Category: Society

Not Just Racism

The spectacle surrounding the passage of health reform legislation over the weekend disturbed many long-time observers of our political process.  Words like “nigger,” “faggot,” and “baby killer” were hurled at congressmen with uninhibited vehemence. (See “Tea Party Protesters Shout ‘Nigger’ and Spit on Lawmaker.”)

It’s no surprise, of course, that many harbor such sentiments, but to have them shouted out in public and on the steps of the Capital tells us that something unusual and important is going on.  Members of crowds whip each other up, to be sure, but they got undoubted support from the fact that not one Republican voted for the bill as well as from the sectarian convictions of the tea party movement.  A major split is developing in our body politic.

It recalls the divisions and passions over the Vietnam War forty years ago.  Then, the split among us was largely generational:  younger college students, empowered by affluence and the breakdown of traditional values, versus a parental generation preoccupied with national security and frightened of the new cultural forces they did not understand.  The protests over the war gave expression to the underlying tectonic shifts in our population.

But where does the emotional force behind today’s superheated conflicts come from?  What now is lying beneath the surface of our society that can account for this upsurge of rage?

My guess is that it is our growing economic inequality, exacerbated by the Great Recession.  For the last 20 years, it has been getting harder and harder for most middle class Americans to make ends meet, while, on the other hand, Wall Street bonuses and corporate salaries have skyrocketed.  The middle class took out mortgages, home equity loans, and ran up credit card debt to make up for their decreasing purchasing power, inflating the credit bubble that made more yet profits for the financial industry – until the whole thing collapsed.  In the meantime, our national wealth was massively redistributed in a way that has largely escaped our attention.

Big government is getting blamed, not entirely without reason, but the usual suspects are being attacked as well, for their perceived willingness to enact a liberal agenda or benefit from government programs.  Those who actually brought on our financial catastrophe are, as usual, spared.

This bears a resemblance to our politics as usual, of course, but ramped up in intensity and virulence.  The difference now is that so many more people are suffering and scared, vulnerable to the thought that the little they have left will be taken away.

What they don’t know they know is that underneath their rage lies fear.  And what they don’t know is where their rage could be more usefully directed.

Mind-boggling Bureaucracy

At a March 12 briefing on Afghanistan, the President asked whether the police will be ready when America’s scheduled drawdown begins in July 2011.  “It’s inconceivable, but in fact for eight years we weren’t training the police,” replied Lt. Gen. William Caldwell, taking part in the meeting via video link from Afghanistan.  “We just never trained them before. All we did was give them a uniform.” The president looked stunned. “Eight years,” he said. “And we didn’t train police? It’s mind-boggling.” The room was silent.

When you think of the number of people involved in such a project, the importance of the issues, the levels of accountability – not to mention the six billion dollars spent – it strains credulity that our minds could let something like that happen?  But actually it’s quite common.

A story in Newsweek details the complexity of this particular problem and provides some hints as to how such a monumental gap in consciousness could occur.  (See. “The Gang That Couldn’t Shoot Straight.”)

For one thing, it seems, we were unprepared for the level of corruption.  The police sell their ammunition and equipment, often to the Taliban, and they use their power to exploit the citizens they ostensibly are there to protect.  According to Newsweek, “when U.S. Marines moved into the town of Aynak last summer, villagers accused the local police force of extortion, assault, and rape. . . . ‘The people of Marja will tell you that one of their greatest fears was the police coming back,’ says Caldwell.”

Corruption on such a scale suggests the absence of a tradition of public responsibility.  It is difficult for people to think beyond their tribes, their families, themselves. “You have to have a police force that the people accept, believe in, and trust,” said Caldwell.  But that can only be when the identity of the police officers connects them to the larger purpose of a community.  That’s a problem larger, even, than corruption.

Then there is the question of training.  It takes significant levels of competence to train others, particularly when they are poorly educated from the start.  Newsweek noted:  “The people who oversaw much of the training that did take place were contractors—many of them former American cops or sheriffs. They themselves had little proper direction.”  Neither they nor their superiors were “prepared for the job they faced.”

Finally, there is a matter of unrealistic expectations and external pressures.  A former executive of the contracting firm commented off the record: “It’s practically impossible to produce competent police officers in a program of only eight weeks,” the time frame State and Defense set for the course. “They were not going to be trained police officers. We knew that. They knew that,” the former executive says. “It was a numbers game.”

So here is a program with inadequate materials to work with, staffed with people lacking essential skills, aiming at unrealistic goals. At every step of the way, no doubt, people were busy, providing instruction, writing reports, ordering materials, etc.  Occupied with their corner of the system, I suspect, they probably knew the system as a whole wasn’t working.  But when they looked up from their jobs, their minds turned off and tuned out – and then went back to their corner.

Monitoring the effectiveness and efficiency of the whole is a management function.  But if management won’t listen or if management reports to a boss who won’t hear, essentially there is no management.  In this case, someone in the White House had to let the mind-boggling truth in.

What Really Is the Difference – and For Whom?

