Financial Crisis Denialists

In order to be a good investor, you need a firm grasp of reality. Identifying when the crowd deviates from that underlying truth can be a lucrative endeavor; the tricky part is the timing — recognizing the moment when the crowd realizes its wrong and is about to reverse itself.

In markets, there is a severe penalty for being consistently and stubbornly wrong: You lose your capital. If you fail to reverse yourself, you eventually get steamrolled over. In other realms, such as politics and economics, there is no such penalty. Being horrifically, tragically wrong leads to jobs at Think Tanks and book deals and speaking gigs preaching to audiences who are similarly wrong.

Which leads me to a new phrase: Financial Crisis Denialists.

Some people, for horrific reasons of prejudice, deny the holocaust. Other people have been well paid by the Oil industry to deny global warming.

There is yet another group of people who are engaged in a similar deception — they are the Financial Crisis Denialists. Whether it is willful agnotology or their own cognitive dissonance, they continue to ignore facts, are married to disproven theories, and refuse to accept the reality of a complex world.

Yesterday¬† morning, we posted the Financial Crisis: Final Essay Exam. I have yet to score the various essays and give out final grades for the semester. But I can tell you that people like AEI’s Peter Wallison and Edward Pinto would fail. They are Financial Crisis Denialists and need to be treated as such . . .

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