I have frequently referenced the idea of Cognitive Dissonance. This has been traditionally described as the “uncomfortable tension which comes from holding two conflicting thoughts in the mind at the same time.”

However, where we see an even greater discomfort is when a person of a given mindset or ideology is confronted with facts that directly contradict their previously held beliefs.

As we have seen, there is a cynical attempt to falsify the narrative of what actually occurred before, during and after the credit crisis. The data is overwhelming as to what did and did not cause the financial collapse. The belief that markets can self regulate, that bankers can be trusted to act in their own best interest, even that people are rational, have all been shown to be silly nonsense.

The conflicts within the minds of the people who believe these fallacies is overwhelming. The attempt at reconciling facts with beliefs leads them to a painful conflict: Either they significantly modify their belief system — a challenge when its a defining characteristic of their personas — or, they utterly disregard the facts in order to construct a new narrative.

Some people have recognized their belief system was overrun by reality. They are chastened, have begun searching for a new or modified ideology.

Many others refuse. Facts be damned, they double down, sticking with their beliefs, regardless of all evidence to the contrary.

I have a new name for these folks: They are Cognitive Dissidents. They will continue to dissent from reality for as long as it takes to get everyone else to believe as they do, no matter how much evidence there is to the contrary.

If you engage with a Cognitive Dissident, it is futile to try to use facts or data, for theirs is a belief based upon Faith. You cannot convince a person of a fact if it conflicts with their deeply held, nearly religious convictions.

Thus, when confronted with someone who has a fervent belief based not on evidence or reason or data or logic, do not waste your time convincing them the earth is not flat; their cognitive facilities simply will not allow them to recognize the world is round. 

A farmer — or was it Robert Heinlein? — once passed along this slice of wisdom; I repeat it now for your benefit: Never try to teach a pig to sing; it wastes your time and annoys the pig.

Category: Psychology, Really, really bad calls

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

70 Responses to “The Cognitive Dissidents”

  1. InterestedObserver says:

    As in most subjects, there’s a flip side as well. Here it would be cognitive consonance. People not only willfully ignore what they perceive is in conflict with their beliefs, they will unthinkingly embrace anything seemingly in support of those same beliefs, even if it’s irrelevant. Two sides of a the same coin of uncritical thinking.

  2. stonedwino says:

    BR: Right on…Never try to teach a pig to sing; it wastes your time and annoys the pig…Congnitive Dissonants are alive and well in the good old US of A, but…I prefer to say, “You cannot fix stupid”, you really can’t. Let the pigs wallow in the own muck…

  3. USSofA says:

    The difference with how one deals with cognitive dissonance has been around forever.
    Think Skeptics and Believers or Theists and Atheists.

  4. Moss says:

    Biases come in many forms and cover all subjects.

  5. cthwaites says:

    Some facts change….economic statistics revisions for one.

    But never wrestle with a pig. You both get dirty and the pigs likes it.

  6. normal1 says:

    As much as I agree with you, it is damn hard to “turn the other cheek” and focus on what can be changed when you know their influence in government will affect you in some way. And, personally, I still believe the main goal of the Republican party (with newly adopted tea partiers) is to keep the public believing that they are the party that represents capitalism. If you go against them, you’re going against capitalism. So, for many Americans (especially the retirees I’ve talked to) the notion of abandoning the Republican party is akin to abandoning citizenship.

    Our national identity is tied to capitalism, with it’s chief enemy being socialism. One way to get around this is de-mystify the word and start pointing out all the ways we’ve already adopted socialsim, and how it’s tied to the creation and sustainability of the Middle Class. We are all supposed to have skin in the game, not just some of us.

  7. ironman says:

    “Cognitive Dissidents” – great name! There have definitely been some Class A examples among the comments here at The Big Picture during the last two and a half weeks.

  8. crutcher says:

    This effect is hypothesized to be due to the “massive modularity” of the human brain – meaning that brain circuits, just like other body functions, are highly specialized and sometimes working at cross-purposes. Robert Trivers, the genius biologist who wrote the first paper on why deception and self-deception makes evolutionary sense, has a new book out on the topic.

    I can remember looking at a list of people hired for a certain job, and feeling 100% certain that my name was on it, literally could barely even see the page once some part of my brain realized I wasn’t on it. Wild cognitive vertigo. A more subtle kind of that kind of mental censorship of reality is always going on in our brains.

  9. [...] "When a person of a given mindset or ideology is confronted with facts that directly contradict their previously held beliefs."  (TBP) [...]

  10. PDS says:

    BR…I guess you could make the argument that OWS suffers from Cog Dis…in fact…to a degree….the whole planet suffers from it currently

  11. budhak0n says:

    All the bickering just makes me think of this,

    ” I’ve got no skin in their game”.
    “Sorry buddy, I’ve got no horse in your race”

    It’s like somebody at work who is constantly bringing up stuff that is just irrelevant.
    What I “used” to like to tell them is I don’t care if you run around with your hair on fire.

    Now it’s better to just smile.

    Doesn’t mean we can’t enjoy the side benefits. I just hope there will actually be some form of side benefit to all of this. We’ve had enough noise. NFL doesn’t stand for National Football League .

  12. Conan says:

    It’s been most helpful to me over the years to do the math first or quantify what I am studying. If you can’t quantify it then you can’t really know what you are dealing with. Then you should try to open it up to as much review by people that are trained in other areas. For example I am an engineer, I regularly ask accountants, business majors, lawyers and others to review what I have studied. You want your systems to be robust and not suffer from group think.

    The numbers are cold and don’t care about your opinions or beliefs. Once this is done then you need to do simulations, not only looking for data that evenly distributed, but find data sets with tails. Hopefully it will blow up. I don’t trust systems that are too pretty and never fail.

