When that fire hits your ass, it will sober your ass up quick. I saw something, I went ‘Well, that’s a pretty blue. You know what? That looks like…FIRE!’
Fire is inspirational.Richard Pryor, in Live on the Sunset Strip (1982)
It is difficult to get a man to understand something, when his salary depends upon his not understanding it!Upton Sinclair, from ‘I, Candidate for Governor, and How I Got Licked’ (1934)
That impossibly happy old man in the picture with the oily, torn-up hands? That’s my granddad, holding me (red) and my brother. He died 25 years ago this week. My family lived in rural Illinois while he was still alive, and I didn’t get to see him much. He was a mechanic in Lovington, New Mexico, where people of a certain generation wouldn’t have the foggiest idea who you meant by Fred Guinn, but if you were talking about Red, well, sure. He’s down at the shop.
I have two memories of Red. I remember the last time I saw him, and I remember the time I saw him after a long road trip from Illinois. We stopped at a couple state and national parks along the way. At one of them, a tick found my left arm. Red, who had a pack-a-day habit, would have none of your tweezers and rubbing alcohol. It wasn’t a half second from seeing that tick that he gripped my shoulders like iron, told me to sit still, lit up a cigarette, and brought it down on that tick quicker than my eyes could widen.
In my imagination, he nonchalantly took a drag off the cigarette after crushing the tick in his ash tray, but I can’t be sure if that’s what really happened. I do know that a little bit of fire changed that tick’s mind about my arm in a hurry.
I’ve got another friend who doesn’t get to see family much, either. No, that’s not quite right. She doesn’t see them at all. Oh she’s got reasons for it – good reasons. But I know her family – small towns and all – and her family knows we are friends. From time to time they reach out to me to convey some message. Only the message is never a message of reconciliation or apology or grace or simple kindness. It’s always naked passive aggression, if that’s a thing. Things like ‘Well, we just wanted to wish her a happy birthday, and if she could stop breaking our hearts that’d sure be swell by us.’ The most fascinating part of it is that they know that I know. That I know everything. That I know why they don’t have her address, and that I know why she doesn’t write back. And still they write me. Why?
They don’t write to convince me or my friend of anything. They write to convince themselves.
The second something becomes existential, the second something becomes necessary, there is practically nothing a creature cannot justify. If the alternative is getting burned to a crisp, a tick will relax its grip. If the alternative is learning that we failed in our duties to a child, our mind will create new stories about what really happened. It is a way in which our ego protects itself. It keeps us sane.
This is the mental process that fuels most memes: the perception of existential risk. Fight or flight. It’s a great tool for surviving as an anatomically modern human in a pre-civilization wilderness. Not so much in an always-connected world awash in signals and information.
Two weeks ago, social media was buzzing with Invaders! memes like the one on the left in the image below. This week, social media is buzzing with Invaders! memes like the one on the right. Other than whom a particular variant deems it acceptable to shun as the outsider – and the fact that they are embraced by (ostensibly) opposite poles in the political spectrum – there is zero daylight between how these affect the human mind. Even pointing this out will trigger fight or flight responses. The mind races to come up with an explanation for why they are completely different, because it must. The alternative is unthinkable: we might be jerks, too.
As citizens, it is worth being extremely skeptical of ourselves and our responses – even to a fault – when someone tries to convince us that something is a life or death issue. Yes, even on big issues, like climate change or national security. The fact that something is real and serious doesn’t mean that it can’t also be transformed into a meme.
As investors, it is worth making it part of our routine – every day – to think anew how this may be shaping our behavior and that of others at any given time. It’s just two questions. Both are simple and, in my experience, capable of cutting through a great deal of confusion and obfuscation about why financial markets and asset prices behave in certain ways. They’re equally workable in our thinking about civil society.
What are the things which investors/citizens must believe because the alternative is unthinkable?
How do I think that will change their investment/political decisions?
The dollar will remain THE safe haven currency.
Shotguns and canned food.
Continue the discussion at the Epsilon Theory Forum