Brain-dead Politics Assures Chaos Till 2016

“Brain-dead Politics Assures Chaos Till 2016″
By Paul B. Farrell

 

“Liberals and conservatives do not just see things differently. They are different, in their personalities, even their unconscious reactions to the world around them,” warns senior editor Emily Laber-Warren in “Scientific American Mind”, one of the more fascinating reports on behavioral-science research on the political brain. Yes, conservative or liberal, Republican or Democrat, you can tell them apart from their DNA, brain scans, behavioral patterns… seriously, guys like Eastwood, Trump and Romney don’t just “see” the world differently than Spielberg, Soros and Obama… they are very different human beings from the outset. Yes, they see different, but they also think, decide, behave, vote and invest different.

How different? Here’s a simple test: Do you cheer loudly when a tough guy like Dirty Harry points his .357 Magnum, challenging the bad guy to “go ahead, make my day.” And did you feel relieved when the frazzled Dreyfus character in Spielberg’s “Close Encounters of The Third Kind,” marches up to the UFO to gets the hell off your great Earth?

In her “Calling a Truce in the Political Wars,” Laber-Warren elaborates on the differences between conservative and liberal thinking by paraphrasing humorist Dave Barry: “Republicans think of Democrats as godless, unpatriotic, Volvo-driving, France-loving, elitist latte guzzlers.” “Democrats dismiss Republicans as ignorant, Nascar-obsessed, gun-fondling religious fanatics.” That’s why “Congress is in a perpetual stalemate because of the two parties’ inability to find middle ground on practically anything.”

OK, so you ask, what’s all this really mean for my investing strategies, now and especially after the November elections? Yes it depends on who wins: Will conservatives get absolute control of Washington? What if liberals hold onto the presidency and the Senate? Or if the conservatives add the Senate to their control of the house, but Obama is still president? Remember the president has enormous power to appoint over 5,000 administrative positions, including the SEC and other regulatory agencies, plus the Fed chairman, as well as any Supreme Court and other federal court vacancies?

So, given your unique brain psychology, how will you invest successfully with four more years of irrational chaos when both parties get even more aggressive jockeying for the 2014 and then the 2016 races? Yes, you got a helluva lot at stake folks: Should you invest in defense contractors? Conservatives want to increase spending on the Pentagon budget. Liberals want to cut back as our wars wind down, use the savings for social programs, highways. How about Wall Street bank stocks? They’re betting on the conservative free-market agenda. And what if the Affordable Care Act program is reversed? And you get a voucher? Or buy more health-care insurers, hospitals, drug stocks now? Yes, you bet your investment choices will be impacted by psychological “differences,” and big-time, no matter who wins the election.

So let’s look at the new behavioral research, see if it increases our understanding of the “differences” between conservative and liberal thinking and their impact on your investing strategies. We found several fascinating differences in “Scientific American Mind”:

More wars ahead? A study by psychologist Michael Dodd and political scientist John Hibbing at the University of Nebraska “found that when viewing a collage of photographs, conservatives’ eyes unconsciously lingered 15% longer on repellent images, such as car wrecks and excrement — suggesting that conservatives are more attuned than liberals to assessing potential threats,” which might also be why they bet on the NRA and Pentagon.

Controlling or curious? In a study of the contents in the dorm rooms of 76 college students, researchers found “conservatives possessed more cleaning and organizational items, such as ironing boards and calendars, confirmation that they are orderly and self-disciplined. Liberals owned more books and travel-related memorabilia, which conforms with previous research suggesting that they are open and novelty-seeking.

NYU psychologist John Jost, co-author of this study adds: “These are not superficial differences. They are psychologically deep.” And he adds that “the capacity to organize the political world into left or right may be a part of human nature.” Yes, that left-right division is locked, hidden in our DNA, our brains, thinking processes, inherited, our destiny.

