occur to them; it damages reputations to appear incompetent; it is also a crime.

From Lewis:

Katsuyama asked him a simple question: Did BATS sell a faster picture of the stock market to high-frequency traders while using a slower picture to price the trades of investors? That is, did it allow high-frequency traders, who knew current market prices, to trade unfairly against investors at old prices? The BATS president said it didn’t, which surprised me. On the other hand, he didn’t look happy to have been asked. Two days later it was clear why: it wasn’t true. The New York attorney general had called the BATS exchange to let them know it was a problem when its president went on TV and got it wrong about this very important aspect of its business. BATS issued a correction and, four months later, parted ways with its president.

Emphasis mine. I interpret Lewis' claim to be that BATS was helping HFTs extract money from non-HFT investors. The benefit to which I referred is the fee BATS was paid for the faster market picture and the increased trading volume generated as a consequence.

More broadly and aside from allegations of specific wrongdoing, the claim is that HFT is just shaving the margins of everyone who makes trades more slowly. This argument makes sense to me; I can see no added value in giving preferential information to one market participant over others. It isn't as though HFT is providing a service by helping disseminate information faster - most of the action taken by regulators on the subject was because of exchanges not informing investors about whatever they were doing. My naive guess is their only real impact on the market is to slightly amplify the noise.

That being said, I can easily imagine HFT competing to a profit margin of zero and thereby solving itself, and I can also imagine that there would be other uses for the technology once other types of algorithms were introduced. I can also imagine that the regulatory burden would be greater than the damage they do so it wouldn't be worth it to ban them.

Which is why IEX was the focus of my interest. They are competing on the basis of countering this specific practice, and they seem to be doing alright.

I think your second and third bullet points would make great laws. That might not be what most people have in mind when they talk about "finance regulation", but it's an area where the government could force people to act in their own long-term interest instead of responding to shorter-term incentives. (And if people want to nitpick exceptions, many exceptions could be written into the law.)

People's spending (bullet points #1 and #4) might respond to laws that limit advertising, but I don't know what else. I think your #4 is one of those suggestions that doesn't intuitively grasp the scope or nature of the problem, like people who suggest that exhausted parents of newborns sleep when the baby sleeps. People who buy things so that others think they're cool are rarely consciously aware that that's a significant motivation for them, and they aren't going to stop and perform mental gymnastics before purchases. I have a friend who is in debt because shopping makes her feel better when she's stressed. Most purchasing incentives like these are deeply rooted and not easily solved, even with education.

So some organization will still cough up the initial budget, and then some set of potential shareholders will decide that this project will be the first megaproject to run under budget. They'll then give the project more money, in exchange for getting that money back, plus whatever the project doesn't use out of their original budget?

I don't feel like incentives are aligned very well, here.

The organization sponsoring the project is going from the current situation where they can at least lie and pretend that the possibility exists that they'll come in underbudget, to one where they're guaranteed to burn >=100% of the budget if only because they've got to give away the leftovers at the end. In exchange they get maybe a few percent more budget. Do shareholders even get to elect the board of directors?

Middle managers on the project could now easily benefit financially by shorting the equities and sabotaging the project.

Why is average wellbeing a goodharted measure?

I hear there is a way to fiddle with the foundations of probability theory so that conditional probabilities are taken as basic and ordinary probabilities are defined in terms of them. Maybe this would solve the problem?

This does help somewhat. See here. But, in order to get good answers from that, you need to already know enough about the structure of the situation.

Maybe I'm late to the party, in which case sorry about that & I look forward to hearing why I'm wrong, but I'm not convinced that epsilon-exploration is a satisfactory way to ensure that conditional probabilities are well-defined. Here's why:

I agree, but I also think there are some things pointing in the direction of "there's something interesting going on with epsilon exploration". Specifically, there's a pretty strong analogy between epsilon exploration and modal UDT: MUDT is like the limit as you send exploration probability to zero, so it never actually happens but it still happens in nonstandard models. However, that only seems to work when you know the structure of the situation logically. When you have to learn it, you have to actually explore sometimes to get it right.

To the extent that MUDT looks like a deep result about counterfactual reasoning, I take this as a point in favor of epsilon exploration telling us something about the deep structure of counterfactual reasoning.

Anyway, see here for some more recent thoughts of mine. (But I didn't discuss the question of epsilon exploration as much as I could have.)

If your theory leads you to an obviously stupid conclusion, you need a better theory.

Total utilitarianism is boringly wrong for this reason, yes.

What you need is non-stupid utilitarianism.

First, utility is not a scalar number, even for one person. Utility and disutility are not the same axis: if I hug a plushie, that is utility without any disutility and if I kick a bedpost, that is disutility without utility, and if I do both at the same time, neither of those ends up compensating for each other. They are not the same dimension with the sign reversed. This is before going into the details where, for example, preference utilitarianism is a model where each preference is its own axis, and so is each dispreference. Those axes are sometimes orthogonal and sometimes they trade off against each other, a little or a lot. The numbers are fuzzy and imprecise, and the weighting of the needs/preferences/goals/values also changes over time: for example, it is impossible to maximize for sleep because if you sleep all the time, you starve and die and if you maximize for food then you die of eating too much or never sleeping or whatever. We are not maximizers, we are satisficers, and trying to maximize any need/goal/value by trading it off against all the others leads to a very stupid death. We are more like feedback-based control systems that need to keep a lot of parameters in the good boundaries.

Second, interpersonal comparison are between hazardous and impossible. Going back to the example of preference utilitarianism, people have different levels of enjoyment of the same things (in addition to those degrees also changing over time intrapersonally).

Third, there are limits to the disutility that a person will endure before it rounds off to infinite disutility. Under sufficient torture, people will prefer to die rather than bearing it for any length of time longer; at this point, it can be called subjective infinite disutility (simplifying so as to not get bogged down in discussing discounting rates and limited lifespan).

Third and a halfth, it is impossible to get so much utility that it can be rounded off to positive infinity, short of maybe FiO or other form of hedonium/orgasmium/eudaimonium/whatever of the sort. It is not infinite, but it is "whatever is the limit for a sapient mind" (which is something like "all the thermostat variables satisfied incl...

But, like, how do you actually do that? I make three times what I did in grad school, but somehow it doesn't feel like my standard of living has changed much, and I still basically spend everything I make...

I guess the problem is that "consumptive patterns" can be sneaky, and sometimes you didn't notice they were there all along. The rent doubled because I moved to a city, even though my apartment's not much nicer; my cell phone is no longer on a family plan; my parents no longer buy me plane tickets home for Christmas; I take the train to work every day. Maybe the cat gets sick and suddenly there are vet bills. In other words, nothing that feels like much of a change in consumption, yet the expenses keep going up.

And then there are a bunch of little expenditures, each one of which feels reasonable: What's the harm in fresh vegetables, or a gym membership; won't you save money on health problems in the long run? Wouldn't it be dumb to worry about a $10 movie ticket or spend 20 minutes looking for free parking, when you make $30+/hr? I know people who make a lot of money but spend a lot of time and effort trying to avoid small expenses, and that doesn't seem like a good way to live either. Sometimes I think the "save half your income and retire early" crowd is actually just faking it somehow.