[Neurons] 2009 Meta Reflections #9

[L. Michael Hall]

From: L. Michael Hall

2009 Meta Reflections #9

February 27, 2009

 

 

PSYCHO-ECONOMICS

 

 

I was surprised by the downturn in the economy during 2008.  For me, it came
as a surprise.  I really did not expect it.  At first I figured it was just
the natural ups-and-downs of the market.  But then at the end of 2008 it
seemed to explode taking the markets really down and then in Dec. and
January came all of the shocking surprises about just how deep and pervasive
was the downturn.  I suppose I can take some comfort in that I was not the
only one surprised.  It seems that almost everybody everywhere was equally
surprised.  What began as an economic downturn in the US with the sub-prime
mortgage market now seems to be pretty much a worldwide economic downturn. 

 

Since the 1970s, futurists have been telling us that the world is changing,
that the change itself is changing, and that the changing change is also
accelerating.  And much of this change is how the world is getting smaller.
When I first read Alvin Toflin in the 1970s (Future Shock), it seemed like
science fiction, but no longer.  The predictions that life on this planet
would one day be like a village, a global village-that day seems to have
arrived.  Thomas L. Friedman calls this "the flattening of the world" in The
World is Flat (2005).  In that book he identifies ten "flatteners" beginning
with the fall of the Berlin Wall to the introduction of Windows to
open-sourcing, outsourcing, offshoring, insourcing, and so on.

 

The world is not only smaller, it is faster.  News today occurs on thousands
of cable and internet channels-24/7 / 360 days of the year.  News today
travels around the world not merely in hours or even minutes, but in
seconds.  In moments, information about political crisis, armed invasions,
tsunamias, earthquakes, Britany Spears, the price of oil, a suicide bomb
explosion, etc. can be in our email inboxes and on hundreds of news
programs.  So today we have the "soft" science of economics is governed by
other "soft" sciences (psychology, linguistics, wealth, etc.) that is now
influenced and affected by more and more variables.  And that means the
world is becoming more and more systemic.

 

As a soft science, economics is influenced as much by beliefs,
frames-of-mind, representations, interpretations, emotions, values, states
and meta-states as it is by anything tangible like houses or mortgages.
What is the value of a house?  Above and beyond the materials that go into
the construction and its cost, the supply of houses, the demand for them,
the value depends on what people think, how much they want them, how much
sellers think they can ask for, etc.  It depends on fallible human states
and meta-states.  That's why they can be so over-valued that they can mess
up the economy.

 

Similarly with the human decision to lend money to a buyer for a mortgage.
It depends on the criteria they set for determining who they can trust to be
dependable in repaying the loan.  And once a mortgage company creates a
subprime loan for people with no or little down payment, who don't have the
financial resources, but who believe that the value of the house will
increase at such a rate that it will have, say $100,000 equity in 12 months,
and then someone sells these high return loans to Wall Street who then
offers them on a world market ... then people can believe and feel confident
about returns, and borrow more money on the assumed value of the increased
and increasing equity and somewhere along the line we all move to La-La land
assuming that if we believe it or think it, it will happen.

 

Then reality hits.  The balloon payment on the loan comes due and people
begin to default on their loans.  This lowers the confident feelings of
others about the loans, which is communicated by the sensational bad-news
"News" organizations thereby creating more fear and worry about the home
mortgage market, then a negative spiral begins and suddenly market value
drops around the world.  And the nature of the world- smaller, faster, and
more systemic is amplifying all of this.

 

There's now one more quality.  It is more psychological.  Did you notice the
number of states and meta-states in these descriptions?  How many did you
notice?  We call all of this economics, yet it is actually psycho-economics.
The psycho- part is the role of people's assumptions and interpretations of
value or dis-value, their emotional states of confidence or fear, of
optimism or apprehensiveness and how these states play such a critical role
in economics.

 

Apparently the banking industry has lost a trillion dollars worth of value
and the US Congress has voted to spend more than a trillion dollars to deal
with it.  A trillion dollars!  How much is that?  On one program someone
said that if you had a trillion dollars in one dollar bills, it would be
67.8 miles tall (over 100 kilometers).  Or if you went out on a spending
spree - and you could spend a million dollars a day (a million!!) - and you
started today, it would take you more than 2,000 years to spend it.

 

Okay, so if the economy or the banks lost a trillion dollars, where did all
of that money go?  Who got it?  The weird thing is that much of it didn't go
anywhere.  Much of it existed on paper as a record of the way people were
thinking, expecting, valuing, feeling confident or worried, etc.  One day
people made certain evaluations about their trust and confidence in certain
homes, businesses, markets, and futures and presto- there was a trillion
dollars of value.  At a later time, they lost confidence-and a trillion
dollars of value disappeared.

 

What is this downturn about?  Perhaps it is just a market correction,
perhaps it is another aspect of the flattening of the world, perhaps it is a
call to recognize the role of our meta-states in creating our social
realities.  Whatever it is, it is a call to your resilience, state
management, and ability to know that your highest asset is your ability to
add value.

 

I think it is also a call for a belief in responsible abundance.  That is,
if our psycho-economics play such a crucial role in all of this, we now have
to resist the temptation to play into the hands of the negative press.  It
is the psychology of the press to sensationalize whatever they can and turn
facts into negative catastrophes.  After all, if in the small, fast,
systemic, and psychological world-our beliefs, fears, worries, hopes,
optimism, resilience (and many other states and meta-states) are now key
factors determining whether we set in motion a negative downward spiraling
or an upward positive spiraling -then we have to be more responsible to
fear-mongering, fear-spreading, negative-forecasting and more committed to
intelligent optimism that fosters resilience, persistence, and hope.

 

What's needed is an army of people committed to actualizing their own
potentials and those of others.  What's needed is a community of people who
believe in an abundance of possibilities and potentials-if people are given
a chance.  What's needed are a global village of people who will resist the
negatively-oriented media and do their part to unleash more and more
possibilities.




 

 

 

 

L.  Michael Hall, Ph.D.

International Society of Neuro-Semantics

Meta-Coach Training System

P.O. Box 8

Clifton, CO.  81520 USA

1 970-523-7877

1 970-523-5790 fax

      <http://www.neurosemantics.com/> www.neurosemantics.com 

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www.neuro-semantics-trainings.com 

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       <http://www.meta-coaching.org/> www.meta-coaching.org

       <http://www.ns-video.com/> www.ns-video.com 

 

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