Getting Apologies for the Economic Crisis


Felix Salmon says he wishes Larry Summers would apologize for some economic policy mistakes of the 1990s, and that he’s got a longer list of hoped-for apologizers:

Of course, Summers isn’t the only person who should be apologizing: I very much look forward to reading or watching something similar from Bob Rubin, who managed to compound his errors at Treasury with further massive blunders at Citigroup. And the list goes on. Greenspan would be nice, but he’s already admitted being wrong on some fronts, and has at least engaged substantively with his critics on most others. Ken Lewis and Stan O’Neal and Sandy Weill and Dick Fuld, of course. Phil Gramm, absolutely. But let’s start with Summers, since he’s the one name on the list who’s still actively involved in making incredibly important decisions which affect the future of the country. And if he can’t admit to making mistakes, how can he learn from them?

I’m not hugely optimistic that any of this will happen, but I think part of the same rationalist paradigm that got us into some economic trouble is to underrate the extent to which this kind of thing is important even though it doesn’t come with any tangible penalties. Indeed, if you look at the extent to which political leaders who’ve implicitly admitted error on Iraq (think Hillary Clinton) are loathe to outright say that they messed up and their mistakes had consequences, you can see that it’s very psychologically difficult for people to come to terms with admissions of culpability.

But the emotion of shame and the fear of humiliation are important psychological drivers. And I think that’s particularly true when you’re talking about very wealthy people and powerful people who are basically beyond the point of benefiting in any incredibly tangible from further career success. That’s why I’m glad to see Ken Lewis getting pushed out even if it doesn’t “make a difference” and do hope that social, cultural, political, and media pressure will continue to build on the wise men and business titans who were running the show over the past 15 years to accept some culpability. Among other things, it’s important to get across the point that human agency is involved in these problems.