Wednesday, July 19, 2017

Why Does The Crowd Still Support Trump?

So, why does Trump still have so much support among Republicans and “his base?” When it's obvious to so many of us how ineffective and embarrassingly gauche he has been, when his paper-it-over lies are so obvious? Why?

Well, that's the way mass psychology goes. Take the stock market, which like politics is another exercise in mass psychology. In both politics and the market, you can go quiescently along for a while, and then you are forced to make a choice. Elections force a choice upon people, just as when you have money in your account and you need to be in the market, you need to buy something. Then, when you buy, you tend to hold. You tend to keep your bet until you are forced to make another choice. No one likes to admit a mistake; a naïf tends to hold a stock to the bitter end, and it can be bitter, hoping it will come back. For that matter, a naïf is likely to hold a stock even when it goes up, until it comes down to the level where it was bought, where it is sold so the holder doesn't suffer a loss. This is called a “round trip.” Lucky are they who have the fortitude to sell with a nice gain, or to sell with a mild loss before the collapse. All good things come to an end, but not everyone recognizes it in time. And there is always somebody who buys at the top.

It's not only the market. The Giants took fully half a season of being the second worst team in the majors to finally have a night with less than a sellout crowd, for goodness' sake. And Mr. Trump's supporters, who are inattentive to politics most of the time and who are often incapable of analysis even if they are attentive, are holding onto their stock even as it palpably weakens and the smart money is bailing, quietly, out of the limelight, leaving it to the public to take the hit.

Mass psychology, of course, is built on personal psychology. I've just been reminded that Danny Kahneman, he of the Nobel Prize, investigated this issue formally and brilliantly, and Dave Leonhardt in the NYT supplied this link:

Here is the introduction:

A wine-loving economist we know purchased some nice Bordeaux wines years ago at low prices. The wines have greatly appreciated in value, so that a bottle that cost only $10 when purchased would now fetch $200 at auction. This economist now drinks some of his wine occasionally, but would neither be willing to sell the wine at the auction price nor buy an additional bottle at that price. Thaler (1980) called this pattern-the fact that people often demand much more to give up an object than they would be willing to pay to acquire it-the endowment effect. The example also illustrates what Samuelson and Zeckhauser (1988) call a status quo bias, a preference for the current state that biases the economist against both buying and selling his wine. These anomalies are a manifestation of an asymmetry of value that Kahneman and Tversky (1984) call loss aversion-the disutility of giving up an object is greater that the utility associated with acquiring it.

It continues:

The Endowment Effect

An early laboratory demonstration of the endowment effect was offered by Knetsch and Sinden (1984). The participants in this study were endowed with either a lottery ticket or with $2.00. Some time later, each subject was offered an opportunity to trade the lottery ticket for the money, or vice versa. Very few subjects chose to switch. Those who were given lottery tickets seemed to like them better than those who were given money.”

In other words, do we really expect people, generally untutored in politics and ignorant of policy until it hits their paycheck or their lack of a health insurance card in their wallet, to give up on Trump in only six months? They don't see the failures yet, and were blind to the moral outrages from the beginning, blinded by anger at Hillary and her crowd, and blinded by what they took as business success riding to their rescue. It takes time, it just takes time. But just as in the stock market, when the weakness finally asserts itself, it will be unmistakable, even as the entrenched and the stupid hold to their convictions despite their depleted wallets.

To switch the analogy, getting people to change horses is never easy. It will be a trick to combine fierce resistance – necessary to stop the runaway – with gentle persuasion – necessary to get people into the other saddle. Obama could probably manage it, but he's ineligible; Hillary certainly can't, her voice rising with insistent ambition and now with I-told-you-so-how-could-you-reject-me-it-must-be-because-I'm-a-woman. As they say in the market, she's dead money. Obama can't rise again personally to the top, but his role as a kingmaker might just be starting. Meanwhile, we have to await the emergence of a new crop of leaders, those who have quietly doubled and tripled their value with the support of smart money, before the general public is even aware of them. The question will be, when will the old leaders have the grace to leave leadership to new leaders who can lead? Timing is everything.

The trick will be for the new leaders to make sure the current Republican party departs along with the Trumpsters. After all, he just crawled into their own rotting carcass and, lacking a vision of his own, simply adopted their eyes and the goals they had fixed on. He featured himself as a fixer, not a visionary. When it's clear he can't fix, he's dead meat. It will be the traditional Republicans' problem to find a way back from the ideological swamp they have created for themselves.

While resistance is pursued in the Congress and at the grassroots, leadership is likely to spring from the states where positive steps can be taken. It's hard to change an organization from within, easier to create a new alternative. The weaknesses of the small-state weighted Congress are well known; it's hard to get things done there, and the scope is too big for much experimentation. Maybe the progressive states – the Left Coast, Hawaii, Minnesota, the Northeast –can form alliances over issues like climate, minimum wage, retraining, education, health care, or even following Alaska's lead to a guaranteed annual wage. States can do what the feds can't, then threaten to either take over the presidency and Congress, or minimize the feds and just revert to a version of the Articles of Confederation and minimize the federal ability to tax. It's tempting to let the South go its own way and to reconsider the 19th century with expulsion rather than secession, but that's a pipe dream and anyway, there are so many good souls there and some nice vacation spots. Let there be a movement within those recalcitrant states to join the progressives in their policies, like Turkey seeking EU membership. Meet the criteria, dudes.

Change comes slowly, and big change comes only when pushed by crises, and we won't be there for some time, hopefully. Forced secession? A thought when viewing Jeff Sessions, perhaps, or Scott Pruitt, the anointed ignorami. But even if these idiots are with us now, it's just as sure that new leaders will emerge. They will. The question will be, what will the battlefield look like and who will be the contending forces? We can only hope that the current cadres of the Republicans will wither quickly and completely, and that the strong emerging forces will not have to wear too much of the old Democratic uniforms, and that the officer corps has some idea of progress that can whip the troops into shape to work together, without the old officers held over with their bad old habits, and just preserving what is best.

As in The Leopard, things must change in order that they can remain the same. We'll see what we shall see. And we must remember to observe the moral imperative of optimism.

Budd Shenkin

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