Category: Society

Re-imagining Sovereignty

Citizens of Greece are demonstrating against the austerity plans demanded by the European Union.  Citizens of Iceland have actually rejected an agreement to pay their debts.  California teeters on the edge of bankruptcy – but can a sovereign state actually declare bankruptcy?

According to an article on Slate posted Monday, the answer is “no.”  We are in the presence of an anomaly, stressful to government officials, worrisome to bankers, confusing to citizens – and sometimes enraging to them as well.  Our conventional categories of thought about sovereignty no longer work.

Once again, economic ingenuity and need has outstripped political and legal developments.  Globalization and financial markets have rendered us mutually dependant in previously unimaginable ways.  But legally we are in a no-man’s land, a limbo of agreements, understandings and assumptions that no one actually has the authority to enforce.  No one is in charge, and that means everyone is anxious.

Slate’s Christopher Beam writes matter-of-factly: “There’s no international bankruptcy court for countries that can’t pay their debts. Instead, other EU countries that depend on Greece’s solvency, such as Germany or France, would have to agree to bail it out.”  (See, “Can California Declare Bankruptcy? And What About Greece?”)

Oh?  And what if that is unpalatable to Germany and France.  The Obama administration is in trouble with voters for having bailed out our own banks.  It’s not too hard to imagine voters in Germany and France balking at bailing out Greece, and, in fact, there are signs that they may well be unwilling to do just that.

The psychological problem here is that, as our minds approach these black holes, the discontinuities where chaos lurks, they tend to stop working.  Without a map, lacking precedents and traditions, overwhelmed by dread, our minds fall back on weak assumptions — or turn away.

I think that something like this afflicted us during the financial meltdown in 2008.  Federal officials scrambled to put together a series of desperate strategies to keep the system from crashing.  They slogged through and averted a crash, while most of us watched from the sidelines unable to grasp just how much at risk we all were.

European officials may also slog through this one too, but it’s worth our while to consider the power of such moments to evoke terror.

ANNOUNCEMENT

The William Alanson White Institute EDCAS Conference Series
Saturday, March 27th, 2010 9 AM- 3 PM
20 West 74th St., NYC 10023

MONEY MATTERS:
THE COLLAPSE OF CONSCIOUSNESS.
On a societal and individual level unconscious forces and dysregulated emotions can determine financial behavior.
This conference is divided into two sections.  In the morning, we explore psychological aspects of our recent near financial collapse.
Psychoanalysts, Ken Eisold, Ph.D. and Stuart Kantor, Ph.D. dialogue with Financial Journalist, Dan Grech, David Adler, Author of Snap Judgments, and Columbia Behavioral Economist Eric Schoenberg, Ph.D.

In the afternoon three renowned psychoanalysts, Muriel Dimen, Ph.D., Irwin Hirsch, Ph.D. and Lewis Aron, Ph.D. will discuss irrationality and compulsivity in matters of money in the clinical situation.

CONTACT:  Carlos Acha at 212-873-0725 ext. 10 or
EMAIL: c.acha@wawhite.org for additional details
COST:  Early Registration: $135 At the door: $165

Another Role for Consciousness

If we don’t have to do something, it drops out of our minds.  We forget.  Consciousness needs incentives to work, and this is true as much in paying our bills as it is in guarding national borders – or protecting consumers.

Elizabeth Warren, Chair of the Congressional Oversight Committee set up to suggest reforms to our financial system, reminded us of this in her recent interview with Charley Rose in BusinessWeek.  “There’s nobody in Washington focused on the economics of the family, focused on the consumer products—credit cards, mortgages, car loans, overdraft fees. All the stuff you have to do in your daily life to survive economically.”

She points out that the relationship between consumers and banks used to be relatively simple.  But then, driven by increased competition, banks got creative and began to think more about what they could do to improve profits:  “We could hold up free gifts. We could hold up a warm and fuzzy relationship. And then we could put what are called in the trade revenue enhancers back in the fine print, and we could make a lot of money because you won’t figure out what this product costs. So that one-page credit-card agreement in 1980 has now grown to about 30 pages. And it’s not just 30 pages, it’s 30 pages of incomprehensible fine print.”

