A.K.A. Let's Not Bicker And Argue Over Who Killed Who
Well, we did it - made it through fifty pages of hell and into the final stretch, which means that very soon I can take this thing back to the library, exchange it for something I actually want and pretend I never had a book by Megan McArdle in my domicile. And this is a chapter that I know I've been looking forward to, because it concerns one of McArdle's favorite things - arguing that the rich aren't responsible for the mistakes they make.
We've been building to this for a while. McArdle introduced her "No villains in the market" perspective back in Chapter 2, when she absolved Ken Lay of his misdeeds because he couldn't have done any of those things if not for the market and those awful consumers who insist on using electricity during the summer. She supplemented this in Chapter 4, arguing that institutions are so complex that you really can't learn anything from them, so it's not worth trying. Chapter 5 was a deviation - she was suddenly very clear on what caused GM's financial woes, and it was those greedy grasping workers who selfishly refused to shred their contracts and go become nurses. But all of that was just a warm-up for Chapter 8, where that she will argue that the Great Recession - the biggest economic crisis in a century and far and away the biggest thing that happened in McArdle's tenure - is just something that happened and we shouldn't waste any time digging into it to figure out who did what.
This chapter deviates from the stated thesis more than any other. Up until now, McArdle has argued that failure is a learning experience whereas success is "systemic" - there are too many factors at play, so there's nothing at all to be learned from it. She's been arguing that since at least 2008, as you'll recall from her Iraq mea culpa in which she accused her critics of just getting lucky. But now she's going to turn that on its head and argue that, in fact, it's failure that's systemic, with so many factors that there's no way to figure out what went wrong and therefore nothing to learn. A lot of people have pointed out that The Upside of Down is heavy on recycled material, and that probably explains the incoherence. McArdle threw this in to make the narrative seem weightier without considering that it doesn't click with anything else she's said.
Chapter 8 has a great opener, too. So great that you'll have to forgive me for transcribing more than normal:
A few months ago, I walked into my husband's home office and found him yelling at his video game.Hah! Home office. I doubt this was a one-time occurrence.
"That racist goon is talking trash to me about elves, and I am an elf!"
I hardly need point out that my husband is not an elf. He's a handsome, clever, and amusing but otherwise nonmagical human being. He's also six two.That's what this thing has been missing - a reference to McArdle being of above average height. She was really obsessed with that back in the Atlantic years.
...I understood exactly what he was getting at, having just spent many hours myself wiping out the Persian Empire in a game called Civilization IV...
...The problem is that I can't teach the Persian Empire anything. I'm playing against the computer, and the computer program is not capable of learning. It doesn't tabulate data and change strategy accordingly...It operates according to simple algorithms, including ones that tell it to attack me if it thinks it can get away with it.McArdle has just stumbled into my territory, and I can tell you that she is so very, very, very wrong about how the Civilization series functions. Leave aside, for a moment, the concept of a computer running algorithms without using data (seriously, this was edited?). The fact is that enthusiasts have pulled apart the code of Civilization IV and figured out exactly whether a leader will declare war in any given situation. If you're all about the math and computer logic (and I certainly am), you can see all of the behind-the-scenes tabulations here. It accounts for a lot of factors including comparative strength, wealth, relationships, and the personality of the leader in question. And while you can't really teach it a lesson, thoroughly beating down an aggressive leader can weaken him/her enough to discourage future attacks.
Now, did that serve any purpose? No. I had this rather long exegesis on how strategy game AI design proves that McArdle doesn't know what she's talking about, but then she went another direction and my grand discourse became useless. To relieve my frustration, I plan on working as many video game analogies into this post as I possibly can. Consider yourself warned.
The next subhead introduces a new faction - Truthers. Seriously:
A few years back, I found myself embroiled in a long e-mail exchange with a 9/11 Truther. When it comes to arguing, I am a professional: a typical workday involves endeavoring to convince Republicans that tax cuts do not pay for themselves through increased economic growth, to persuade Democrats that government spending doesn't pay for itself either, and trying to induce people of all political stripes to save 20 percent of their income every year for retirement or an emergency rather than going on a much-needed vacation.It probably wasn't necessary to include that whole chunk, but I thought you might like to see what it's like when a 70-word self-congratulatory run-on sentence appears in a professionally edited work. For the most part I'll be speedrunning this section because, well...it's 2016, what is there to say about Truthers? Was it really worth rehashing a fading conspiracy theory for seven pages? That's a quarter of this whole chapter, you know.
