The fallacy of mood affiliation

Recently I wrote:

It seems to me that people are first choosing a mood or attitude, and then finding the disparate views which match to that mood and, to themselves, justifying those views by the mood.  I call this the “fallacy of mood affiliation,” and it is one of the most underreported fallacies in human reasoning.  (In the context of economic growth debates, the underlying mood is often “optimism” or “pessimism” per se and then a bunch of ought-to-be-independent views fall out from the chosen mood.)

Here are some further examples:

1. People who strongly desire to refute those who predicted the world would run out of innovations in 1899 and thus who associate proponents of a growth slowdown with that far more extreme view.  There’s simply an urgent feeling that any “pessimistic” view needs to be countered.

2. People who see a lot of net environmental progress (air and water are cleaner, for instance) and thus dismiss or downgrade well-grounded accounts of particular environmental problems.  There’s simply an urgent feeling that any “pessimistic” view needs to be countered.

3. People who see a political war against the interests of the poor and thus who are reluctant to present or digest analyses which blame some of the problems of the poor on…the poor themselves. (Try bringing up “predatory borrowing” in any discussion of “predatory lending” and see what happens.)   There’s simply an urgent feeling that any negative or pessimistic or undeserving view of the poor needs to be countered.

4. People who see raising or lowering the relative status of Republicans (or some other group) as the main purpose of analysis, and thus who judge the dispassionate analysis of others, or for that matter the partisan analysis of others, by this standard.  There’s simply an urgent feeling that any positive or optimistic or deserving view of the Republicans needs to be countered.

In the blogosphere, the fallacy of mood affiliation is common.


Must these logical fallacies be driven by some inherent, mood based bias? If your goal isn't to find the truth but to advance policy goals, that all seems like it could be perfectly rational behavior.

Especially the last one. In a two party system it makes sense that pundits would focus on attacking one party and helping their own. I think this could be less "i've identified some areas where people's attitudes affect their reasoning" and more "politicians and pundits contribute to debates different set of goals in mind than academics."

A shorter description of how most intellectual though is organized was provided by Lenin:

""Who? Whom?"

3. The poor have little of value to offer. That's the problem.

"Predatory borrowing"? Are you serious? Am I really paying the bank twice as much the value of my house because I'm "preying" on a bank willing to give me that loan? Are there any examples of the poor using borrowing as a method of preying on banks that you can give - or is this just another poor attempt to shift blame on the financial crises from the people who define market conditions and their associated trajectories?

If you put no money down, make payments for three months, but live in the house for a year & a half, then yes, you are likely a predatory borrower.

The real blame belongs to the people who advocated hog-wild heads-I-win / tails-the taxpayers-lose capitalism in the name of Diversity. For example, Google President George W. Bush's speech at his White House Conference on Increasing Minority Homeownership (10/15/2002), in which Bush denounced as racially unjust his federal regulators getting sniffy over details like down payments and documentation for mortgages.

But, Diversity remains so sacred across 99% of the intellectual space in America and hog wild capitalism has its own defenders, that almost nobody has noticed the extensive historical record of how shoot-the-moon speculators used the sacredness of Diversity to justify their gambles.

I call bs. Diversity is far from "sacred" in any meaningful sense. It's a polite word used by white folks to signal their progressive bona fides to other white folks. The idea that there is some deep intellectual or cultural commitment to diversity that's pushing this country down is an argument that really falls apart once you start actually investigating what all this "diversity" entails.

You are missing the point: "Diversity" served and continues to serve as a cover story for pursuing private interests, financial and political. There's an enormous paper trail of Bush, Henry Gonzales, Angelo Mozilo, Kerry Killinger, etc etc all justifying hog wild lending in the name of closing the racial gap in homeownership. And there was very little pushback against that tactic either in the 2000s or even in the 2010s. After all, who likes being accused of racism?

If I take out a no doc negative amort loan with nothing down, live in the house for artificially low payments until the reset and then drag out the foreclosure as long as possible making no payments for another two years, then walk away with no liability after practically living in a house for free for several years and not taking care of it at all.

Take the same idea with any kind of unsecured debt like credit cards, etc. There is profit to be made if you can get someone to extend you credit that you plan to abuse and then walk away from.

How common is this, as opposed to "predatory lending"?

Which side are you asking?

You don't think the resultant loss of credit rating balances this out more than the negligible "bad press" that BoA and the like get with their own predatory activities?

Doesn't it make more sense to critique the firms drawing up the contracts, rather than the masses which sign them, as to the contents thereof?

Q) Are there any examples of the poor using borrowing as a method of preying on banks that you can give?

