My Syllabus of Errors
By Bryan Caplan
If Brad DeLong himself has a few mistakes to confess, imagine how many I’ve made! I discuss quite a few in my intellectual autobiography, but here are my highlights (lowpoints?), in rough chronological order:
1. I used to think Catholicism was true.
2. I used to think Objectivism was true.
3. I used to think Austrian economics was true.
4. I used to think standard public choice explained political failure.
6. Around 2002 or 2003, I bet Tyler Cowen and Robin Hanson that the U.S. would capture or kill Osama bin Laden within 6 months. When I lost, I made a double-or-nothing bet for another six months, and lost again.
7. I thought the mortgage crisis was comparable to the Enron meltdown: Nothing to worry about unless you’d chosen to pursue a high-risk investment strategy. (I know I blogged this, but I can’t find my exceptionally obtuse post. Help!)
On #6: I make a lot of bets, and make money doing so. I was wrong about bin Laden. But if anything, my mistake is that I’m betting too conservatively.
On #5 and #7: My default position is that alarms are false. The first few times I hear anything bad, I immediately dismiss the Chicken Littles of the world. Once every few years, this leads me into error. But I still think my default is the right one. If I had $1 for every “major concern” I’ve correctly dismissed, and paid $1000 for every “major concern” I’ve incorrectly dismissed, I’d have a nice nest egg. And despite everything that’s happened, my buy-and-hold 100% equity index funds investment strategy has worked well for me overall – and I’m sticking with it.