Wednesday, March 08, 2006

Pundits who screw-up: No big deal...













Matt Barganier desconstructs Andrew Sullivan's mea sorta culpa on Iraq in Time magazine (Sullivan seen above in a thoughtful pose on Bill Maher's "Real Time"). There have been many of those in recent weeks (including by WFB and Fukuyama). In an commentary published last year, Oops! I helped start a War which was about one of the earlier apologizing-war-aplogists, I pointed out to the contrast between the way the losers who operate in the market (including financial analysts) are punished and the reality in which the losers in the political game (including foreign policy analysts) rarely get punished:
Imagine: for a few years you were investing the money you had saved for your daughter's college education in one of those moderately conservative plans that provided some increase in the value of the investment without exposing it to major risks. But then your financial planner – let's call him Ken P. – got in touch with you and came up with a really great idea.

He heard through the grapevine on Wall Street that there was a grand company in Texas – it was called Enron – that was for all practical purposes a cash cow. His recommendation was to take out the money that was supposed to get your daughter through Harvard and that was invested in that dead-end Fidelity fund and put it all in Enron stocks. And since you trusted that guy, you ended up following his advice – and let's just say that you are still trying to figure out how to pay for your daughter's junior year.

Your financial planner did call you to apologize. "I'm so, so sorry. Really! Really!" he said. "You have to understand that the conventional wisdom on the Street at the time was that Enron was very big."

Indeed, major investment banks had forecast at the time a major rise in the value of Enron, whose bosses were also close friends of a powerful political family. Again, Ken P. pleaded for your forgiveness and expressed his hope that you would continue to use his services.

Would you actually do that? I don't think so. But now instead of a financial adviser, imagine a foreign policy expert who tells you in 2002 that you should invade Iraq because Saddam Hussein had weapons of mass destruction (WMD) and links to Osama bin Laden and the perpetrators or 9/11, and that the Iraqi people would welcome you as their liberators. But it's 2005, and with no WMD, no Saddam links to Osama, not to mention the more than 1,500 American casualties and the prospects of a long quagmire in Mesopotamia, you would probably fire that expert.

Now let's imagine that there is such an expert and his name is Kenneth Pollack. A former U.S. intelligence officer, he published in September 2002 a book with an ominous-sounding title, The Threatening Storm: The Case for Invading Iraq.

Mr. Pollack, it should be emphasized, was a Democrat who worked on the Middle East under President Bill Clinton and was well-regarded among the members of the U.S. foreign policy establishment. In short, he wasn't a devout Bushie or a neocon ideologue. And when he assured the readers of his book and op-ed columns – and the many viewers of our talking-head television news shows – that Saddam had WMD and links to al-Qaeda, and he called on the United States to invade Iraq and topple Saddam Hussein, people around Washington listened.

If ideas do matter in determining policies, Mr. Pollack clearly made a difference when it came to the decision to go to war against Iraq. Bill Keller, the editor of the New York Times, admitted that he had been opposed to the invasion of Iraq and then he read The Threatening Storm and changed his view.

More importantly, some Democrat lawmakers on Capitol Hill who had been wavering on the issue probably decided to give President George W. Bush a green light to invade Iraq after listening to Mr. Clinton's respected aide. So it won't be an exaggeration to argue that if a list were compiled of the 1,000 or so individuals who are responsible for the mess America finds itself in Iraq these days, Mr. Pollack would be on it.

But don't worry. Mr. Pollack has not fallen on his sword; he is not even looking for work. After all, he did apologize for his pre-Iraq war role as a leading wise man. Indeed, during a post-Iraq war TV appearance, he actually said that he was "apologizing" for his mistakes and that he was "sorry."

He was "really, really sorry!" he told the television viewers in a tongue-in-cheek sort of way. And you know, he explained, the conventional wisdom among most "intelligence experts" at the time was that Saddam had all those things. And weren't there MI6 and Mossad reports in 2002 that made exactly the same point? So who can really blame him?

Apologies accepted, and so let's close The Threatening Storm chapter. He is now a senior fellow at the Brookings Institution who continues to write op-ed columns in the New York Times, make TV appearances, and testify on Capitol Hill.

Mr. Pollack has just published another bestseller, The Persian Puzzle: The Conflict Between Iran and America, in which he provides Americans with recommendations on how to deal with Iran. This time he doesn't call for invading that country.

Thank God for this and other small favors.

Well, all of this makes a lot of sense if you're familiar with the arguments made by F.A. Hayek and other classical liberal critics of the state and politics in general. The market and especially the price system allows consumers and producers to gain immediate access into info about the supply and demand conditions of a product, and if you own a business that manufactures the product and you fail to respond to the changes in the market prices you'll be punished very quickly and even go bankrupt (and if you are an investment analyst, you'll probably be fired if you advised your client to invest in that failed business). The political system doesn't have anything that resembles the price system which explains why the failed Political Man (including foreign policy analysts) can survive longer than the failed Economic Man. For more on all of this, read the recent issue of Critical Review, which is one of my favorite journals on political and economic theory.

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