A) Exactly what I just posted. Its obviously a big enough issue that there are whole websites devoted to screwing over your lender as much as possible.
- - -
Who deserves the most blame is another question. I don’t think Tyler made a statement about relative immoralities. Merely that predatory borrowing was a part of the current problem, and that can’t be ignored. If everyone treated debt conservatively and moralistically the way my parents did the bubble may not have been totally avoided, but it would not have been as big a problem.

Oh, moral blame is not the issue. I could care less about the points there. The point is blame for the creation and execution of this model of business.

I find it highly dubious to claim that a substantial number of people sign mortgages without intending to pay them off. I think its far more likely that they would choose to rent, for one thing, and furthermore that defaults on mortgages are due to the ignorance I described above (in terms of debtor-side failure).

It's hard to seriously to critique un-associated individuals following standard market practices in the context of a system which is being maintained by an lending organization which has to tools to predict that debtor-default is probable.

But if you really wanna play the morality game - cheating to get into a house in an inflated market is far less sinister than supplying someone a loan when there is every reason to expect default on the same. And before you say it - yes, Fannie, Freddie and government policy all share a considerable part of the blame.

Dean, you're missing dave's point again. "If everyone treated debt conservatively and moralistically the way [dave's] parents did", these business models should not have been even created, much less got off the ground. Yes these business models and helpful lenders might have made it easy for many borrowers to delude themselves as to their capacity for eventually paying the loan off, but delude themselves they did.

@ Anton: I wonder. . .if this business model had not been created, what's the chance that anyone, let alone the small number that did it on purpose once the lending system was in place, would try to cheat the system? To put it another way, how many tried took loans out on houses they couldn't pay for BEFORE the business model was created? I think the answer to the first question is, obviously, very few. And I believe the answer to the second question is probably very, very few. There's likely research out there that addresses the second question. If anyone out there can cite facts that prove there were lots of poor people cheating on loan applications from 2000 to 2005, for example, I'd appreciate their input.
If you want to assess and place blame, blame the real evil-doers. The lenders, and the entities that sanctioned, and indeed encouraged "non-conforming" loans.

frk: Tyler doesn't say lenders are not to blame, and neither do I. They certainly are. Nevertheless I don't think the "helpless poor in the clutches of evil lenders" story can be taken at 100% face value. Of course there was a self-reinforcing dynamic between lots of people's debt practices and lenders' business models once things got rolling, but the potentiality was there to be exploited. Credit card debt, for instance, is the same thing on a smaller scale, and I do remember the constant complaints about credit card companies' practices 10 years ago. Come to think of it, how many people had a credit card in 1950?

A few months back I heard an NPR interview. Tavis Smiley claimed that the black population had been targeted with predatory loans much more often than whites had been. If I could have reached through my radio and slapped him, I probably would have.

Predatory loans came into existence when Congress passed equal opportunity lending legislation. The legislation meant that a black man with poor credit, massive debt, and no income could cry "Racism!" and take a bank to court if the bank wouldn't approve his loan application. Banks responded by making the potential profit worth the potential risk, and created loans with silly interest rates. That's how predatory loans came to be. They're an unintended consequence of equal opportunity laws.

You wanted examples of predatory borrowing? Ask Tavis. Thousands of people getting loans they could never repay because they threatened to sue for racist discrimination if they didn't get their loans, and somehow Tavis Smiley thinks these are the victims.

@ Anton
"the potentiality was there to be exploited" Again, if the predatory lending hadn't existed, the prey would have had no blame.
If "the poor" had been required to follow the rigorous approval process as it existed before these spurious loans became all the rage, if they were approved, and if they signed the mortgage, and if they eventually defaulted, then, and only then, would some of the blame shift to the borrower. More blame if he lied on the application, much less blame if he was deceived by the lender.
If bad lenders are making bad loans there will be people, desperate, greedy, or ill-informed people to sign for those loans. If there are no bad loans being made, well, those desperate, greedy, or ill-formed won't be able to sign for them. As far as these loans go, where does the "potentiality" lie? All rests with the lenders and none with the borrowers UNTIL the questionable loans are offered and approved. The lenders were realizing their full potential for greed. If loans had been approved only after the borrower's financial situation has been appraised (the process in place before this problem ever surfaced) I'm making a wild guess here that few if any would have had their loan applications approved.
"Nevertheless I don’t think the “helpless poor in the clutches of evil lenders” story can be taken at 100% face value" Nor do I..
At songar (my bad--I use different names on different sites and I a got them mixed )3/31 9:30am below I tried to concentrate on the wording of Tyler's statement. I do not, as he writes have " an urgent feeling that any negative or pessimistic or undeserving view of the poor needs to be countered." I do expect some objectivity and less defensiveness toward someone like myself who would like to see "the poor" referred to as "some of the poor". I'm not a big fan of tarring everyone with one brush. That's generalization. And generalization is akin to prejudice:It's not by any means simply a "negative or pessimistic or undeserving view of the poor".
"The rich" are not all rich. Neither are "the rich" all evil.A "few" rich people are swindlers. Maddof for example. A"few" are crooks. Lay. Then there's Warren Buffet and there's Bill Gates, for example. And so it goes. Among "the middle class". Among "the poor". The potentiality for "doing wrong"--as well as "doing the right thing" is there in most of us. I carefully chose the word "most" because I'm trying to avoid lumping those living in a comatose state in with the rest of us. They may survive, and I don't think it's honest to make any assumptions about their potentialities.

