When I started this newsletter, I said I was going to focus on business, investing, decision-making and whatever happened to cross my mind. Up until now, all of the topics have been from the first three areas. Today, we’re going switch gears to the “whatever happened to cross my mind” category to take a little road trip back to 1969 and apply it to today. Shoutout to Amy Navarre Cantrell, a classmate from just a couple years ago (okay, 35 years ago) when we were in high school, for the original post that brought the topic to my attention.
Introduction
I reached out briefly to Mr. Foard to verify that it was a real story. He responded quickly and even provided a few more details, which is more than enough of a fact-check for me to feel comfortable that this is legitimate recollection of the events from a half century ago. And kudos to him for the excellent delivery and engaging story. Those of you that have seen me attempt public speaking can testify that he is easily 20 times better at presenting than I ever was or will be. This is one of those situations where social media seems to be adding value.
Having been born in 1968, I was all of one year old in 1969. Needless to say, my memories of the year are pretty much non-existent. However, let’s start with a passage from the start of Mr. Foard’s video:
but when I was a little kid in 1969, the Vietnam war was tearing the country apart and they’d shot John F. Kennedy, and they’d shot Bobby Kennedy. They shot Martin Luther King, Jr. and Malcom X. There was the Manson Family and the Zodiac Killer and it just felt like the whole country had lost its mind.
Tribes and Teams
It was a pretty easy time to separate people into peaceniks/conservatives, haves/have-nots, by race, etc. Our tendency towards tribes makes this even easier. Tribes offer advantages in that having more people in the group increases safety and allows for psychological benefits (just look at how every profession adopts its own jargon and we often communicate in memes). Having competitors outside of your tribe (rivals) can also be beneficial from a motivational standpoint. Imagine racing a 5K with about 200 yards to go and having a comfortable 30-second lead over your closest competitor. Alternatively, imagine that you’re in 2nd place with 200 yards to go and the leader is only a step ahead of you? Under which scenario are you likely to push yourself harder towards the finish line? Humans are also famous for spite, jealousy, and even schadenfreude. In other words, human nature makes it easy for us to split ourselves into in-groups and out-groups.
In a famous study from 1954 (even BEFORE the turmoil of the late-1960’s), two researchers (Albert Hastorf and Hadley Cantril) looked at a college football game between Princeton and Dartmouth. Shockingly (he says with sarcasm), fans from each school perceived the actions on the field differently. Again, the “tribes” we identify with influence how we perceive reality.1 What actually happens is not as important as how we perceive what happened.
The Role of News Media
Another factor that has played a big part over the past forty years or so is the commercialization of news. While there is a lot of finger-pointing about who is responsible2, the reality is that we (consumers of the news) share a lot of the blame. For-profit “news” is going to sell us what we choose to “buy”. Our natural tendency to pick sides and see the other side as “evil”, “naïve”, “despicable”, etc. makes us predictable targets. We also come into the news-selection process with our own pre-conceived biases and worldviews. If you feel that the government is bad, you will often look for (and believe) evidence which supports that framework. Alternatively, if you feel that the government needs to provide regulation in order to keep people with power from exploiting others, you will often look for (and believe) evidence which supports that storyline. Your view on taxes will likely depend on whether you see taxes as a way for the government to confiscate your hard-earned dollars or as a tool that helps keep people with a net worth in excess of $100 million from having too many advantages. Do you see masks/vaccines for COVID as tools for government authority abuse or as tools for public health? The list goes on and on. These tendencies make a compelling case for news to be “sold” with a bias. That bias can be conservative (OAN News/Fox News) or liberal (CNN/MSNBC). Headlines that drive “clicks” (aka “clickbait” are often employed to trigger responses) and engage interest.
Pick a Side…or Better Yet, Don’t!
Way back as we were heading into the 2016 Presidential election, I put together this little diagram to illustrate the manner in which many people were seeing the political environment (again, as I’ve pointed out on multiple occasions — I am NOT an artist!)
The top diagram illustrates how Democrats/liberals tended to view the political environment. The middle diagram illustrates how Republicans/conservatives tended to view the political environment. The bottom diagram probably best captures reality. For the record, this diagram has room on each side where there are some pretty EXTREME individuals. However, the vast majority of people are probably not too far apart on many major issues. Consider the following data from the Pew Research Center based on a survey of just over 5000 US adults in the spring of 2021.
