Behavioral economist George Loewenstien, according to his recent interview in Discover magazine, thinks we need to move past the antiquated classical notion that people act rationally making logical decisions about how and why they spend their money. George and others are working for a better understanding of why people act the way they do, in the hope they can use these insights to better predict market behavior.
According to George, we're self destructive.
If we want to believe in something, we're amazingly adept at persuading ourselves that what we want to believe is true. We fail to generalize and learn from our specific actions or mistakes, to connect-the-dots. We feel safe in numbers and tend to follow the herd. We have a 'present bias preference" which makes us short-sighted and challenged to deal with slowly unfolding threats like the housing bubble and climate change. We suffer from the 'default effect'; we are lazy decision makers and tend to take the path of least resistance.
Sounds about right to me.
But nothing that George and his colleagues couldn't have ascertained more easily and readily, and with a lot more wit and flair, if they had picked up a copy of the beautiful new edition of The Complete Lyrics of Johnny Mercer.
As students of human nature, no one since old Will Shakespeare has done it better that Johnny and his Tin Pan Alley brethren at distilling into rhythm and rhyme the convoluted contours of the human heart.
Fools rush in where angels fear to tread And so I come to you, my love, my heart above my head Though I see the danger there If there's a chance for me then I don't care Fools rush in where wise men never go But wise men never fall in love so how are they to know When we met I felt my life begin So open up your heart and let this fool rush inwilliam