@frk And around we go. If there were no 'desperate, greedy, or ill-informed people to sign for those loans', there would be no loans made. As it is, there were rather a lot of such people, certainly enough for the US financial system to have a bad cold. "All rests with the lenders"? Give me a break. Do they put people under duress to apply for bad loans?
@frk Notice that I didn't generalize. I understand the power words and generalizations carry, but just to state it here I think that this bending over backwards to avoid offending anybody at all can be carried too far. Lots of people are offended by the very fact that there are Americans, whatever they do. Do all Americans therefore need to kill themselves ASAP to avoid offending them? By the way, the other side of this "do anything rather than offend any one person" approach is the offense paranoia, of which the first paragraphs of Self-Made Man (Norah Vincent) provide an accessible example. I am fairly certain most of what she describes is paranoia, because I used to feel much the same walking around chav-infested neighborhoods (our chavs were famed for relieving passers-by of mobile phones and wallets) when in reality no-one was giving half a damn about my presence. Socially-awkward adolescent boys feel the same in public, especially around girls — it's like everyone's looking at you and secretly sniggering at your appearance, gait and bearing. Why encourage this?

"predatory" has metaphoric connotations that makes the phrase "predatory lending" sound fine and the phrase "predatory borrowing" sound wrong. Archetypical Predation situations are ones where the prey is devastated and the predator is bigger and stronger than the prey.

With respect to "mood affiliation", Jon Haidt has an excellent article called "The Emotional Dog and its Rational Tail " on this issue in the case of moral judgments:

What about those who lie on loan applications. It seems foolish in that the banks interest and borrowers long term interest are aligned in this case, but happens all the time.

It's reminds me of a fish taking the bait. The fish thinks he's getting a great deal -- hell, he can even beat the system if need be; of course he doesn't even know what the system is. Here's a great big morsel of food just hanging out there for the taking. But you have to think: somebody threw out that line for a reason, knew what he was doing, and is going to make the catch. Cui bono -- the fish or the fisherman?

If you take a loan, and don't have an intent to repay, that's very much predatory borrowing. If one is aware there's a decent chance an unsecured loan or credit won't be repaid because some life event will occur making them unable to do so, that's predatory. Most of the earlier years of my life were spent around people like this (and, responsible paying was not habit I acquired until I actually had something to lose later on).

It's relatively easy to get credit (not just cards, but not returning calls after biliing cycles), and then not pay. There"s a whole collection industry based on this (whose calls I receive regarding members of my family from time to time. There's a reason an unsecured line of credit costs more: People don't pay them back as often.

How can one assume intent? All we can really try to project onto these arrangements (in trying to discern intent) are expected outcomes - based on the relevant research that each party engages in. Who do you think is in a better position to determine projected outcomes of a home sale - the financial firm or the under-advised individual home purchaser?

"How can one assume intent?"

That's why I'm using myself in the past, and several of the members of my family currently. I'm aware of the intents on a micro basis. My real assumption is that the behavior scales up, but I don't think it's too far a stretch. We have borrowed with the knowledge that we might not repay, and that there was little that could be done because we were/are turnips. The consequences are minimal because the laws make collecting unsecured debt not worth it for a thousand bucks or so, and if something get's repossesed, it gets repossesed, someone else will give you credit later.

I know what you're saying about the financial system having a better understanding, but I think that could be missing that the two parties don't have the same interests in the contract. The financial guy has a better idea about the lifetime net worth of these contracts on an aggregate basis, but on an individual level, the borrower knows that he'll be relatively OK, and their immediate need will have been satisfied. Both sides feel they make out ahead, albeit unethically.

