"I was wrong" isn't in my vocabulary.                                Photographer: Fabrizio Costantino/Bloomberg News
"I was wrong" isn't in my vocabulary.                               Photographer: Fabrizio Costantino/Bloomberg News

I have spilled a great deal of pixels and time in these pages discussing the importance of not letting your biases get the best of you as an investor. (See this, this, this, this, this, this, this, this, and this). Further, when you are wrong, you must do more than merely acknowledge it: Embrace the error, understand it and learn from it. Traders who don't learn these lessons very quickly become ex-traders.

If only the same were true for the pundits and politicians who refuse to acknowledge their mistakes. Instead, they double down on the same bad philosophy and belief system that led to the error in the first place.

The latest example of this is former Vice President Dick Cheney. In a recent Wall Street Journal op-ed -- one that isn't even worthy of a link -- he blames the entire Iraq fiasco on the current president, stating “Rarely has a U.S. president been so wrong about so much at the expense of so many.”

I did a double-take when I read that: I wasn’t sure if he was discussing the current president or the man Cheney ostensibly worked for, George W. Bush. Regardless of what you think about the current sitting president -- he has been an enormous disappointment for many, and his poll numbers reflect that -- invading Iraq was a choice made by the Bush administration. And the only person more wrong about Iraq than Bush was the invasion’s chief advocate and architect, Cheney himself.

Paul Waldman writing in the Washington Post pulled together some Cheney quotes that are instructive:

• “Simply stated, there is no doubt that Saddam Hussein now has weapons of mass destruction. There is no doubt he is amassing them to use against our friends, against our allies, and against us.”

• “It’s been pretty well confirmed” that 9/11 hijacker Mohammed Atta “did go to Prague and he did meet with a senior official of the Iraqi intelligence service.”

• “We do know, with absolute certainty, that [Saddam Hussein] is using his procurement system to acquire the equipment he needs in order to enrich uranium to build a nuclear weapon”

• “I think they’re in the last throes, if you will, of the insurgency.” (2005)

Waldman further notes that among the other people who were terribly wrong about Iraq -- and it is a long list that includes Bill Kristol, Paul Wolfowitz and Donald Rumsfeld -- no one “has been more wrong and more shamelessly dishonest on the topic of Iraq than Dick Cheney.”

My own analysis of the invasion of Iraq, published the night before hostilities formally began, was called ``Not So Hidden Agenda.'' Using open-source material, I wrote at the time it was fairly conclusive that Iraqi leader Hussein didn't have weapons of mass destruction. And since it was unimaginable to me that any American president would invade a country under false pretenses, I tried to reverse engineer the actual reasons we might invade a sovereign country that posed no direct threat and hadn't attacked the U.S. or its allies.

I got it wrong. My failure was to miss the mendacity of Bush-Cheney administration, its lack of planning for the occupation and its ignorance of the history and culture of the nation we invaded. At least I accurately estimated that the war would last more than a decade and cost at least $1 trillion.

Which leads me back to the original theme I have been harping on lately: Being wrong has consequences -- but they are easily recognizable, and if corrected early enough, not often terribly costly.

Being wrong, staying wrong, and refusing to acknowledge your errors are expensive, fatal flaws. It's as true for politicians as it is for traders.

To contact the author of this article: Barry Ritholtz at britholtz3@bloomberg.net.

To contact the editor responsible for this article: James Greiff at jgreiff@bloomberg.net.