Home
Economies are driven by imagination. We give it other names, such as consumer confidence, expectations, and forecasts. It all boils down to imagining the future. If you imagine you'll have plenty of money tomorrow, you'll spend more of your savings today. If you think tomorrow will be challenging, you hoard your cash to be safe.

Our current economic situation is often described as a lack of demand. The country has capital to invest, and savings to spend, but people aren't so sure this is the right time. You wouldn't, for example, buy a house unless you imagine property values to be heading up instead of down.

A recent study showed that you can influence how much people save for retirement by having subjects simply imagine themselves older. When you imagine an old version of yourself, it changes how you act today.

Presidential election years are especially good for imagined futures. At the moment, both the supporters of Mitt Romney and the supporters of President Obama see a brighter future ahead because both groups imagine victory, and with it the improved economy they crave. The problem is that the day after the votes are counted half of the country will turn deeply pessimistic and imagine tragedy. According to the imagination theory of economics, you'd expect stocks to zoom with optimism as we approach a close election (check!) and a deep pullback right after the election when half the country turns to instant pessimism.

The three presidents who did the best job of manipulating citizen imaginations were probably Kennedy, Reagan, and Clinton. The economy was strong under each of their administrations.

President Obama is a master at manipulating our imaginations with his hope and change message. But I think Republicans have done an effective job of blunting his imagined future with their large doses of obstructionist reality and imagined drift toward greater socialism. The President's plan of taxing the rich doesn't feel like optimism; it feels more like the stranded survivors of a plane crash voting to eat the fat people first.

If society descends into chaos after the elections, for whatever reason, and I am forced into my role as Emergency Backup Leader (EBL), I'll use the country's collective imagination as my user interface to steer civilization back on course. I'll literally tell people to imagine being generous to the people in need, and imagine the wheels of commerce rolling forward. I'll ask people to remember how constipated and bloated the government was before civilization imploded and to imagine how we can learn from past problems and design a better model.

Rationalists will scoff at my methods and deride the idea of an imagination interface as new-age magic. They will compare it to the bestselling book The Secret. They will demand data-driven executive decisions, not gazing at crystals and thinking happy thoughts. I'll make all of the rational decisions that are needed, especially in cases where it will improve confidence. But I think science supports the notion that the job of a leader is to control imagination. When you get the imagination right, capitalism has all the direction it needs.

When things get so tough that only the rich have resources to spare, I'll ask the wealthy to imagine a future conversation in which someone asks what they did to help the country through its tough patch. I'll ask them to imagine remembering with pride how they intelligently opened the spigots to their capital and let it flow into the economy, boosting demand and increasing optimism when it was needed most. Perhaps some of the rich will imagine hiring more people than they needed. Others might imagine they invested in more projects than they would have normally bitten off. Some might imagine feeding the poor. It will be a source of great imagined pride - sort of a Greatest Generation thing - and an opportunity for the rich to regain respect in society.

Let's hope the economy self-corrects before I need to test that approach.

 
Rank Up Rank Down Votes:  +28
  • Print
  • Share
  • Share:

Comments

Sort By:
Sep 25, 2012
Given the power of my imagining skills, her name is now Holly Berry. I'm feeling very omnipotent right now.
 
 
Sep 25, 2012
Is Holly Berry any relation to Halle Berry or is she some xmas vixen I've never heard of?
 
 
-1 Rank Up Rank Down
Sep 25, 2012
Kingdinosaur, Russia under the Soviet Union was better by almost every metric than 13% top-rate Russia. And the countries with the highest taxes, the Nordic countries, are rated as having the best quality of life. But don't let a little thing like evidence get in the way of dogma.
 
 
Sep 25, 2012
[But I think science supports the notion that the job of a leader is to control imagination. --Scott]

I don't normally think much of WATYF1s comments but I have to admit this time he has drawn my attention to a good point which had previously escaped my notice. Where DID you get this notion from Scott?
 
 
Sep 25, 2012
WOW,,, this really works!! I'm imagining that your a brilliant writer, and I completely believe it!.
Next I'll imagine that I'm happily married to Holly Berry. Hope that goes as well.
 
 
0 Rank Up Rank Down
Sep 25, 2012
[Economies are driven by imagination. We give it other names, such as consumer confidence, expectations, and forecasts.]

....said the good little Keynesian. :^D

[The country has capital to invest, and savings to spend, but people aren't so sure this is the right time.]

