Tuesday, April 21, 2020

The scariest clock in the world

Our brain is an amazingly powerful computer. It is capable of performing countless complex computations in a fraction of a second. And it works best when left alone, while working in 'subconscious mode'.

Here is an example: with a trolley loaded with goods, you are heading towards the checkout registers. Of course there is a queue in front of each register, so for a moment you wonder which one you should join. But in no time at all, you know the answer. Solving a complex mathematical puzzle by scanning the contents of 60 trolleys down to a smallest item; taking into consideration the age of each shopper; and speed of each cashier; time required to scan each item in real time while retrieving millions of terabytes of shopping experience data stored over the years of shopping at Coles. All that in seconds, effortlessly.

However, try this one quickly: what is larger? A quarter of the square root of 16 or a third of the square root of 9? With all due respect, most would struggle to figure this out even with a calculator. Nothing personal, just pointing out the obvious: we suck when trying to work out answers to problems which cannot be solved subconsciously or those that we don't encounter on a daily basis.

Here is another problem with humans: we are not good at handling very large and very small numbers. Actually, anything related to what we see beyond a few meters away or that requires some imagination is hard to fathom, unless translated to a value under 10. A distance of 1230km is translated to a more familiar "1 and a bit hour flight". 80 microns is nothing but "the thickness of a hair". So what is one micron? Clearly, an eightieth of a hair's thickness- but since you haven't seen a hair sliced 80 times, the brain classifies micron into 'too difficult to handle' box and sends a signal to the mouth to create- keep quiet.

For that reason it is almost impossible to impress any watch enthusiast with micron tolerances.

But small numbers are not our problem right now. Try this one: 1 billion dollars. To be honest, brains capable of understanding the size of 1 billion are very few and far between.
Have you ever seen a billion dollars in cash? Don't hold your breath – you won't see it any time soon.
Let me help you to translate this monster into something you have seen, something tangible and very real: $1 billion can buy a modern, state of the art, brand new hospital.
So every time you hear "one billion" think of one super modern hospital with 1000 beds, 300 specialists, 500 nurses and all the supporting admin staff. (The Northern Beaches hospital in Sydney is only half a billion dollar facility, with a 500-bed capacity. Actually, I don't believe we have even one single hospital with a 1000-bed capacity)
Empowered with this mental image, let's crunch some billion dollar numbers.
Australians spend $242 billion on gambling every year. That is 242 hospitals. In the month of March, during self-isolation, the amount spent on online gambling is up by 32%.
Australian Government Stimulus package: $214 billion. That is 214 hospitals worth of money pouring into our economy, right now, as we speak. Money that comes from two sources: either redirected from funding other projects and largely, as a loan yet to be repaid in the future.
Of course, we know that it takes years of planning and budgeting just to build ONE hospital. All of a sudden, we have money to 'buy' 214. Talking about all of us, collectively, getting rich overnight.
But, the only way to repay that loan would be to collect more in taxes in years to come. My prediction, the best case scenario would be: GST increasing to 15%; Personal income tax top bracket to 59%. And this will be good news, because any other alternative would make the 'borrow to grow' musical chair bubble explode even faster.
Of course, if you are an American, then you have even a bigger stimulus number to crunch: FOUR trillion (four thousand hospitals). Good luck with that...
I am sure you've seen this before, but if you haven't here it is... the scariest clock on the planet:


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