Do The Facts Really Matter?

You have probably heard that President Obama finally released his birth certificate to put aside the whole birther controversy that Donald Trump ignited. Even so, 40% of Tea Party, 33% of Republicans, 27% of Conservatives still have doubts whether Obama was born in the US, and, therefore, whether Obama can legitimately be President.

Here’s what Jonah Lehrer has to say about this event. I think it’s important in understanding human psychology.

What a sad day for American political discourse. It’s more than a little pathetic that the President of the United States had to release his own long form birth certificate just to prove what every serious person already knew. Once a rumor starts, it’s really hard to stop, especially when a quick Google search can rummage up evidence for nearly any belief.

And yet, it’s not entirely fair to blame Trump, Drudge or the information age for our persistent idiocy. Rather, the fault is really our own: The human mind is simply terrible at politics. Although we think we make political decisions based upon the facts, the reality is much more sordid. We are affiliation machines, editing the world to confirm our partisan ideologies.

Consider a recent study by the Public Policy Institute of California. They polled voters shortly after the most recent election, in December 2010. Quite rightly, the majority of Californians said they had little confidence in their fellow voters to make public-policy decisions at the ballot box. That, unfortunately, is where the wisdom ends. While most voters believed that other voters were uninformed, they expressed no such skepticism about their own knowledge.

That was a mistake. It turned out that only 22 percent of voters could identify the largest category of state spending (public schools) when presented with a list of four options. In other words, they performed below random chance. Voters performed even worse when it came to state revenues, with many identifying car registration fees as the leading source of funding. (In reality, those fees account for 2 percent of state revenue.) As the Institute concluded, “Californians’ views about the budget are not based on an understanding of where the money comes from and where it goes.”

–The Ignorance of Voters

Here’s the thing: More education does not lead to more accurate beliefs. Lehrer says this is because "[w]e silence the cognitive dissonance through self-imposed ignorance." Translation: we filter out things that don’t fit our pre-conceived views of the world.  I would posit the answer also lies in Why Powerful People — Many of Whom Take a Moral High Ground — Don’t Practice What They Preach.

"Ultimately, patterns of hypocrisy and hypercrisy perpetuate social inequality. The powerful impose rules and restraints on others while dis regarding these restraints for themselves, whereas the powerless collaborate in reproducing social inequality because they don’t feel the same entitlement."

Let’s call it the hypocrisy of arrogance. As Newt Gingrich said to his wife when caught cheating, ""It doesn’t matter what I do. People need to hear what I have to say. There’s no one else who can say what I can say. It doesn’t matter what I live." That’s about the most cynical display of self-delusion and arrogance I have ever heard. I have to marvel at the brazenness of the treachery Gingrich defends. Trump is cut from exactly the same cloth. It is telling that he is the (temporary) frontrunner to oppose the US President as America sinks further into banana republic status. And this is because Humans prefer cockiness to expertise. They would rather someone be consistent and wrong than inconsistent but right. That’s the basis of ideologies.

[M]y overarching comments to all this are:

1. The real problem in the U.S. has been government capitulation to large corporate interests in fields like healthcare, banking, real estate, defense, agriculture and oil and gas.
2. The elites in America in both government and large corporations feel a sense of entitlement that exempts them from the rules. I see the Charlie Rangel scandal this way for example.
3. The revolving door between government and large corporations reinforces this sense of  entitlement by staffing elites in corporations and government with the same players.
4. The result is a tilting of the playing field toward elites who accumulate wealth. The U.S. seems headed toward a Latin American style income distribution with a wider dispersion of wealth.
5. There will be no substantive change to the financial system unless we get a full economic collapse.  Financial interests are just too powerful now. Re-regulation has just meant greater power for regulators. None of the real systemic issues like too-big-to-fail are off the table.
6. Elites are convinced they have it all figured out. They see themselves as the best and the brightest. That is why re-regulation has increased regulator power in institutions like the Federal Reserve rather than decreasing it (see few comments on this blog’s harsher tone about the credit crisis for more on this).

