“We Need to Expose the Cover-Up. But of Course That Embarrasses All the people Who Have Gone Along With It for All These Years. That’s Just About Everyone Who Works in This Field. Because Those Who Speak Out About the Corruption See Their Careers Destroyed and Are Never Heard From Again.”

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

“But a board or blog that does not permit honest posting is a corrupt enterprise.”

It’s been years since you even tried to post at any other board or blog. But you’re calling them all corrupt anyway. Does that sound fair to you?

The corruption affects everyone alive in the United States today, Anonymous. I have been a victim of it. But it is not just about me.

Look at our friend John Greaney. Greaney has been a victim of the corruption.

The reason why Greaney freaked out when I pointed out that his retirement study does not contain a valuation adjustment is that he was embarrassed for people to see that he got the numbers wrong in his study. Greaney took his methodology from the Trinity study, a peer-reviewed study. The purpose of peer review is to ensure that studies do not contain obvious errors. The Trinity contains the most obvious error possible — it lacks a valuations adjustment! Shiller had published his research showing that valuations affect long-term returns many years before the Trinity study was submitted for peer review. Yet it passed! What the f? Is that not corruption?

Now —

If you want to say that the members of the peer-review committee for the Trinity study were Buy-and-Holders who were suffering from cognitive dissonance and did not appreciate the extent of the problem of the failure to include a valuation adjustment, I can go along with that. I think that’s probably the case. So you might say that the corruption here was not deliberate. It still hurt millions of people in very, very serious ways, right? It’s still something that we need to talk about, something that we need to fix.

I didn’t intend to embarrass Greaney. I just wanted to report the numbers accurately. But because of the corruption that had gone on before I even came on the scene, Greaney was embarrassed. Do you see how it works?

It works that way for everyone. Wade Pfau wasn’t trying to hurt anyone’s feelings when he co-authored our amazing peer-reviewed research paper showing that investors can reduce the risk of stock investing by 70 percent by being willing to abandon Buy-and-Hold strategies. But he did, didn’t he? Because of the mountain of corruption that was in place before Wade ever came on the scene.

Shiller published “revolutionary” (his word) research findings in 1981. A national debate on the implications of those findings should have been launched within one week of the publication of that research. We didn’t see that. We are all today suffering the effects of the delay in the launching of the national debate. It is that delay that caused our economic crisis. It is that economic crisis that caused a lot of the political frictions that we have seen in recent years.

We need to fix the problem. To do that we need to expose the cover-up. But of course that embarrasses all the people who have gone along with it for all these years. That’s just about everyone who works in this field. Because those who speak out about the corruption see their careers destroyed and are never heard from again.

It’s quite a little pickle that we have gotten ourselves into, isn’t it?

We all have played a role in this massive act of corruption. I did so myself in the days prior to my famous posting of the morning of May 13, 2002. The only way to bring the corruption to an end is to EXPOSE it. And everyone who is part of it (which is everyone in the field) fears what will happen to their reputations when the corruption is exposed.

I’m being fair. It doesn’t take an I.Q. of 140 to figure out that retirement studies that do not contain adjustments for valuations cannot possibly get the numbers right in a world in which valuations affect long-term returns. If the boards were not corrupt, we would be seeing write-ups in all the papers every day talking about how the continued promotion of Buy-and-Hold caused the economic crisis. I haven’t heard of those sorts of stories being published. So, yes, I think it is fair to say that the corruption is ongoing whether I have recently posted at any of the boards or not.

The 37-year cover-up of Shiller’s “revolutionary” (his word) findings is the biggest act of financial fraud in the history of the United States. When the corruption comes to an end, we are all going to hear about it. We are all going to know. It is going to be in all the papers.

My sincere take.

Rob