{"id":70,"date":"2009-02-13T14:14:53","date_gmt":"2009-02-13T21:14:53","guid":{"rendered":"http:\/\/www.showcasemarketing.com\/ideablog\/?p=70"},"modified":"2017-02-28T12:50:47","modified_gmt":"2017-02-28T20:50:47","slug":"volitility-is-the-new-equilibrium","status":"publish","type":"post","link":"https:\/\/www.showcasemarketing.com\/ideablog\/volitility-is-the-new-equilibrium\/","title":{"rendered":"Volatility is the New Equilibrium"},"content":{"rendered":"

Cognitive and biological science has demonstrated that our animal instincts replace human reasoning in the face of mortal threats. When individual survival is at stake, Charles Darwin<\/a> trumps Adam Smith<\/a>.<\/p>\n

Instincts are powerful. They are put into practice without training or thought. But they aren\u2019t always \u201cright.\u201d Those of us who\u2019ve lived a little know that some threats are real while others are illusions of our imperfect ability to perceive the world around us. A noise in the dark will awaken a deep sleeper, even if it\u2019s from the wind knocking over a trashcan rather than a lion preparing to pounce.<\/p>\n

I started with a biology lesson because I believe that collectively, our imperfect instincts have distracted us from reality when it comes to the current economic crisis. Let me explain why.<\/p>\n

The past twenty years of improving American prosperity have conditioned us that there is a single economic reality: consistent and predictable quarter-over-quarter growth. In the past year this perception has been challenged by sharp declines in prices for stocks, homes and labor. We\u2019ve weathered other declines in financial markets, specifically in 1987 and 2001. The difference is that the current decline is broader-based and steeper than those other declines. No question about it, these changes are frightening.<\/p>\n

With regard to the economy, I believe its time to turn decision-making back to human reasoning. The sense of mortal threat needs to be eliminated before reason can take over. Have you noticed:<\/p>\n