–On ideology and economics and the apathy of the American public

But do these facts really matter? Consider this. Just recently, President Obama urged a repeal of oil and gas tax breaks, something House Speaker Boehner also has said is a step in the right direction.  Subsidies are distortionary and should be eliminated. I say get rid of all subsidies and tax breaks – corporate and individual. But as soon as Obama made this appeal, the response from Boehner’s people was negative:

A Boehner spokesman, Brendan Buck, said Tuesday that Obama’s suggestions "would simply raise taxes and increase the price at the pump." Buck said that Boehner’s willingness to examine a subsidy did not mean he was advocating its repeal.

Are you kidding me? That’s Corporatism masquerading as Liberty. This is the kind of nonsense you hear nowadays – and people believe it. Why? Well, here’s one reason:

In January 2006 a group of scientists led by Westen announced at the annual Society for Personality and Social Psychology conference in Palm Springs, California the results of a study in which functional magnetic resonance imaging (fMRI) showed that self-described Democrats and Republicans responded to negative remarks about their political candidate of choice in systematically biased ways.

Specifically, when Republican test subjects were shown self-contradictory quotes by George W. Bush and when Democratic test subjects were shown self-contradictory quotes by John Kerry, both groups tended to explain away the apparent contradictions in a manner biased to favor their candidate of choice. Similarly, areas of the brain responsible for reasoning (presumably the prefrontal cortex) did not respond during these conclusions while areas of the brain controlling emotions (presumably the amygdala and/or cingulate gyrus) showed increased activity as compared to the subject’s responses to politically neutral statements associated with politically neutral people (such as Tom Hanks).

Subjects were then presented with information that exonerated their candidate of choice. When this occurred, areas of the brain involved in reward processing (presumably the orbitofrontal cortex and/orstriatum / nucleus accumbens) showed increased activity.

Dr. Westen said,

None of the circuits involved in conscious reasoning were particularly engaged… Essentially, it appears as if partisans twirl the cognitive kaleidoscope until they get the conclusions they want… Everyone… may reason to emotionally biased judgments when they have a vested interest in how to interpret ‘the facts.’

–Drew Westen, Wikipedia entry

So, let’s be clear: Political partisans have a well-developed political world view. Facts won’t change that view. When confronted with data that did not fit their particular view, they experienced mental stress because this created cognitive dissonance. Rather than trying to resolve the conflict objectively, they looked for ways to mesh the new information with the pre-conceived view. When they successfully accomplished this feat, they were massively rewarded by the areas of the brain for pleasure. I talked about this before in my post On The Hypocrisy of Voters: The politics of economics redux which shows that:

People are hypocrites. People don’t have any defensible philosophical world view that they apply systematically. It depends on who is in power and whether one feels allied to power by party affiliation.

What about in investing and economics? Why should we expect things to be any different? Look at the credit crisis. How many leading economists or politicians are crying "Mea Culpa. I was wrong. I screwed up and now I need to repent?" You thought Alan Greenspan was until he started saying "Prove I Was Wrong." You add the psychology of economic forecasting to the hypocrisy of arrogance and the partisan nature of economics and you have a recipe for people digging in their heels, facts be damned. It doesn’t matter what the facts say.

I try to resist this – not always successfully I might add. But I do try. I am asking you to do the same. Don’t overcommit yourself to an investment, a stock, a position on deflation versus inflation, an economic paradigm. If you do, you will be the worse for it. You will be wrong and then you will be confronted with a decision on how to react. The insidious thing about this is that when we are wrong, we react automatically in defense without even thinking about it. And that’s where we get into trouble. Being wrong is humbling, humiliating, shaming – and shame is an emotion that is about as powerful as fear in driving motivations. But being wrong can be a good thing. I will leave you with a TED video by Kathryn Schulz on being wrong. I think it gets at what I’m trying to say.