A recent article in The Economist questions our reliance on the Gross Domestic Product as an adequate measure of our economy’s over-all health.  According to the GDP, the recession has now been officially over for more than half a year.  But is it really over?  Does one measure help us know how well the economy is really working?  And why that measure?

The crux of the problem, not surprisingly, is jobs:  As the article pointed out, “during the second half of last year the economy still managed to lose more than a million jobs.”  The bad news was disguised by the fact that the rate of the loss declined somewhat, though the total number of jobs lost continued to rise.  Oh?

“One explanation for the divergence of output and employment,” suggests The Economist, “is that firms are now able to wring more productivity out of their workers,” increases of 7.6%, 7.8%, and 6.9% in the last three quarters.  That’s extraordinary, and most likely achieved by squeezing workers to make up for the empty jobs not being filled.  (See, “Slow Going.”)

But there are other measures of economic progress:  “A theoretically equivalent but less commonly-cited indicator is Gross Domestic Income, which adds up wages, profits and taxes . . . and a growing body of research hints that GDI, rather than GDP, should be given more weight in computing an estimate of the economy’s true direction.”

The Economist points out that: “in the third quarter of 2009 (the most recent for which income data are available), GDI continued to contract while GDP notched up the increase that led many economists to announce the end of the recession.”

“The picture painted by GDI throughout the downturn is . . . one more in line with the employment data and with the experience of most Americans.”

So why do we continue to use the measure of GDP almost exclusively?  What psychological sleight of hand is involved here?

Clearly we would all like to believe that the recession is over.  Moreover, the purchase of stock is essentially a bet on future growth, and investor optimism can be a self-fulfilling prophecy.  But it seems clear that the lens of GDP is one that belongs to economists, businessmen, and members of the financial industry.  That’s how they see it.

From that perspective, unemployment is regrettable, but it can be compensated for by getting others to work harder.  Mortgage defaults are a problem, but then Wall Street can find other industries to invest in.

One thing we don’t know we know about our economy is how we are seeing it through selective and distorting lenses.

Internet Virulence

In posting my last entry, I had no idea I would stir up a hornet’s nest of virulence – and certainly no intent to do so.  Some of you may have noticed the comments posted on my blog over the weekend suggesting I was in cahoots with The New York Times or the S.E.C. – or possibly just deluded, incompetent, and hopelessly corrupt.

My intent was simply to contribute to understanding the human tendency to deny being victims of fraud.  I never claimed to adjudicate the problems of specific investors, though some claims still do seem sillier than others.  If anything, the virulence of the attacks confirms my point:  it is often intolerably humiliating to accept having been victimized, and so the victims must direct their rage elsewhere.

Some commentators were threatening, while others tried to alert me to the extent of the campaign to discredit me.  One person directed me to a website dedicated to attacking me.  Some helpfully tried to fill me in on the facts of the case.  In any event, the whole experience was enlightening if a bit alarming.  I have managed to get most of the particularly offensive comments removed, though anything with information was retained.  For those interested, enough remains to give you the flavor of the emotions aroused.

The whole process brought another issue into focus:  the ease with which virulence expands and is amplified on the internet.  Perhaps it is anonymity that opens the floodgates.  Perhaps it’s the speed of electronic communication, the opportunity to react spontaneously, driven by unconsciously shaped emotions.  Maybe it appeals to the latent grandiosity in all of us to speak to the crowds we imagine out there.

Whatever the reasons, I have a new respect for the power of the internet.  We tend to think of it in terms of an “information explosion,” but there are emotional explosions worth thinking about as well.

Why We Can’t Face Facts

When victims of Charles Ponzi’s original scam were offered 30 cents on the dollar, many of them refused to turn over their original notes and get what they could.  Though Ponzi was in jail, they still believed he would make good on his initial promise of 50% interest.

“That was probably not the first, and certainly not the last, example of what might be called ‘buyer’s denial’,” as The New York Times reporter Floyd Norris put it in his article on a more recent fraud.   Investors in CMKM Diamonds are suing to recover an alleged $3.87 trillion in compensation they claim they are owed by the government. (See “Dealing With Fraud By Denial.”)

The CMKM investors sound more than usually paranoid and grandiose.  That puts them in a somewhat different category.  But, still, why is denial so common and so powerful, especially when it comes to financial matters?

The Times quotes Dean G. Kilpatrick, director of the National Crime Victims Research and Treatment Center:  denial “may be better than having to admit to yourself that it is over and you’re never going to get your money back.”

The study of consciousness offers a different explanation.  It’s not about the reluctance to accept loss so much as the difficulty of acknowledging the mistake.  A major function of the unconscious is to protect us from information damaging to self-esteem, and few things can be more humiliating that be suckered into losing your money, especially in a get-rich-quick scheme that defies common sense.  Our consciousness invents alternative explanations, such as governmental conspiracy, as in the case of CMKM.  The simplest response of all is denial:  I didn’t actually make the mistake.

In the wake of our recent credit disaster, economists are searching for better models to explain our economic behavior.  It would be a shame if they failed to take into account our unconscious tendencies to “fix” reality.  Beyond or below the sight-lines of “behavioral economics” lie deeper and more powerful motivations.