What Color is the Dress? Political Edition

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I had a conversation with a medical doctor 2 days ago-we looked at the now infamous Inauguration comparison images and he stated that “he wasn’t quite sure which image had the largest crowd”. Wow. We are just in a brand new place where objective facts and evidence are meaningless to a large group of people. Psychology does provide justifications for this. Cognitive biases like the confirmation bias and the backfire effect can explain why people would reject evidence that does not conform to their worldview. It is just so amazing to engage with people who you think should know better resort to mental gymnastics to explain their unsubstantiated worldview.

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Last night, Rachel Maddow  discussed results from a PPP poll asking about the new Trump administration. Take a look at the chart below.  There is a bubble alright…two bubbles. The Trump supporter bubble…and the everybody else bubble.

President Trump appears to have his own reality where he is sacrificing trust in the White House to claim that 3-5 million undocumented immigrants illegally voted in the election and that his Inauguration was the largest ever–both easily prove falsehoods (or lies).  The good news is that a plurality of the people still believes in the objective truth.

 

Why discuss politics and psychology on a personal finance blog? Now, this is a matter of financial security for our customers and readers. White House policies from Obamacare repeal with no real plan for replacement, deregulating Wall Street and eliminating Dodd-Frank, weakening the Consumer Financial Protection Bureau, Infrastructure spending plan that is just tax breaks for Trump’s friends, and a tax reform plan that may raise taxes on the middle class are all affronts to the financial wellness of our customers. Trump’s Tax plan has been published and analyzed-it benefits top earners the most-as much as 7% and only 0.6% on the bottom quintile.

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“A single parent who’s earning $75,000 and has two school-age children, they would face a tax increase of over $2,400,” Batchelder says. That’s if they had no child-care deductions; the increase in taxes comes partly because the Trump plan eliminates the $4,000 exemption for each person in a household.

Source: NPR, Who Benefits from Donald Trump’s Tax Plan

Facts matter. The truth matters. It matters that the Obamacare repeal and replace plan will leave more people without health insurance. President Trump may try to shower himself with praise after the Obamacare repeal and claim that the replacement is “terrific!” We the People, need to embrace the truth and recognize that the “shower of praise” isn’t rain-it’s something entirely different.

Much Ado About Something

 

Ferguson: The Conversation on Race in America
Ferguson: The Conversation on Race in America

Recent grand jury decisions regarding the murders of Mike Brown in Ferguson and Eric Garner in New York show that there is an understanding gap as wide as the Grand Canyon on race. We have trouble agreeing on the facts. Cognitive and social bias fuel the divide on both sides. It’s not just that evidence in the cases in Ferguson is unavailable, people make up their mind and then point to the evidence that supports their opinion. There are a host of cognitive and social biases that get in the way from the group attribution error to the defensive attribution error and the halo effect.

Yet, what if our side is wrong and the other side is right? What does that mean for Society? Mayor Giuliani mentioned during a cable news segment that police violence against black men was not as important or prevalent as black on black violence. This is a strawman. Two wrongs don’t make a right. However, most murders are intraracial according to the Bureau of Justice Statistics.

In reality, 93% of homicides of blacks are committed by blacks. Yet, 84% of homicides of whites are committed by whites. FBI crime statistics show that homicide is usually committed by people who know each other regardless of race. Moreover, more crime is committed by folks on lower socioeconomic levels. A higher percentage of blacks are in lower socio-economic level; thus, there is a higher rate of crime. The real culprit is economics. We need to be very careful not to judge an entire group of people based on the facts and stereotypes we choose.

Yet, looking deeper into the data doesn’t change the perception problem and the fact that people will pick sides and facts to support their team. This debate also happens with climate change, immigration, economics, and can extend to our personal decisions. We form biases that impact all of our decisions. How can we make progress as a Country if we refuse to empathize with “the other side”?

Amidst the protests, a phenomenon occurred on Twitter last night. The Hashtag #CrimingWhileWhite was trending as well as #EricGarner. This literally started a discussion on social media about how police treat folks differently based on race with actual experiences. This is not the end of the journey. Yet, speaking about your experiences and explaining why you agree or disagree starts a dialogue on contentious issues. Let’s have those difficult discussions about contentious issues and focus more on listening rather than just talking.

 

Rocking the Boat

Team meetings never begin with the group agreeing to make a bad decision. Yet, current events repeatedly demonstrate how “group think” results in sub-optimal or even disastrous decisions. The US went to war in Iraq based on the belief that there were Weapons of Mass Destruction. As the drumbeat of war got louder, dissenting opinions were silenced. We can also think of other crises like the BP oil spill or General Motors’ refusal to implement a simple, in-expensive design change that would have saved lives. As it turns out, there is evidence that General Motors silenced a whistle-blower that pointed out the issue with the ignition.

This is the Abilene Paradox at work. A group is presented with a problem. The optimal solution to the problem is evident but the members of the group gravitate towards a different solution. To prevent “rocking the boat” other members agree and just go with it. The consensus created by the group becomes unstoppable and dissenting opinions are easily tossed out. This paradox occurs very often in politics. A few issues come to mind, e.g., gun control, immigration, and raising the minimum wage. 90% of Americans agreed that background checks for gun purchases were a good idea. However, both Democratic and Republican politicians did not want to “rock the boat” and pass legislation to prevent gun violence.

According to a survey administered by the Brookings Institution and the Public Religion Research Institute, a solid majority of Republicans, Independents and Democrats are for comprehensive immigration reform. We have a new crisis with young immigrants from Central and South America crossing the border and being granted the right to stay in the US because of a provision in the Patriot Act. There are no shortages of plans to make comprehensive immigration reform with a path to citizenship a reality. Yet, in the face of overwhelming consensus and a growing crisis, politicians do nothing.

At some point, we must stop playing the blame game. It doesn’t help our families, communities or businesses to intentionally make bad decisions. It takes courage to challenge conventional wisdom. We must use data and logic to identify and promote the best solutions. Challenge group think. Fight the good fight. Rock the boat.