In “The Righteous Mind,” another NYU psychologist, Jonathan Haidt, sees a time of cooperation ahead, out of necessary: “Although conservatives and liberals are fundamentally different, hints are emerging about how to bring them together — or at least help them coexist.” And they “need not revile one another as immoral on issues such as birth control, gay marriage or health-care reform. Even if these two world views clash, they are equally grounded in ethics,” says Haidt. Hope for a reconciliation may seem quixotic, certainly before the 2012 elections. But when “Scientific American Mind” focuses on fear, psychologists “found that conservatives are fundamentally more anxious than liberals, which may be why they typically desire stability, structure and clear answers even to complicated questions.”

“Scientific American Mind” quotes social psychologist Paul Nail of the University of Central Arkansas, “Conservatism, apparently, helps to protect people against some of the natural difficulties of living… The fact is, we don’t live in a completely safe world. Things can and do go wrong.” So conservatives tell themselves, “if I can impose this order on it by my world view, I can keep my anxiety to a manageable level.” But do conservatives really experience more fear and anxiety? That’s questionable. Still, generally we can see “anxiety is an emotion that waxes and wanes in all of us, and as it swings up or down our political views can shift in its wake.” As a result, “when people feel safe and secure, they become more liberal; when they feel threatened, they become more conservative,” according to Nail’s research after the 9/11 attacks.

The core message of Laber-Warren’s “Call a Truce in the Political Wars,” is, of course, that these “psychological insights might tone down the bitter feuding between Democrats and Republicans.” Unfortunately, the evidence and research may actually suggest just the opposite by focusing on America’s broken political system as we go into the November elections, further suggesting that in 2013 the feuding will intensify, and even get far more aggressive at least until the 2016 elections… no matter who wins this year! Why? Behavioral science is no magic bullet.

“Scientific American Mind” highlighted one area of hope in the most contentious climate arena. In one experiment, “psychologists reframed climate change not as a challenge to government and industry but as “a threat to the American way of life.” The research was conducted by Irina Feygina, an idealistic NYU doctoral student who Scientific American Mind believes may have “found a way to bring conservatives and liberals together on global warming.” Feygina’s research process: “After reading a passage that couched environmental action as patriotic, study participants who displayed traits typical of conservatives were much more likely to sign petitions about preventing oil spills and protecting the Arctic National Wildlife Refuge.” “Scientific American Mind” makes a quixotic leap of faith, concluding that “environmentalism may be an ideal place to find common political ground.” Unfortunately, America as a whole is in collective denial about the environment. And this issue goes to the heart of Big Oil revenues that exceed $150 billion annually, far in excess of the $1 billion cost of getting the oil-friendly politicians in office. Big Oil has zero interest in compromising.

So what’s an investor to do as our brutal political infighting accelerates? While we have the highest respect for “Scientific American Mind,” the same can’t be said for the behavioral sciences. This new research, rather than revealing a new path forward, simply confirms the fact that behavioral science has, in the last decade, become the investor’s worst enemy, another powerful weapon in Wall Street’s vast arsenal manipulating America’s 95 million investors. One that cannot be trusted.

In the final analysis, “Scientific American Mind” editor Laber-Warren admits that when it comes to many moral issues, “liberals and conservatives will never see eye to eye.” Maybe they “can try to cultivate mutual respect.” But even that seems highly unlikely, not now, not in 2013, nor likely any time before the 2016 elections.

Worst case scenario: Only a global catastrophe will shock politicians out of their self-defeating gridlock that’s savaging America’s future.

So where should savvy investors put their money? We began hoping to find solutions in Scientific American Mind’s work… but in the end, we only see ahead more chaos and gridlock as irrational politicians will have far more impact on investing and retirements than market fundamentals. No, expect no compromise, at least not till after 2016 elections… or after the coming crises, catastrophes and global economic crash, whichever comes first. Till then political ideologies will intensify, interfering unpredictably and irrationally in economies and financial markets worldwide… no matter who runs government.

Best strategy? Get out of the stock market, now, till 2016… although, unfortunately, your political brain won’t let you! “

- http://www.marketwatch.com/