I don't think borrowers end up ahead (short-sales, for example) - certainly not as much as some of the major executive actors who screwed their own banks to accrue profits. Further - losing all of those interest payments (which were basically fees to allow people to start accruing equity down the line) is a near-100% loss on a debtor's investment, while the bank has the luxury of maintaining a good portion of the house value. One could cite the time spent living in the house as a "plus" - but it was also a "plus" for the bank to get rid of the (then unrealized) asset.

"Are there any examples of the poor using borrowing as a method of preying on banks that you can give"

Heck yeah.

When I was 24, a guy I knew refused to work, largely because he had the attention span of a walnut. But he was quite good at sniffing out introductory credit card offers. He maxed out seven different cards over the period of a few months ($500-$1000 each) with the explicit intention of walking away from the debt. And so he did. You should have seen his jubliation each time a new offer arrived in the mail, as if he had found a winning lottery ticket, or was simply stealing from people who deserved it.

He had all the clothes and toys and stereo equipment he had ever wanted, and the only downside was that he could never answer his phone due to all the creditor calls. He eventually solved this by disconnecting the line.

Any other of your world views I can easily shatter for you, Dean?

Wow, you're right. Citibank has really been hurting from all the deadbeats since 1812. Its a wonder they haven't gone bankrupt in all of those 199 years.

A cursory look at the numbers - the money flow between consumers and banks - will show who the predators are.

Mr. Sayers's reply is a beautiful example of exactly what Tyler's post was about.

"In the blogosphere, the fallacy of mood affiliation is common."

While true, I contend it is far more common in the comments section.

Actually, its not even a fallacy, since nowhere is "mood" being used as an argument to support the validity of a position.

One could critique Tyler and others here for consistently arguing these points from a moralist-propertarian perspective (a key train of Austrian Economists), rather than the far more materialist attitude seen amongst their Keynesian counterparts.

More materialist? Krugmen is nothing but moral outrage 24/7. Think of the poor!!!

Dean, I think your reaction is making Tyler's point.

'“Predatory borrowing”? Are you serious?'

Dean, did you write that just to confirm Tyler's point?

I would add a clarification to 4. which I think was implied ("or some other group"):
5. People who see raising or lowering the relative status of women/African Americans/minorities/LGBT people (underline as appropriate) as the main purpose of analysis, and thus who judge the dispassionate analysis of others, or for that matter the partisan analysis of others, by this standard. There’s simply an urgent feeling that any negative or pessimistic or undeserving view of the above-mentioned group needs to be countered.

Isn't this just confirmation bias?

I guess it could be called emotional confirmation bias. Practitioners try to 'confirm' a pet feeling instead of a pet theory.

In any case, it is certainly a bias rather than a fallacy. The term "fallacy" gets thrown around to carelessly.

I got it: emotional confirmation bias is what produces the mood affiliation fallacy, just as our bias towards magical thinking produces the "Post hoc ergo propter hoc" fallacy.

Dean Sayers, welcome to the fallacy of mood affiliation. Millions of poor or lower middle income borrowers committed legal felonies in their mortgage applications, no?

Not all legal infractions are equally culpable. I grew up in India. Poor people have to bribe hospital employees to get medicines. Giving a bribe is a crime. Accepting a bribe is also a crime. Who do I consider more at fault? Mutual felonies where there was a significant power differential need to be judged accordingly.

I don't think Tyler made a statement about relative immoralities. Merely that predatory borrowing was a part of the current problem, and that can't be ignored. If everyone treated debt conservatively and moralistically the way my parents did the bubble would not have been as big a problem.

BTW, "Bloomberg" wants and almost exhorts Japan's companies to end their "aversion to borrowing" and "take on debt".

How far would "predatory borrowers" have gotten without "predatory lending? By some specific definition of the word "poor" how many "predatory borrowers" were poor? Many of them? All of them? Some of them?
Tyler, I'm happy to see that in this comment , you specify and modify: " Millions of poor or lower middle income borrowers". That's an improvement. Sure you don't want to add "middle income borrowers" to the mix?


"Millions of poor or lower middle income borrowers committed legal felonies in their mortgage applications, no?"

Yes they did, and some were well organized scams by professional con men. The reality is though, that most "poor or lower income", not to mention most "middle to upper income" borrowers, wanted to believe what they were being manipulated into by the mortgage brokers who got paid straight application fees, whether the loan was eventually approved or not. They, especially the poor and unsophisticated, were told what to put on the application, and that they weren't doing anything wrong. Most of the affluent and sophisticated ones knew exactly what they were doing, but many were blinded by their dreams and justified it accordingly. There were many, many cases of what the industry called "ethnic scams". Non-English-speaking immigrants, who were "taken under the wing" of a trusted fellow countryman, who would guide them through the process of acquiring the home they thought was beyond their means. Why? Because they didn't trust those sleazy American businessmen. Ironic or what?

