It sounds like a dubious aspiration, but one of the more pressing priorities for America this decade is to preserve our cherished freedom to fail in this country. This freedom to fail may not have made it into President Franklin D. Roosevelt's famous declaration of the four freedoms that define America — it would have been bad karma on the eve of World War II — but it has long been one of the pillars of this country's exceptionalism. Call it the fifth freedom.
In the rambling and often irrelevant paragraphs that follow, McArdle explains that our systems are set up to handle failures because we study our failures and learn from the past. Unfortunately, McArdle adds, we are presently wasting our time "searching for bad guys instead."
Watch a hearing held before the House Financial Services committee, and you don't see legislators absorbing sound policy advice; you see them mouthing talking points and beating up on bankers. There isn't really much evidence that the "unsafe" financial products vilified by some proponents of financial reform played a large role in the meltdown. While exotic loans certainly helped make the bubble larger, there's no reason to believe that we could have avoided it entirely. But the architects of the proposed Consumer Financial Protection Agency have made it very clear that they think they can tamp down bubbles by nudging people toward "plain vanilla" products. Many financial innovations eventually turn out to be bad ideas. But as with Edison's lightbulb filaments, the failures point the way to our successes.
As we can see, McArdle's assessment of the failure of the financial system is not based on the facts, on what actually happened. McArdle ignores the bad faith and illegal activities committed by bankers and claims they are being victimized and they did nothing wrong. She cannot defend their actions so she makes emotional arguments instead--bankers aren't really bad, and people are being mean to them. It wasn't that too many bad mortgages were written because they could be bundled, leveraged, given fake ratings, and sold--it's just that, eh, some financial innovations work, some don't, and the failures point the way to success. And any consequences of this free-for-all marketplace won't be too bad because we're exceptional that way.
And so rather than launch a quixotic war on failure, we should be using what we've learned to build a system that fails better: increasing the reserves financial institutions hold against a crisis, improving our tools for modeling system-wide risks, creating better mechanisms for winding down the operations of failed institutions without triggering a market panic, and making better provisions for the people who are hardest hit.
In other words, the elite should continue to do what they have been doing, the same thing that led to this financial wreck that McArdle so hopefully declares all but over. The same people who created this mess should take charge of the mess, tweaking here, tamping there, and the models based on permanently rising house prices will suddenly work correctly, and miracle cures for banks drowning in bad loans will arise from the ashes. Do the same, only better. Somehow.
Unfortunately our elite can't and won't think, and will not find miracles cures to clean up the messes they create out of greed and incompetence. Let us see how McArdle assessed her greatest failure, her support of Bush and his illegal preemptive invasion of Iraq.
Now, of course, I supported the war, so I can be expected to say something like what I am about to say. My only excuse is that I have been thinking hard about this, trying to pick out what went wrong, and I think that I am willing to admit where I was wrong. I was wrong to impute too much confidence to my ability to interpret Saddam Hussein's actions; I was wrong to not foresee how humiliating Iraqis would find being liberated by the westerners who have been tramping around their country, breaking things for their own reasons and with little regard for the Iraqi people, for several hundred years.
Yes, McArdle, who has never studied the Middle East in any fashion whatsoever, was certain that she understood the leader of Iraq and the psyche of its people. The type of elite arrogance that assumes it can make correct decisions based on nothing but self-regard is as enormous as it is self-destructive.
I was wrong to impute excessive competence to the government--and not just the Bush administration, but to any government occupation.
This is dishonest. Anyone who believes in American Exceptionalism believes we could win a war with a tiny country. We have the largest military budget in the world. McArdle is affecting a libertarian cynicism that will hopefully make her seem wise and neutral instead of deeply and consistently wrong.
This has not convinced me of the brilliance of the doves, because precisely none of the ones that I argued with predicted that things would go wrong in the way they did.
Here we are graced with more of the elite consensus; they care for nothing but their own opinions and those of their closest associates. McArdle does not identify the doves, so her remarks cannot be verified. She does not state what they said would go wrong, so we cannot check her statements against facts.
If you get the right result, with the wrong mechanism, do you get credit for being right, or being lucky? In some way, they got it just as wrong as I did: nothing that they predicted came to pass. It's just that independently, things they didn't predict made the invasion not work.
One thing came to pass; the war was a disaster, causing unnecessary death and destruction. Since that is the main thing, it should have been noted. It is also difficult to believe that McArdle never heard of Gen. Shinseki or any accurate criticism at all of the invasion. The only way McArdle could have missed hearing correct predictions would be if she never read or listened to anyone with a dissenting opinion.
