Knee-jerk Nation

Knee-jerk Reaction:

An automatic response to something.

From the tendency of the knee to jerk involuntarily when hit sharply, properly called the patellar reflex. That was recorded by Sir Michael Foster in his Text-book of physiology, 1877:

"Striking the tendon below the patella gives rise to a sudden extension of the leg, known as the knee-jerk."

If there’s a cultural/political/economic trend that has defined the past several years it’s the knee-jerk reaction. The sudden realization that something is horribly wrong and that something must be done about it immediately (or sooner) or else things will become worse. Like a cat lazily stretched across a floor suddenly bounding up and charging into the next room only to stretch itself out and plunk down again, we seem to careen from one crisis to the next, often revisiting last month’s crisis but never stopping long enough to consider what’s really going on, how it came about, and what our options are. There always seems to be a politician or an ‘expert’ ready with a plan that may not be complete but needs to start now!

What happened to us? Sure they’ll always be real emergencies like Pearl Harbor, a volcano about to erupt, or Kate’s ex-husband Jon cleaning out their joint checking account but aren’t there supposed to be adults in charge to help us slow down, take things into consideration, and make the right decisions?

Perhaps it’s the 24 hour news cycle, the internet, or our insatiable need to have what we want when we want it, be it an LED T.V. or a mortgage. Maybe there are politicians in Congress who see a window closing on the honeymoon period of pro-Obama, anti-Bush sentiment. But it could also be a sign of an overwhelming success in providing goods and services to the right place at the right time at a reasonable price. That’s right, a crossover from the worlds of finance and industry into the worlds of culture and politics.

When I was eight years old I saw an advertisement on a local UHF channel for Get Down and Boogie, a disco compilation album promising continuous long play versions of the hottest club hits of 1976. As the ad played non-stop between breaks in the Banana Splits and Gilligan’s Island, I had time to carefully write down the address, the price (including shipping and handling), and other ordering instructions (money order preferred) and discuss financing options with my mother. After a week’s deliberation a decision was made to purchase GD&B. It took around twelve years for the album to arrive. OK, I’m exaggerating a bit but when you’re eight and the much anticipated, nay, life altering prospect of the arrival of a compilation of the hottest club hits of 1976 fills yours days and nights, it seems like a long freakin’ time.

Last week my eight year old ordered a song off of iTunes for 99¢ and it took ten seconds to download.

Please don’t paint me as a nostalgic Luddite yearning for the days of money orders and six to eight weeks for delivery. I come here to praise technology and process improvement, not to bury them. But let’s think about the consequences. For too many of us our expectations have been heightened and our senses numbed to the point where we believe public policy and even the macro economy should work like iTunes. Still worse, people like Henry Paulson and Barak Obama have learned to play on the public’s new found hatred of patience and continually urge immediate approval for whatever solution they are proposing. Practitioners of this alarm and charm method have been successful in the past. Look at Al Gore’s largely successful ploy to end useful debate on the many aspects of global warming by continually stating that the “debate is over”. Or Hank “who needs balls?” Paulson getting down on one knee to beg Nancy Pelosi to push through TARP legislation.

One reason the alarmists have become successful is that they are able to steer the decision making process around the public’s ability to establish rational expectations. Here’s a shady 411 on the economic theory of rational expectations:

People will take into account as much information as they can get before forming expectations of future outcomes. Individual sets of expectations will be wrong or outright wacky but when many sets of expectations are pooled and average expectations are derived, a highly accurate set of expectations results.

By providing incomplete or wrong information and by not allowing time for a natural selection like process to take place, a set of expectations will look more like the agenda for a three year old birthday party than a reasonable solution.

For most of us experience has shown that it’s almost always better to do something rather than nothing when faced with a problem. However, how informed we are, who we discuss things with, and how much time we have to develop an answer must be weighed against how quickly we think we need one. Alfred Sloan, who led General Motors from 1923 to 1956, was rumored to have slept on every major decision he made. GM’s track record through depression and war was quite impressive. Sloan would probably have agreed with the old saw that it’s always easier to get into something than it is to get out.

Later…