    Once you have fixed this or dealt with it, then have contingencies (stops), and percentages of allocations, plus watch leverage. You always need a plan B beyond your system. Do exercises in what if’s:

  13. Raleighwood says:

    Is it “cognitive dissonance” or psychopathy? “The lie” is known to be a lie but it is necessary that “the lie” be carried forward with the intent of driving the cultural meme (and then the politicians) in a certain direction for the financial benefit of a few.

    When someone creates the illusion of a singing pig, and then gets the illusionary pig a big win on American Idol – the whole damn country will soon believe in singing pigs. And the creator of the illusion is laughing all the way to the bank.

    Critical thinking is toast.

  14. rpseawright says:

    I agree with your general position, but disagree with two implicit predicates to your conclusion.

    1. Your presumed definition of “faith” is erroneous. You seem to try to define faith as “belief without evidence.” However, that isn’t faith in a Christian context (or any other religious context of which I’m aware) and doesn’t conform to standard dictionary definitions either. For example, the Oxford English Dictionary defines faith as

    “a. Confidence, reliance, trust (in the ability, goodness, etc., of a person; in the efficacy or worth of a thing; or in the truth of a statement or doctrine).

    “b. Belief proceeding from reliance on testimony or authority.”

    For the Christian (at least), faith is confident belief in God as revealed in Jesus Christ. It doesn’t relate to a set of propositions at all and thus evidence as to the truth or falsity of such propositions is manifestly irrelevant.

    We already have a great word in English for the concept you seem to be driving at. It’s credulity, commonly defined as “readiness or willingness to believe especially on slight or uncertain evidence.”

    The unsupported claim that faith is belief without evidence is a purported argument disguised as a definition. And it’s a pretty lousy argument at that.

    2. Implicit in your assertion seems to be the idea that “they” do that but “we” don’t. Nonsense. Confirmation bias is everywhere. Fortunately, Daniel Klein’s new piece makes the point better than I can:


  15. Trevor says:

    Great post and great moniker, Barry.

    Dorothy Parker once put it well: “You can lead a whore to culture, but you can’t make her think”

  16. GeorgeBurnsWasRight says:

    Heinlein definitely used the quote about pigs. Whether he originated it or just borrowed it I don’t know.

    One of my favorite Heinlein quotes goes something like this: “The lion and the lamb CAN lie down together. However, it is necessary to periodically replace the lamb.”


    BR: I always like the quote “Democracy is not two lions and a lamb voting on whats for dinner”

  17. AtlasRocked says:

    It sounds like you’re setting up an argument to always call for more regulation as the solution to every problem, Barry. I know plenty of folks that want SOMEWHAT less regulation there, and more over in another place. This is just another strawman attack, Barry, you’re going to mischaracterize every one that, for instance wants to strike down the Dodd Frank as “cognitive dissidents”, even if we want to re-instate Glass-Steagall. These kind of strawman arguments work great to sell blog page hits, but terrible at moving solutions forward.


    BR: How do you get from STOP BELIEVING IN NONSENSE as the equivalent to More Regulation?

  18. EMichael says:

    I agree, but it is just not negative enough.

    Maybe living in Scottsdale, AZ (if not the world leader in CDs, it is close) for the last eight years has just built up too much anger in me to control my emotions.

    In “A league of Their Own”, Tom Hanks has a scene where he deals with an outfielder missing the cutoff man by being understanding and making it a teaching moment. His face almost explodes as he does so.

    My face exploded a long time ago.

  19. dead hobo says:

    In the words of Lex Luthor (Gene Hackman) in Superman 1 (more or less):

    “People are no damn good, they’ll always disappoint you”

    Very true.

  20. FlourChild says:

    Sad but true, Barry. Of course we all suffer from cognitive dissonance to some degree. In fact our deepest held convictions only get stronger when challenged by facts: http://youarenotsosmart.com/2011/06/10/the-backfire-effect/

  21. budhak0n says:

    You really want to know why this latest round of American drama truly sucks?

    Because the internet and it’s ever growing group conscience has basically eliminated the need for hired guns.

    Just my two cents . hehe

    Maybe OWS should hire an image coach . Then our latest group of hypocrites can march about with someone in the background pulling the strings to put a public face on some very private emotions.

  22. crutcher says:


    “…thus evidence as to the truth or falsity of such propositions is manifestly irrelevant.”

    You are completely agreeing with BR that faith is belief which cares not for evidence. While some believe that they could change their mind according to evidence, even though in fact they don’t, you identify yourself as belonging to a more extreme category where you self-consciously acknowledge that no evidence could ever possibly be relevant to change your belief. You and the billions of others who hold wildly irreconcilable beliefs about human origins, all certain that you’re right, do have one this in common – a complete disinterest in Darwin.

  23. gman says:

    It is impossible to make a person understand something when that persons salary depends on NOT understanding!

  24. budhak0n says:

    @dead_hobo. You do realize that Lex Luthor is the bad guy in that archetypal tale?

  25. rpseawright says:

    Crutcher –

    “You are completely agreeing with BR that faith is belief which cares not for evidence.”

    No I’m not. The suggestion was that “faith” is belief without (or in spite of) the evidence. That’s a phony definition.

    “While some believe that they could change their mind according to evidence, even though in fact they don’t, you identify yourself as belonging to a more extreme category where you self-consciously acknowledge that no evidence could ever possibly be relevant to change your belief.”

    Quite the contrary. I make a conscious effort to challenge confirmation bias consistently and I do change my mind routinely on account of the evidence. I *try* to do so whenever the evidence demands it. Of course, how we see, interpret and evaluate the evidence is impacted by confirmation bias too.

    “You and the billions of others who hold wildly irreconcilable beliefs about human origins, all certain that you’re right, do have one this in common – a complete disinterest in Darwin.”

    This is evidence of *your* confirmation bias. I have no quarrel whatsoever with science in general and with Darwin in particular. You’re just making stuff up.

  26. David Merkel says:

    I’m sorry Barry, but everyone, no matter how logical, has unproven postulates that they rely on. And, people’s postulates are not all the same.