So, a basic question of economics. Would it have been more or less costly to the economy, to have had federally funded programs to: recognize what was going, educate and warn the victims, and hold those running the industry accountable; than to have the house of cards collapse and trigger the "Great Whatever"?

Respectable leaders like George W. Bush and Angelo Mozilo campaigned in 2002-2005 to make no-doc and/or zero-down mortgage lending more palatable to regulators, lenders, and borrowers, and they explicitly and relentlessly did this in the name of racial/ethnic equality.

It may have been in the name of racial equality but it was in the spirit of unbridled capitalism and everyone knows that. There ought to be a word for taking mendacity at face value.

Oh shit. I just took mendacity at face value.

Some people go beyond stating the existence of "simply an urgent feeling" and analyze it, quite credibly IMO, as religious fervor and much of our contemporary debate as a dominant faith battling heresies. Progress is an article of faith comparable to transsubstantiation, thus any 'pessimistic view' of it or its effects must be extirpated. The tone and content of the writings of Sir Dawkins also makes more sense in this light, because from the p.o.v. of the dominant faith ('einsteinian religion') belief in God is a heresy.

So Tyler Cowen has a mood affiliation of pessimism, thus advances TGS?

"thus who are reluctant to present or digest analyses which blame some of the problems of the poor on…the poor themselves". Tyler, the issue is not that people deny that it is the poor' own fault - the issue is what do we do about it as a society. If a person was lazy in high school and could not get into any college and, as a consequence, cannot get a decent job - we all agree it is his own fault, he made his own mistakes. But what do we do now ? do we help him or not. If so, how? So maybe in some quarters people refuse to assign individual responsibility, but that's kind of besides the point.

I think the point people take issue with, or maybe just me, is the concept of economic "rights". People have a right to X, Y, and Z economic goods. I can be persuaded to help people to the degree that I have excess discretionary income and I want to give to charity. But when I start having to dig into things I consider more critical, say sending my kids to a good school or having a house in a safe neighborhood, to pay taxes to secure peoples "rights" I have a problem. I don't mind helping people try to get X, Y, and Z, but if they fail to get X, Y, and Z with the level of help I'm willing to provide then tough shit for them. I feel this especially strongly because I think that most citizens without X, Y, and Z could actually achieve it with the resources they have, and that only a small minority truly can't achieve X, Y, and Z with what they've been given.

In theory, your position makes sense. But in practice "tough shit for them" does not work - what if you end up with dirty angry mobs and huge crime rates as a result of "tough shit for them" ? You don't necessarily have to end up there, but it has a non-zero probability of happening. Most people are so scared of this, that they support providing help to those "tough shit for them" people - so the only practical question on the table is: what is the most effective way to provide that support.

I don't really accept that premise. You really think mediocre Americans are going to go all Egypt? Egyptians are starving desperate people brutalized by a dictator living in third world squalor. At a certain point, "freedoms just another word for nothing left to lose," becomes the truth.

Mediocre Americans live in the first world and their greatest health concern isn't even lack of insurance, its obesity and type II diabetes from eating shit all day. They practically live of government transfers and services of one kind or another. Do a bunch of fat, lazy, dependent people sound like they are going to storm the Bastille and demand that middle and upper middle class professionals who work their asses off pay even more so they can get more welfare?

Right, you yourself said "They practically live of government transfers and services of one kind or another". What we are discussing here is a situation in which we follow through with the logic of "tough shit for them" and take away government transfers and services from people who through their own fault are in a bad economic situation. In this world, those "tough shit for them" people would be significantly worse off. As a result, there is a non-zero probability that mayhem and chaos would ensue. And my point is, we are so scared of this probability, however small it may be, that we don't want to take away their government transfers and services. So what we should be debating is, how to make the whole system more efficient, because for better or worse, those transfers and services are never going away.

I'd rather accept a tiny "non-zero probability" that someone might try to mug me then the 100% probability of a gigantic chunk of my income being take from me year in year out and used for dubious purposes.

No. We don't "all agree" about the student. Some place the blame squarely on the school system and its teachers. NCLB left the kid behind, so the federal government ican be blamed as well. And don't forget the family (often single-parent) that raised him.
Helping him now is going to require a much greater investment than would have been necessary, if we had helped him "then".

Really man? Did you go to public school?

