Michael Lewis has written a number of wonderful books, from Moneyball to Liar’s Poker to The Big Short. He explains complex financial realities in cogent and intelligible terms.
Now, Lewis has just written a book about the two founders of behavioral economics, Daniel Kahneman and Amos Twersky. The book is called, The Undoing Project: A Friendship that Changed our Minds. It is doing very well on Amazon, and thus looks to be a best seller.
As part of his marketing campaign Lewis has been giving interviews to the press. He wants to show that the discoveries of behavioral economics can offer new insights into political leadership. He wants to show how it’s relevant to our everyday life. How better to seduce new readers?
And yet, when you get to the bottom of it, Lewis’s conclusions are anything but earth shattering. They are: Obama good; Trump bad. We did not need prize winning behavioral economists to tell us that. We could have turned to a column by Paul Krugman or by any suitably biased hack.
Apparently, Obama took behavioral economics seriously and used it to run the government and the country. Trump, it appears, is not as tuned in to this latest academic production. Which means, precisely, nothing. Or better, it means that Obama has sucked up to the behavioral economists in ways that Trump has not.
One notes that Lewis’s views of Trump are based largely on his campaign. If it is true, as Selena Zito has famously pointed out that Trump’s detractors took him literally but not seriously while his supporters took him seriously but not literally, then they are chasing a phantom.
Besides, behavioral economics seems to want to reduce decision-making to manipulation. Might this not mean that these members of the guardian class want to arrogate to themselves the power to make decisions for the rest of us?
Behavioral economics seems to devalue rational decision-making and even free will in order to explain decisions as a product of manipulation and exploitation. Everyone seems to find this to be a great idea, which means that it probably is not. One wonders how these self-aware psychologists and their self-aware chronicler have failed to examine their own biases—are they enamored of Obama because he has been stroking their ego and appalled at Trump because he has not surrounded himself with behavioral economists?
Jesse Singal summarized the Lewis argument in New York Magazine:
Kahneman is right, of course, that “the fate of entire societies may be sealed by a series of avoidable mistakes committed by their leaders.” The parent of all these mistakes, at least arguably, is overconfidence in one’s own abilities and perception. Here the divide between Trump and Barack Obama is profound. Say what you will of Obama, he recognized human fallibility: The first president to express active interest in applying cutting-edge behavioral science to his role as chief executive, Obama famously told Lewis that he had decided to wear only two colors of suits to cut down on the potential for “decision fatigue” — a concept straight from the decision-science literature (though part of a cluster of findings facing replication issues) — to color his judgments. Obama also launched the so-called Social and Behavioral Sciences Team, the homepage of which prominently displays this quote from the president: “A growing body of evidence demonstrates that behavioral science insights — research findings from fields such as behavioral economics and psychology about how people make decisions and act on them — can be used to design government policies to better serve the American people …”
Just in case you did not know that behavioral scientists are self-interested. Amazingly, the scientists do not factor in Obama’s lack of any serious qualifications for the office of the presidency. One might say that a rank outsider like Trump did not bring any experience in politics to his candidacy, but if we are going to be fair and balanced, we need to notice that Obama had far less executive experience than Trump. He did know more about the law, however.
But, why doesn’t Lewis deal with the track record of the Obama presidency. Does behavioral economics give anyone a special insight into policy and politics? Does it tell us why the economy has sputtered along for eight years? Does it tell us how much of a mess Obama made out of the Middle East? Does it tell us why the refugee invasion of Europe played in the minds of Europeans and even American? Does it tell us why Obama has been an appalling bad negotiator?
We could go on. I am sure you would rather I did not. Lewis will claim that Trump was manipulating the minds of voters by pegging immigrants as rapists, but the truth of the matter is, in Europe, in sanctuary countries like Sweden and Germany refugees have been committing far more than their share of rapes and other crimes. And let’s not forget the terrorist actions in France.
To say that fewer people died at the Bataclan than on the roads of France misses the civilizational threat that an invading army of Muslim immigrants poses to Western Europe.
To think otherwise is to bury your head in the sand.
To think that people who take these matters seriously are bigots who have not drunk deep of the wisdom of behavioral economists is insulting. It’s the kind of insult that caused people to vote for Donald Trump.
In another interview for New York Magazine Lewis offers up his enlightened opinion that giving power to Trump is dangerous.
New York reports:
Yesterday I [Lewis} noted that The Undoing Project reemphasized for me just how dangerous it is to give power to someone like Trump, who has so little capacity for introspection and humility, who is never going to challenge his own biases and thinking in the way Kahneman and Tversky’s research suggests he — and everyone — should.
Lewis didn’t salve my worries at all. “If it works out, it’s going to work out purely by chance,” he said of the imminent Trump presidency. “There’s no design [with Trump]. He’s at the mercy of the very intellectual forces in the mind that Danny and Amos describe, and so we all are. I think they provide a really interesting filter to observe his political life through. They give you a lens onto his behavior, and in addition, the lens on the behavior of the people he energizes.”
Of course, Lewis did not consider that Trump was playing a part in his presidential campaign and that we ought not to take what he said very seriously. Obviously, this might well turn out to be a problem. I have mentioned the point myself on several occasions.
Yet, if we examine the developing Trump cabinet for hints about how Trump will govern, we note that he has chosen many people who have serious executive and leadership experience, and who do not need to read books about behavioral economists to figure out which suits to wear.
And we note that the generals and the CEOs are not political figures. They are not beholden to a political party and rarely, if ever to an ideology.
Will they be out of their depth on the world stage? Perhaps so. Perhaps not. Are they more or less likely to be warmongers? Historical evidence suggests that they will be less apt to engage in military conflict and more likely to want to win, as quickly as possible. Why are people opposed to that?