    Many can’t discern the correct answer to complex questions when many “experts” have agendas, and the limits of the Scientific Method frequently get compromised. Thus they rely on what they trust, which has had value for them in the past.

    There are many books on the cognitive biases of scientists, and how groupthink often populates those who are relatively bright — almost everyone craves acceptance by the powerful and the cool.

    I may be a old-school Calvinist Christian, with a lot of education behind it, but I am skeptical of a lot of what many tolerate as scholarship today. Talking to my children in college makes me ever more aware of the biases professors bring to their teaching and research.

    Perhaps the best thing I can say here is to try to understand the presuppositions of others, and one’s own presuppositions, and maybe you have a chance at intellectual progress. Few do this, whether conservative or liberal, Christian, religious or other, smart or dumb, so I don’t hold out much hope here.

  27. Mr. Samsa says:

    This has been pondered for a long long time. Ancient Greek philosophers saw a difference between truth and opinion, and saw most of us most of the time, at the least, condemned to be enslaved by opinion, due to our lower natures, unable to climb past. In “Anna Karenina” Tolstoy’s surrogate, Levin, decides minds once made up cannot be easily changed and so does not to argue with his fellow landowners. Kafka wanted to use an ice ax on the frozen sea within.

    It may be physical: we are animals, bugs, with at best very limited capacities to alter instinct and imprinting.

  28. cthwaites says:

    1. Facts are malleable. For example here is how BR describes, in facts, his readers:

    [Big Picture readers display] ignorance, unfamiliarity with data, repeat discredited memes, and [do not] respect scientific knowledge. [They] create straw men and argue against things I neither said nor implied. [They traffic in] irrelevancies and forgo all civility; [they are] anonymous.

    But does he mean it?

    2. Faith comes into it quite a lot. For example, here’s a big question: “Can one pick markets bottoms?” Yes, according to this writer:

    The good news is that it can be done. There are, on occasion, situations where all of the technical and sentiment indicators align “just so.” When all the stars and planets line up, it may be worth taking a high-probability stab at that with a little money.

    That “stab” is probably some faith at work. Oh, and that’s BR from Jan 2008.


    BR: That looks like mine, but I cant find it (my Google site search seems broken)

    Do you have a link? Thanks

  29. cthwaites:

    You omitted what follows immediately, which suggests the OPPOSITE of what you excerpted:

    “The bad news is this is exceedingly difficult. The ideal conditions and circumstances for bottom picking are rare, and the tools necessary to do so are even rarer. Most traders and investors do not have:

    the requisite skill to identify these circumstances;
    the obligatory patience to wait for these conditions;
    or the compulsory discipline to cut losses when the trades don’t work out.

    Rather than tell you if it is safe here or not, let’s consider a different strategy . . . ”

    -Don’t Just Do Something. Sit There!

    FAIL !

  30. constantnormal says:

    This is the “big picture” view, a broad-brush perspective. There is a more detailed perspective, wherein one realizes that in most things, our view of the data is not conclusive (even if it seems so at the time). Just from the hard sciences alone, can you name a theory or law that has gone unchanged for more than a few hundred years?

    And even where the “facts” have remain unchanged, there are obscurities that we can (understandably) miss, and would change our entire world view if we knew them back when our base of opinions and beliefs were being formed.

    Thus enters the most damaging meme, the meme of “faith”. Faith is when we cannot logically support something that we want to believe in, and chose to hang onto that belief, to buttress it beyond any assailablilty by logic and reason. Faith is what has driven countless religions into wars of extermination across the ages, and will doubtless continue to do so as long as people exist.

    Faith is what makes one hang onto some arcane technical indicator or principle, that is only a rule, without basis or theory behind it, long past the point at which one should have abandoned it.

    The same thing applies to all our deeply held beliefs.

    Perhaps this says we should not have deeply held beliefs, that we should be constantly seeking a new North star. But the truth is that Reality is bigger than our money minds can comprehend, and of all the liars in the world, our own brains are the biggest ones, veritable engines of fabrication.

    We only actually see in detail what is immediately before us, and our brains make up the stuff in the periphery according to what it “thinks” we should see. We are constantly running “what if” scenarios in our minds, trying to anticipate our futures. Perhaps those tendencies spill over into other areas of our thought as well.

    Thus far in our evolution, our imaginations and “faith” have, on balance, served us acceptably, albeit far from perfectly. Whether that will continue to be the case as the pace of change increases remains to be seen. I am not hopeful, lacking a certain faith in this area.

  31. constantnormal says:

    errata: should be “monkey minds” instead of “money minds” — but in this instance, the error works.

  32. Clem Stone says:

    We know nothing beyond conflicting thoughts. Anyone able to function with confidence is lying to himself.

  33. lunartop says:

    I think sometimes different interpretation of words can be the problem, saying “the facts show that X can’t self regulate” is only correct if facts do show that and you agree on X. So let’s say X is “the market”, then depending on your viewpoint you may see this as meaning the operation of the banking sector over the last ten years. However if your of a different disposition you may take “the market” to mean “free market” and think that the banking sector in last ten years has been anything but a free market. From that one bifurcation your both off on a different tack. For one, talk of government regulation is exactly what’s needed, for another it’s government regulation serving vested interest that’s been the problem.

