The Company We Keep

The Monday following the Kentucky Derby the Dow advanced triple figures, supposedly on the basis of the usual economic reports investors look at. I would bet the rally had more to do with the astounding come-from-behind win by Mine that Bird, the longest Derby shot since 1913. Although he subsequently lost at the finish line to a filly named Rachel Alexandra in the Preakness, it was another glorious day for horse racing and for optimism about the future of gender equality and long shots. Even if your horse didn’t win, it was fun to be witness to both of those historic races in 2009. All of the horses were in good company.
As if we don’t have enough fears, the idea of closing Guantanamo and relocating prisoners to American soil has America boiling with fear and loathing. The trio of horses called “The Economy,” “The Swine Flu” and the really dark horse, “The Future” are not seen exactly as great bets for the current race toward recovery. Why augment our woes by adding Guantanamo to the race card? As the New York Times points out, based on information supplied by the Pentagon, one in seven terrorists released goes back to terrorism, so why increase our odds of seeing the Guantanamo horse stumble on the way to the gate let alone down the stretch? Leave that horse in the stable for now. We have enough fears without unnecessarily adding new ones, or so the argument goes.
The optimists among us trot out the old Roosevelt aphorism: “We have nothing to fear but fear itself.” That was easy for Roosevelt to say, for he was a privileged man. However, even he, in the midst of his recovery plan, changed strategies because he feared inflation would run rampant, so he killed the recovery for another decade by raising interest rates just as things were on the brink of getting better. That led to a wiser aphorism: so much for fear itself remaining the only fear, even for privileged aphorists.
But Roosevelt had a point, although he didn’t stay his own course. As behavioral economists and psychologists have indicated, fear itself is not good medicine for us or the economy. Just when we need to start spending again, we are hording what little or much we retain and thereby adding to the problem rather than the solution. We aren’t even at the track, let alone on track to bet on anything. We’d rather sit in our fear than venture forth because the inertia of fear has us in its grip. And the more we listen to fear-mongers like conservative talk show hosts, Little Red Hens (red state Republican politicians), and Hen-pecked Red Roosters (Democrats from traditional red states) straddling the middle of the road and pretending to be tough, the more fear we generate. The less action we take.
NOW HEAR THIS: We can fear this bailout or that regulation or socialism or eating pork or prisoners escaping maximum security prisons. Or we can choose not to. We can surround ourselves with or listen to people who reinforce our fears or we can surround ourselves with or listen to people who alleviate them. The question is: which strategy will do the most good?
My advice is: listen to the guarded optimist, not the prophet of doom or the slick, oily salesman. You are the key to a successful recovery, not just the BIG GUYS. Your guarded optimism will get the machinery going again and the economy recovering.
Here’s how it works. Although the subject of the following is happiness, it shows how optimism can spread among us as well. The following is a summary prepared by Dan Ariely of Duke University’s Fuqua School of Business for Time Magazine. He summarizes the work of a noted physician and sociologist from Harvard, Nicholas Christakis.
Social scientists used to have a straightforward, if tongue-in-cheek, answer to the question of how to become happy: Surround yourself with people who are uglier, poorer and shorter than you are - and who are unhappily married and have annoying kids. You will compare yourself with these people, and the contrast will cheer you up.
Nicholas Christakis, 47, a physician and sociologist at Harvard University, challenges this idea. Using data from a study that tracked about 5,000 people over 20 years, he suggests that happiness, like the flu, can spread from person to person. When people who are close to us, both in terms of social ties (friends or relatives) and physical proximity, become happier, we do too. For example, when a person who lives within a mile of a good friend becomes happier, the probability that this person’s good friend will also become happier increases 15%. More surprising is that the effect can transcend direct links and reach a third degree of separation: when a friend of a friend becomes happier, we become happier, even when we don’t know that third person directly.
This means that surrounding ourselves with happier people will make us happier, make the people close to us happier - and make the people close to them happier. But social networks don’t transmit only the good things in life.
Christakis found that smoking and obesity can be socially infectious too. If his thesis proves out, then the saying that you can judge a person by his or her friends might carry more weight than we thought.
We can choose to listen to the fear-mongers like Dick Cheney or Rush Limbaugh, or we can listen to the practical and principled wisdom of President Obama. More importantly, we need to surround ourselves with people who will spread the much needed optimism for a real recovery (flu, economy, future) to take place.
We also need to live up to and demonstrate our principle of justice for all, not just when it is convenient. The Guantanamo “horse” needs to be saddled and ridden sooner or later and not frightened off the track by scare tactics voiced by those who may have personal information to hide. Our short-term fears are miniscule when compared to the long-term consequences of failing to address the world’s perception of what Guantanamo currently stands for, namely American injustice.
The Belmont Stakes is next. Ladies and gentlemen, place your bets.