Let us now praise wealthy madmen

Dear Barack,

It’s time we talked about The Market, that utopian place where rational beings make rational decisions based on rational self-interest, the sum total of these decisions guaranteeing that The Market will maintain equilibrium and will insure the positive outcomes for the public.

Not.

According to the proponents of behavioral finance, the market is a mob that behaves like a mob, driven as it is by primal emotions. On writer explains:

The current events in the financial markets are much better explained by the next great paradigm shift in economics, behavioral finance. Here, it is not assumed that human economic actors operate with computer-like logic and dispassion, but are subject to the same wide emotional swings from euphoria to panic, from fear to greed, that is expected in the rest of the human condition. This framework much better explains a financial system willing to lend to anything with over 40 chromosomes (“46 chromosomes? That’s so old fashioned!”) a few years ago, but unwilling to lend even to itself right now.

Warren Buffet knew what he was doing when the planted his desk in a Nebraska cornfield, well away from the hysteria that is Wall Street.

The basic mechanisms that drive the market are ego, greed and stupidity.

Ego is the lies we tell ourselves about ourselves, and stupidity is the conviction that we couldn’t possibly be wrong.

Greed is grossly misunderstood. Everyone assumes it is driven by a desire for money and power. Neither money nor power has anything to do with it. On the contrary, all greed lusts after is to the fawning adoration of all the creatures it believes to be its inferiors. Money and power simply facilitate greed, they aren’t its object.

Greed doesn’t fear going broke; it fears the mob turning on it when it realizes greed is simply so much hot air.

Your job, as president, is to stroke The Market and reassure it that it amounts to something. Praise its wisdom even as it shakes itself apart in a paroxysm of stupidity. Preach the superstition that it will eventually achieve balance and equilibrium, even though The Market’s idea of equilibrium is a blind tightrope walker clinging to the wire by his toenail.

However, when madmen finance your campaign, you have an obligation to praise their sanity.

Your admirer,
Belacqua Jones