Barack Obama is a Holocaust Denier
Goldman Sachs and "Goodfellas"

The Elitism Bias/In-Group Bias

The financial crisis has given us insight into a blindness bias that affects the elite.  Ask yourself: How furious were you to learn the details of the bail outs?  Unless you're reading this blog from a Goldman Sachs network, you were likely outraged.  

How is it, then, that even progessives like Barack Obama were unable to anticipate the populist outrage? Cognitive psychology has the answer.  It's the in-group bias:

In-group bias is the preferential treatment people give to those whom they perceive to be members of their own groups.

Experiments in psychology have shown that group members will award one another higher pay-offs even when the "group" they share seems random and arbitrary, such as having the same birthday, having the same final digit in their U.S. Social Security Number, or even being assigned to the same flip of a coin.

We all these in-group biases.  Are you white?  Black?  A lawyer?  A judge?  Let me make posts critical of lawyers, judges, blacks, or whites while measuring your blood pressure.  It's going to go up.  "How dare he attack my people?"  We are herd animals, and so an attack on those within our in-group is an attack on ourselves.  

More interesting is that the bias is so subtle that is destroys thinking without our knowing that it's destroying out thinking.  Think about it.  How could Obama not know that the bail outs would destroy his credibility?

Obama and his advisors have pollsters monitoring public opinion.  He has an army of Ph.D's.  Yet none of his best and brightest were able to anticipate the populist outrage resulting fromt he bail outs.  How could they have missed this?  The in-group bias is so strong that it literally prevents you from thinking critically.  You don't even know what questions to ask in those expensive polls.

Robin Hanson, at the must-read Overcoming Bias, has a great post on the bias of the elite.  He lists to ancedotes involving well-qualified peopel being excluded from leadership positions for lacking elite credentials.  He concludes:

So it seems the US has a finance and policy elite defined by college ties and related social connections, an elite with a strong sense that only people in their circle can really be trusted, and that their institutions must be saved at all cost at taxpayer expense if necessary. 

Perfect.  And doesn't that seem consistent with the bail outs?  Moreover, the bias is stronger than Hanson states.  The bias is so strong that no one was even able to anticipate how furious the public would become at what Paul Krugman aptly described as "the spectacle of government supported institutions paying giant bonuses is playing."  

Cognitive bias is literally no different from brain damage.  The only answer to bias is true intellectual and cultural diversity.  

Obama, like anyone who makes serious decisions, needs to find a Napoleon's Corporal.  Before Napoleon gave the final command for a battle decision, he briefed a lower-ranking enlisted soldier, asking the soldier if he understood the plan.  Only if the corporal understood the plan would Napoleon move forward.

Imagine if Obama had had a Napoleon's Corporal in the room.  "Hey, man, I'm about to give billions of dollars of no-strings-attached money to Goldman Sachs, AIG, and other Wall Street investment bankers.  Ya dig?"  What corporal would have understood that plan?

Now, here is what is more perverse.  The in-group bias would prevent Obama from having the right Napoleon's Corporal.  We all know that the corporal would be an Political Science intern from Harvard College rather than an Aggie major from a community college.  And thus, we see that the in-group climbs in through the window after we've kicked it out the front door.