I went to a regular public school in a lower middle class neighborhood. They didn't fail because the parents were impoverished, or the school was dilapidated, or the environment wasn't safe. It was a boring typical suburb and most everyone had food on the table, a roof over their head, and a reasonably loving family. They failed because they goofed off and dicked around almost their whole youth and never bothered to plan for the future. Most of the kids who went to public school in my town ended up growing up to be mediocre townies with no real careers, and having seen the process firsthand I can tell you they have no one to blame but themselves. That's the case for the majority of Americans, the truly disadvantaged are a much smaller subset of everyone who claims victimhood.

Congratulations. You are among the few who escaped unscathed. . .because you're better than most? That's not an uncommon feeling among a certain subset of high school graduates. Were the typical suburbs in your day inhabited by "reasonably loving families". What was the divorce rate then, where you lived? Did you canvass your fellow students and the students in other local schools to support your findings?Certainly you've read about the devastating effects divorce can have on a child and his interactions in the school environment.
I tend to question any individual who says, "I was standing behind a woman in the grocery store checkout line who paid with a welfare check. She had a fancy handbag and was dressed better than me. Let's eliminate welfare. " I ask him whether he's basing his conclusion on his own limited sphere of experience or if he has research to back it up.

Above I was questioning the "we all agree it is his own fault" assertion. I, for one, fall into the "all" group (by definition, everyone, including me) and I "don't" agree. I'm sure there are other renegades out there who stand with me on this. Ergo, the assertion is false.
I made no defense of the majority of students. I simply raised other factors that may be involved.

My parents didn't get divorced, but they fought constantly, and not low grade bickering married couple fighting. Given my fathers health issues, I probably went through a lot more hardship then most of my peers, and our income was lower then many of my peers. Somehow, I made it and they didn't. It wasn't some magic formula or winning the lottery, I just studied and worked hard, and I watched them not make the same choices.

You can find a victim in any situation if you want. My own experience, and my intuition from looking at comparable statistics, is that its just not all that hard for middle class people in first world countries to provide for themselves. Outside of perhaps the 10-20% of our population that truly lives in crushing poverty, everyone's got a decent enough chance that they have to take responsibility for their outcomes in life.

@Dave 11:18
When my father wasn't working he was drinking. My mother worked. I think I was one of the original latch-key kids. So I, too, was raised in a loving lower-middle-class environment (characterized by the smell of booze and the frequent absence of parenting). I made a success of myself. So ?
Neither you nor I was beaten or abused, right?
You've got your experiences and intuitions to go on, and I have mine.

The difference is I disagreed with Michael Kogan's generalization that "the issue is not that people deny that it is the poor’ own fault " because, I for one believe it is 'not' "the poor's own fault." Some of them? Yes.Many of them? Perhaps. But not all of "the poor" can be viewed as the single ungrateful, slothful mass that the phrase "the poor" implies.
One little slice of my weltanschauung.


I don't have to believe every single welfare recipient is undeserving. I need only conclude that most are to want to reform, reduce, or eliminate the program.

Agreeing with part of my point? The person in the checkout line wants to eliminate welfare because of one or two observed incidents. You're doing the same thing with "They ( the slothful, the goof offs who lack direction )are fully responsible for their situations. And "Most of the kids who went to public school in my town ended up growing up to be mediocre townies with no real careers" -- except for you, of course, and some others who are, by implication, totally responsible for your success. Even Warren Buffet is humble enough to admit that he is a member of "the lucky sperm club".

Warren Buffet also just swindled the US to the tune of $5B or so loaning to GS and having the government bail GS out. I'd be pretty grateful too, don't you think.

I'll note two things about Buffet:

1) He doesn't mind higher taxes because they don't effect his lifestyle. He can afford to basically spend money on taxes to assuage his conscious. When your a working professional paying extra taxes means having to work longer, send your kids to worse schools, etc. Its a genuine impact on your standard of living. I'd favor higher taxes on the ultra wealthy too, but last time I checked there isn't a political party offering up new tax brackets for the super rich.

2) When he had a choice of writing a check to the government and writing a check to Bill Gates, he knew who could do more good with that money. Buffet spoke with his money, and his money said he trusts a private charity run by another plutocrat more then the federal government.

I prefer to think of Buffet as a very savvy investor who has a pretty clear picture of the role good fortune and genetics have played in his success.
In a capitalist society with a free market , calling him a swindler because he bought Goldman Sachs preferred shrares is mere hyperbole and name-calling. He made big moneyselling those shares back to GS. That's the kind of thing good investors do. GS lost money paying him back. But, partly because Buffet invested in the company, GS lives on to invest in companies like facebook. Your so-called swindler invested in GS and
facebook gains. This is swindling?
Bernie Madoff is a swindler. Ken Lay was a swindler.