No, it doesn't. It's still completely over its head in debt.

[President Obama is a master at manipulating our imaginations with his hope and change message. But I think Republicans have done an effective job of blunting his imagined future with their large doses of obstructionist reality...]

Right... this had nothing at all to do with Obama's ineptitude and the fact that "hope and change" are nothing but empty rhetoric. :Op

[...and imagined drift toward greater socialism]

Because Obamacare isn't an *actual* drift towards greater socialism??

[But I think science supports the notion that the job of a leader is to control imagination.]

I think your imagination supports the notion that science supports that notion. :^D

WATYF
 
 
Sep 25, 2012
The guy behind rich dad-poor dad had an exercise in which he hampered the physical abilities of people in his seminars and made them try to prepare a meal. It was to show them what it was like to be old. Supposedly, it was a great help to get them preparing for getting old.


BTW, the commies (Russia) have a top income tax rate of 13%, which is our bottom tax rate (payroll taxes). If the russians can do that, I say we can do better. I imagine a USA where we have a business tax rate of 10%, no income taxes, and still provide fundamental government services. Theoretically, if we had a corporate economy of 30 trillion or so and the dollar had today's value, 10% of that would pay our national budget. So all we need to do is imagine a valid way to create a $30T economy with little inflation.


 
 
Sep 24, 2012
Some day we will imagine that economy is run by imagination of creative people (like cartoonists and engineers) and not by that of stock traders. That will be a good day.
 
 
Sep 24, 2012
I am getting a very uneasy feeling from last few posts that you are trying to hypnotise your readership to vote for Mitt Romney. I hope it's not true.
 
 
Sep 24, 2012
@Dooby

[How about asking the rich to imagine having their homes overrun by angry mobs of hungry poor people? Fear is the language of most politics right now anyway, and it's pretty powerful.]

Tactics like that feel good when you say them but, unfortunately, in the real world The Other Side rarely reacts to your move in the way you want them to. I can't help thinking that they would react to such an imagination by upping the security level, paying private security and the government to guard them, increasing the disconnect between them and us and sticking us with more onerous security requirements, not by giving more money to poor people. In other words, by making things worse.
 
 
-3 Rank Up Rank Down
Sep 24, 2012
How about asking the rich to imagine having their homes overrun by angry mobs of hungry poor people? Fear is the language of most politics right now anyway, and it's pretty powerful.
 
 
Sep 24, 2012
Imagine all the people, living for today, hey hey oooooh.

Except thats not how politics works. Democrats want to move forward into a brave new world, while republicans want to retreat into an imaginary 'good old days' that never really existed in the first place.

And nobody wants to imagine a future in which they are not the ruler of the world.
 
 
-7 Rank Up Rank Down
Sep 24, 2012
They *don't* read novels, that should be. (In fact, they're generally so lacking in fiction-literacy that they have no idea that corporate-controlled dystopia is the setting of a good half of sci-fi movies.)
 
 
-9 Rank Up Rank Down
Sep 24, 2012
I agree. There's even a theory (see "Better Angels of Our Nature" by Steven Pinker) that the reason Europeans stopping being so sadistic (burning witches at the stake, drawing and quartering anyone for treason against the king) is precisely that the printed word allowed them to get better at their capacity for imagination. The educated classes would read novels and imagine what it means to be on the receiving end of so much punishment. Over time their morals trickled down to the lower classes.

I suspect that's one reason why Republicans are so deadly. They have less imagination than Democrats. Businessmen and rednecks don't watch HBO, and they read novels.
 
 
Sep 24, 2012
Glad to see a post that isn't all about you. Oh, wait, it was. Never mind.

To your first point, that is, that economies are affected by emotion, you're right. It's pretty much an attitude thing, and based on our confidence in the direction of our personal finances over time. That's why it's called consumer confidence, rather than consumer knowledge.

Your second point, where you say in effect that if you could hypnotize businesses into hiring more people than they need, that would somehow improve the economy, makes me wonder about you. Businesses do hire against anticipated demand, but if they're wrong, guess what? Their competitors, who didn't take on the added burden of that expense, kick their behinds. They are able to offer the same goods and services for a lower price. Then, when the first company hires even more people to meet their falling demand, company #2 puts the other company out of business, thereby causing more people to lose their jobs than were hired in your plan.

You, as I recall, were an economics major. Did you sleep through the supply/demand portion of your classes? Did you miss the part where your professor said, "The most expensive cost that businesses incur is the cost of people?"

