Pat on the back

Forgive my amateur excitement, but a day after my post on Robert McNamara Philip Delves Broughton posted on the same section of his book, and then today Felix Salmon - probably my favorite finance blogger, highly recommended - excerpted the exact same quote I used.

For a brief, exhilarating moment I thought Felix had actually read my blog. Turns out not, but it is gratifying enough to know that I'm thinking along the same lines as someone I admire highly.

Their conclusions are both worth repeating. PDB:

One way of diagnosing an individual or institution suffering from the McNamara Syndrome is to observe how they respond to criticism. Do they accept it and try to make use of it? Or do they lash out contemptuously, sneering at those who dare criticize them? It’s a good test at which many businesses, individuals and even educational institutions do poorly.

And Felix:

When Wall Street quants fail to account for model risk, they can end up losing hundreds of billions of dollars. But that’s an improvement over what happened when McNamara failed to account for model risk: those losses were much worse.