Update on Economic Stupidity
May 23, 2009
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Posted by Michael S. Langston
I wrote a week or so ago about some humans seemingly unending ability to blame others for their mistakes as well as wanting others to help pay for voluntary choices these people made in their lives (here).
Among the proof I used, was an economist writer in the New York Times magazine who blamed easy credit on all his woes. Making 120K a year, he and his second wife racked up more than 50K in debts and a 400K dollar home. Both things anyone with a third grade math ability should be able to understand.
Well it turns out, that not only was this mensa candidate attempting to blame other people for his mistakes, we find out he lied.
Megan McArdle writing in The Atlantic, did a great investigative piece on Edumund Andrew’s book, and the excerpt which appeared in NYT Magazine (here). It appears that bankruptcy is his MO, where he and his family rack up excessive debts, lower their income by reducing consultancy work, then file for bankruptcy as soon as they can a second time.
…But en route to that moral, it turns out the story has been tidied up a little. Patty Barreiro, Andrews’ wife, has declared bankruptcy twice. The second time was while they were married, a detail that didn’t make it into either the book or the excerpt that ran in last Sunday’s New York Times Magazine.
Andrews’ desire to shield his wife is understandable–hell, laudable. No decent person wants to parade their spouse’s financial trouble in front of the world. But this is material information that changes the tenor of his story. Serial bankruptcy is not a creation of the current credit crisis, and it doesn’t just happen to anyone, particularly anyone with a six figure salary….
He obviously left certain facts out that would make him appear less knowing than he actually was in order to blame the evil banks, easy credit, and anyone else but himself.
While people lying to themselves is nothing new and in fact a known human condition where your belief in yourself makes you feel uncomfortable with the reality of yourself. This is known as cognitive dissonance and most humans seemingly lie to themselves.
However, most humans don’t write books that are this poorly vetted by both the published and the NYT Magazine. They probably failed under a condition known as confirmation bias, where what was written was so close to what they already believed, they took it as the truth, but we should expect much more out of those people that seek to educate the public through writing and publishing.
At some point, hopefully, the media will see their complicity in this and other ongoing issues.
Historians will likely write, and correctly so, about the politicans who pushed policies that led us into this mess. Hopefully someone will also write that in a representative government we get the government we deserve.
Categories: Business, Critical Thinking, Economics
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Tags: Cognitive Dissonance, Confirmation Bias, Critical Thinking, Economics
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