How about the increasing burdens that have been put on businesses by this administration? If the business owners have to spend money complying with government regulation, they can't use that money to hire people, or buy equipment, or buy raw materials. The latest estimates of the cost of regulations, plus the additional ones that are coming under Obamacare, will cost the country (taxpayers and businesses) about $1.8 trillion per year. That's 20 times the original estimates of $88 billion. Do you think any sane business owner, looking at that burden coming next year, is going to run out and say, "Wow! The economy is about to take off! I better start hiring people today!"

Only if your hypnosis is strong enough to make them jump off a cliff by making them think they're birds. Have you heard of "Taxmageddon?" Are YOU feeling all warm and cuddly about YOUR future finances under that? Have you hypnotized yourself into running out and hiring a bunch of people you don't need at your restaurants?

I know you're a humorist, and that you write columns like this partially tongue-in-cheek, and partially just to yank the chains of people like me. But this one has strayed too far from reality to be anything that we can consider even as complete farce. I believe you can do better, and hope you will. Tell us how you would seriously fix our debt problem, and handle the unfunded liabilities. How would you save Medicare and Social Security? What would you do to lower unemployment? What would you do about Obamacare? Hey, I'm saying this as your self-appointed campaign manager, so I mean only the best for you in your non-run for the presidency.

I'm sure you have some real ideas. I would like to see you putting some real ideas out there, rather than waving some fairy dust around while singing "Everything is Beautiful", lol.
 
 
Sep 24, 2012
Scott, if you become the Emergency Backup Leader, you will have to pry my rationalism from my cold, dead brain.
 
 
Sep 24, 2012
"The President's plan of taxing the rich doesn't feel like optimism; it feels more like the stranded survivors of a plane crash voting to eat the fat people first."

I look at it more along the lines that the bill has finally come due for all the tax cuts we have enjoyed in the last 30 year at the same time an excess of 800 billion is 'due' to pay for the 'unfunded' Iraq war. Of course the GOP gets credit for the giddy feeling you have when the tax breaks are dispensed, and the Dems take the blow for declaring the party to be over.

Consider that along with these facts:

1. Ronald Reagan Tripled the National Debt (Reagan described the new debt as the "greatest disappointment" of his presidency)
2. George W. Bush Doubled the National Debt
3. Republicans Voted Seven Times to Raise Debt Ceiling for President Bush
4. Federal Taxes Are Now at a 60 Year Low

As for the rich getting stuck with the bill, well, they benefited most from the tax breaks, and lets face it, you can't get blood from a stone.
 
 
+8 Rank Up Rank Down
Sep 24, 2012
"When you get the imagination right, capitalism has all the direction it needs."
- Are you becoming a Libertarian? After all of your central planning ideas lately, it's great to see you advocating for a vision, but letting capitalism and free markets direct the resources.

As to your examples, I'm too young to remember Kennedy, but from what I've read, his was more charisma than vision (those who listened to the Kennedy/Nixon debate on the radio felt Nixon won; TV viewers thought Kennedy). I'd say the same of Clinton - a incredibly charismatic, and even empathetic speaker, but I'm not sure about the vision. Reagan was mostly vision. I'd say Obama was in 2008 too, but after a failure to execute anything besides an unpopular entitlement, he can't really run on hope again.
 
 
Sep 24, 2012
Scott, you said: "President Obama is a master at manipulating our imaginations with his hope and change message."

As you know, it isn't what how do per se, but where you come in relative to expectations that affects people's perceptions of how you are doing. In other words, a person delivering a performance when expectations are high will be perceived as doing poorly, while that same delivery with low initial expectations will be perceived as doing well. It is the same performance, but the judgement varies with initial expectations.

Raising high expectations is a recipe for (perceived) failure.
 
 
Sep 24, 2012
You might get a small positive response by asking the rich to imagine being charitable - that happens in churches every Sunday. However, you are more likely to get a large positive response if you can get the rich to imagine themselves being even richer, by starting or funding new companies. Rather than redirecting their imagination, it would simply reinforce the imagination they already have. I believe this is what Reagan and Clinton both did successfullly, and it coincided with signficiant job creation. Conversely, if you tell them you are going to raise their taxes, you are likely to prompt them to imagine moving to the Cayman Islands, which might employ and extra bartender or two, but not much else.
 
 
 
Get the new Dilbert app!
Old Dilbert Blog