    Both sides may find themselves suffering less cognitive dissonance if the statement was

    “The fact’s show that in the last ten years the banking system suffered from regulatory capture under the guise of a move to “free up” markets”

  34. Taliesyn says:

    Clever term-of-art this *Cognitive Dissidents*. My pejorative-of-choice ( outside of just calling them Kudlows ) has been the *Ideologically Correct* . Witness presidential candidate Newtgrich whom the WStJ’s Dorothy Rabinowitz has an opinion video entitled ” Why Newt Could Win”.
    I mention this because , deep down , the problem lies with the degree to which these *Cognitive Dissidents* wield genuine power & influence and thus have contributed , and *continue* to contribute , to the vast damage done to our economy and , no stretch of the imagination , *will* contribute to the *next* financial crisis. Major damage has happened *twice* just this century and thrice if you encompass the S&L debacle.
    An easy place to start with would be exhibit A poster child former Fed Res Chair , rabid Ayan Randista & fellow-traveler with free market evangelical Milton Friedman at the dawn until death of the Reagan Revolution .
    Now while redefining this pathologically tribal- level religious *idelogical idoloatry* as *Cognitive Dissidents* is all fine in trying work out towards a serious solutions towards economic sanity , but due to the adamantine nature & entrenchment of this *protect wealth* religion of the church of Pluto I must ask out loud , how disastrous does an economic debacle have to get? , while following so close on the heals of the last Wall St. debacle when we had clear lessons to learn all the while having a good deal of documented vocal canaries in the coal mine warning those in meaningful positions to correct the course.
    I mean if this now global economic crisis alloyed with rampant *global* debt & deficit crises where will the money come from for the next *BailOut*. Looking at our Nation’s balance sheet & new level of credit risk alone perhaps this was that one-economic-crisis-too-many tipping point . I mean we’re one more costly war and an earthquake/flood/hurricane national disaster away from *no more bailouts*. Most of the Top 5% would rather collectively spend a few billions on an army of Jack Abramoffs to corrupt Congress & Cabinets than pay for the last war a lion-share of them led in charge in advocating rather than lobby for evermore tax-cuts and this even though Buffet says he paid lessapercentage thanhis9-5 employees.. Scary stuff indeed.
    Citizen Ritholtz knows all this as he knows the nature of the beast in which he works , wrote a great book about the lessons that should be learned , continues to speak publicly ( great WP article and am *encouraged* with the public response ) , and created this public forum.
    This countering of the *Cogntive Dissidents* has to be as relentless , but ain’t nothing meaningful gonna happen unless there is *effective* refereeing of the market game arena. Short of that Wall St’s gonna continue to do what it does , eventually blow bubbles that always blow up in our faces and cost us dearly.

  35. budhak0n says:

    @ Taliesyn. It’ll come from the same exact place the last one came from. Out of thin air.

    Please elaborate as to how the financial markets cost you dearly.

  36. Petey Wheatstraw says:

    An open mind is satisfied when an idea or belief and that idea or belief is challenged and shattered (especially any idea or belief that is culturally mandated, ingrained or reinforced, such as religion/theism, bigotry, tribalism, etc.). In a sense, it’s more about courage and character than cognition.

  37. Mike in Nola says:

    Quick searches also show the quote attributed to Mark Twain, but no sources give for either Twain or Heinlen.

    NPR this morning presented an example this morning and showed how they have caved in to the crazies. Long segment about Ayn Rand, including a Mike Wallace interview with her, all followed by quotes showing how her philosophy has been adopted by leading Republicans. No editorial comment t0 to indicate that maybe some of these unquestioned beliefs might be wrong or not borne out by facts.

    I’m thinking that next they do a segment on Mein Kampf with excerpts from interviews with Hitler and maybe quotes from leading Nazis about how these theories are so successful, all without editorial comment.


    BR: I have been told the phrase “The Big Lie” is from Meim Kampf

  38. ES says:

    Everyone sees the world through a set of their beleives. Every culture has its own main set wiht multiple variations. I am most familiar with european vs. american. A european and an american see the world completely differently, and then a chinese and a japanese see it differently. Even living in another culture for many years all one can hope to achieve is to identify adn conform to the other set but it is still pretyt impossible to completely convert over.
    I think americans are “brainwashed” since they act most of the time against their own interests. They think I am the brainwashed one ( that it if I ever go into trouble of actually explaining my views, which is rare )) since it is of no use in the end ).

    None of us see the world the way it is. All we can achieve is to be able to see the world through the eyes of others to broaden our perspective. I think Kant was the dirst philosopher who explored the idea of a “thing in itself”, a pure thing untainted by our perceptions.

  39. econimonium says:

    One of the reasons I love your blog so much is the comments. And not always for entirely positive reasons. Cognitive Dissidents are all over the place explaining why official non-partisan stats are wrong and they are right, why the numbers don’t tell us what they plainly say, and why OWS is really about a bunch of “hippies and unemployed” (when, honestly, the word “hippie” is sort of irrelevant unless you were born before 1960 because you’ll have no idea what it actually refers to…even I am honestly clueless about why anyone would use it and have no idea what it’s supposed to mean).

    So instead of reading the numbers and leaving the politics aside when it comes to economics and investing, suddenly we have this entire industry built out of the supposition that economics and investing somehow are dependent on being “liberal” or “conservative”. I don’t understand it at all, and I’ve come to the same conclusion…it’s all faith-based. For example, I might not agree with Krugman’s politics on the balance, but if you read what he’s written about the current state of economic affairs, he’s dead-on. Others? Not so much. Here is a perfect example of letting politics get in the way of reality. Personally I don’t care about someone’s politics when I’m looking at their equations and data interpretation. And all of these people that do remind me of talking to Christian Fundamentalists.

    Here is the perfect example: I know a woman who’s job depends on the laws of physics in rather concrete ways…especially radioactive decay. She’s an Evangelical type. So one day a person I know asked her, honestly and not with snark, how she could believe what she does in the face of the data and what she works with for a living. Her answer? “Well, I’m a Christian!”. That was it. After she left we were all like…WOW…and just laughed. And there you have your answer. When something smacks your belief system that you build your life on and threatens to tell you everything you believe is wrong, you just ignore it because to do otherwise means your entire structure falls down. It’s honestly sad, I think.

  40. beaufou says:

    For most of our contemporaries, facts, reality, society, progress are not relevant, only money is.

  41. canoles says:

    “Reality Dissidents” defines it better IMO.

