David Sirota: The Economic Normalcy Bias

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from truthdig:



The Economic Normalcy Bias

Posted on Jan 26, 2012
By David Sirota


In 1977, two Boeing 747s collided on an airstrip in the Canary Islands. According to accident investigators, those who survived the initial blast in one plane had time to escape before a fire consumed the wreckage. But eyewitnesses reported that many remained in their seat looking perfectly content—as if nothing was wrong.

Not surprisingly, dozens of these dazed victims were burned to death, and the episode became a reminder of the so-called normalcy bias—a cognitive phenomenon whereby many who are faced with imminent disaster instantly convince themselves that everything is normal and that they don’t have to modify their behavior.

Unpleasant as this anecdote is to recount, it exemplifies the psychology at the root of one of America’s most destructive traits: our obsession with materialism and consumerism. To extrapolate the metaphor, if our damaged economy, record-low savings rate and sky-high personal debt levels are that smoldering plane about to explode, then America’s “shop till you drop” normalcy bias may be engineering yet another avoidable tragedy.

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A glance at new data from the holiday season tells this story. After Black Friday’s now-annual melee of hyper-aggressive shoppers, The Washington Post reported that Christmas saw credit card purchases jump 7 percent over last year. Meanwhile, the Federal Reserve bank reported that consumer borrowing surged to pre-recession levels; Forbes reported that online holiday spending hit a record; and the Los Angeles Times reported that “consumer spending “grew faster than people’s take-home incomes” as households “cut their savings rate (to) support their purchases of cars and other goods and services.” ...............(more)

The complete piece is at: http://www.truthdig.com/report/item/the_economic_normalcy_bias_20120126/

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