MM: It's interesting with the financial crisis and the Iraq war. The people who "predicted the crisis," or said the war was a bad idea, were, by and large, not correct about what happened, or why it was a bad idea.
ST: Yes, that's true. Although, just to be clear, in almost all cases of major policy mistakes, there were people who predicted what would happen. That is, the information that could have allowed you to know what was going to happen was available, but policy makers ignored it or discounted it.McArdle's book tells us how to succeed through failure, and McArdle states that the people who made the correct assessment regarding the financial crises and the Iraq war just happened to be on the winning side of those issues. Their predictions about the outcome of events were wrong and their analysis of why the events would fail were wrong. This is not true and Dr. Teles was obligated to clarify the issue. Some might have been right for the wrong reasons but plenty of people were right for the right reasons.
Which makes it all the more curious that Megan McArdle was paid to write a book on success through failure. By all rights the people who were right should be the ones being paid to give advice. They should be teaching how to make correct decisions, instead of how to profit from failure while ignoring the consequences of those failures. Of course we need to learn to learn from our mistakes and improve our ability to reason but we do not need to indulge the callous, careless warbloggers and economically illiterate econobloggers while they attempt to cash in for a little while longer.
8 comments:
Surely McMegan is living proof that being wrong is the key to success?
It's going to be a short book if she can't explain step number two in her underpants gnome theory.
1. Fail
2. ????
3. Profit!
Which makes it all the more curious that Megan McArdle was paid to write a book on success through failure.
Jonah Goldberg would have written this book, but his common taters haven't done it for him yet.
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2. ??? = Part 2 of her Elizabeth Warren takedown
Ah, yes.
1.McArdle reiterates Warren is sloppy with data, basically ignoring the multitude of corrections. She will write another post describing that sloppiness and of how Warren's mistrust (of what? who?) manifests itself in paternalism. The rest is silence.
So this is Step 2:
1. Declare your argument is not destroyed and smouldering in a heap of broken glass and twisted metal.
2. Promise that you will respond to your critics at a later date, perhaps in the sweet bye-and-bye.
3. In the future link to debunked posts as proof of your argument.
That's pretty much it. For her book we'll see more analysis no doubt.
1. Admit failure.
2. Declare that the analysis of failure leads to success.
3. Declare success without any analysis of failure.
Not that she did not try.
1. Admit that her predictions were wrong and her reasoning was wrong.
2. State that one must find out why one was wrong.
3. Claim people who were wrong are now wiser.
Imagine a person using a home-made parachute made from old sheets and twine. S/he jumps off the 5 story building and dies in agony, but not before saying "Well at least I TRIED!"
Unfortunately, even being correct in the past is not a particularly good way to predict if someone will be correct in the future. This is how incompetent hedge fund managers and other investors get reputations for being amazing. You have enough managers out there and one of them is going to flip the coin heads 10 times in a row. That said, having someone who is wrong all the time is a real talent. Megan might be onto something with the success through failure thing. All you have to do is the exact opposite of what she recommends at all times. Guaranteed win!
The Costanza Theory-- do the opposite of what you would normally do. Yet her decisions actually do lead to success through failure, if you think of McArdle as the only person in the world which she evidently does.
I keep thinking of McArdle as Beck Sharpe. They say a liberal education is useless but knowing Mr. Collins, Mrs. Elton and Beck Sharpe has helped tremendously when attempting to understand McArdle. Sharpe succeeded through failure for a long time. Everyone else paid the price for her success.
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