  42. Greg0658 says:

    interesting thread (again) .. I’ve got things in que that fit here …
    growing up it seemed the capitalist system itself was the cop on the beat and it freed the government to govern* … I can’t put my finger on a sollution or a cause**
    * whatever that means to me at 54yo on the planet … just worked to buy stuff and feed the it
    ** it may be the stocks/bonds novas
    if you haven’t noticed the big black economic hole has its suck on
    OWSers its time to retreat – you are making matters worse and putting yourselves in unproductive risk .. ie: you will feed the system you are attemping to reform …. resistance is futile

  43. Mr. Samsa says:

    On the other hand, or the other side of the mind.

    Cognition or deliberative rational thought may not be all it’s cracked up to be, at least sometimes. How much should it influence our worldviews and actions?

    Consider the “Seinfeld” episode in which Jerry is dating a very beautiful blonde who can get away almost anything: men will gladly overthrow esteemed rationality, including our best common-sense rules of the road, in favor of her charms. Should the “irrational” lure of beauty often overrule good reason? Are there rewards making the overthrow worthwhile?

    Consider that Copernicus, it seems, did not decide to rework, drastically alter, overthrow the calculations of Ptolemy because he had empirical evidence to the contrary but because he thought a simpler, more symmetrical system would be more beautiful, more pleasing to the mind.

    An acquaintance who spend time in Africa trying to get the “locals” to be more rational and change their habits, in the light of sound empirical data and logic of course, reports that he was often frustrated as they stubbornly stuck to old patterns of thought and behavior simply because that was the way of their fathers and mothers and ancestors and was more pleasing to them. But after a while he came to realize that empirical data, logic, rationality, all that good thought, sometimes did not have the complete picture or was simply wrong, and that stubborn old feel-good ways were often based on a long long period of trail and error and followed a collective logic, larger than the ego or individual consciousness, and ingrained into second nature over many generations, a logic sometimes more true, though more opaque, than the new and improved logic of our rationality convinced, like Kurtz going up the river, of its impending success. Hubris is with us always, including when we think we are in good reason or faith correcting the stubborn pride, delusions, convictions, confidences of others.

  44. romerjt says:

    Please see David McRaney book and our website “You Are Not So Smart of A Celebration of Self-Delusion”. http://youarenotsosmart.com/2011/06/10/the-backfire-effect/ He call this the Blowback Effect.
    “The Misconception: When your beliefs are challenged with facts, you alter your opinions and incorporate the new information into your thinking.
    The Truth: When your deepest convictions are challenged by contradictory evidence, your beliefs get stronger.

    AND, this in is not new, Francis Bacon (1561 – 1626) “The human understanding when it has once adopted an opinion draws all things else to support and agree with it. And though there be a greater number and weight of instances to be found on the other side, yet these it either neglects and despises, or else-by some distinction sets aside and rejects, in order that by this great and pernicious predetermination the authority of its former conclusion may remain inviolate.”

    Everybody does it, some more than others, and we know have a major network devoted to a belief system instead of objectivity (of a sort). I personally suspect Frank Luntz is probably involved also.
    The only hope is a more compelling narrative and just maybe the OWS phenomenon is offering that opportunity.

  45. AtlasRocked says:

    @BR: You wrote “How do you get from STOP BELIEVING IN NONSENSE as the equivalent to More Regulation?”

    First of all, you regularly hammer all those that want less regulation, first with the strawman attack that we want “no regulation”, now you label them as cognitive dissidents. Romney was a case in point: I don’t believe he ever said he wanted “no regulation”, but that’s how the attack reads. Did he or any others state that FM or FF caused the crisis? What we don’t like is the Fair Housing Act, shaking down banks to loan to folks that can’t afford it. I gave you a link before, it’s still going on today: http://www.justice.gov/opa/pr/2011/May/11-crt-576.html Why don’t they sue Ferrari and Jared’s Jewelry to open up some stores in blighted Detroit areas as well?

    I don’t believe I’ve printed any nonsense here. I’ve steadily publicized the 100% failure rate of Keynesian stimulus and challenged you to provide a post-WWII success case among the “G20″ or so nations: A nation in economic stagnation or recession that has increased deficit spending, grown their economy, and paid back the deficit in 3-5 years because their economy boomed.

    I provided a research basis from Harvard: http://www.economics.harvard.edu/faculty/alesina/files/Large%2Bchanges%2Bin%2Bfiscal%2Bpolicy_October_2009.pdf

    You’ve ridiculed me.

    Nonsense indeed – you are a peddler as much as any, by making fun of spending cuts. Bring on your proof if you’re going to ridicule, bro. Why not do an article one day on all the success stories of Keynesian stimulus since WWII? Maybe I’m wrong, but I can’t find any. I’ll send you a $50 gift certificate to the restaurant of your choice.

    Just be ready for the next battle if you find a success: We’ll then start compiling stats on all the times it has failed, and you’ll be left defending a policy with probably a sub-5% level of success. We’ve been doing it here heavily since the Reagan era, so on a per year basis, we’ve got 36 failure events. That’s oh-for-36 since 1985.

  46. Mr. Samsa says:

    Konrad Lorentz, founder of ethology, speculated that imprinting occurs also in our species, and that in the late teen years perhaps we are imprinted with an ideology which we cannot shake off.

  47. Mr. Samsa says:

    Konrad Lorenz, founder of ethology, speculated that imprinting occurs also in our species, and that in the late teen years perhaps we are imprinted with an ideology which we cannot shake off.

  48. Da55id says:

    Cognitive Dissociation: To cease association with all or parts of inconvenient reality

  49. Taliesyn says:

    budhak0n Says:
    November 14th, 2011 at 10:10 am

    @ Taliesyn. It’ll come from the same exact place the last one came from. Out of thin air.

