Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
It sounds like Shiller is guilty of playing a large part of the cover up since he would know the truth. Will he be going to prison as well?
We’ll work out together as a society who goes to prison and who doesn’t following the next price crash, Anonymous. I would be shocked and stunned and amazed if we decided as a society that Shiller should go to prison. I get the feeling that you Goons would like everyone who did even the smallest thing wrong to be treated the same as you Goons. You see that as your protection. Shiller has not behaved perfectly. Therefore, if we Goons go to prison, Shiller must go to prison as well. It doesn’t work like that.
I have drawn the parallel to the race relations issue. If someone makes a racist comment today in a public place, there is a heavy price to be paid. The person might lose his job. There was a time when racist comments were relatively common. Do you think that, as we changed as a society to become less tolerant of racism, we went around and rounded up every person who had committed even tiny racist crimes and sent them to prison? We didn’t. We employed common sense in making distinctions between different levels of bad behavior.
Just about all of us are guilty of some bad behavior during the Buy-and-Hold Crisis. I have often noted that I failed to speak up about the errors that I knew about in the Greaney retirement study because I was afraid of what his Goon squad would do to me. I rationalized my behavior. I said that Greaney’s study was a big improvement over the safe-withdrawal-rate analysis that was being advanced by Peter Lynch not too many years before the Greaney study was posted (this is so). But I held back from expressing my concerns that Greaney’s study, while an improvement from what had come before, still got the numbers wildly wrong. I was a coward.
Shiller has behaved in cowardly manner re a number of matters. We all have. There are very few exceptions. We are not going to elect as a society to put every person who on occasion acted in a cowardly manner in prison. I believe that all of the cowardly behavior will be brought to light and that most of the people who engaged in cowardly behavior will apologize for the harm they have done to others. I believe that Shiller will be making some apologies. But I don’t believe that he will be going to prison. I believe that he is going to be playing a huge role in helping us all move from the awful place where we find ourselves today to the wonderful place where we all deep in our hearts aspire to be tomorrow.
I think that you are wrong when you suggest that Shiller “knows the truth” in an all-encompassing way. We all learn by talking things over with others. Shiller is not able to talk things over with others to the extent he could if there were no social taboo against speaking openly and honestly re these matters. So there are lots of things that Shiller has not yet learned that he would have learned a long time ago had circumstances been different.
I have no doubt but that Shiller knows much more than he has thus far been willing to say in his public comments. But I do not believe that he today knows everything. I believe that he will be enjoying an amazing learning experience along with all the rest of us in days to come. He will be teaching us all by giving voice to things that he already knows but has thus far been afraid to speak about and he will be learning by hearing what lots and lots of others think about aspects of the question that he has not yet been able to explore in great depth himself.
That’s why I describe the opening of the internet to honest posting on investment-related topics as a win/win/win/win/win. Learning is the one true free lunch. When we learn together, we all end up better off than we were before we did so. It’s good stuff piled on top of good stuff piled on top of good stuff piled on top of good stuff with no possible downside for even a single one of us. This ain’t no zero sum game we’re playing!
I hope that helps a tiny bit.
My best and warmest wishes to you.