I was wrong

If you ask people the three hardest words in the English language to say all in a row, “I love you,” would probably win the survey. But I think the three are “I was wrong.”

For example, I was wrong about the subprime crisis. When people started to mention that subprime mortgages might be problematic, I said that housing was a small part of investment and subprime was a small part of housing. So the consequences of an increase in the default rate on subprime loans wouldn’t be a big deal. I was wrong. I was right about the first few facts. I was missing a fact–how Wall Street had invested in subprime mortgages. I didn’t realize how leveraged they were and would have been surprised to discover that firms had put their existence at risk.

I was wrong. There I’ve said it.

But I was wrong out of a particular kind of ignorance. It’s not that hard to say. Plus I was in very good company. People smarter than me had made the same argument and I found it convincing. I guess they didn’t know the facts about leverage either.

I’ve been thinking about “I was wrong” since reading this article by Andrew Sullivan. It’s an open letter to President Bush. Here is the essence of the article:

The point of this letter, Mr. President, is to beg you to finally take responsibility for this stain on American honor and this burden on a war we must win. It is to plead with you to own what happened under your command, and to reject categorically the phony legalisms, criminal destruction of crucial evidence, and retrospective rationalizations used to pretend that none of this happened. It happened. You once said, “I’m worried about a culture that says … ‘If you’ve got a problem blame somebody else.’” I am asking you to stop blaming others for the consequences of decisions you made.

I have nothing to say about the substance of the accusations. What I’m interested in is the probability that Bush would ever agree with Sullivan and say “I was wrong.” I think the odds are very close to zero. In fact, I’ve been thinking about the general phenomena–can you think of an example where a leader–a President, a Prime Minister,  a CEO, anyone with power, has ever admitted error about a significant policy decision? I’m not talking about President Clinton saying he was wrong to appoint a special prosecutor to investigate Whitewater. I’m talking about a major policy initiative. I think it’s quite rare and I’ve been thinking about why.

I’m also thinking about this because it’s a time in the Jewish calendar when traditional Jews search their souls for mistakes they’ve made and behavior they regret. It’s the essence of Yom Kippur which was a week ago. I think this is a very healthy exercise. On Yom Kippur, you say to God–I was wrong. And you’re supposed to say it to your friends and family as well in advance of the holiday if you’ve wronged them. It’s not a very easy exercise. Such admissions of guilt or wrong-doing do not  come easily to great leaders. It may not even come easily to anyone great or small. It’s hard to do.

One reason it is hard is that there is a natural tendency to think that you were  right ex ante, given the available information. See my very modest mea culpa on the subprime crisis. But I think the more interesting case is the inability to see it as a mistake ex post. The kind of people who make it to the top are not very introspective about their shortcomings. I think about someone like Churchill. Did he ever see himself in the wrong about anything? Is it possible that Bush has any second thoughts about interrogation procedures he OK’d? I doubt it. He might admit it was a hard decision. But I suspect he disagrees with Sullivan on the substance of his claim. He might be right. But I find it interesting that almost all leaders think they were right ex post. At least publicly.

There are two kinds of pain in admitting you were wrong. One is obvious, you look less effective/smart/wise than you’d like people to think you are. But the second is I think, the real reason. If you admit you were wrong, there is accountability. It’s one thing for President Obama to admit that the stimulus plan was a mistake. That’s bad. But if it was a mistake, he has to answer to the taxpayers whose money he wasted. That’s unbearable to face. And no real restitution is possible. That’s true of torture, mis-spent government funds, wars that don’t work out like you intended, and so on. Why leave yourself open to the hatred of thousands of millions of people. A lot of people already hate you if you’re the leader. So why give them ammunition and concede that they have a case.

I’m not saying this is necessarily a strategic response on the part of leaders (or their advisors). It’s just too painful. The mind and the conscience easily find rationalizations and justifications. Ex ante and ex post.

Finally, this inability on the part of leaders and politicians to admit guilt for policy errors is very expensive. It leads to doubling down–escalations of wars that are failures and increased expenditures on policies that should be abandoned or rescinded.

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