Are Liberals Driven By a Desire for Novel Pleasure and Conservatives by Fear of Pain? If So, How Does that Affect Investing, Politics and Happiness?
by ilene - March 10th, 2011 3:47 pm
Courtesy of George Washington’s Blog
Preface: This essay slams partisan liberals and partisan conservatives. If you think I’m unfairly criticizing "your" side, it might be because you’re falling into a self-destructive pattern of defending your narrow worldview, which is the whole point of this discussion.
In addition, I would bet that the "conservatives" showing fear are not really conservatives, but Republican party loyalists and authoritarians, and likewise the "liberals" showing a lack of discipline are not true progressives but naive, unthinking Democratic party loyalists. Indeed, some of the bravest people I’ve ever met are libertarians, and some of the most disciplined people I’ve ever met are progressives.
Remember, poll after poll shows that both national parties are deeply unpopular with an electorate looking for something new and different. It is those who love one of the two mainstream parties who are the extremists.
Numerous studies have claimed to show that conservatives tend to be more fearful than liberals.
For example, Wired reported in 2008:
In reflex tests of 46 political partisans, psychologists found that conservatives were more likely than liberals to be shocked by sudden threats.
Accompanying the physiological differences were deep differences on hot-button political issues: military expansion, the Iraq war, gun control, capital punishment, the Patriot act, warrantless searches, foreign aid, abortion rights, gay marriage, premarital sex and pornography.
"People are experiencing the world, experiencing threat, differently," said University of Nebraska political scientist John Hibbing. "We have very different physiological orientations."
The study, published today in Science, has not yet been duplicated, but adds a potentially troubling piece to the puzzle of biology, behavior and politics.
Earlier studies have linked reflexive responses to threats — which for testing purposes take the form of loud noises and graphic images — with existing states of heightened anxiety.
Though the Science study’s authors cautioned against an overly broad interpretation of their findings, the results suggest that fear leads to political conservatism.
***
Study co-author Kevin Smith, also a University of Nebraska political scientist … agreed that "people with stronger responses are more sensitive to potential threats in their environment."
And the Telegraph reported last December:
Scientists have found that people with conservative views have brains with larger amygdalas, almond shaped areas in the centre of the brain often associated with anxiety and emotions.
On the otherhand, they have a smaller anterior cingulate, an area at the front of the brain associated with courage and
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Stock World Weekly 2-27-11
by ilene - February 27th, 2011 8:22 am
Here’s the latest edition of Stock World Weekly: Irresistible Forces Meet Immovable Objects. - Ilene
Excerpt:
On Saturday, February 27, the Security Council of the United Nations (UN) voted unanimously to institute sanctions on Libya, including travel bans and freezing the assets of Muammar al-Gaddafi and others associated with his regime. Protests have dragged into their twelfth day, and protestors refuse to yield in the face of utterly horrific retaliation by Gaddafi’s loyal forces. U.S. ambassador to the UN, Susan Rice said, “When atrocities are committed against innocents, the international community must act with one voice – and tonight it has.”
The Telegraph reported over the weekend that Gaddafi apparently made good on his threats to trigger a civil war, using irregular forces largely composed of hired mercenaries to launch a counterattack against protesters. “Anywhere we go there is danger,” said one woman, a 28-year-old mother of four who asked not to be named. “All we want is food and fresh water for our children but it is impossible to find. Security is the only concern of the authorities.”
An accurate report of the death toll is impossible to obtain at this time, but on Wednesday, Italy’s Foreign Minister, Franco Frattini said, “We believe that the estimates of about 1,000 are credible.” The situation in Libya has deteriorated since then. Multiple stories coming in from all over the country have cited dozens to hundreds of casualties in each city. It appears that Libya has slipped into the abyss of complete social breakdown and civil war.
This is just one example of the tide of popular unrest that has been unleashed in the wake of the Federal Reserve’s and other central banks’ inflationary policies. The chart below shows the U.S. Adjusted Monetary Base increasing from $1.75Tn in 2009, to $2.0Tn in 2010, and now nearing $2.3Tn, an increase of $300Bn in just two months! This represents an increase of 35% in less than 18 months. (The U.S. Monetary Base is the total amount of currency that is circulating in the hands of the public or in the commercial bank deposits held in reserves of member banks of the Federal Reserve System.)
