Why Greece Matters
To trace something unknown back to something known is alleviating, soothing, gratifying and gives moreover a feeling of power. Danger, disquiet, anxiety attend the unknown—the first instinct is to eliminate these distressing states. First principle: any explanation is better than none. . . . The cause-creating drive is thus conditioned and excited by the feeling of fear. . . .
“Any explanation is better than none.” And the simpler, it seems in the investment game, the better. “The markets went up because oil went down,” we are told, except when it went down, there was another reason for the movement of the markets. We all intuitively know that things are far more complicated than that. But as Nietzsche noted, dealing with the unknown can be disturbing, so we look for the simple explanation.
“Ah,” we tell ourselves, “I know why that happened.” With an explanation firmly in hand, we now feel we know something. And the behavioral psychologists note that this state actually releases chemicals in our brains that make us feel good. We become literally addicted to the simple explanation. The fact that what we think we know (the explanation for the unknowable) is irrelevant or even wrong is not important to the chemical release. And thus we look for reasons.
The United States is extremely unlikely to default. At worst, we may experience severe inflation while we adjust our taxing and spending—or deflation if markets are forcing austerity! ...