There’s a genre of expository writing where the author explains in detail how he got something completely wrong. The name for this form is “nonexistent” because no one ever does it. Similarly, you will never hear a lecture from an economist explaining how he got some prediction totally wrong. For instance, Obama’s economic team swore that the stimulus bill would set off an economic boom through the magic The Multiplier. They were wrong and it was a flop, but no one talks about it because it is simply not done.
This is something you see in all fields, not just public policy. You never read about scientists discussing how they screwed up an experiment or fell for some nutty idea that sounded good at the moment. What we expect and what we get is equivocation, denial and when that does not work, an attempt to flush the incident down the memory hole. It usually works too. Paul Ehrlich was hilariously wrong about human populations, but he has paid no price.
The weird thing about this, I think, is we know that being wrong is usually more important than being right. When you are a student learning mathematics, you are required to show your work in detail. The reason is the teacher wants to see your mistakes. In sports, coaches focus on the mistakes even after a big win. The reason is we learn more from our errors than through our successes. It’s an axiom of life that old people teach to young people as they help them get over some difficulty.
I think one reason why public people never admit being wrong is they know that a lot of people really want them to be right. The people telling the public that economic science said the stimulus bill was a sure fire cure for the economy knew that a lot of people wanted that to be true. They voted for Obama believing he was Jesus. Those economists selling the stimulus probably believed it too. They really really wanted to be on the winning side of history. When that did not happen, they could not face it so they did not face it. The dogs barked and the caravan moved on.
Our side of the game is not immune to this either. Read Zero Hedge and you come away thinking the world is about to explode any minute. Every day they have a post title something like “Five Charts Predicting Armageddon.” That’s been a feature every day since it started in 2009 and the world has not exploded. More important, being wrong for six years has not discouraged them. In fact, they are more certain than ever, operating under the theory that they are due, I guess.
It’s not just the fringe weirdos on our side. Reagan was convinced that taking tax hikes off the table would eventually force the welfare state into retreat. His reasoning at the time sounded great. Make tax hikes the third rail of politics and it leaves borrowing as the only way to finance the government. Eventually, the bond markets would force a roll back as the deficits would grow so large that eventually no one would lend. Reagan came into office when debt was at $900 billion. He left with debt at $2.6 trillion. Obama will leave office with $20 trillion in debt.
I’ve been thinking about that a lot lately. In the 1980’s people knew that no country could survive with public debt equal to or greater than GDP. Now, that mountain of debt may one day topple over and take us all down, but it is not happening tomorrow. As it stands, the great day of reckoning over public debt is 25 years late and nowhere to found. That’s important to keep in mind when thinking about the current issues of the day. The odds are, we are all wrong about what’s coming next.
The people in charge, the central planners running the economy through the central banks, are often mocked by people on our side. After all, every effort at central planning has failed miserably so why should this time be different. The thing is, it has been different and it remains different. Say what you will, but the massive debt and real estate bubble that burst seven years did not plunge the world into depression. Maybe it was dumb luck or maybe the central planners are better than we think. I’m not saying they are perfect or that they really know what they are doing, but I don’t see any soup lines either.
It’s possible that the looming custodial state, where the Cloud People rule over the Ground People like game wardens, is going to be wonderful. The Ground People will embrace being cared for like children and accept being pushed around by the authorities when necessary. The sense of looming catastrophe that animates much of the alternative right will turn out to be completely misplaced. Instead, it will be viewed as a great leap forward for humanity.
Or, I could be completely wrong.