The video below is an interview between Stephen Colbert and John Darnielle, the singer/writer/main guy in The Mountain Goats, of which two parts caught my attention. The first was the "suicidal pride" (in Colbert's words) of mountain goats, in that many die attempting to jump across ravines that are significantly wider than they can jump. The second was Darnielle's discussion about finding hope in times of absolute desolation because, basically, there's nowhere to go but up.
|The Colbert Report||Mon - Thurs 11:30pm / 10:30c|
The day after that interview aired, I received in the mail a copy of Miles Benjamin Anthony Robinson's Summer of Fear (which is pretty awesome and you should buy it). The song Trap Door (embedded below) is an interesting counterpoint to Darnielle's statement above: it basically argues that things can always get worse; there's "a trapdoor in every rock bottom."
Miles Benjamin Anthony Robinson - Trap Door from LaundroMatinee on Vimeo.
Thinking about these ideas, I thought back to my freshman year of college, when I broke my arm shortly after my birthday. I had a cast up to my elbow and was unable to write at all, and unable to type, eat, or do just about anything else at a normal speed. In the grand scheme of things, it wasn't a huge deal - I had no permanent injury or scar, and I didn't have any midterms or finals while the cast was on - but it still would have annoyed most people. After I had had it on for a few weeks, one of my friends pointed out that I seemed to be enjoying the experience, and wondered what was wrong with me.
I responded by saying that it was an opportunity to temporarily see things from a new perspective, and try something that I (hopefully) would never have to do again. In hindsight, I have no idea why it would be desirable to experience one-armed life. But the "new experience" thing, coupled with the fact that I really wasn't suffering very much, was enough to make me (sort of) enjoy it.
More generally, this got me thinking of a fairly simple model of personality profiles. In it, there are two basic states of reality: better than average, and worse than average. In each of these states, you can believe that (and act as though) the state will continue indefinitely, or you can believe that it will soon revert to the mean.
Putting it this way is a little bit different from the old glass half empty/glass half full dichotomy, in that, viewed this way, there are four possible personalities:
1. The Mountain Goat
This is the eternal optimist. Like the band's lyrics, they are comfortable with the knowledge that after a certain point, things can't get any worse and must get better. Like the animal, they can get overconfident and take excessive risks, which don't always end well. For an example, think of a typical eight-year-old...and be thankful that I didn't make a "kid" pun about it.
2. The Trapdoor
These people are the worriers. If things are going badly, they can probably get worse. If things are going well, they're bound to get worse. Lots of old people seem to think this way, which is hopefully not an inevitable result of the aging process.
The conservation of momentum is a physical law, as unavoidable as it is dependable. Some people extend that to their lives in general - if things are going badly, they're bound to get worse, and if they're going well, there's no way that's going to stop. It would be easy to say that these people have no perspective on things, or that they're just stupid. I'm not strongly inclined to disagree with either statement. A nicer way to put it may be that they give themselves too much credit when things are good and too much blame when things are bad, and as a result they think their current trajectory must continue. This profile fits the typical teenager pretty well.
These people think things are going to revert to the mean sooner or later - if things are going badly, they're going to get better; if things are going very well, that's going to slow down at some point. I'm probably one of these, and if I thought there was a stronger argument that most middle-aged people think like this, I could have rewritten this whole post as an age-based thing.
Unfortunately, the American economy seems to be driven by Momentum-Conservers, and we'd be much better off if the opposite were true and it were driven by Mean-Reverters.
During the internet bubble, day traders and professional analysts/stockpickers were amazed at how talented they were (and conveniently ignored the fact that everyone else was doing just as well as they were); many kept doubling their bets until everything started crashing. During the housing bubble, builders and brokers ceaselessly sped up construction until demand - clearly a factor outside their control - slowed, then they were left with acres of unsellable and/or unfinished inventory. In the run-up to the credit crunch, traders bundled mortgages together and somehow thought they could increase the expected return of a set of mortgages by combining them in a different way (note from anyone with a decent knowledge of statistics: you can't); their faith in their own mathematical skill was not enough to beat the laws of probability. In the last year or so, we've seen the flipside of this momentum-conserving belief: excessive pessimism when things aren't going well, and a feeling of hopelessness regarding the economy's short and long-term prospects.
The lesson in all this is that more temperance is needed: people shouldn't rush to throw all their assets at whatever sector of the economy is doing well (either by investing their life savings in tech stocks or by buying a house they can't afford) and companies and banks shouldn't overleverage* themselves just because they've done well recently.
*It's a little ironic that someone who went to law school - a choice, despite being made by many risk-averse people, that generally brings huge amounts of student loan debt in return for the promise of an unresaonably high salary - is advocating against excessive leverage.
As a side note, Daniel Kahneman and Noah Tversky's prospect theory - which is a foundation of behavioral economics and won them a Nobel Prize in economics - is centered on the idea that, from their current vantage point, people overweigh the risk of any loss and underweigh the possibility of any gain. This would mostly correspond to a trap door viewpoint above, though they go into much more detail and explain it (and its implications) much better than I could.