Why Obama Should Put Psychology over Philosophy.

Photo courtesy of CNN.

People are very particular about their choice of stimulants. Coffee or Yerba Matte? Red Bull or Monster? Cocaine or crystal meth? Never mind that they all do the same thing, to different degrees. Users have all sorts of reasons why they prefer one over the other and why you should prefer one over the other.

Economic stimulants are the roughly same, but Congress (and every armchair economist) is obsessed with debating the finer points of cutting taxes versus spending increases.

When I was five, I tried to eat a Big Mac. For some reason, McDonald’s lounge singing moon-headed mascot sold me on the burger, which fell apart after a few bites. My mother just shrugged and said, “It all goes to the same place.”

Exactly.

Same thing with stimulus plans.

I realize there are some differences. To what degree each particular item in the stimulus bill will actually stimulate the economy is a question for the unfolding future. The economic crisis we’re currently in should clue us into our inability to tell where the money will go.

But more on that another time.

Personally, I believe tax cuts are the way to go, but not because I think they’re a superior form of economic stimulus. However, many Americans do.

President Obama lassoed the American hearts for the election. Doing the same for the stimulus bill shouldn’t be that hard. After all, if you can win a presidential election, shouldn’t you be able to get a bill passed?

So much of politics is psychology. That’s obvious. What isn’t as obvious is how much of economics is also psychology. Behavioral and Neuroeconomics are very nascent fields compared to economics proper. Maybe all the graphs and Greek letters and long formulas have given us the impression that economics is more left brain than right, but it’s real people with irrational leanings and bizarre superstitions who spend the money. If we were all rational, we simply wouldn’t be in the mess we are in right now.

The psychological impact of immediate and broad tax cuts could be huge, providing that we believe that it’s safe to begin spending again, and banks believe it’s safe to start loaning again. Those provisions, however, won’t matter to us. All we will care about are the tax cuts.

One of the things that appealed to me about Barack Obama when he was running for office was his thoughtful approach to the economy. Whereas John McCain and many Republicans wanted to make broad, almost indiscriminatory, tax cuts, Obama wanted a more nuanced policy.

Unfortunately for Obama and those of us who favor subtlety, the mood of the country and the world is desperate. Desperate people don’t want nuance. They don’t want to have to think about whether or not they’ll receive tax cuts under what they see as a complicated policy. Desperate people want loud, definitive answers. And they want them now.

George W. Bush, with all of his failures, was the perfect president for the financial crisis that was exacerbated by the attacks on September 11.

That’s not a compliment, at least not to the American people.

The man knew that we wanted blood, money, and validation of our primal cravings and reactions.

President Obama should take a page from Bush’s playbook regarding the TARP banks, and to some degree, he’s doing just that.

Only not as well.

It’s great that he wants to cap executive salary, even though that’s been done before.

The American people want to see bankers hanging from their neckties. Obama needs to speak the language of desperate people right now. He needs to “declare war on corporate greed.”

He can save his subtlety and nuance for the backroom.

And he should definitely forget about spending right now, even though spending is probably a good idea. Spending, in a way, is very similar to Obama’s nuanced tax cuts. We simply don’t want to spend our mental energy on figuring out whether or not the new jobs he seeks to create or the programs he wants to fund will put money our pockets. The shortest distance between two points is a line, and the shortest distance between the government and our pockets is a blunt and loud tax cut. That tax cut must also have a sunset far off enough into the future so we don’t hoard our money fearing that the rug will be pulled out from under us soon. People are snatching up guns because they’re afraid Obama is going to ban them or ubertax them. “Available for a limited time only” is a tried and true sales trick that doesn’t just apply to deals at Jack-in-the-Box.

Obama can spend later, once we’re doped up on tax stimulants. And he should spend later. His plans to revamp our infrastructure are absolutely laudable. At the end of the next recovery, it would be nice to have something to show for our economic investment other than an even bigger deficit and a closet full of Louis Vuitton.

Desperate people have a “me-first” attitude, and there is nothing wrong with that. We have every right to ask what our country can do for us. We pay taxes, watch as our government makes bad decisions with our money, and saves the corporate bigwigs that don’t need saving. Our very existence is for this country. Obama needs to recognize our desperation, and he needs to talk us down.

And when we do get talked down, perhaps Hollywood can be persuaded to create Carl Reiner-type shows that teach us the value of rational spending and investing.

