The Baseline Scenario

There's a name for this product space! "Spreadsheet controls" describes the product space inhabited by various products that aim to help businesses manage the terrifying, complex Excel workbooks whose contents influence business decisions in subtle, interrelated ways.

Microsoft recognized that this was an important hole in the way enterprises used Excel, which is why they acquired a company in this space, Prodiance, in 2011. Office 2013 integrates some but not all of the company's products in its "enterprise risk management" / "spreadsheet controls" functionality; see some discussion at http://blogs.office.com/b/microsoft-excel/archive/2012/09/13/introducing-spreadsheet-controls-in-office-2013.aspx .

It was really interesting to read the prior blog post on this topic ( http://baselinescenario.com/2013/02/09/the-importance-of-excel/ ) because it sounded so familiar! That blog post is spiritually identical to about the first third of the Prodiance sales pitch.

The "controls" space has a surprising amount of depth. Just a few problems that these folks think about:

(1) Excel spreadsheets are not a very good computation engine: business logic can be subtly altered by a typo that includes one too few lines in a range or a copy-paste error that accidentally includes a constant instead of a calculated cell. It turns out to be possible to programmatically inspect a workbook for "risky" or "possibly wrong" calculations and warn on their presence.

(2) Chained dependencies can be…

Well, all your concerns may very well be provably correct, from a purely academic perspective.

I just think the question you keep missing is: Does it matter in practice?

Our entire world runs on imperfect systems. Can we really already tell whether bitcoin is worse?

Where is your mathematical proof that the current monetary system is secure against polynomial time attacks? Where is your rigorous security definition for the current monetary system?

Could it be we are witnessing attacks on the current system right now, resulting in enormous concentrations of wealth through interactions that we barely understand[1]?

Could it be we are witnessing the authorities abuse the current system to cut off organizations like Wikileaks[2]?

You seem to demand a system that is perfect in every sense on day 1 and replaces the US Dollar on day 2.

Yet couldn't it be that it is actually the academic imperfections, the pragmatic approach of bitcoin that make it a success?

Who knows whether airtight mathematical security is even the most important requirement? Perhaps the known attacks are "hard enough" already, or will be after a few more patches? Perhaps bitcoin will fail spectacularly in a few years due to scalability instead of security issues?

My point is: We simply don't know. We have no precedent, nothing even remotely close (please correct me if I'm missing it, I honestly can't think of one).

Thus I disagree the case is nearly as clear cut as you make it out to be.

[1]…

I work with an army of very smart people who need to build incredibly complex models to drive our business. Like most companies, we turn to Excel. It's the only widely used application with a low enough barrier to entry that "non-technical" people can build legitimately complex (if not always robust) models.

But the problems with Excel and general spreadsheet modeling limitations offer such a great opportunity for improvement that would impact just about every business out there. I wish I saw more people tackling this, or I had a great idea to do it myself. The problems I see are around barrier to entry, in that it must be usable in just a couple minutes, simple enough for non-programmers to learn, and equally or more efficient to get a basic model functioning. Otherwise I just don't see wide adoption despite possible maintenance, accuracy, and reliability benefits.

James Kwak has written some smart stuff about this (http://baselinescenario.com/2013/04/18/more-bad-excel/), and I'm interested in what Data Nitro (datanitro.com) is doing.

Excel is/was a popular tool at the highest level in various industries, including finance. A frequently shared anecdote:

https://baselinescenario.com/2013/02/09/the-importance-of-excel/

> JPMorgan’s Chief Investment Office needed a new value-at-risk (VaR) model for the synthetic credit portfolio (the one that blew up) and assigned a quantitative whiz (“a London-based quantitative expert, mathematician and model developer” who previously worked at a company that built analytical models) to create it. The new model “operated through a series of Excel spreadsheets, which had to be completed manually, by a process of copying and pasting data from one spreadsheet to another.” The internal Model Review Group identified this problem as well as a few others, but approved the model, while saying that it should be automated and another significant flaw should be fixed.* After the London Whale trade blew up, the Model Review Group discovered that the model had not been automated and found several other errors...

Wait a minute: you say that our expenses versus income is too high, but then also say that higher taxes won't solve anything? Unless you're arguing that higher taxes won't increase government income (which is a totally specious argument that people make all the time, but which isn't backed up in the least by any actual historical analyses), then higher taxes absolutely could solve the deficit problem. Federal tax revenues as a share of overall GDP are historically low right now, and merely letting the Bush tax cuts expire for good would solve almost all of the "deficit crisis." For example see http://economix.blogs.nytimes.com/2011/07/26/are-the-bush-tax-cuts-the-root-of-our-fiscal-problem/ or http://baselinescenario.com/2011/10/03/how-big-is-the-long-term-debt-problem/

So I guess it depends on what problem you want to solve, but if you're worried about the federal deficit, then higher taxes (even in the form of just eliminating the bush tax cuts) will absolutely help to solve that problem.

I highly disagree. To argue that articles like this have a macro effect on the economy (short term) is categorically false. If we want to focus on economic recovery as a function of consumer spending then we really can't zero in on a strong correlation between magazine articles and how the public feels about the economy without the data to back that up.

Furthermore, it is absolutely essential that everyone learns more about the current recession and are realistic about a recovery.

http://baselinescenario.com/2009/05/25/recession-and-recovery-how-long/

I would in fact argue that economic education for the public helps the economy, because if more people are educated on the many factors that contributed to the current recession (negative U.S. savings rate being one major one) then they now have the knowledge to change their actions. On a wide scale (larger percentage of people saving more) this would have a net positive effect on the economy.