    OMG, Barry , I got your real live practicing *Cognitive Dissident* right here.
    To state that this current economic crisis happened , as he tellingly put it , “Out of thin air” , more than suggests that not only is he part of the problem , a problem you , Barry , are trying to help in getting any lessons learned from these past 2 bakc-to-back financial crises , but that he also obviously *never* read your book “Bailout Nation” , that or his ideologically correctness blocked his comprehension /retention of what you wrote as well as other whistle-blowers who reported and/or testified before Congressional hearings viewed publicly recorded for viewing on C-Span.
    All this , “Oh , Whoops”, just happened out of thin air?
    Just because you didn’t see it coming doesn’t mean others who were *really* in the know missed it and in fact went on to either A) whistle blow or B) figure how they could profit from the collapse they saw coming and did.
    I know “Details, details”.
    ( Simply amazing. )

    “Please elaborate as to how the financial markets cost you dearly.”

    Well I start with the repercussions of the Dot.Bomb alloyed with the Enron/WorldCom/Shall I go on? outright corporate criminal behavior era. Right off the bat , from that resulting recession , I felt the drying up of my freelance work in the digital production field. it has since had ebbs & flows , but *never* recovered to pre-Dot.Bomb. You can throw in the oil price spike it was proven in court to be ginned up and made worse by the likes of Enron’s conscious gaming that supply-side chain reaction. So throw in the general tax on us all for *gamed* higher fuel prices affecting all transportation.
    That public record recent history has had several books written about it as well , but if you *believe* this current economic debacle gone global happened “out of thin air” then nothing I school you on will matter one wit.
    The outrage of 9/11 , which our already wounded financial system didn’t need at all , did literally came out of thin air , but we were already in a recession that Bush’s advisor’s told him to deny was even occurring while there was big gub’ment financial scrambling around trying
    to staunch the financial bleeding ( which included ever less regulatory oversight let alone enforcement ).
    So to keep things real simple for you I mention the resulting DotBomb/Enron economic recession because it gave the rationalization for Greenspan right up through Bernanke for keeping interest rates *historically* low for way too long which couldn’t help but feed what became the Wall St. financial frenzy with real estate-based WallSt financial product &unavoidably ginning up derivatives to stratospheric levels . This was accompanied by levels of obscurity where even Greenspan himself admitted publicly at a CSpan hearing that he couldn’t understand what he was reading.
    Clue Number One: When even the very topmost financial commissioner overseeing a then 14 trillion dollar economy can’t decipher a derivative’s math formula then that’s a really big red flag and a warning of a incoming “out of thin air” front.
    If the chairman of the Fed Res can’t understand what is gong on then he can’t do his job though , being the confirmed
    ideological idol worshiper/cognitive dissident he was , Greenspan was quite content to just continue to “let the market go”.
    We are living with the dire results that still continue their repercussions .
    That’s how serious this issue of *Cognitive Disendents* that Citizen Ritholtz thought important enough to red flag is. Do the homework because your “Out of thin air” assessment of what happened speaks to the worth of your opinion on just recent history …..
    …..hence the sobriquet of *cheap tricktser* , dear bodhukon , sticks.

  50. I Was Wrong, and So Are You

    A libertarian economist retracts a swipe at the left—after discovering that our political leanings leave us more biased than we think.

  51. tsk tsk says:

    Aren’t we all Cognitive Dissidents? We continue to have faith in in our leaders even thought they continue to manipulate us. We continue to have faith in our teachers even though they continue to deceive us. We continue to have faith in our doctors even though they continue to poison us. We continue to have faith in our clergy even tough they continue molest us. Then again, without faith we are just existential beings searching for answers where none may exist. Even when facts are considered true it doesn’t take much of an imagination for those facts to considered those facts untrue.

  52. MorticiaA says:

    This topic seems like it could have been motivated by the Libertarian backlash you got for your “It wasn’t all CRA’s fault” column last week.

    Though this topic could have been motivated by pretty much anything these days.

  53. PDS says:

    BR….there are a lot of cog dis’s in OWS….in fact we all suffer from it to a certain extent…only human…BTW….I see the banner has gone missing again?

  54. DeDude says:

    We all have some degree of confirmation bias. Smart people struggle to lower their confirmation bias because they realize that the real world and its consequences cannot be “forced” by arguments; and the further you remove yourself from the real world the more likely you are to make mistakes and fail. We should all recognize and fight our tendencies for confirmation bias because the closer you live to reality the fewer mistakes you make.

    What you call cognitive dissidence is the extreme end of confirmation bias some would say “a whole new level” or “the majors” of conformation bias. It is often seen in people who have no clue why they should fight confirmation bias so they let it get completely out of control. They often seem to think its all about “winning” the argument rather than arriving at the best approximation to the truth. Some of them are sociopaths who are aware that they are arguing against the truth but believe it is in their own personal interest to support a specific lie. Besides ignoring “inconvenient” facts they often misrepresent and distort facts in order to “win” an argument.

  55. Taliesyn says:

    PDS Says:
    November 14th, 2011 at 2:03 pm

    BR….there are a lot of cog dis’s in OWS

    Yeah , but the big fat sticky difference is the OWS have next to *zero* influence except vent in numbers whereas the “Wall St Fault deniers/deflectors” that Citizen Ritholtz has to work daily to challenge are those whose opinion actually get *published* by the likes of Murdock’s Wall St. J or Bloomberg or AEI or you name the pro-business middle-class-be damned investment engines / brokerage houses who can afford to buy an army of Jack Abramoffs and we all know what corporate lobbyists job is & what they can charge now don’t we.
    BTW: Interesting mya culpa by old self-described * devoutly religious*Jack lately. I guess it’s been a busy week of news because I looked forward to what Ritholtz’s take on Abramhof’s recent interviews in the media supposedly exposing all of the Congressional corruptions he excelled at during his reign of influence.
    Jack , who owes some $40 million to the American Indian tribe he stole from , is as ripe for a deal as those in his party during the time of his heyday to make one lest he really start on up the food chain of the $10k to $50k a speech circuit. I’d love for Citizen Ritholtz to interview him just on the financial interest/Wall St lobbying Abramoff handled.
    Conservative Tom Coburn wrote about this as well in his book , ” Breach of Trust” © 1993 , from his days as a Congressman under Newtgrich & fellow * Cognitive Dissenter* Dick Army. Good reading from a conservative insider no less.