Surely they could find a way to make that sexy.

Michael Phelps & the Munchies.

Photo courtesy of The Times and whoever snapped the cell phone pic.

“I thought his eyes were just red from the chlorine. Remember when he was here, he said he was eating 12,000 calories a day? That’s why.” – Jay Leno on Michael Phelps’ bong photo.

Eating a lot has always been difficult for me, so when I learned that Olympic swimmer, Michael Phelps, sucks down 12,000 calories per day, I blanched. It’s hard for me to make the recommended daily allowance of 2,000 calories, but 12k? Are you high?

Apparently.

Lost in all this handwringing over whether Michael Phelps is still an American hero, is the acknowledgment of marijuana’s potential uses to athletes.

Michael Phelps, like many athletes, seems to take a mechanical, not epicurean, approach to his diet regimen. This is a guy who must build muscle mass or risk losing it during his punishing workouts. How can eating all that food not feel like a chore?

If anyone’s in need of a case of the munchies, it’s Michael Phelps.

Athletes have quietly been using marijuana to stimulate their appetites for years, just like they’ve been using steroids to build muscle mass.

The recent doping scandals, which have hit not only baseball, but the Tour de France as well, have revealed a peculiar hypocrisy on our part. We expect our athletes to consistently break records and deliver exciting performances, but we also expect them to do it with only the help of barbells and raw eggs.

Maybe it’s because we’ve seen Rocky too many times.

The neurochemical effects of marijuana, done in moderation, are far more favorable than those of anabolic steroids. Anyone remember Chris Benoit, the wrestler who strangled his wife, suffocated his son, and then hung himself two years ago? Anabolic steroids were found inside his house, which doesn’t necessarily mean he snapped due to ‘roid rage, but the drugs have been linked to antisocial behavior, depression, and psychosis.

A purple-eyed swimmer smoking marijuana and giggling at everything doesn’t seem as threatening.

Freebies at Last!

If Denny’s Free Grand Slam Day is any indicator, freebies are back in a big way.

Lines were reportedly long for today’s breakfast promotion, which was announced during Sunday’s Superbowl. Denny’s spokesperson, Cori Rice, told the Associated Press that the company expected over 2 million people to take advantage of the dine in-only, tip-not-included deal, with over one hundred Grand Slams to be churned out per hour.

As someone who has waitressed during an insanely busy breakfast rush, yikes.

At 795 calories per Slam, that’s an estimated 1.6 billion calories added to the American waistline. But that wasn’t the only fattening freebie on the table today. Participating Dunkin’ Donuts franchises offered Phoenix residents a free donut with beverage purchase as a consolation prize for the Cardinal’s loss.

Then there were all the free promotions on Election Day. Ben & Jerry’s offered a free scoop of ice cream. Krispy Kreme gave away donuts. Starbucks gave away coffee, although there were concerns that the promotion violated election laws. Shane’s Rib Shack gave away chicken tenders and French fries.

As far as I know, no one gave away antacid.

This is not a good time to be a restaurant. The National Restaurant Association expects industry sales to decline for a second, consecutive year. Denny’s sales declined during the third quarter, while Starbucks, which showed us that customers will pay more for coffee, despite previous reservations, has been forced to layoff workers and shutter stores. This may delight some of the many Starbucks haters, but considering that the restaurant industry employs nine per cent of the American workforce, getting this opportunity to laugh while the company is down seems in poor taste.

Dan Ariely, author of Predictably Irrational, devoted an entire chapter to the emotional reaction towards freebies. In one experiment, a friend of his sold a product three ways 1) The product was five dollars, but the shipping was free. 2) Both the product and the shipping cost $2.50 each. 3)The product was FREE, but the shipping cost five dollars. Each scenario still guaranteed the customer would pay five dollars, but the overwhelming majority went for the free product with the five dollar shipping. “Something about free – just the idea that something has no negative side, it only has an upside – creates an emotional reaction in us and makes us value it more,” the professor said in a Duke University podcast.

The long lines for the Grand Slam giveaway seem to suggest that freebies put asses in seats, which is weird because the Grand Slam usually doesn’t cost all that much anyway.

Hopefully, the customers at Denny’s tipped well, or at least tipped at all. Whoever came up with the percentage-as-tip rule should apologize to every server who has had to bear the indignity of watching a guest pull out his cell phone to calculate a ten per cent tip on a five dollar meal.

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