Another revolt of a more peaceful nature took place in Ireland. The long-dominant Fianna Fail party was brutally rejected by Irish voters, taking just 15.1% of the vote and losing…
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Ron Paul slams Fed’s bond-buying program; Political Pressure on Fed Mounts
by ilene - February 9th, 2011 3:49 pm
Courtesy of Mish
MarketWatch reports Paul slams Fed’s bond-buying program
Outspoken Federal Reserve critic Rep. Ron Paul, R-Texas, slammed the central bank’s latest $600 billion bond-buying program on Wednesday, saying it and near-zero interest rates haven’t led to job creation in the United States.
“Over $4 trillion in bailout facilities and outright debt monetization, combined with interest rates near zero for over two years, have not and will not contribute to increased employment,” Paul said at a hearing of a House Financial Services subcommittee he heads.
“Debt monetization” is a reference by Paul and other Fed critics to the Fed’s latest bond-buying program — a characterization rejected by Fed Chairman Ben Bernanke.
In essence, Paul is charging that the central bank is enabling profligate spending by the government. The term “debt monetization” is a buzzword for how some poorer countries conducted policies in the post-World War II era.
Political Pressure on Fed Mounts
WSJ’s Sudeep Reddy reports on concerns the Federal Reserve could be facing political pressure from Congress, as Rep. Ron Paul holds the first hearing of a new Fed oversight committee. Separately, Fed Chairman Bernanke updates Congress on the economy.
If the above YouTube does not play here is a link: Rep. Ron Paul Ignites Fed Worry
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Buried One Mile Deep In Economic News: Rand Paul Proposes Elimination of HUD; Churches “Walk Away”; China Hard Landing; Repeal of Davis-Bacon
by ilene - January 27th, 2011 3:01 pm
Courtesy of MIsh
Many stories of significance have come my way on housing issues, state debt issues, federal debt issues, pension issues, and other economic items of note. I feel as if I am buried a mile deep news. Here are a few stories that caught my eye.
Senator Rand Paul Proposes Elimination of HUD
I am pleased to report a tremendous deficit cutting idea by senator Rand Paul: Eliminate Energy, HUD and most of Education department
In his first major legislative proposal, U.S. Sen. Rand Paul has proposed cutting government spending by $500 billion in a year, including eliminating the Departments of Energy and Housing and Urban Development and most of the Department of Education.
That is the single best piece of fiscal legislation proposed in years.
Nevada Governor Brian Sandoval Addresses Underfunded Public Pension Plans
While Illinois has jumped off the deep end with tax hikes, Nevada’s Governor says Tax increases last thing Nevada businesses need
Tax increases are the last thing Nevada businesses need now, Gov. Brian Sandoval told a receptive audience Wednesday during a speech to the Las Vegas Chamber of Commerce. "My understanding is that PERS is an $8 (billion) or $9 billion unfunded liability that Nevada can’t afford," he said. Sandoval said benefits reforms must starts with the new employees hired by the state.
I commend Governor Brian Sandoval’s ideas and his starting point. States need to scrap defined benefit pension plans for new hires immediately.
100,000 People in Oakland Expected to Apply for 650 Subsidized Housing Openings
The San Francisco Chronicle reports Oakland opens waiting list for Section 8 vouchers
Oakland’s housing authority opened up its waiting list Tuesday for Section 8 housing vouchers, drawing thousands for a coveted spot in line.
The only way to sign up was over a computer, so across the city, hundreds jammed into city libraries to fill out the forms in the hope that they might eventually get a chance to live in subsidized housing.
In the first three hours, 6,000 people filled out applications. Over the five-day application period, the housing authority expects 100,000 people to apply for only 10,000 spots on the waiting list.
The housing authority uses a lottery to determine who gets on the list. And even then it’s no more than a foot in the door. It has taken nearly five years to clear the waiting list that was
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Surprise, It Was Greenspan and Bernanke’s Fault
by ilene - January 27th, 2011 2:38 pm
Courtesy of Jr. Deputy Accountant
The Financial Crisis Inquiry Commission is about to tell us, in 576 pages, what many of us already know:
The majority report finds fault with two Fed chairmen: Alan Greenspan, who led the central bank as the housing bubble expanded, and his successor, Ben S. Bernanke, who did not foresee the crisis but played a crucial role in the response. It criticizes Mr. Greenspan for advocating deregulation and cites a “pivotal failure to stem the flow of toxic mortgages” under his leadership as a “prime example” of negligence.
Anyone else running out tomorrow to get a copy?
Like the 9/11 Commission, we could have saved a whole lot of money and time by simply verifying alternative media claims instead of starting from scratch as if no one knew anything all along.
Oh well.