Note that many items are considered problems (86% of people think health care costs are either a very or moderately big problem and climate change — which is a pretty politically charged arena — has 65% thinking it is very/moderately big problem plus another 22% arguing it is at least a small problem). We may be divided on how to address these issues, but not on what issues we face. Therefore, the debate is more about what solutions the country should take — an area where rational debate can occur. Having taught finance, “the federal budget deficit” is an area that grabs my attention. We can debate at what point (if any) it is truly a problem (see Modern Monetary Theory) and, if it is a problem, how do we address it (reduce spending, increase taxes, a little of both)? Smart, rational people can have different perspectives on this (and do).
The Role of Strawmen and Nuance
So, why do we tend to view the other side as extreme lunatics when, for the most part, they are not? The answer goes back to tribes. Once I buy into the idea that my tribe is better, I need to reinforce that image by attacking a strawman on the other side. A strawman argument is one in which you are incorrectly representing (either intentionally or not) the other side’s argument.
Many in the media (definitely not all of them) who make their money based on eyeballs on the screen or clicks on internet articles understand how having an “enemy” (the other tribe) can reduce our ability to think rationally about that enemy. Also, outliers tend to attract our attention which can cause us to think things are worse than they really are and think without nuance. One mental image that I saw recently (in a discussion about masks and COVID-19) was talking about how we tend to see things as an on-off switch when, in reality, a sound mixer is probably more appropriate.
The on-off switch implies binary thinking (our team is right/good, their team is wrong/evil). The reality is often far more nuanced. Both teams are likely right AND wrong at the same time.
For example, consider economic inequality which appears as item number 8 on the list of issues from Pew Research. Instead of arguing that income inequality is bad, let’s look at it in more detail. First, economic equality is more likely to be bad than good. Some people have historically done a better job of allocating capital than others. I’d rather have Warren Buffett, Jeff Bezos, or Mark Zuckerberg handling that role, as opposed to someone who dropped out of high school because they were not motivated. That doesn’t mean that the people who have a successful track record are guaranteed to repeat their previous success or that someone who struggled initially can’t turn things around. Merely, that probabilities favor the former. Also, since we don’t all value the same things, why should we have equal amounts of them? I recently retired because I value my time more than the income I could continue to earn from working (and because I was fortunate to have enough wealth to be able to make that choice). Others, with far more wealth than me, continue to work to increase their wealth or economic power. Neither approach is better than the other, but the different decisions increase economic inequality.
On the flip side, extreme wealth inequality is bad. If I have enough money that I can buy 15 mansions across the world and you are worried about affording shelter, there is a problem. If I can afford to send my daughter to private school, hire quality tutors, and introduce her to the right connections to enhance her opportunities, while you are working two jobs and can’t spend time with your kid(s), there is a problem. These are real challenges that many people across the globe face. So, what is the RIGHT amount of economic inequality? Good luck finding mutual agreement on that question, but the key is recognizing that neither zero nor infinite are the correct answer.
Stuff’s Getting Better. Stuff’s Getting Better Every Day!
The subtitle of this week’s blog (stolen from The Postman) is “Stuff's Getting Better. Stuff's Getting Better Every Day.” One of the traits of people is that we tend to spend more time thinking about what is going wrong than right.3 However, if we look at our past, things are MUCH better today than they were 100 years ago.4 Consider some of the highlights from a 2015 article in The Atlantic that looked at this issue.
According to the 1920 census, 85 percent of men over 14 were in the labor force, compared with just 69 percent for men over 16 today.
With a fatality rate of 61 deaths per 100,000 workers, the workplace was about 30 times more dangerous than it is today.
School boards preferred female teachers not only because they were seen as more loving, but also because they would do what male principals told them while accepting less than a man’s wage.
Social Security didn’t exist, and in bad times, poverty among the old was so bad that contemporaries wrote of growing old as if it were a dystopia.
The typical American spent one-third of his income on food 100 years ago, which is twice today’s share.
The average American ate roughly equivalent amounts of lard and chicken—11.5 pounds and 14 pounds, respectively, per year. One century later, the ratio has, blessedly, widened. Americans eat 57 pounds of chicken, compared to just 1.5 pounds of lard.
Ten percent of infants died in their first year, compared with one in every 168 births in the U.S. today.
And the list goes on. There were no cell phones or internet. Penicillin came about in 1928, while television crept into homes in the 1920’s - 1940’s. The technology at our fingertips today would blow the mind of someone who was around in 1900. Are there legitimate challenges facing the population today? Sure there are. However, the tools at our disposal today are staggering…and they’ll be even greater twenty years from now. The future is looking bright!
