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Can't refute the message? Smear the messenger instead!

|Includes:Overstock.com, Inc. (OSTK), PPD

Something's been eating at me. Evidently, a lot of folks either accept it as OK, or haven't thought about it. I'm talking about the strategy of discrediting the source of an idea when one can't refute the logic of an argument. 

Our politicians do it to one another. It seems they would rather beat the other team, than ever concede that their enemy might have a good idea. Similarly, they hypocritically excuse behavior by members of their own party, while raising Hell about it when someone from the other side does the same thing. Sarah Palin's double-standards of Rush Limbaugh's use of the term "retard," versus Rahm Emanuel's is a recent example; However, both parties are guilty of this. (For what it is worth, I have no dog in the fight between the Dems and GOP. If you look closely, they are basically interchangeable. Just saying.) Regardless of who is doing it, it is revealing. It shows a fundamental lack of integrity. It is also morally indefensible. 

I've also noticed this toxic dynamic working its way into economic, market and stock analysis. Good God! Would these people rather win the argument based on faulty logic, even though it means losing money? I simply can't understand this. 

A few months back, some of the enlightened teleprompter readers on CNBC went after anonymous/pseudonymous financial bloggers, such as Tyler Durden at zerohedge.com. They argued that his ideas and analysis couldn't be taken seriously, because his identity was a mystery. Good thing our founding fathers didn't take that ignorant position. Because if they had, the Federalist Papers would not have contributed to what our Constitution became, nor illuminated it's interpretation. I can see it now; these empty-headed talking heads in powdered wigs, saying, "Who's this Publius guy?" 

And even if you reveal your identity, as Sam Antar and Barry Minkow have, you can be shouted down because of something you have said or done in your past. (Both Barry and Sam are convicted felons, former white-collar criminals, who now spend their time exposing present day fraudsters.) They are easy targets, which makes me appreciate their efforts even more.

Individuals who don't like what these men say about the management at companies like Overstock.com (NASDAQ:OSTK) or Prepaid Legal Services (NYSE:PPD), often cannot refute the truth of Sam or Barry's analysis. Instead, they attack the credibility of messenger, and thus, change the debate. When their pasts aren't being rehashed, their motives are being impugned. ("He's just trying to bash the stock, so his hedge fund buddies can make money on their short positions!")

The subject is no longer the accounting irregularities of the company in question, but the crimes the investigator committed many years ago, or speculation about some kind of conspiracy he might be involved in. Call it smoke and mirrors, or a shell-game, but the effect is to distract observers from the real issue. I am saddened when I see readers being suckered by these transparent ploys.

I'm not apologizing or making excuses for what these men did before they were caught. (They don't need me to anyway - they have paid their debts to society.) This isn't really about them. It is about our society losing it's way. I do not believe that Americans are dumber than they were 200 years ago, but I worry we might be more lazy. Using these shortcuts might be a natural coping mechanism in a world where we are trying to drink information from a firehose everyday... But it doesn't make it right. (I know, I know - stereotypes are a real time-saver.)

I've come to appreciate the value of anonymous bloggers. They force me to think critically, and not just on anonymous pieces. If I see that a piece is written by Larry Kudlow, Jim Cramer, Bill O'Reilly or Keith Olbermann, I might be tempted to brush it aside because they are so often wrong. But if I do that, I close my mind to the occasions when they just might be on to something. Likewise, convicted felons might know more than me about cooking books, therefore it seems in my interest to consider what they have to say.

Ultimately, any thesis, argument, analysis or proposed legislation is valid because of the logic, not the individual originating it. If the identity of the author is essential information for you when evaluating an idea, you might want to reconsider how you are making these kind of decisions. And if you are a member of Congress, I hope my semi-anonymity doesn't make it too difficult for you to consider this little rant. ;-)

"If they can get you asking the wrong questions, they don't have to worry about the answers."
 
- Thomas Pynchon, Gravity's Rainbow


Disclosure: No positions

Stocks: OSTK, PPD