Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
Since Shiller did not respond, he clearly did not see any value in what you had to say.
I certainly do not agree.
All of my work follows from Shiller’s research findings. For Shiller not to find value in my work is for Shiller not to find value in his own work. And, if Shiller stopped finding value in his own work, he would stop doing it. So I feel certain that Shiller sees value in my work. It may be that, if he offered comments on my work, he would not agree with everything that I have said. That certainly seems possible and even likely. But that’s different. If he were to say that there are things that he agrees with and things that he disagrees with, he would be endorsing the national debate that I have been calling for for 17 years. That’s what matters, not his assessment of one particular participant in that debate or of one particular participant’s take on one particular issue.
I mentioned in my earlier comment that Shiller did not discuss the how-to aspects of his research findings in his own book. Does that suggest that Shiller does not support his own work? That would be an absurd suggestion. He obviously supports his own work or he wouldn’t do it. Yet it is an objective fact that he does not discuss the how-to implications of his research in his book. That would be true whether Rob Bennett ever showed up on the scene or not. This strange phenomenon has nothing to do with me. Shiller presented the world with a huge advance in its understanding of how stock investing works and the world (including Shiller) elected not to explore its implications. That’s our story.
Change is hard, Anonymous. That’s what it comes to. If we have that national debate, we are going to have to make some changes. Books are going to need to be rewritten. The courses that people need to complete to earn a Ph.D. in Economics are going to need to be redesigned. Calculators are going to need to be recrafted. People who are today big shots in this field are going to be diminished in status. People who are today little shots are going to gain in status. Showing that stock prices are set by emotion rather than by reason is a breathtaking change (an advance if this is the reality). It changes absolutely everything. Shiller’s research is like a hurricane (a benevolent one, to be sure) passing through our country. Everyone but me (including Shiller!) had had the sense to run to get out of the way of it rather than to run towards it and ultimately into it.
If Shiller endorses my work, Shiller is involved in something that he doesn’t want to be involved in. That’s the bottom line. I’ve mentioned prison sentences. I’ve mentioned civil awards and settlements. I’ve mentioned sites that have banned honest posting that obviously should not have done that. The owners of those sites obviously do not want to be exposed. If Shiller endorses me. he places himself in the middle of a hundred controversies. He would prefer not to do that. That’s what is going on here.
It is of course the same with all the others. Wade Pfau loves my work. Loves it, loves it, loves it. But he doesn’t want to see his own career destroyed because he says openly that he loves my work. So now he does not say that publicly. And he is able to go about his business. He still publishes research that has value. He just doesn’t publish the research that he knows in his heart would have the MOST value. He rationalizes the way that he is playing it by telling himself that people benefit from the work he does do, which is so, and that, if he spoke honestly about what he thinks of my work, he would not be able to find employment in this field. It’s not an entirely bad rationalization. I do not endorse it. But I see where he is coming from. That’s the basic story for lots and lots and lots of people.
The problem is that the national debate did not begin in 1981. That’s when it should have happened. There are arguments that can be made on both sides. I am obviously a firm believer in Valuation-Informed Indexing. But I don’t say that only Valuation-Informed Indexers would be making reasonable arguments if we had the national debate. There would be strong arguments coming from both directions. And we would over time learn important things as a result of the battle of ideas. That would be a very good thing. But how do we get started down that wonderful road now that the debate has been delayed for 38 years? It’s a very, very, very embarrassing situation. So we have elected to collectively put our heads in the sand and hope that somehow things work out okay without us having to engage in the national debate.
I don’t think there was evil intent when as a society we took a pass on initiation of the debate in 1981. I think that we were suffering from cognitive dissonance. It’s a real thing. It happens when you see changes this big — the human mind just cannot process them and so it tunes them out. And, once a certain amount of time had passed, it became too embarrassing to launch the debate 10 years after the logical starting date or 20 years after the logical starting point or 30 years after the logical starting point or whatever. So here we are.
Shiller doesn’t want to get involved. That’s the bottom line. He has made amazing contributions. He earned that Nobel prize. So he has gotten involved re other aspects of this in hugely important ways. But he does not want to be the one to expose the 38-year cover-up. Like lots of other good and smart people, he would like to see someone else take on that job.
I have taken it on. But I do not have the power at this point in time to get the job done. It is my belief that the next price crash will scare enough people that I will be able to get some help and then my efforts will be more effective and, once this is all written up on the front page of the New York Times, Shiller and lots of others will be willing to go on the record and then we all will live better lives from that point forward and not one person will regret our collective decision to finally move forward in our understanding of how stock investing works. But as of today Shiller and the others do not want to get involved, they do not want their names associated with this messy situation. All that I can do is to ask them for help. I have done that. And they have elected not to get involved at this point in time.
Rob
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