In the absence of any proof, I prefer the view that Buffet chose an organization with a particular focus because he believed in its specific purpose . I don't see that his choice is in any way a statement about trust in government. If I wanted to contribute to cancer research, I would contribute to an excellent cancer research program. That would in no way be a statement that I didn't trust government or even that I thought one entity less trustworthy than the other. If I were like Buffet, it would be the free choice of a very savvy investor who recognizes he owes something to some country or some power that helped make his success possible.


Are you sure you are not getting caught in a "just-world fallacy" here?

I see where you are coming from, but you are walking a knife edge when you say that the issue of individual responsibility is beside the point. The distance from wanting to help, especially 'as a society', to denying others' responsibility is extremely small. People are plenty confused about helping their own relatives without denying them responsibility. How much more so when setting out to help 'as a society' — this brings to life organizations whose bread, butter and caviar is giving help.

"The fallacy of mood affiliation"

Why all the jargon? Just say "Analysts have biases" Mood affiliation is just a bias towards a pet theory.

There is some point to mood affiliattion.

The elderly, for example, are more likely to be proponents of religious views that the end of the world is near, or personal views that the world not as good as it once was and is going to hades in a personal handheld container.
Of course, you have to consider their perspective: their mood, that the end of the world is near, is based on their physiology, not just the world outside of them. Their view that the world is not as good as it once was is due to their current conditions and limitations, as well as selective recall of only happy events of the past.

And, peoples moods can be changed simply by how you start off the discussion or article, even this one: If you started the article about the desparate plight of the poor and talked about the wealth of the country, or of certain citizens in it, you would be primed to respond later differently about social service budget cuts than if you started the article about "dangerous unfunded liablities".

Tyler, my concern is that in the blogosphere, sloppy scholarship is too common. Too many bloggers claim to know science, history, philosophy and other humanities but at best they have read a 101 textbook, often when they were in college. Don't blame readers for their mood. Blame bloggers for mis-feeding the beast.

And blame readers for accepting all the BS without question. Do you know that it's not uncommon on blogs to apply the label "troll" to a commenter who questions any claim?

Biases aren't those things the other guy has. That's why Charlie Munger recommends a checklist.

The "mood affiliation" theory has a flaw. I can be optimistic about the environment but pessimistic about the economy. The "mood" is not generic but highly compartmentalized. It's not so much about a mood, but just about cherry picking evidence to further a specific point of view.

I think of this issue as being motivated less by our own mood biases and more by the desire to structure the moods of others.

When I feel a desire to fight back on issues like #3, it's mainly out of a sense that if we concede that some poor people, some of the time, "deserve" what they get, it allows for political opponents to use those stories to shift the mood of an audience, and cause that audience to embrace wide ranging policies not justified by the narrow evidence.

Most obivously, stories of "welfare queens" will be used to cut welfare programs including those for people who really need help - the negative story creates a mood bias and a willingness to embrace changes much broader than the story itself justifies.

So in a desire to pre-empt that bias, I am at risk of behaving as though I had my own mood bias and arguing against any negative story about the poor.

Maybe everyone is doing this, and we're actually all really much more rational than we appear, we just don't trust each other..

And we're faced with the phrase "the poor" (which comes across as a thinly disguised generalization with pejorative connotations) in "some of the problems of the poor on…the poor themselves. ", and the fact that some may see no difference between that and the use of the word "poor" in "some poor people, some of the time". I vote for your choice.

The opposite it true too. The plight of the extreme poor is used to justify a lot of benefits for middle and lower middle class mediocrity. If I question why I should provide housing subsidies to some middle class kid who didn't go to college, I get a story about some single mother whose father was an abusive alcoholic. People use straw men to drive their agendas.

Yes, this is fair.

I think what I'm saying is that we get caught in this loop where someone like you might see what's happening and so start arguing against the single mother case, just so that others don't get caught up in the sob story. And so I hear that person arguing that single mothers with abusive fathers etc. don't deserve help, and we end up talking past each other even if we're both perfectly well-intentioned.

I've noticed something like this among some baby boomers I know (I'm Gen X myself). These are intelligent, well informed people who hold a variety of political beliefs.

There is a big resistance to anything that suggests that the next few decades will be marked by economies in decline or stagnation, beyond any normal skepticism. This seems to be due to the fact that the Boomers came of age during the biggest economic boom in history. A world where economic growth is not the normal state of affairs is literally inconceivable to them.

Try bringing up “predatory borrowing” in any discussion of “predatory lending” and see what happens.

