Guest Post: Now Playing: Cognitive Dissonance and Wishful Thinking

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Tue, 07/05/2011 - 11:27 | 1426558 Cassandra Syndrome
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Cognitive Dissonance Bitchez

Tue, 07/05/2011 - 11:52 | 1426627 ratso
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When Leon Festinger developed Cognitive Dissonance Theory in 1957 and coined the phrase, he had in mind a theory that would provide useful hypotheses for predicting irrational human behavior in unexpected situations.  Since then the phrase has taken on "excess meaning" as philologists might put it.

In line with Festinger's original intentions for his theory it is not clear what a useful hypothesis could be developed for the present situation.  He was fond of making predictions that once a person or group of people had committed themselves mentally and emotionally to a situation, they would discount contradictory information and only gather supporting information without a concern about it's validity - much like listeners to Fox News 



Tue, 07/05/2011 - 12:11 | 1426681 Overflow-admin
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Or more vulgarly said:

Dis-Cognitive Resonance Bitchez!

Tue, 07/05/2011 - 12:46 | 1426786 Missiondweller
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" much like listeners to Fox News"


I was thinking the same thing but would substitute, "Obama kool-aid drinkers still seeking 'hope and change'"

Tue, 07/05/2011 - 13:04 | 1426873 kridkrid
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Divide and conquer.  Both positions are probably correct, making most of us simple pawns.

Tue, 07/05/2011 - 13:40 | 1427051 gmrpeabody
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Well put!

Tue, 07/05/2011 - 13:48 | 1427089 CH1
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Tue, 07/05/2011 - 12:48 | 1426793 carbonmutant
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Reality Distortion Field (RDF)...

Tue, 07/05/2011 - 13:35 | 1427034 narnia
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you have it right, carbonmutant.  

the officers of this centrally planned empire have an interest in keeping it together, and are arrogant enough to think they can "centrally plan" the desired outcome while protecting their interests.  in their minds, they still believe they have the force of inflation under their control.  

the board of directors probably prefers the officers to succeed, but ultimately they are arrogant enough to believe they will not be materially affected or could benefit in any outcome.  that's a fatal conceit.  i'm sure most of the directors have realized the officers will not be able to control the force of inflation by now, but they aren't the ones selling it nor do they feel they have an interest in selling it.

Tue, 07/05/2011 - 11:31 | 1426570 Robslob
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Seems like it was just yesterday the EU bailed itself out with a historic $1 Trillion free for all...

Wow, how time flies...along with money.

Tue, 07/05/2011 - 12:51 | 1426810 Fukushima Sam
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The cycle of history will not be denied; it can only be staved off until, like a seized cog in a complex machine, the pressure builds and then forces a break, causing devastating damage to the rest of the machine.

Tue, 07/05/2011 - 11:32 | 1426572 Gene Parmesan
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At the very end of this process, the announcement of the next "fix" will crash the credit and stock markets because participants will finally understand that the fixes are only floundering, last-ditch acts of desperation which have zero chance of actually working.

I'd argue that the participants are already at the point of understanding this, and that they're all just willfully ignoring it, for no better reason than the fact that everyone else is also ignoring it.

Things won't really come crashing down until there's an inevitable misstep by the central economic planners which puts them down a dead end alley, with no further can-kicking room.

Tue, 07/05/2011 - 11:57 | 1426640 kridkrid
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What do you think that "misstep" looks like?  What are a couple of examples of what you think would represent the dead end alley that doesn't allow for more can-kicking?  And for what it is worth, I'm not disagreeing at all (I know sometimes people ask questions when they are attempting to back someone into a corner... not the case here).  I'm trying to picture how this unravels.

Tue, 07/05/2011 - 12:41 | 1426771 Gene Parmesan
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Who knows. Something that results in truly runaway inflation, supply chain disruptions for things like food or fuel, suspension of welfare benefits, rationing, something that really pisses off China, an overt grab by government at personal property or savings, etc. Whatever it is it's going to have to be enough to get people off their asses. While we all joke around about the Dancing With the Stars crowd, I think it's only a matter of time before people can't ignore what's happening because it's directly and noticably affecting their quality of life.