  56. Taliesyn says:

    Just in case anyone has the passing interest here’s the link to the Lesley Stahl’s interview with Jack Abramoff.
    I feel it would be especially edifying to those from the * This economic debacle was all the gov’t’s fault” wing of the Cognitive Dissenter’s camp by being reminded just who influenced the big bad gov’t to pave the way for Wall St’s
    ultimate self-immolation & then forcing us taxpayers to have to pay for *their* bailout. To them I say ” it always takes 2 to Tango”. Too often the Cog Dis wing who rails against the corrupt gov’t give the *corruptors* themselves a conspicuous pass.
    End of trnsmission.

  57. Jack says:

    Anecdotal story: A friend was working in Greenland on the DEW Line (look it up). The natives (he called them Eskimos) had seen all the equipment being used to construct the towers, dishes, etc. Naturally, most, if not all of the stuff was flown in.

    As usual in a U.S. installation, American entertainment was provided, including movies. One night a movie was shown that included scenes involving railroad trains. This was greeted with profound fear and consternation by the indigenous population. They could not “believe” such a vehicle existed.

    I never “believed” my bank would take away my “free” ATM usage. I goddam well “thought” it would. Guess what?

  58. BTUR says:

    “What we don’t like is the Fair Housing Act, shaking down banks to loan to folks that can’t afford it. I gave you a link before, it’s still going on today: http://www.justice.gov/opa/pr/2011/May/11-crt-576.html Why don’t they sue Ferrari and Jared’s Jewelry to open up some stores in blighted Detroit areas as well?”

    You should probably try educating yourself on the topic before railing against it. Read up on the history of redlining, for instance. Or even try reading the article you provided a link for.

    “Citizens Republic Bancorp Inc. (CRBC) and Citizens Bank of Flint, Mich., will open a loan production office in an African-American neighborhood in Detroit, invest approximately $3.6 million in Wayne County, Mich., and take other steps as part of a settlement to resolve allegations that they engaged in a pattern or practice of discrimination on the basis of race and color, the Justice Department announced today…
    …The complaint alleges that CRBC, as the successor to Republic Bank, and Citizens Bank violated the Fair Housing Act and the Equal Credit Opportunity Act, which prohibit financial institutions from discriminating on the basis of race and color in their mortgage lending practices. The lawsuit alleges that Citizens Bank, and Republic Bank before it, have served the credit needs of the residents of predominantly white neighborhoods in the Detroit metropolitan area to a significantly greater extent than they have served the credit needs of majority African-American neighborhoods.”

    Regulations against racial discrimination are not the same as forcing banks to make loans to people who can’t afford to pay them back. Read to achieve.

  59. AtlasRocked says:

    @BTUR – I’ve filled out a number of mortgage applications now one of them asked me my race. If you have such a loan application please point me to the web page, bro.

    Unless you can show me firm proof otherwise- the issue appears as such: The applications, much like the Connecticut firefighter’s test, showed bias only in the sense that the questions asked resulted in biases pass/fail scores. http://en.wikipedia.org/wiki/Ricci_v._DeStefano That is not racism – that is one race consistently failing a test.

    The bank qualifying scores, as I’ve read over the years, are based on questions about the loan applicants background time in residence, income, and job history. These were fed by the banks into a computer to form a linear equation that would predict default probability. These results did show bias, but they also predicted default rates accurately. Do you have evidence of someone writing on a bank application that the applicant was black and to deny them the loan? Or evidence the equations were biased to exclude blacks instead of excluding high loans risks. Surely you’ve “read to achieve” the data to support your case.

    Notable black editorialist Thomas Sowell has commented on this topic. He’s a former Harvard educator and PHD economist. “It so happens that whites were turned down for mortgage loans at a higher rate than Asian Americans, but that fact seldom made it into the newspaper headlines or the political rhetoric. Nor did either the mainstream media or political leaders mention the fact that black-owned banks turned down black mortgage loan applicants at least as often as white-owned banks did.”

    Please show us your counterarguments so the forum can decide which of us has the most compelling evidence and support.


    BR: Here’s a counter argument: Thomas Sowell is an idealogue whose squishy arguments are blessedly data free. He can write like the dickens, however.

  60. flocktard says:

    @ BR- the “Big Lie” is indeed Hitler’s idea, and it is a simple one: repeat the lie often enough- no matter how outrageous it is- and people will simply come to accept it, just as they believe dropping marginal tax rates always helps the economy, despite the fact there is no empirical evidence to support the idea.

    We have a new proponent of the “Big Lie” in a man by the name of Conn Carroll of the Washington Examiner- the thrust of the piece?


    Mr.Carroll believes that since Countrywide was the biggest supplier of loans to FannieMae, it follows they caused the disaster. I sent him this piece from the St. Louis Fed, which is filled with all sorts of wingnut busting facts.

    Note page 9:


    Also note an interesting discovery of the authors: there is no correlation between lows down payments and increased foreclosure, a major insistence of the anti-GSE crowd.

  61. AtlasRocked says:

    @flocktard – I know 4 people now that are living in there house without making payments. They aren’t being foreclosed upon. I have a hunch a LOT of houses are not being foreclosed on now, that doesn’t mean monthly payments are being made. “Not foreclosed” doesn’t mean things are healthy, right?

    Have you looked into how many houses with low down payments aren’t getting payments made on them?

    BR do you know where such data might be?

  62. flocktard says:

    @ AtlasRocked- who writes: “I’ve filled out a number of mortgage applications now one of them asked me my race. If you have such a loan application please point me to the web page, bro. ”

    I was a mortgage broker for eight years, which means I’ve filled out more applications (called Form 1003) than you ever will or could.