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What Most People Don’t Realize About The Fed’s Superpowers
by ilene - January 27th, 2011 2:33 pm
Bob Prechter’s Conquer The Crash reveals whether the Fed really can rescue the US economy
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By Elliott Wave International
Since its creation in 1913, the primary intended role of the U.S. Federal Reserve Bank has been that of protector. In theory, the central bank was bestowed with the power to shape monetary policy in a way that would keep both booms and busts in check. The two main tools at its disposal — interest rates and money creation — would provide a "ceiling of normalcy" above expansions AND a "net of safety" below contractions.
To this day, the financial mainstream holds great faith in the Fed’s ability to fulfill its save-the-day duties — as these recent news items make plain:
- "Why Raising Fed Funds Rate Is Positive For Equities." (Seeking Alpha)
- "Fed’s Moves Lift All Asset Classes." (Associated Press)
- "US Stocks Erasing Losses: The aggressive moves of the Fed have been an important driver for the stabilization of stock prices." (Bloomberg)
But of all the variables the Fed creators took into account, there’s one glaring factor they neglected to consider: Namely, it cannot force consumers to spend, creditors to lend, or businesses to borrow. The events of 2007-2009 "credit crunch" and the subsequent "Great Recession" made that obvious. Remember how the government was upset at banks for sitting on the bailout funds instead of lending them out to consumers? And consumers weren’t exactly lining up on the street to get a loan, either.
The Fed’s inability to change social mood is the central theme in Chapter 13 of EWI President Bob Prechter’s NY Times business bestseller book Conquer the Crash. There, Bob describes the Fed’s strategy of lowering the federal funds rate to stimulate spending to be as effective as "pushing on a string." Writes Bob:
"The primary basis for today’s belief in perpetual prosperity and inflation with an occasional recession is what I call the ‘Potent Directors Fallacy.’ It is nearly impossible to find a treatise on macroeconomics today that does not assert or assume that the Federal Reserve Board has learned to control both our money and our economy. Many believe that it also possesses the immense power to manipulate the stock market. The very idea that it can do these things is false."
And so begins one of the most groundbreaking studies into the very real INABILITY of the Fed to fell the great bears of economic declines, or…
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One Reaction to the Obama State of the Union Address That Made Sense
by ilene - January 27th, 2011 1:57 am
Courtesy of Jesse’s Americain Cafe
It amazes me that the discussion on change centers on ‘improving competitiveness’ when the crisis was caused by a massive financial fraud and political and regulatory failure that goes largely unresolved and unrepaired, sucking the life out of the real economy and spreading corruption of thought and action. Slogans and code words are the substance of the public policy discussion in the US and Europe, and I think with the intent to deceive, a propaganda campaign. The mainstream media in the States is owned by a handful of powerful corporations. But fewer and fewer turn to the mainstream media anymore.
"In addition, any economist will tell you that when the free market fails a black market emerges. The blogs are the black market of information."
David B. Collum, Cornell University
As for competitiveness, the current global trade regime is underpinned with and founded on a fraud, a set of managed currencies pinned to the US dollar and under the control of a banking cartel. There is no real free trade, only an illusion of such, promoted by the rapacity of multinational corporations and their partners in authoritarian governments.
The only real competition I can see is the race to destroy the middle class and reduce the public around the world to the least common denominator of slavery, serfdom, and servitude, with the dollar and the jackboot as their weapons.
From Mark Thoma:
"Eliminating regulation: The idea is that removing unnecessary regulation will improve our ability to innovate, and this will help the economy create new, good jobs. However, it wasn’t lack of innovation or lack of competitiveness that got us into this mess, it was an out of control financial sector.
The President talked about eliminating unnecessary regulation, but far too little was said about the need to implement new regulations where they are needed. In addition, by focusing so much on helping business, the president risks sending the message that what is good for business is necessarily good for the nation. (Risk? As the risk of sounding snarky, that is the reason for the season. It was the corporate FIRE sector that caused the financial crisis in the first place. – Jesse)
Businesses need the right environment to thrive, but we must not lose sight of the fact that it’s the skills of the people that work at businesses that matters most. Our ultimate goal is the best possible life for
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One Investment Strategy for Q1 2011: Cash, Baby, All the Way
by ilene - December 28th, 2010 10:09 pm
Charles Hugh Smith agrees with us on the wisdom of cash: One Investment Strategy for Q1 2011: Cash, Baby, All the Way - Ilene
Courtesy of Charles Hugh Smith
In response to readers’ requests, I disclose my own amateur’s Investment Strategy for Q1 2011: cash is king, and the U.S. dollar looks good simply because almost everyone expects it to collapse.