This isn't really a good example because predatory borrowing is a ridiculous concept. The information asymmetries point the wrong way. Amateurs don't fool professionals unless the professionals are deliberately closing their eyes.

What really went on with liar loans was predatory middlemanning. The originators told the borrowers "Just put down $X" (or even wrote the application for them) knowing that they could collect their commission, sell the loan, and then in a few years collect another commission on the refi (since, of course, the value would go up -- pretty much if you didn't believe that you would have been fired for having a negative attitude).

This led to a lot of churn, which is great news if you live on commissions. That's why people on commission should always be the first suspects for creating inefficient churn in a market. Cui bono? One man's inefficiency is often another man's salary.

Even a professional loan officer won't realize that the borrower is lying if his salary depends on not realizing it so that the transaction can go ahead.

*The information asymmetries point the wrong way. Amateurs don’t fool professionals unless the professionals are deliberately closing their eyes.*

This is silly. Professionals may not have all the information - I certainly know more about myself than my bank does. They don't always have the ability to know your parents helped you with the down payment, that your job doesn't really exist, etc. Further, it's important to recognize that regulators discouraged them from following up on all of these facts in order to increase home ownership.

The fact that middlemen (mortgage brokers, etc) assisted predatory borrowers in committing fraud does not absolve the borrowers of responsibility.

Also, if you don't believe amateurs can fool professionals, does this mean adverse selection in medical insurance is impossible?

Adverse selection doesn't happen because sick people fool insurance companies into believing they're healthy. It happens when there are too few healthy people in the insurance risk pool to subsidize the care of sick people.

Would this bias exist as some combination of availability and recall bias.... or even perhaps drive the former?

Ah, that explains why my belief that arguing facts was generally useless, as actual arguments seem to be against a point of view, which requires a change of heart; which as this points out, is because I'm debating an emotion.

wow... And blame readers for accepting all the BS without question. Do you know that it’s not uncommon on blogs to apply the label “troll” to a commenter who questions any claim?

This is classic. An automated spammer caught complaining about a troll.

Holy wow, that is awesome. It's like automated meta-trolling. The singluarity is one step closer...

So. Once and for all: . Is asking for substantiation of a questionable claim trolling or not? Where's the 'Mungerian' checklist for "trolls"?

Mission F'ing accomplished:

Predatory borrowing, hilarious, I love the thought of a hillbilly outsmarting some Harvard educated banker. The real estate collapse was a conspiracy perpetrated by the poor to live rent free for two years.

Hillbillies don't deal directly with Harvard educated bankers, in case you didn't notice, but with your garden-variety regular joes in local lending departments. Harvard educated bankers are sufficiently educated to outsmart themselves, they don't need outside help (as if they would accept any, being so smart).


Is it just a coincidence that the first 3 items are phrased as countering "pessimistic" views of liberal points; yet the 4th, the one you leave us with, is phrased as countering "optimistic" views of Republican points. Or are you just in a particularly conservative mood today?

"Is asking for substantiation of a questionable claim trolling or not?" Having read the material at the site you cited, the answer would be "No", yes?
But I think it all comes down to Andrew's 10:10 statement above: "Biases aren't those things the other guy has." I'll know pornography (trolling) when I see it." The Naked Maja may be loosely labeled 'pornographic by the few quite conservative types who still think it's disgusting. For some trolling is anything that disagrees with their views.
For some,the troll accusation is simply a means of evading a question.

I interpret this as "taking sides and digging yourself in. "

"Fallacy of mood affiliation" is a hard term for me to understand.

Tyler said, "Try bringing up “predatory borrowing” in any discussion of “predatory lending” and see what happens."
We have now seen what happens.

If you insist on walking around Cabrini Green hailing people as niggers, of course you are going to get shot. What's news in this?

Clearly there was predatory borrowing. The same people that were shocked to find steriods in baseball are probably the same people who can't imagine predatory borrowing in modern America.

I'm the only one I know who doesn't suffer from this common fallacy.

My mood swings are violent enough that my usual lack of perspective gives me a balanced aggregate perspective.

One needs to distinguish blatant partisanship from inaccurate political equivalency and recognize that views on the shape of the earth differ is not accurate or balanced. There is simply an urgent feeling that any negative or contrary view be needs to be countered.

If I'm reading you right, this is what's called in the literature the "affect heuristic."

I am a female college student, and am torn by my fashion sense (or lack thereof). My friends would say I'm gothic, but since I have no real affiliation to any sub-culture, I would say I just really enjoy wearing heavy eyeliner, combat boots, and black.
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