It can either be a controlled collapse of some kind, where TPTB are stuck making a move which they know will likely have a disastrous outcome, but which will play out on a known timeline with expected results (and which can be prepped for and spun accordingly), or something more unexpected and violent.

Tue, 07/05/2011 - 15:39 | 1427494 malek
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Nicely put. I also believe runaway inflation is the most likely next stop.

Tue, 07/05/2011 - 12:52 | 1426812 Missiondweller
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I'm certain we'll see it in the bond market or rate derivatives. At some point people will begin demanding higher rates (bond vigilantes) with enough strength to counteract Fed rate manipulation. When that happens, things will quickly unravel. How fast? I fear fast enough that I don't hold any stock or bonds out of fear I could get crushed before I know what's happening.


Everyone wants to keep dancing at the party as long as its going on but it seems many are dancing very close to the door fearing they could be the last out.

Tue, 07/05/2011 - 13:53 | 1427112 CH1
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Don't know that I have a better crystal ball than anyone else, but there is the possibility of China falling apart. That might break the denail in enough people.

Tue, 07/05/2011 - 12:21 | 1426709 Thomas
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Like the diabetes metaphor, the markets are heading for the Tainter Endgame. Limbs will start falling off.

Tue, 07/05/2011 - 12:54 | 1426821 carbonmutant
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I believe blindness sets in first...

Tue, 07/05/2011 - 13:08 | 1426899 Reptil
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convulsive spasms sounds about right.

Tue, 07/05/2011 - 12:22 | 1426712 Thomas
Thomas's picture

Delete of another FFF (fat-fingered fuckup).

Tue, 07/05/2011 - 11:33 | 1426576 Internet Tough Guy
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Nice move in oil today.

Tue, 07/05/2011 - 12:49 | 1426798 SheepDog-One
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And most were saying the SPR would cause oil and gas prices to plunge. Nope.

Tue, 07/05/2011 - 11:36 | 1426580 Cognitive Dissonance
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Nice to see the term "Cognitive Dissonance" getting a wider audience. If nothing else, just seeing the term compels some people to pause and reflect.

Changing the world one mind at a time. It's the way real change really happens.

Tue, 07/05/2011 - 11:36 | 1426584 Ray1968
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For a nanosecond, I thought you penned the article.

Tue, 07/05/2011 - 11:47 | 1426609 Cognitive Dissonance
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I have.............several times. But Charles Hugh Smith is older and wiser than me and he understands that short articles get wide exposure and long articles get dumped.

I'm still in first grade finger painting when it comes to writing, so Charles picked up my slack and moved on through. Short and to the point is what my first grade finger painting teacher always whispers in my ear as I ask for a 10th sheet of white construction paper and more paint. :>)  

Tue, 07/05/2011 - 11:59 | 1426649 kridkrid
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Your handle led to me to reexamine the phrase about a year ago.  It has become a very frequent topic of conversation for me.

Tue, 07/05/2011 - 11:48 | 1426620 Dr. Engali
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So did I until I saw how short it was and easy to read :) No disrespect do you or the author.

Tue, 07/05/2011 - 11:58 | 1426643 Cognitive Dissonance
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I specialize in long and convoluted. It's a natural talent I've been improving upon for years. :>)

Next year I start using affirmations here and here and here and here and here and here and here................. 

(Click each one folks, they are all different.)

Tue, 07/05/2011 - 12:22 | 1426715 GeneMarchbanks
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Entirely too many links at once, for shame, you made my brain hurt. Apparently, you Sir, actually read. Contrary to popular belief this isn't good:

Tue, 07/05/2011 - 13:12 | 1426924 JW n FL
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FUCK GOVERNMENT!!! LOVE WE THE PEOPLE!!! because they are to stupid to Hate the Government and too stupid to Love themselves enough to help themselves!