But many of them have already functioned quite effectively on the world stage. And surely, when academics object that generals and CEOs just give orders they are merely showing how little they understand about the exercise of power.
And what’s with this obsession with bias? Businesses do not run on bias. Corporations do not run on bias. Armies do not run on bias. To say otherwise is to obscure the issue with one’s own bias.
Speaking of bias, the Obama administration has generated an eight year national conversation about racial bias. Why is this such a good thing? One suspects that the American people, perhaps less irrational than the behavioral economists imagine, decided that they were tired of fighting the culture wars and that it was time to get down to business. You know and I know that if Hillary had been elected we would have gotten a four year conversation about sexism. All criticism of her presidency would have been greeted with cries about sexism.
Generals and CEOs are not culture warriors. They are not ideologues. They are not political party hacks. Their loyalty has been to the nation or to their company.
Perhaps people voted for Trump because they wanted to bridge the American political divide, to put an end to the culture wars and to assert national pride. It may or may not work, but since Lewis and his behavioral economist friends have no awareness of the importance of national pride-- and have failed to see that Obama has diminished it significantly, thus producing the anger that they are so upset to see-- they should be less arrogant about their theories and should show more respect for people who have significant executive experience?
These great thinkers do not respect the free will of the American people. If the American people voted against the best interests of behavioral economists that can only mean that they are being irrational. Lewis thinks that they have been exploited by Trump… as though the American people were not conned and do not continue to be conned by Barack Obama and by his enablers in the media and the academy.
Lewis seems to think that the brouhaha over immigration is much ado about nothing. He should try to explain that to Germans and Swedes and the French and the British, all of whom have come to a different conclusion. Besides, if you are thinking about bad decisions, you should ask yourself what led the American people to put a neophyte like Barack Obama, a man with a minimal experience in the Senate and no executive experience whatever, in the White House. Was he qualified because he read the right books?
New York offers up other pieces of their interview with Lewis:
Trump both knows how to exploit other people’s biases and heuristics and appears completely biased to his own. Here, Lewis sees a stark contrast between our incoming president and our lame-duck one. “Obama was and is totally aware that you need to watch yourself when you’re making decisions, that the decision is influenced by all kinds of extraneous things, like the mood you’re in when you make it, the way it’s framed, the environment,” and so on, said Lewis.
As I said, one of the legacies of the Obama years is that we have become mired in endless conversations about bias. Do you really believe that once we overcome our bias we will see that Obama was a great president? This is not rational deliberation; it’s therapy.
Lewis seems to think that Trump will be more at the mercy of his advisors than Obama. Based on what empirical evidence, one might ask?
I too have occasionally mentioned that the risk with a Trump presidency is that he knows so little about the workings of government or about policy. Thus, he might allow himself to be manipulated by his advisors. And yet, how much did Barack Obama know about these matters? How does Lewis know whether Obama, bringing with him a mindset crafted by Jeremiah Wright, is not just functioning like Wright’s puppet?
As of today, Trump has not made any real decisions besides choosing his cabinet. You can ask yourself whether he has made good decisions or bad decisions. You can ask whether his generals are as likely to make a mess of the Middle East the way Obama did. You can ask whether they will be as likely to encourage an Iran nuclear deal that, if it is not overturned, might very well turn out to be a world class catastrophe. But, to present Obama as a model for good decision making is absurd.
I will grant that Obama has been great for the reputation of behavioral economics? Why do these great scientists ignore their own bias?
New York reports on Lewis’s comments:
“Among other things,” he continued, “Obama was not nearly as much at the mercy of his advisers as Trump will be, because people will be able to manipulate Trump by the way people describe things to him, and Obama is able to change the frame, so he can see the decision for what it is rather than how it’s presented to him. I like that in a president — in a weird way I think a lot of Trump’s decisions are going to be made for him by the people around him because he’s manipulable. This is why people say about him, it all depends on who he’s seen last, what he decides to do. I like having a president who is aware of the forces that are at work in his own mind, and now we have a president who seems to be oblivious, and just loves the forces that are at work in his own mind unconditionally.”
Do you really believe that self-awareness trumps experience? True enough, Trump often claims to be making decisions with his gut. And yet, as I have pointed out, there’s gut and then there’s gut. Warren Buffet says that he relies on his gut. He means that after having spent seven decades reading and studying businesses and the market, his can think more quickly and make better decisions than many of the rest of us. If you wish to rely on Buffet’s gut in choosing stocks you are welcome to buy shares in one of his funds. Just don’t pick stocks by relying on your own far-less-educated gut.
The same applies to Trump, especially when he offers advice on how to negotiate. Again, a real estate developer has far more knowledge of such deals. He gained it from experience, from, let us note, good and bad decisions. He will make quicker decisions than the rest of us more rapidly. Nothing guarantees that his decisions are always right, any more than that Warren Buffet’s decisions are always right.
One is concerned and one has expressed concern over Trump’s inexperience in government. Yet, he does have experience in making executive decisions, something that Barack Obama did not have. It’s not just about shifting the frame. It’s about possessing the information needed to make a decision and about having made a sufficient number of executive decisions to know how to do so.
On that score Obama has certainly not been a success. He has not made deals. He did not negotiate with Republicans and failed to negotiate a Status of Forces agreement when walking away from Iraq. He allowed his IRS to persecute his political opponents and incited his Justice Department to cover it all up.
I do not know how well the Chairman of Exxon Mobil can negotiate with foreign governments. And yet, he has garnered experience managing a massive corporation and dealing with foreign leaders in his current job. Is it really a terrible thing to have a Secretary of State who is trusted by the Russians or an ambassador to China who is trusted by the Chinese? Or, would you rather have the monumentally unqualified Hillary Clinton back running the State Department?