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Notes From A Polite New Yorker: Trust Me, I'm An Expert
Where we go wrong is putting blind faith in experts.
When people ask me what I do for a living, my first reaction is to say, “As little as possible.” But after saying that, and admitting that I had just delivered them my favorite line from the movie Chinatown, I tell them that I work as a financial journalist, which is true.
Because I work as a financial journalist, people often think that I am an expert on the economy or investing or taxes. People might ask me, “Do you have any good investment advice for me?” or “What stocks are going to be hot?” or “Where should I put my money?” I don’t have any real answers for any of them. I don’t cover the stock market, and the market I cover is not one that average working people invest in, except through whatever is left of their 401(k)s.
My own financial journalism career has seen the bursting of two bubbles. When I first began covering venture capital in early 2000, it was the height of the dot-com boom. That quickly fell apart and was followed by a recession. When I began covering the credit markets in the fall of 2006, it was the height of the days of investing in overpriced mortgage-backed securities and easy financing for large leveraged buyouts. That fell apart to help bring us to the economic situation we are in today. I tell people that if I begin to cover a new financial market, get your money out.
I’m not too proud to admit that I don’t know everything there is to know about the markets I cover. A journalist’s job is not to know everything, but to learn what he or she needs to know to get a story written. As such, we rely on talking to as many knowledgeable people as we can, and on becoming more knowledgeable ourselves.
But these experts that we financial journalists rely on are the same ones that helped put our economy into the toilet. Very few of the people I spoke with foresaw the current economic crisis, and only one or two stand out as accurately gauging the extent of the damage the credit markets’ collapse would do.
A friend was driving his father to JFK airport when he hit one of the city’s infinite potholes on the highway. His car stalled and he could not get it started again. He had his car towed to the nearest garage, where the mechanics told him it that he had a serious problem that would cost several hundred dollars to fix. Desperate to get his car usable again, he agreed to the repair work. It wasn’t until he was able to read his car’s owner’s manual several days later that he realized that the jolt of hitting the pothole had activated a special safety switch that shut off the engine. It only needed to reset. He had paid hundreds of dollars for needless repairs.
The leading shipbuilding experts in 1912 assured the public that The Titanic was unsinkable. Experts told Elvis Presley he would never make it in the music business. Experts told the American public that invading Iraq would be quick and cost-efficient.
Please don’t think that developing an expertise or consulting experts is a bad thing. Where we go wrong is putting blind faith in experts. We often do this because we are intimidated by our own lack of knowledge and we feel the need to be reassured. That makes us easy prey not just for dishonest auto mechanics and shady investors, but for all manner of other things as well.
These times call for us to be more active and do more for ourselves. As we’ve seen from our government’s response, or lack thereof, to Hurricane Katrina, the meltdown of our financial system and the erosion of our public education, when we disengage and leave things to the so-called experts, the experts screw up. But when they know that well-informed people are keeping an eye on them, asking questions and holding them accountable, things change fast. That goes for presidents, governors and mayors as much as it does auto mechanics.