Despite my oft-avowed amateur-market-observer status, readers often ask me for advice or opinions on where to put their capital. This is not advice (please read the HUGE GIANT BIG FAT DISCLAIMER below), it is a disclosure of my own personal opinion, what we might call "one investment strategy of many possible investment strategies" for the first quarter of 2011: cash, baby, cash all the way.
Why am I in cash? Because I don’t trust the parallel rallies, and I am extremely skeptical of the various "stories" which are driving the rallies. Why am I skeptical? Because everybody and their sister has bought into the stories, and a one-sided trade is rarely the winning one.
Yes, it’s my contrarian nature: when everyone is a believer in a "story" that is too good to be true, then I become skeptical. This often gets me in trouble. When everyone was buying GM at $50, I was shorting it. When everyone was buying Fannie Mae at $60, I was shorting it (via puts). Both GM and FNM were obviously, painfully insolvent, but it took practically forever for reality to intrude on the fantasy/narrative that each firm was a "solid blue chip" investment with numerous analyst recommendations. In the meantime, I lost money treading water for quarter after quarter.
So even though the market is clearly top-heavy, the short-side trade may yet be ground down by the Fed’s prop-job and the Wall Street/Central State partnership’s desperate desire to use a rising stock market as a propaganda proxy for the "recovery."
(Hey, just borrow and squander roughly 13% of GDP, year after year after year (roughly 45% of the entire Federal budget), and you might stimulate a modest "recovery," too.)
So let’s examine each of the "stories" driving the rallies.
1. The global recovery is solid, and Central State stimulus and quantitative easing will keep growth rising and interest rates low. This narrative drives capital into "risk assets," i.e. stock markets, commodities, FX carry trades, Chinese real estate, junk bonds, etc.
I’m not really sure…
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WILLIAM BLACK: THE EURO COULD COME UNDONE IN 3-4 YEARS
by ilene - December 28th, 2010 3:20 pm
Courtesy of CULLEN ROCHE, The Pragmatic Capitalist
William Black of UMKC believes the Euro could unravel in the coming 3-4 years as the political tension continues to increase and ultimately creates a divide between the core and periphery. Black says the economies on the periphery are likely to remain very weak and will lead to civil unrest and political overhaul. In the end the strains will be too much for the region to overcome.
Black also discusses the imbalances in China and why the Chinese are likely to experience their own crisis in the coming years. (Video here.)
Source: Bloomberg
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Post Mortem for the World’s Reserve Currency
by ilene - December 15th, 2010 2:34 pm
This is a thoughtful analysis by Mike Whitney showing what a financial mess we’re in – the proverbial rock and a hard place scenario. – Ilene
Post Mortem for the World’s Reserve Currency
Courtesy of MIKE WHITNEY, originally published at CounterPunch and Global Research
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Paul Volcker is worried about the future of the dollar and for good reason. The Fed has initiated a program (Quantitative Easing) that presages an end to Bretton Woods 2 and replaces it with different system altogether. Naturally, that’s made trading partners pretty nervous. Despite the unfairness of the present system--where export-dependent countries recycle capital to US markets to sustain demand—most nations would rather stick with the "devil they know", then venture into the unknown. But US allies weren’t consulted on the matter. The Fed unilaterally decided that the only way to fight deflation and high unemployment in the US, was by weakening the dollar and making US exports more competitive. Hence QE2.
But that means that the US will be battling for the same export market as everyone else, which will inevitably shrink global demand for goods and services. This is a major change in the Fed’s policy and there’s a good chance it will backfire. Here’s the deal: If US markets no longer provide sufficient demand for foreign exports, then there will be less incentive to trade in dollars. Thus, QE poses a real threat to the dollar’s position as the world’s reserve currency.
Here’s what Volcker said: “The growing sense around much of the world is that we have lost both relative economic strength and more important, we have lost a coherent successful governing model to be emulated by the rest of the world. Instead, we’re faced with broken financial markets, underperformance of our economy and a fractious political climate…..The question is whether the exceptional role of the dollar can be maintained."
This is a good summary of the problems facing the dollar. Notice that Volcker did not invoke the doomsday scenario that one hears so often on the Internet, that China, which has more than $1 trillion in US Treasuries and dollar-backed assets, will one day pull the plug on the USA and send the dollar plunging. While that’s technically possible, it’s not going to happen. China has no intention of crashing the dollar and thrusting its own economy into a long-term slump. In fact, China has…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
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