Old Well: UNC Chapel Hill Campus

Monday, July 25, 2011

The psychology behind Obama's decision making

It's Monday and a new day begins for troubled markets as party chiefs once again try to resolve the deficit impasse that threatens a financial meltdown with global implications. Nevertheless, I remain optimistic that cooler heads will prevail and a deal will be struck, though perhaps to no one's liking. Whatever we do, it's probable our credit rating will drop from triple to double A, resulting in higher borrowing interest for everybody.

In this post, however, my focus is on the psychological dynamics at work in our President's seeming inability to provide firm, creative, leadership across the board. Quite frankly, he lacks leadership spunk, the resourcefulness of occasionally putting up his dukes, or more bluntly, becoming a just plain son-of-a-bitch, Harry Truman style if you will. Mind you, we're in a war, economically speaking, with high stakes. We can't afford taking the wrong options. As on a real battlefield, leaders must develop a strategy and prove decisive in its execution. Our president, however, a kind man, lacks the killing instinct to get the job done. It's never a straight path for him. He'd rather waddle. In my previous post, I spoke loud and clear on the President's tendency to put up the white flag prematurely, undermining his promises, and in the process, giving strength to the opposition, who increasingly perceive him as vulnerable.

Why is he this way? With the increasing advances in neurobiology comes a possible answer. Medical researchers can now map and measure the brain's capacity to respond to our emotions. Frankly, some of us are wired to be hot, or emotionally sensitive; conversely, there are the cold types, or those said to have "ice in their veins." I suspect good relief pitchers in baseball belong to this tribe. The worst of the cold types, of course, are the sociopaths, who can shoot 76 teens in a Norwegian camp and argue afterwards how it was necessary. Neurology has grown so advanced that we can even detect who the sociopaths are.

In the realm of finance, an offshoot of neurology has been the development of neuroeconomics, or the study of the cognitive processes at work behind financial decision-making. Let's take a case scenario: Investors in Wall Street who consistently earn little tend to be markedly conservative, with little appetite for risk. A few losses and they quickly panic. Often they'll opt for investing in bonds rather than equities, even though over a sustained period, and despite market downturns, the latter out perform bonds. This conservatism, rampant among the hot types, has given rise to what's known as "myopic loss aversion." As British psychologist Kevin Dutton remarks, "Emotion, it would seem, is so oriented toward risk aversion that even when the benefits outweigh the losses it henpecks our brains into erring on the side of caution" (Split Second Persuasion, 20011, p. 208).

Our president, surely one of the more cautious and feeling presidents we've known, unfortunately mirrors the hot-wired grouping of those undermined by an excessive capacity for empathy. He can see, or better, feel both sides. The result: consensus or compromise, whittling down previous commitment.

In the business model, you may not like it, but the ruthless prove the most successful entrepreneurs, whether Bill Gates or Steve Jobs. In his now classic studies, Harvard's Stanley Rachman studied bomb disposal experts with 10-years or more experience, specifically those decorated and undecorated. What separates the great ones from the merely good? Rachman made a startling find: the heart rate of the undecorated remained stable, even though subject to high stress. However, here's the thumper, the heart rate of the decorated proved unstable. It went down!

Rachman discovered something else: not only did successful risk-taking have a physiological basis, but something additional was in the mix--confidence (Stanley Rachman, "Fear and Courage: A Psychological Perspective," Social Research 71(1) (2004),14976).

Obama is fond of Abraham Lincoln, perhaps intuitively in seeking a mentor of what he would like in himself. While we obviously aren't able to map Lincoln's brain via an fMRI, we can presume he had the necessary prerequisite of confidence to make the crucial, hard decisions necessary to preserving the Union, whether in opposing the expansion of slavery, declaring war, changing generals, or issuing the Emancipation Proclamation. In the previous century, three presidents again demonstrated this confidence factor, the Roosevelts, and Ronald Reagan. Regardless of your politics, they inspired a nation with their own confidence and took us from the dark places into the light.

Unfortuately, Obama, a hot type, isn't wired this way. In truth, he's more Carteresque than vintage Lincoln. Compassion and equity surely have a place, but not when their offspring is paralysis.