Actually, this seems to be a uncharacteristically wily move on McArdle's part. To see what's she's doing, I'd like to put the last sentence of this subsection together with the first sentence of the following subsection on the financial crisis:
But we all have a little more Truther in us that we may recognize or like to admit. Consider the two main narrative of the financial crisis.Did you catch that? It's a relatively subtle form of well poisoning, albeit conducted in a clumsy manner. McArdle spends seven pages talking about how Truthers keep looking for invisible bad guys, then immediately switches over to talking about all those silly people who think that the 2008 crisis was caused by someone's actions. Apparently, there's no fundamental difference between people who doubt McArdle's "the collapse of the world economy was just something that happened" theory and people who think Bush did 9/11. And just in case you missed this, she bookends it with a page on the anti-vaccination movement.
Of course, it's also a rather comical example given McArdle's argument for one very good reason - 9/11 was not just something that happened. If you're making a case that there are no villains, maybe it's not so wise to use an act of terrorism as your point of comparison. Analogy must have been one of McArdle's dump stats.
So who are these fools?
The left-wing version is what I call Con Men and Corporate Shills. In this story, crazy free market ideologues persuaded Congress and the president to deregulate the financial sector, undoing all the wise regulations that had prevented financial crises since the New Deal. This, in turn, allowed the Con Men - rich banksters - to start systematically stealing from the poor and gullible by selling outrageously oversize mortgages to financial naifs who couldn't possibly afford the payments, and turning those mortgages into ridiculously complex securities that they scammed still other financial naifs into buying.So with the regulation torn away by the big boss, the bosses at the banks and the minibosses handling the mortgages were able to run rampant. Utter foolishness, obviously. Let's take a look at one of those moonbats who thinks that short-sighted greed and an excessively complex unregulated market caused any problems:
Mortgage companies had pushed exotic mortgages on to millions of people, many of whom did not know what they were getting into. But the mortgage companies could not have done their mischief without being aided and abetted by the banks and rating agencies. The banks bought the mortgages and repackaged them, selling them on to unwary investors...
...The Federal Reserve, led first by Chairman Alan Greenspan and later by Ben Bernanke, and the other regulators stood back and let it all happen.seems like he might be more of an expert than McArdle. Freefall is a very dry book, and McArdle is very busy (what, you expect the paid "econoblogger" to read every bestseller by a Nobel-winning economist?), so maybe she just missed it.
But hey, it is just one man's opinion, and Stiglitz is one of those left-wing types with his clear ideological bent. Maybe we can get more answers from the bipartisan U.S. Financial Crisis Inquiry Commission, concluded the year before McArdle started working on the book? The conclusion are freely available. Let's say what those people have to say about this thing that just happened:
We conclude this financial crisis was avoidable. The crisis was the result of human action and inaction, not of Mother Nature or computer models gone haywire. The captains of finance and the public stewards of our financial system ignored warnings and failed to question, understand, and manage evolving risks within a system essential to the well-being of the American public.They go on to blame...the Fed, the banks and the mortgage companies. Wow, there were a lot of Truthers on the FCIC! I appreciate a challenge, but sometimes it's nice to face an opponent with a big glowing weak point.
The conclusions reached by the FCIC were pretty universal. There were some dissenters - you can see some of the contesting opinions here - and McArdle cites a few of those in support of her "just a thing that happened" narrative. But curiously, she never discusses the official conclusion, despite the fact that it was released a year before she started writing. In fact, she never mentions the FCIC at all. Nor does she mention Stiglitz or any of the other "blamestorming" economists, let alone cite or quote them.
That's pretty galling already, making a political argument without ever mentioning what the other side even had to say. All of the cites in this chapter (and there aren't many) are to the few people with whom McArdle agreed. For everyone else, McArdle doesn't even give names, content to blindly describe alternate narratives in broad, often unfair strokes with cutesy little handles. But it gets worse. Catch this from page 211, in a section about (for some reason) prosecutorial misconduct:
How did they become so convinced of the guilt of someone who is not guilty? Well, how did Mary Mapes convince herself that she'd found the scoop of the century?Fifty pages and ten years after the fact, McArdle is still doing a victory jig over her superiority to the feeble minds at CBS. But what was the lesson we were meant to take away from Chapter 6? Listen to your critics? Avoid confirmation bias? Wait, I've got the key line right here: "When someone tells you you're off track, don't look for reasons why they may be wrong; listen for reasons why they might be right." What McArdle did in Chapter 8 was a pitch perfect example of confirmation bias, something she just told us not to do.
There's more to this chapter I could dig into, mostly concerning McArdle's insistence that breaking the economy or putting the wrong person in jail due to recklessness and bias isn't really villainy (yes, completely contradicting Chapter 6), but there's no need to run into every bonus room. The real point is that this chapter completely fails to confirm the stated thesis. And the unstated thesis? The fact that I didn't see the crisis coming and have nothing to say about it doesn't mean that my success is unearned. It was a just a thing that happened. Don't blame me.