If I say we shouldn't go to dinner downtown because we're going to be robbed, and we don't get robbed but we do get food poisoning, was I "right"? Only in some trivial sense. Food poisoning and robbery are completely unrelated, so my belief that we would regret going to dinner was validated only by random chance. Yet, the incident will probably increase my confidence in my prediction abilities, even though my prediction was 100% wrong.
Our elite are children, who embarrass us with their simplistic thinking and refusal to accept responsibility for their actions.
I'm trying to assess my decisionmaking process without developing a massive case of hindsight bias.
Many of the doves seem to be reconstructing their memory of why they objected to the war, crediting themselves with having predicted that the invasion would fail in this way. Many hawks are also reconstructing their memories to make themselves less hawkish. Fortunately, or unfortunately for me, I wrote my predictions down, so I know that I was an unabashed hawk, 100% convinced that Saddam had WMD.
The lesson that I can unequivocally take out of this is: do not be so confident in your ability to read other people and situations. Saddam was behaving exactly as I would have behaved if I had WMD, so I concluded that he had them. I will never again be so confident in the future.
At the same time, though, in a similar situation this shouldn't necessarily make me listen to the hawks next time. North Korea was behaving exactly like a country that had WMD, and it turned out that this was because they had them. What the doves would like to see the hawk's do--"I was wrong, wrong, wrong, wrong, wrong about everything, I am a stupid idiot, you are a brilliant figure with god-like omniscience"--is no better a guide to future decisionmaking than ignoring the fact that you were seriously wrong about the Iraq invasion. They are both ways of being completely stupid, not that this has stopped anyone.
McArdle's elite assessment of her failure to understand the repercussions of illegally invading another country is to point a finger at everyone else and say, "So what, he was wrong too!" Again she argues from emotion, not from fact, which is necessary because her knowledge of the Korean nuclear program is probably just as extensive as her knowledge of Saddam's WMD program. Her own bad decision making is glossed over by declaring that the anti-war crowd was just as bad.
When I look back at the decision I made, and I try to imagine making it without what I know now, which is that Saddam didn't have WMD, could I change it? I'm not sure. I don't see any way that I could have known, without actually checking, that he didn't have at least an advanced programme.
Amazing. Just incredible. McArdle couldn't physically check to see if Saddam was hiding a nuclear bomb under his pillow, so what the hell, invade anyway. She makes no serious attempt to reason logically or assess her past decisions impartially.
And even with the chaos now, had we found an advanced nuclear programme, most of the doves would be finding it much harder to argue that the invasion was a disastrous mistake. Perhaps even if he had had them we should have left him alone, but that's a difficult argument. And given the number of Democrats, including President Clinton, who clearly believed that we would find an advanced weapons programme, I have to conclude that without benefit of hindsight, the information painted at least a 50% chance that he had them.
You spins your wheel and you takes your chances. Actually, others take your chances and die, are dispossessed, or are plunged into illness, poverty, pain and chaos.
As I see it, doves have, in effect, benefited from winning a random game. Not that the result was random--obviously, there was only one true state of the world. But at the time of making the decision, the game was random to the observer, with no way to know the true state until you open the box and poke the cat. Having won a random game, they are now crediting themselves with brilliant foresight. And yet, if the hawks had won the game, they would be preening themselves on their analytical ability, and demanding that the doves prostrate themselves in an extensive grovel.
It's all about the elites, their vanity, their pride, their image of themselves. Making the right decisions is utterly secondary to maintain one's elite status and image.
That doesn't mean that my decisionmaking wasn't faulty. It was, in all sorts of ways, and I am trying to learn from them with proper humility. But I think the doves are crediting themselves with way too much analytical brilliance, which is fine to a point, but not so very fine that I am willing to turn over my decisionmaking to their allegedly more capable hands. World War II, after all, came in part out of learning lessons from World War I that weren't actually there. And the sight of doves saying, in effect, "I don't have to listen to you any more" does not make me sanguine that they are doing much better.
McArdle wrote this pathetic self-justification in 2007 and now she is back, older but no wiser, yet being paid a considerable amount of money by Time magazine to explain to us how the big thinkers and big idea men and women of our time will assess the failures that have been inflicted upon us, and tell us how to go forth and succeed, or at least to fail upwards as they always seem to do.