Set forth below are the words of a comment that I recently put to the Goon Central board:
do you really think any reputable university would pay any heed to anything anonymous individuals we’re saying about one of their employees?
Wade didn’t say that he thought that the officials at his University would necessarily believe everything that you Goons said. He said that he was concerned that his career would be done harm all the same because they just wouldn’t like the controversy and they wouldn’t like having to deal with the crazy situation. Since it was his work creating the problem, he would be punished.
Yes, I find that believable. I once compared Greaney’s behavior threatening a woman at Motley Fool to the behavior of a rapist. The others at the board wanted to help their friend but they didn’t want to report Greaney. Why? It was for the same reason that many women don’t want to report rapes. There are intense social pressures not to do so. Rape is such a horrible crime that all in society affected by it are ashamed about what happened. So we look to blame the victim — she must have done something to bring this on. Wade was afraid that he would be blamed for having brought on the smear campaigns against him. There are Buy-and-Holders (and perhaps even some Valuation-Informed Indexers) who would have said: “Wade must have done something.” I don’t think Wade is entirely wrong about that.
It was not solely the threats made by the Goons that caused Wade to flip. Six other factors are: (1) the lack of a positive reaction to his research by the majority of posters at Bogleheads; (2) the charges by Mel Linduaer that he had engaged in unethical research practices and the failure of other community members to stand up to Mel; (3) the feelings of envy that Wade knew he would inspire in his peers if he were put up for a Nobel prize at his age; (4) the failure of Bogle to speak up about Mel’s attacks and about the threats made by the Greaney Goons; (5) Wade’s experiences seeing what had happened to other Valuation-Informed Indexers, including myself, and the intense, burning hate that had been directed at them by Buy-and-Holders; and (6) Wade’s lack of understanding of many aspects of the Valuation-Informed Indexing model.
It was the combined effect of all these factors that caused the flip. The threats were the trigger and the threats tell the most compelling story. It is amazing to hear that such threats were made in public and that Wade did not call the police when they were made. It is a compelling part of the story and the threat element of the story suggests the other elements because Wade’s failure to call the police informs the listener that something exceedingly odd is going on.
You ask whether what the Goons did could have mattered. He flipped, didn’t he? And Shiller to this day holds back on telling us all he knows about stock investing, doesn’t he? And the bans at the 15 boards and blogs remain in place to this day, don’t they? And Mel Lindauer and John Greaney retain posting rights to this day, don’t they? And the economic crisis continues to this day, doesn’t it? And there are still people to this day who recommend Buy-and-Hold strategies, are there not? And the Old School safe withdrawal rate studies remain uncorrected, do they not? And Wade now buries the valuation question in the research he publishes so that it will not attract too much attention or controversy, does he not?
Yes, what the Goons do matters.
Not because of the inherent power of the Goons. The Goons have little inherent power. If Bogle spoke up about Lindauer when I sent my first e-mail to him, there obviously would never have been any threats made against Wade. But Bogle didn’t speak up, did he? That’s the story here.
When Bogle speaks up, it is over. For so long as Bogle fails to speak up, his silence is interpreted by millions of people as an implicit endorsement of the Goon behavior. People trust Bogle and the other experts in this field. They need to see Bogle and the other experts take action to feel confident that what their common sense tells them is so really is so. They need to see Bogle take action against the Goons to understand and accept that the rules of social intercourse that apply in every other area of human endeavor apply in the investing realm as well.
Bogle doesn’t make death threats himself. But Bogle associates with people who make death threats and fails to speak up about it. That’s the problem. That’s what needs to change. That’s what gives the Goons the power they possess today. When Bogle speaks up, all the rest of us will feel comfortable speaking up. When Bogle speaks up, the fever will break and we will all make it together to the other side of The Big Black Mountain and a thing that has brought us a lot of bad over the course of 10 years will begin very quickly bringing us a lot of good and will continue doing so for a long, long time.
Bogle needs to call out Mel Linduaer and John Greaney in the way that I have called out Mel Linduaer and John Greaney. It doesn’t matter much what Bogle says about Valuation-Informed Indexing. He needs to behave re the Lindauer/Greaney matter in the manner in which Arnott said he has always behaved in the presence of Arnott. He can disagree on substance. He must act like a gentleman on process questions. He must come out strongly in opposition to death threats and defamation and board bannings and threats to get academic researchers fired from their jobs. When he does that, the substance questions will take care of themselves.
We can handle the substance questions so long as normal process rules apply. We cannot handle Jack Bogle attending functions with people who have put up posts in “defense” of Mel Linduaer and John Greaney and saying nothing about their behavior. That failure to speak up sends a signal that imprisons us all. It is so far outside of our social norms that we cannot process it. People fear what a John Bogle, with all his connections and influence and money, can do to them if they “cross” him. People need to know in no uncertain terms that Bogle is on the side of those who want the sorts of individuals who have put up posts in “defense” of Lindauer and Greaney serving prison terms rather than posting on our boards. Only Jack himself can change the public perception that has grown over the past 10 years that he is ethically compromised re this matter because of his own feelings of personal pride over having developed the Buy-and-Hold concept.
Yes, the Goons matter. They shouldn’t, that’s certainly fair to say. But today they do. Because people who do matter have failed to disassociate themselves from the Goons in the matter in which they would if we were talking about any subject other than the errors that were made in the development of the Buy-and-Hold concept (because all the research needed to get it 100 percent right was not available at the time the concept was initially formulated).