Tuesday, December 16, 2008

Has the economy gone to the dogs?

I think so, especially after learning about an old Pavlovian experiment with canine subjects.

Two dogs were put in separate cages. A bell would ring, after which they would be "zapped" by some low voltage.

But, one of the dogs had a button that would stop the zapping in both cages. Eventually, he learned to hit that button as soon as the bell rang to save both himself and his unwitting comrade.

Later, the same two dogs were put in different cages. This time, both had the ability to stop the zapping by simply moving from one side of the cage to the other.
Well, the dog who had previously had a switch in his cage started looking for a solution as soon as he heard the bell ringing, until he eventually learned the new steps that were necessary to stop the zapping.

But, in the other cage, the dog who had never been taught about the switch heard the bell and immediately began cowering and whimpering. He hadn't been taught to search for a solution to his misery. This response has been labeled a "learned disability."

The behavioralist who presented the experiment says lessons may be drawn from it and applied to our current economic situation.

The folks "in the know" got used to pushing the Fed to flip the switch on interest rates every time our financial bell started ringing. But, now that's not going to work. So, while the eggheads scramble around trying to figure out what the new solution is going to be, the economically illiterate are cowering and whimpering rather than trying to find the solution, too.

Pretty thought provoking stuff. But, I think we're going to keep getting zapped if The Disaster in Waiting leads us down the road to socialism in the attempt to find that solution . . .

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