Politics & Policy

Black Hats and White Hats

With elections upon us, a return to the Evil-Man Theory of Everything

The season of black hats and white hats is upon us.

American governance is complex – even its subcomponents are so complex that the well-meaning people who are handsomely paid to manage them throw up their hands in despair, e.g. IRS agents who freely admit that there are too many changes in the tax code – an average of more than one per day – for them to keep up with. There are unintended consequences and there are unforeseen consequences – they are not the same thing, but neither set of problems should be surprising.

You hear stories about the Pentagon spending a million bucks to ship 38 cents worth of washers from South Carolina to Texas and think, how is it possible that that happens?

But dig in and you’ll see how it is possible – absurd, wasteful, and detestable, sure, but certainly possible.

When considering the major failures of recent American governance – the 2008-09 financial crisis, the catastrophe that is U.S. policy in the Mideast – the one thing that any honest-minded person must conclude is: Nobody meant for things to turn out this way. It is impossible to make precise predictions about the effects of government policy; that is the nature of systems characterized by high levels of complexity. It’s one thing to predict that it’ll be colder during the winter, but another thing to predict down to the millimeter how much snow will fall on a particular acre in rural Maine on the third Wednesday in February, which is really what we expect from our public policy.

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Classic cowboy movies, in contrast, are not complex at all: The good guys wear white hats, the bad guys wear black hats, all hats remain firmly affixed to all heads at all times, and that’s that. You can pretty much always predict how an old Western is going to turn out.

But that isn’t how the real world works.

On Tuesday, I had a conversation about Elizabeth Warren and Wall Street, pointing out that the popular version of that story – Senator Warren vs. Wall Street – is so oversimplified as to be not merely useless but misleading. The reality is that there are people working on Wall Street who dislike Senator Warren – investors and bankers, mainly – and people who adore her – notably Wall Street lawyers, who are reliable donors to her campaign and to those of other Democrats. My naïve interlocutor said: “Hopefully, it’s the lawyers that fight against Wall Street,” as though there were such a thing, as though there weren’t nice progressive lawyers in Manhattan who jokingly refer to their yachts as the SS Dodd-Frank.

Spend any time writing about this sort of thing and you’ll hear angry and panicked denunciations of derivatives-trading from people who pretty clearly do not know what a derivative is, just as you’ll hear paeans to Glass-Steagall sung by people who don’t understand the difference between a commercial bank and an investment bank, who don’t know how Goldman-Sachs makes its money or what it is that Standard & Poor’s does.

But they’re quite sure they know who is wearing the black hats.

During the financial crisis, Megan McArdle described this as the “Evil Man Theory of Failure,” and it is widespread. When Richard Fuld of Lehman Bros. was called to testify before the House, Florida Republican John Mica told him: “You’re the villain.” Fuld is said to have personally lost something on the order of $1 billion in the Lehman debacle, most of everything he had, which is an odd tribute to pay to the great god of greed – but never mind that: The black hats on Seventh Avenue were visible from Capitol Hill and Cambridge, Mass. This is a deeply stupid way of viewing business, but the tendency goes well beyond financial arcana.

In popular culture, it is a commonplace that we could have cures for AIDS or cancer if not for the greed of doctors and pharmaceutical companies, that we could have cars that run off of sunshine and goodwill if not for the wickedness of the oil barons. Progressive media is entirely captive to the Evil-Man Theory of Everything, and popular left-leaning commentators such as Thom Hartmann are as crude in their illiterate moralism as any 1930s demagogue – indeed, as economic analysis, their views are indistinguishable from those of Father Coughlin.

The tendency festers in some quadrants of the Right as well. It is one thing to believe that Barack Obama, cookie-cutter Ivy League progressive that he is, broadly sympathizes with the critique of American power proffered by Edward Said or any of the other voguish leftists he would have encountered as a student and activist; it is another thing entirely to argue that the United States failed to prevent the emergence of the Islamic State because Barack Obama is a jihadist saboteur. Even if you believe that Barack Obama is a genuinely bad man – a black-hat-wearing SOB – that would not be a sufficient explanation for the defects of his administration or for the failures of American policy abroad.

#related#But we have Republicans and Democrat(s?) announcing their presidential campaigns, so we must revert into pre-adolescence and spend a year and a half enduring black-hat/white-hat baby talk. Keep this in mind: Every time you hear a politician or activist explain that the world is the way it is because villainous so-and-so is the tool of unsympathetic thus-and-such while heroic so-and-so really cares about sympathetic thus-and-such, what you are hearing is about as meaningful as the croaking of poorly educated frogs or explanations based on the four humors, hepatomancy, astrology, or the keen insights of John Oliver, each of which is about as intellectually defensible as the next.

Satan, Snidely Whiplash, or Lloyd Blankfein: It is a comforting myth that the world’s worst problems can be explained by the presence of individual malefactors, because then the solution becomes simple: Burn the witches.

The unhappy truth is that unmitigated evil is not the problem – it’s far worse than that.

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