http://dotearth.blogs.nytimes.com/2012/05/25/daniel-kahneman-on-the-trap-of-thinking-that-we-know/?ref=science

Great Lecture by Daniel Kahneman from Princeton.  After a hard day of finalizing EzCar followed by Szechuan Chicken dinner at Bamboo Garden and relaxing to Iron Man 2 on Netflix I made my pupils dilate by learning about system 1 and system 2.   All expertise is system 1.  We are all experts in our world.  If it is important to get it right we use system 2.  Scientist use 2.  If knowledge goes against our belief we don't accept it.  I had the experience of watching Nick Hanauer's TED talkhttp://www.huffingtonpost.com/2012/05/17/nick-hanauer-ted-talk_n_1524435.html challenge a friends belief system.  Forbes Magazine argues that a lower tax rate on dividends and capital gains is fair because it is double taxation.  However legally there is no double taxation, because legally, a company is a person and so when dividends are paid money is being transferred between different individuals which is fair game for taxation.  Kahneman notes  we do regressive prediction and come to false conclusions. System one tells stories and is terrible with statistics.  Anything repeated many times appears true to system 1.  System 1 is immune to amount of evidence.  It pays attention to the source and the story.  It neglects message about distant threats.  Most of what we do is dictated by system 1 which we have very little control.  He also said if you put a pencil in your mouth cartoons are funnier.     I also learned that Robert Shiller has a new OYC Markets course.