Roll That Video Into Some Closing Thoughts
Let’s close by looking back at the video that inspired today’s post. A father and son traveling by car across California run into car problems. Despite the apparent divisions across the country (seem familiar?) people worked together to get them back on the road and home. The ending notes of the story are equally important (if not more important) to me.
And about a month later, Neil Armstrong walked on the moon. So, keep the faith.
and
There are a lot more good people than bad.
Let’s address these in reverse order. There ARE bad people out there, but that is not what the sentence is addressing. Instead, it says that there are a lot more good people.5 Think back to the political image related to the 2016 Presidential election. There were outliers on each side that are NOT going to play well with others. That’s okay. If you have 10 people and you can get 8 or 9 of them working together, that is a significant accomplishment. So, how do you get two people who strongly disagree with each other to work together? Note that in Mr. Foard’s story, there was no discussion of who voted for whom. Instead, there was a goal (get the father and son back on their way) and a group of people working to accomplish that goal.
Focus on our goals and what we have in common rather than focusing on the divisions. Remember the on-off switch vs. the sound mixer? Often, the differences are less stark and more nuanced than we think. If there’s a difference of opinion, instead of jumping into argumentative mode6 (and creating straw men), make sure you understand (a) what the other person’s opinion is and (b) what is driving that opinion. Assume that I say that I think capital gains taxes are too high, while you think that they are too low. Instead of getting into wealthy vs. poor arguments, let’s talk about the pros/cons of higher tax rates and lower tax rates. If you can’t think of both a pro and a con for BOTH sides of that question, you are not being honest with yourself. The same is true for any significant problem. Avoid arguing the person and instead focus on addressing the topic by looking for a solution.
My favorite response when teaching was often “it depends”. Not to evade the question, but to illustrate that the answer had more layers than a “yes/no” answer could provide. Listen, communicate, re-think and be open to changing your opinion. It is not a sign of weakness, but a sign of strength to work towards a better position that combines information from both sides.
The first quote reminds us that if we look for reasons to not get along and to separate into tribes, we can do it. It’s almost too easy to “tribe up” and pick our sides. However, there are problems that require us to work together. Solving them (or even improving our situation with respect to them — I doubt we “solve” race relations, climate change, or many of the other challenges society faces anytime soon) will require some effort and we might have to work up a sweat and be uncomfortable for awhile (just like unloading the watermelons). Society will need to learn how to compromise and get away from Team Blue vs. Team Red battling for political power instead of for the good of the world (and keep that focus on the good of the world, not just our country — our country is just another team). However, working TOGETHER makes us more powerful than working AGAINST each other.
Which is why the phrase “You are the average of the five people you spend the most time with” by Jim Rohn carries so much resonance. In fact, “According to research by social psychologist Dr. David McClelland of Harvard, [the people you habitually associate with] determine as much as 95 percent of your success or failure in life.” Read that again, because it is astonishing. Some of that is the fact that we are going to be drawn to people we find interesting and rewarding to spend time with (like attracts like), but part of it is that these people become our “tribe” and we all reinforce behaviors. Maybe a good post for a future blog. Source for the above — https://maartenvandoorn.medium.com/you-are-the-average-of-the-five-people-you-spend-the-most-time-with-a2ea32d08c72.
People will blame Ronald Reagan for overturning The Fairness Doctrine (but that only pertained to network news, not cable stations). Others will blame Facebook, Twitter, and other social media accounts. Some will point to Rush Limbaugh and conservative talk radio, while others point to reality TV, clickbait headlines, etc.
In finance, this is captured by the behavioral bias known as loss aversion which notes that people tend to feel the pain of losses more than they feel the joy of an equivalent gain.
Taking a walk a couple of days ago, I was listening to a podcast (Business Brew hosted by Bill Brewster) where the guest was Jim O’Shaughnessy. Jim made the point of how lucky he felt whenever he stepped into a shower, knowing that for 99% of human existence, the concept of taking a warm shower inside your house was not possible. We take a LOT for granted.
Note that “good people” does not imply that the person is 100% good, just as a “bad person” does not imply that the person is 100% evil. I am still waiting to meet the person who is 100% good. Virtually all of us have faults or characteristics that we would prefer not to have. Some people who may appear to be bad, can just be having a bad day or a rough month. I think most of us have been there. We all spend time in the stupid zone more than we’d like.
This is MUCH easier to do than we realize. It is almost the default setting on our brains and we have to work to avoid it.