Has the world gone mad?

Panic in the markets in the U.S., panic in the streets in the U.K. — has the world gone mad?  No, but there’s definitely cause for alarm.

Let’s start in the U.S., where the stock market tanked on Monday in the wake of Friday’s downgrade of the federal government’s credit rating.  If you read my piece entitled “Our National Debt Delusion” here over the weekend, you know that I agree with Standard & Poor’s (one of three major credit-rating institutions) that our government’s spending and borrowing is unsustainable, out of control, and must be curtailed.  The downgrade of our federal government’s credit rating is a harbinger of things to come if serious, structural reform doesn’t happen in Washington, but the fundamentals of our national economy didn’t get precipitously worse from Friday to Monday.  So, what happened in the markets on Monday was a demonstration of “behavioral finance” at work.  If you’re not familiar with this concept, I’ve written about it here on 5/3/11 and 2/23/11.  Basically, what happened on Monday was more psychologically-driven than economically-driven, more fear-driven than fundamental-driven.  As I said over the weekend, fear is justified, fear is here, and to the extent that it prompts the electorate to get serious about demanding real “change” in Washington this time around, it may end up being a good thing for the country.  Assessing the situation from a behavioral-finance perspective, the antidote to fear is security, and the way for Congress, the President, and our 2012 presidential candidates to reassure the markets is for them to start talking (and acting), immediately (not in 2013 and not in November, as we heard Congresspeople saying last week) and loudly, in terms of scaling back the federal government’s scope, scaling back its spending, scaling back its borrowing, scaling back plans to put the government in charge of our health care system, etc.  The existential threat to our nation’s global economic leadership status is real, but the sky’s not falling today, so the markets really need not be falling so precipitously either.  With further significant market volatility expected in the days ahead, as cooler heads prevail, I think we’ll probably see some market stabilization, but the markets very well may not stabilize anywhere close to their pre-downgrade highs unless/until investors get the kind of reassurance that I’m prescribing.

If you missed Happening Now on the Fox News Channel on Monday (new show for me, photo above), I discussed some recent data demonstrating a correlation between obesity and debt — as many Americans’ debts have expanded, apparently so have their waists.  I explained that like individuals, societies can become spoiled.  It’s a tendency borne of abundance, or as I like to call it, “access to excess.”  As people get accustomed to having everything they need and then some, their tolerance for scarcity can go down, their expectations and standards can go up, they can begin to focus less on long-term gratification and more on short-term gratification, and they can begin consuming in irresponsible, unhealthy ways, both fiscally and physically (even mentally — on 7/28/11, I wrote here about new research suggesting that “fat & happy” don’t necessarily correlate, i.e. wealthier countries had higher rates of clinical depression than some poorer countries).  I’m most concerned about two specific consequences of that for America.  First, I’m concerned that many American kids are learning neither how to manage money right nor how to eat right.  Second, I’m concerned that our major global competition, e.g. China, doesn’t seem to be succumbing, at least not yet, to these same tendencies, at least not to the extent that America has.  If the next generation of Americans behaves in ways that make them sub-optimally productive while their global competition behaves more like Americans did back when we reached the pinnacle of our global prominence, that doesn’t bode well for the country.  Hopefully, a “silver lining” on this economic cloud that’s hanging over the country at this point will be that it’ll force some Americans to bring their tolerances for scarcity, as well as their expectations and standards, back into more reasonable, sustainable territory, and to focus less on short-term gratification and more on long-term fiscal and physical health.

Speaking of some Americans indulging in short-term gratification and not being optimally productive, there’s some new research suggesting that Facebook may be unhealthy for kids, contributing to such conditions as lethargy, anxiety, and narcissism.  If you’re a regular reader/viewer, you know that I’ve been talking about this for years now (see my piece entitled “Girls (and Boys) Gone Narcissistic” dated 3/29/07).  Now I don’t think everyone who grows up in the era of Facebook is going to be a lethargic, anxious narcissist, but I do think that this new research relates to the obesity/debt discussion above in that the bottom line is moderation (managing one’s expectations, being well-rounded in the personality sense rather than in the physical sense, living within one’s means, tolerating some scarcity today in exchange for a greater reward tomorrow, etc.).  Those were the messages I got in the house that I grew up in, and they’re messages that I think all American parents should be giving their kids.  I appreciate that those messages have helped me to be productive as an adult, but just as I always say when I write/talk about crimes committed by people who had rough childhoods, even those who didn’t have good examples growing up have both choices to make as adults and personal responsibility for their choices.

Shifting now to the U.K., you may have seen news footage of riotous looting behavior happening in that country since the weekend.  Like the L.A. riots that happened here in the U.S. back in the early 1990’s, these riots in the U.K. were predicated ostensibly on an alleged incident of police brutality but quickly degenerated into a bogus pretext for a bunch of antisocial people to commit theft and vandalism.  I’ve written in the past about how people in emotionally-charged groups sometimes behave in ways in which they’d never behave individually (due to social psychological phenomena like “groupthink,” “deindividuation,” and “diffusion of responsibility — see my WorldNetDaily column “You call this ‘Christmas’ shopping?” dated 12/4/08: http://www.wnd.com/index.php?fa=PAGE.view&pageId=82628).  This is beyond that, though.  This is pure, blatant, sociopathic criminality on display in the U.K. this week.  Instead of sneaking around as usual, the sociopaths in these instances are simply taking advantage of the cover of anonymity afforded by a large group to steal and destroy things.  By the way, while equally inexcusable, one can at least understand the rational calculations made by individuals who just try to enrich themselves by stealing, but individuals who choose also to smash windows, overturn cars, set buildings on fire, etc., simply for the twisted pleasure that they get from seeing fixtures of civilization destroyed, are even more sociopathic, more unpredictable, more dangerous, and more long-term-cage-worthy than run-of-the-mill thieves.  And before you take any comfort in the fact that there’s an Atlantic ocean between us and these humanoid animals, it’s been happening here, too, just in less-spectacular fashion.  “Flash mobs” have robbed stores in cities across the U.S. in recent months.  These groups are essentially high-tech, loosely-affiliated street gangs, usually comprised mainly of teenagers, who use social networking and text messaging to coordinate their crimes.  They converge en masse on retail stores, wreak havoc, overturn things, break things, grab armloads of merchandise, and run away, overwhelming the stores’ sales and security personnel with sheer numbers.  It’s an appallingly frightening demonstration of the degeneracy that can still happen, even in otherwise “civilized” cultures, even in 2011, when sociopathy becomes “normalized” within a subculture, and it illustrates the need for the broader, civilized culture to either bring chaos under control or face a broader existential crisis of faith in the culture’s order, institutions, etc.

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