---

Guest post by: Paul Kedrosky Become an Author

Tweet

---

---

There is a nice note from behavioral economist Richard Thaler to law & economics sort Richard Posner out. The former takes the latter to task for his WSJ OpEd criticizing his support of a Consumer Financial Protection Agency. Here is a key paragraph:

Posner does not stop at mischaracterizing the proposal. He launches a second line of attack based on the following logic. 1) Behavioral economists such as Thaler have endorsed this plan. 2) Thaler has been known to make mistakes. 3) Therefore, he should not be in the business of helping consumers avoid mistakes. Of all the evidence readily available that I am not perfect, he concentrates on the fact that I have written about the well-known puzzle in economics that the difference in returns between equities and bonds (the "equity premium") has, in the past, seemed to be too large. With the market now down, presumably he thinks this writing makes me look foolish. I plead guilty to joining the hundreds of other economists (most of whom are not behavioral economists) who have written about this historical puzzle. And, as Posner suggests, for many years I did advocate that young investors should consider putting all their money in stocks, and I followed that advice myself until 2000 when the level of the stock market bubble got so ridiculously high that I switched half of my retirement portfolio into treasury inflation-protected bonds (TIPS). But of course, I am not a perfect forecaster. I, like most people, did not get out of stocks last summer. And, I certainly plead guilty to being imperfect. For a long list of particulars, contact my wife.

Read the whole thing.

-----------------------

As a related aside, the introductory comments to Thaler's entry quotes one of my favorite essays about Posner's awesome output:

The literary output of Richard A. Posner is staggering. As a wonder of the world, it ranks with the pyramids and the hanging gardens of Babylon. As far as I can determine, he has authored, co-authored, or edited about forty books and four hundred learned articles,1 many, if

not most, generated while serving as Chief Judge of the Seventh Circuit Court of Appeals and senior lecturer at the University of Chicago Law School, where he is currently delivering courses in antitrust, evidence, and legal pragmatics. How does he do it? Where does he find the time?

Nobel Laureate and fellow Chicago economist Ronald Coase was asked his opinion of Posner's scholarship: "I don't know. He writes faster than I can read."

Related Articles

  Branding the "Branson Way"
  Sourcing Free Photos And Graphics
  Richard Bransons Wisdom
  100 Ways to Succeed #90
  Home Office, Personal Space
  Personal Branding: Learn From The Best
  I Didn't Open the Envelope
  The seven essential willabilities of real leadership
  Jim Kouzes: Leaders Focus on the Destination
  Follow Your Passion
  JP Morgan, Facebook and the Nudge.
  How entrepreneurs stay motivated
  Richard Branson Virgin
  TOURISM WITHOUT EVEN HAVING TO BE THERE!
  HANDLING CHANGE
  Richard Samuel Reynolds, Reynolds Metals
  Follow Your Dreams
  When Buying a Business Forget The Asking Price
  The One Sales and Marketing Idea That Will Separate You From the Crowd
  Successful People Make Their Own Luck

Related Forum Posts

Re: NEW VIDEO - Review my website - Ask Evan
Losing My Virginity
Re: Business 2012 in London
forums referrals
Forum status

Share this article. Fund someone's dream.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Starting a Business a Brave Move or a NoBrainer

Am I a Leader?

How Do You Define Good Business Partners?

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.