Predictably Irrational America

I haven't yet read the new book Predictably Irrational, although I heard the author interviewed on NPR. The book talks about how, as individuals, we make certain kinds of mistakes over and over again. We buy things we don't need because they're on sale. Our headaches get better when we take placebos. "Paying for dinner in cash feels very different than paying the same amount with a credit card, giving your hosts a gift when you arrive at their place for a dinner party is not the same as giving them cash, and giving employees a monthly increase in their salary has different effects on their spending compared to an equivalent yearly bonus."

This is all fascinating, but individual decisions have limited effects. If I personally act as if food eaten standing up has no calories, that only destroys my diet. Think about some of the decisions this country has made that have had horrific effects that could have been predicted--but we made the decisions anyway.

1. When we deregulated the mortgage industry, get-rich-quick schemes put borrowers, lenders, investors, and taxpayers all at risk. Borrowers are losing homes they can't pay for. Lenders are losing big money on defaulting loans. Investors are seeing the securities they bought, which were based on those same risky mortgages, become worthless paper. And we all will end up paying. This happened in the 1980's, when we deregulated the Savings & Loan industry. It was predictable.
   
2. When we declared a "war on terror," we unleashed the intelligence agencies to spy on you and me. It's not just the people with Arabic-sounding names who are getting stopped, often erroneously, in airports. It's snooping on our phone and email conversations and infiltrating our meetings with our fellow citizens. This happened in 1919, with the Palmer Raids; in the 1950's, with anti-communist witch hunts associated with McCarthyism; in the 1960's and 1970'S, with the COINTELPRO operation against the antiwar and civil rights movements (including against the person of Dr. Martin Luther King, Jr.) ; and in the 1980's, when the targets were the radical feminist, Central America solidarity, and nuclear freeze movements. It was predictable.
3. When we invaded Iraq, as I have documented earlier on this blog:
1. Young Americans came home with grave mental health problems.
2. The military tried its best to deny them medical coverage.
3. Many had problems adjusting to nonviolent civilian life.
4. Vets withe Post-Traumatic Stress Disorder will be at greater risk for heart attack than the rest of us as they grow older.
5. The military also tried to cheat returning veterans out of their costly GI benefits, or "bait and switch," giving vets much less than they were promised when they joined.
   
6. Women in the military were sexually harassed and, too often, raped by their fellow soldiers.
7. Military contractors are suffering the same mental and physical wounds as soldiers.

All these insults to our young service men and women occurred to some degree in Vietnam. It was predictable that they'd happen again. And yet we sent them off to war.

It's a good thing to read a book about how to avoid getting snookered out of your personal cash. How can we learn to keep our country from being defrauded out of hundred of billions of dollars, and thousands of lives? Before we make the decisions that people in Washington and at Halliburton want us to make, let's look at that past to avoid predictable mistakes. As the philosopher George Santayana wrote, "Those who cannot learn from history are doomed to repeat it."