In arguing for a Consumer Protection Agency to think about such matters on behalf of consumers and monitor the behavior of banks, Warren notes: “This is an agency that just makes sense. This isn’t liberal or conservative. This isn’t a division of ideology.”  She adds, however, “You’ve got to have an agency that’s ultimately independent, whether it’s located within the Fed, within Treasury, within the Department of Agriculture, or whether it sits in its own separate place. The key is whether or not it is functionally independent.”  See, “Elizabeth Warren: Outrage and Financial Reform.”)

One argument in favor of lobbyists is that they keep legislators and government agencies informed of their clients’ changing needs.  To be sure, that is not without pressure or the desire for influence.  But in a complex society, that can be useful.  Similarly, an agency, set up to think and reflect on consumer issues in banking, can add to the store of information, trends and issues that a typical congressman might not otherwise notice or think about.

What we don’t know we know about regulation is the daily effort it takes to stay focused on any issue before it fades from our minds.

Is Celebrity Going Stale?

Inevitably there comes a point when any market gets over-supplied.  Cheap goods flood in, and buyers gradually disappear.  Is that what’s happening to Hollywood stars?

According to a story in The New York Times, the fees that Hollywood stars are receiving are way down:  “Most of the three-dozen or so top-billed actors in the 10 films up for best picture in this Sunday’s Academy Awards ceremony . . . appear to have received relatively minuscule upfront payments for their work.”

The underlying problem, of course, is that earnings in the movie industry are generally down.  Moreover, in a depressed economy, they’re unreliable.  But Peter Dekom, a film industry lawyer, linked “the general devaluation of movie stars to a lack of interest among younger viewers.”  As he put it:  “Stars don’t resonate with the ‘what’s next’ crowd.” (See, “For Movie Stars, the Big Money Is Now Deferred.”)

There is a psychological dimension to this.  The consumer has to cooperate in creating the magic of stardom.  The object of fascination has to be veiled with an allure denied to most of us, set apart, idealized.  If we do not allow ourselves to be awestruck, it doesn’t work.

But it may simply be that, in an age awash with celebrities, we have too many of them.  Too many are getting too much attention too easily to sustain the magic.  It may not be true, as Andy Warhol predicted, that all of us will have our 15 minutes of fame, but what did “Joe the Plumber” do to earn the attention he got?  What is really required of the “stars” of reality shows?

And those who actually act on the screen, the original “stars,” so many of them have been all too frequently arrested for drunken driving, racial slurs, domestic abuse and other forms of vile behavior that it is not longer possible to believe they live on a different plane.

The emotional capital of fame has been squandered.  Now we have to get our thrills from the special effects the studios are able to manufacture – not our minds.

Woman and Children First

Researchers have found that more women and children were saved on the Titanic, which sank in 1912, than on the Lusitania, torpedoed three years later.  They attribute the difference to time:  the Lusitania went down in 18 minutes, while the Titanic took 3 hours.

According to one author of the study: “When you have to react very, very fast, human instincts are much faster than internalized social norms.” (See, “How the Men Reacted as the Titanic and Lusitania Went Under.”)  The study of the unconscious offers a somewhat better explanation.

Faced with danger, the brain automatically searches for safety.  No doubt this is part of our evolutionary heritage.  When our ancestors were attacked by animals, they didn’t stop to think about running;  they ran.  If they were being stalked, they immediately froze to avoid detection.  We still do the same.  Our emotional unconscious, by-passing the pre-frontal cortex, stimulates adrenaline directly and enacts the strategies that help us survive.

But if are not forced to act right away, we can reflect on alternatives and develop better responses.  We can think about others.  We can discuss alternative strategies.  We can cooperate.  This is the great benefit of consciousness, developed as our species evolved.

Similarly, if we are anxious and automatically reach for a cigarette or a drink to calm ourselves, we could give ourselves the time to become more aware of this tendency and substitute another one.  A bit more reflection allows consciousness to come up with a different response.

The researcher was by no means wrong to suggest the importance of time.  But if we take into account the role of the unconscious in our behavior, we have a better idea than “instincts” to help us understand why time is useful, and what we can do with it.