Why You Shouldn’t Blindly Trust Experts

If you’ve read my “About Me” page linked over on the right hand side, you might recall me writing this –

…I am wholly unimpressed by those who try to dismiss others’ views simply on the basis of a supposed consensus of so-called experts, whether they be scientists, economists or anything else. My goal is to make up my own mind about issues based on my own assessment of the relevant data, not based on someone else’s rhetoric, no matter how much of an expert they claim to be.

Well here is a great illustration of why I think that is important – the video below is a clip from a new movie, Inside Job, and features an interview with Frederic Mishkin about a paper he wrote concerning the stability of the financial system in Iceland prior to the economic crisis. Mishkin is Professor of Banking and Financial Institutions at Columbia University and a former Governor of the Federal Reserve (2006-2008). He holds a PhD from MIT.

His paper claimed that everything was fine with Iceland. It was not. He was wrong. His research was shoddy. Not only that, he failed to disclose that he was paid $124,000 by the Icelandic Chamber of Commerce to write the paper! A Wikipedia article on the Icelandic Financial Crisis of 2008-2010 cites the Economist magazine and claims that “Relative to the size of its economy, Iceland’s banking collapse is the largest suffered by any country in economic history.”

Don’t trust people just because they claim to be experts.

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