Good ideas do not need lots of lies in order to gain public acceptance (2008)

Update, September 2008. Hullo there Paul Krugman readers. Yes, I did say "Good ideas do not need lots of lies told about them in order to gain public acceptance", and as a general maxim I wholeheartedly recommend it. I don't necessarily, however, either endorse or whatever-the-opposite-of-endorse the specific use of that maxim in the context of Prof. Krugman's post about the Paulson bailout plan; I don't actually have a fully formed view about that plan. I do, however, wholeheartedly endorse "Development, Geography and Economic Theory", which I think is a terribly underrated economics book, and am at this moment rather starstruck at having one of my essays admired by the nearest modern equivalent to my hero JK Galbraith. Anyway, as you were; by way of context, the post below was written just as a lot of high-profile commentators like Thomas Friedman were abandoning their support for the Iraq War.

The D-Squared Digest One Minute MBA - Avoiding Projects Pursued By Morons 101

Literally people have been asking me: "How is it that you were so amazingly prescient about Iraq? Why is it that you were right about everything at precisely the same moment when we were wrong?" ... Anyway, the secret to every analysis I've ever done of contemporary politics has been, more or less, my expensive business school education. Here's a few of the ones I learned which I considered relevant to judging the advisability of the Second Iraq War.

1. Good ideas do not need lots of lies told about them in order to gain public acceptance. I was first made aware of this during an accounting class discussing stock options. One side held that stock option grants should not be treated as an expense; the other side (like Warren Buffet) held that they were a massive blag at the expense of shareholders. If stock options really were a fantastic tool, everyone would want to expense as many of them as possible to boast about how innovative they were. Since tech companies fought honest accounting, it was prima facie evidence they weren't that fantastic.

2. Fibbers' forecasts are worthless. If you have doubts about the integrity of a forecaster, you can't use their forecasts at all. Not even as a "starting point". This was how I decided that absolutely no material WMD capacity would be found; the people making the claims were clearly making false claims and therefore ought to be discounted completely.

3. The Vital Importance of Audit. Companies which do not audit completed projects to see how accurate the original projections were, tend to get exactly the forecasts and projects that they deserve. There is no fancy Latin term for the fallacy of "giving known liars the benefit of the doubt", but it is a much greater source of avoidable error in the world. Audit is meant to protect us from this.