Tue, 07/05/2011 - 13:20 | 1426958 JW n FL
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I hate you fuckers! and here is why! you have allowed my Country to be fucking, fucked over! over and over and over again!

Tue, 07/05/2011 - 14:08 | 1427162 gmrpeabody
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Somebody woke up on the wrong side of the bed!

Tue, 07/05/2011 - 14:58 | 1427360 Sudden Debt
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Love = Fucking = Love = Fucking


It's just to inform you that your post confuses people.


Tue, 07/05/2011 - 11:38 | 1426591 Caviar Emptor
Caviar Emptor's picture

+100, bro. Lead us to the mountain top!

Tue, 07/05/2011 - 11:41 | 1426602 Cassandra Syndrome
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It is a remarkable condition. I think everyone has it. Holding a different view from within the safety net of your own worldview causes anxiety. Maybe its a defect that developed from the trauma of birth, of leaving the safety and sanctuary of the womb for the big bad world.

Tue, 07/05/2011 - 15:05 | 1426623 Bay of Pigs
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Circumstances and perceptions change. One must adapt or suffer the consequences denying they exist.

Yes, I see your point.


Tue, 07/05/2011 - 11:54 | 1426634 Manthong
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Does this have anything to do with people born as US citizens believing that they live in a place administered according to the Constitution of the United States of America?

Tue, 07/05/2011 - 11:58 | 1426644 GeneMarchbanks
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More like years of repeating the same lies until they are your only "truth". Generally speaking these folks have much trouble listening to contrasting viewpoints- to the point of neurosis. My own world crumbles if it is opposed or just simply broadened a little bit.

Tue, 07/05/2011 - 12:16 | 1426701 Bastiat
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I always thought you had some great insights but I never expected you to "dominate the world economy."  Impressive!  Were you behind the DSK chambermaid scandal?

Tue, 07/05/2011 - 12:23 | 1426716 Cognitive Dissonance
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Tue, 07/05/2011 - 11:39 | 1426595 slewie the pi-rat
slewie the pi-rat's picture

cognitive dissonance + wishful thinking = viagra

Tue, 07/05/2011 - 12:56 | 1426829 Commander Cody
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And happy endings?

Tue, 07/05/2011 - 11:40 | 1426597 Hedgetard55
Hedgetard55's picture

But, but, but Leo the K says deficit spending and monetization CAN work.

Tue, 07/05/2011 - 11:41 | 1426601 Dr. Richard Head
Dr. Richard Head's picture

Nu-uh!  This next "fix" will be different this time. It will work I tell you. 

I know when I put myself into a debtor status in real estate, a car, and credit cards that all I needed to do was get into more debt for another car, added some more credit cards, and bought another home on the coast.  I knew adding to my debt load would indeed lessen my debt load.  This is a simple math equation of 2 + 2 = 1. 

We will be teaching a course on this through all of the Ivy League schools during the start of school next year called "You Can Win With Debt."

Tue, 07/05/2011 - 12:26 | 1426725 aerojet
aerojet's picture

It's funny you mention that.  I once heard Donald Trump say that it's not how much money you have but how much you control.  The idea is that he levered himself to the hilt and thereby became a player.  That he has gone bankrupt several times seems inconsequential to him.  It's an interesting tidbit, nonetheless.  I doubt most Americans can see the difference between taking on debt for the purpose of investment versus taking on debt in order to sustain consumption.

Tue, 07/05/2011 - 13:34 | 1427025 Panafrican Funk...
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" That he has gone bankrupt several times seems inconsequential to him. "

He probably finds it hard to consider it consequential, when no real consequences have been imposed on him for those bankruptcies.  

Privatize the gains, socialize the losses.  He understood this decades before it became well-known to the public.

Tue, 07/05/2011 - 15:44 | 1427510 malek
malek's picture

Well at least in the moments he was bankrupt he didn't have control over much, me believes.

Tue, 07/05/2011 - 12:50 | 1426806 Milestones
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Ah, Yale grad.--what year?       Milestones

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