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The Dunning-Kruger-Madoff Effect

Via Mark Thoma, Hale Stewart is bemused by John Hinderaker of PowerLine. As Stewart notes, Hinderaker begins by asserting that everyone knows that an economic crisis is coming — which apparently means everyone he talks to — then rolls out just about every one of the myths that have been proved wrong again and again by events, from the looming debt crisis to the imminent takeoff of inflation. What Stewart may not know is that this reign of error goes way back — at least to Hinderaker’s ridiculing of yours truly, back in 2005, for suggesting that we had a huge housing bubble that posed an economic threat. He knew that this was nonsense, because the authors of Dow 36,000 said so. It’s actually kind of a nice symmetry: the man who sneered at warnings about a real crisis is now utterly convinced by claims about a fake crisis. More in the New York Times here.

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