Vail Valley Voices: Times of cognitive dissonance
July 13, 2010
Cognitive dissonance is the basis for stress and depression induced by holding two simultaneous but conflicting beliefs. For example: “We can stay together to provide a good home for the children,” or “We have absolutely nothing in common but the children and I’m ready to open a vein.”
We’ve all lived through instances of cognitive dissonance in our lives. I personally think that it has replaced boredom as “the fulcrum upon which the lever that moves our universe rests upon” in modern society. After all, boredom, the real mother of all invention in former times, resulted when one had shelter and a full belly, is now supposed to be relieved by television programming.
Cognitive dissonance results when, for example, what is constantly displayed by the television to relieve boredom has no basis in anyone’s observed or even perceived reality.
According to a recent Pew Research Center survey, the ongoing depression has directly impacted more than half of the nation’s working adults (about 90 million people), pushing them into unemployment, pay cuts, reduced hours at work or part-time jobs.
Nearly half of the survey’s respondents say they are in worse financial shape as a result of the downturn, which has conservatively destroyed 20 percent of America’s wealth. This reality has forced many people into a new, more austere reality, which probably will have long-lasting consequences for an economy 70 percent fueled by “consumer spending,” since more than six of 10 Americans say they have cut back on borrowing and spending.
According to The Washington Post, which published a story about the Pew survey recently: “Hardest hit are the 9.7 percent of workers (that’s about 17 million people according to the way the Labor Department massages their numbers) who have been out of a job for an average of nearly six months. Many Americans are delaying retirement, and others have lower expectations for their children’s futures,” the Pew poll found.
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“We’re going to see much lower consumption going forward,” said Dean Baker, co-director of the Center for Economic and Policy Research. He blames diminished spending on the drop in housing prices. “People who thought they had equity in their homes have seen it disappear.”
Four in 10 adults say they have tapped savings and retirement accounts to make ends meet. Others have sought help from friends and family. Almost a quarter say they have borrowed money from someone. And one in 10 – including 24 percent of workers from 18 to 29 years old – say they moved back in with their parents to weather the economic storm.”
Here’s the cognitive dissonance:
Even as they continue to reel from the downturn, most Americans are beginning to believe that the worst is over. More than six in 10 respondents say they expect their personal financial situation to improve in the next year, which the report called the rosiest outlook since before the recession began in December 2007. Similarly, 61 percent predict that the damage caused by the recession will be temporary.
There is no rational reason to believe “the worst is over” when one looks at the data stream delivered by daily life: Housing prices are still falling. Inventories are growing. There is a huge oversupply of manufacturing capacity globally that shows no sign of decrease.
China’s now admitting its mercantile economy is in trouble. The economic stimulus of borrowed taxpayer cash is ending. The Federal Reserve is printing more money every week to loan to you and me through its purchase of Treasury and now European Union debt, and it doesn’t require a tinfoil hat anymore to notice that virtually all new oil wells are being drilled into reserves that are three or four times deeper underground than before, and in deeper water, or in the case of the Arctic, more hostile (translation: expensive to mine) locations.
Everyone can see that the cheap and easy-to-get oil supply really has peaked. Why else would the oil companies be drilling down to the edge of hell to get the stuff if there were more “easy, cheap” laying around?
Anyone with a pulse who lives outside of the Washington Beltway, especially the rich folks in places such as Greenwich, Conn., who’ve been shorting the Euro as the old country roll over one by one, crushed by the weight of their public obligations, can feel the dissonance between the data and the conclusion that it’s all going to be “okey-dokey.”
The difference is that folks in Greenwich are actually making a lot of money betting against “okey-dokey.” They’re looking at the data and trading the tape, profiting from reality. That one should profit from others’ stupidity isn’t the point. The point is let’s be honest with ourselves.
I’d be willing to bet that Xanax consumption in the Greenwich zip code is far lower than in ours. Less cognitive dissonance means less stress, less depression.
Rather than face the facts and form conclusions based on data that suggests everything we’ve been taught is right is in fact wrong, though, most of us prefer to try to hold conflicting opinions.
Easy, cheap energy that made global trade possible, based on easy access to the lowest wages no matter where they are and the construct of “nobody ever pays off the debt, you just roll it over,” are the most fundamental tenets of our modern government and “consumer” economy. These tenets no longer have any validity given the data.
Yet we take on the second job or we move in with our parents (who have gone back to work or delayed their own retirements, since they can’t sell the McMansion that was supposed to be 70 percent of their old age pension fund), and we say, “it’s just temporary.” Yeah.
We believed “we could stay together,” unlike our parents, and “make a good home for the children,” too.
What we’ve made is a helluva mess. The quicker we all stop trying to deny it, or blaming government, or worse, blaming each other for this stinking pile we’ve all let build up around us and start shoveling a way out of it, the better.
Bill Sepmeier lives off the grid in Sweetwater.