    Every 1003 asks about race- EVERY SINGLE ONE.

    See section X of this form:

    The following information is requested by the Federal Government for certain types of loans related to a dwelling in order to monitor the lender’s compliance with equal credit opportunity, fair housing and home mortgage disclosure laws. You are not required to furnish this information, but are encouraged to do so. The law provides that a lender may not discriminate either on the basis of this information, or on whether you choose to furnish it. If you furnish the information, please provide both ethnicity and race. For race, you may check more than one designation. If you do not furnish ethnicity, race, or sex, under Federal regulations, this lender is required to note the information on the basis of visual observation and surname if you have made this application in person. If you do not wish to furnish the information, please check the box below. (Lender must review the above material to assure that the disclosures satisfy all requirements to which the lender is subject under applicable state law for the particular type of loan applied for.)


    Consider yourself “pointed.”

  63. AtlasRocked says:

    @flocktard – I don’t fill those section out in any application, so I’ve blocked them out in my mind.

    Of all my points, that was the least important, how about the others?

    You’re an insider then – how about the race decisions then? And the other stuff information I’ve read and provided? Do you know the mechanics of the pass/fail criteria? Was it done by a automated scoring mechanism or a human ? Can you confirm the inherent bias in the non-racial data?

  64. flocktard says:

    @ Atlas –

    you misread what I posted- I said research by the St. Louis Fed found no correlation between low DOWN payments and foreclosure, not NO MONTHLY payments.

    But as an aside, I have heard of people living in homes that have been foreclosed upon, but not evicted- it makes sense. A home that is lived in, heated and cooled, will sell for more than one that is boarded up. But most banks are terminally stupid when it comes to dealing with an issue they created for the rest of the country.

    As far as you ignoring the race issue, read the text I pasted. If you refuse to answer, the loan officer will fill in information based on his observations. If you ignore it, they will do the job for you.

    As far as your accusations of banks being “shaken down,” you should know that racism is rampant in mortgage lending, and I’ve seen it first hand. I quit my first job in the business when the owner explained the difference between “chocolate” loans and others. Minorities are routinely placed in higher interest loans when they could qualify for conventional ones (oddly enough, called “plain vanilla” mortgages in the trade.) I don’t have any fondness for ACORN – but if you want to treat people a certain way, the payback is a bitch.

    All conventional loans that meet GSE criteria are done on automated systems. We don’t have crotchety old women staring at applications anymore.

  65. AtlasRocked says:

    @flocktard – Good post, by the way. There’s no need to speak adversarially to me. I like facts and data, not hyperbole, ok? If you have a good case, I will admit.

    That’s why I asked my question about NO MONTHLY payments. I want to know what the correlation is between NOT PAYING and LOW DOWN loans. Foreclosures are not happening, for the reasonable reasons you said. I would do the same thing.

    The more interesting stat now becomes the rate of NOT PAYING to LOW DOWN payments, right?

    You gave 1 example to support RAMPANT. I can find one bigot in nearly every crowd. And if “plain vanilla” were the “normal”, isn’t “chocolate” sort of a joke that “sort of” implies color but doesn’t necessarily mean the guy is Archie Bunker? I went to the “Kings of Comedy” movie, bro. Blacks make fun of whites too, right? ( I laughed the loudest of anyone in the theatre at the white people joke, btw.) Did any of those guys get outed as racists? Blazing Saddles written by Richard Pryor. Come on we almost all make and enjoy racial stereotype jokes, that doesn’t make a racist qualification.

    So of all your bosses back then, was it 90% watching for black folks to make sure they didn’t get loans, or one moron out of 20 or 30? I ask because it is so frequent that “rampant” is used to support liberal policy advocacy, when it’s a minor problem. Like Obama claiming his Mom was denied insurance, when it turns out she was not.

  66. flocktard says:

    @ Atlas-

    if someone is not paying their mortage and has not been foreclosed upon, it only means the bank hasn’t gotten to them yet, but ultimately, they will. There is a huge backlog, and you can imagine what goes on in Nevada alone. This is gonna take YEARS.

    You can bet the borrower’s credit report is showing the late or missing payments as they happen. Late mortgage payments are a kiss of death for any future credit grantor.

    I think you are confusing foreclosure with physical eviction. Someone I know was foreclosed on two years ago, but still lives in his house. He has not been evicted, but he has indeed been foreclosed on, and I imagine if the bank finds a buyer at an acceptable price, he will be summarily removed!

    I am telling you that Blacks and minorities are routinely preyed upon, and low income neighborhoods are targeted by subprime lenders – or were, when these operations flourished. I saw this first hand. Its a sleazy business, and the practitioners of it are the worst kind of people. They couldn’t care less if people lost their homes. I can assure you that the “chocolate” reference I heard was outright racism.

  67. AtlasRocked says:

    I’d like to hear from other mortgage sellers.

    You’re avoiding specifics, that’s a sign of an exaggerator. You could be right, I’m not seeing what I typically see from an fair racism observer.

    I’m asking for the ratio of NOT PAYING to LOW DOWN. Who can provide such?

    And I’d like to hear from other mortgage sellers to confirm how rampant redlining is. Lots of businesses are shaken down by the justice department for racism. It happened at Lockheed Martin when I was there too. I’m skeptical. Surely there are others here who can confirm or deny?

  68. BTUR says:

    “The bank qualifying scores, as I’ve read over the years, are based on questions about the loan applicants background time in residence, income, and job history. These were fed by the banks into a computer to form a linear equation that would predict default probability. These results did show bias, but they also predicted default rates accurately”

    You obviously misunderstand the issue. Discrimination isn’t about whether they’re offering loans at an equal proportion to each race. Discrimination is when, after controlling for variables that predict default rates (using the linear model you’re talking about), you THEN find that there’s a significant difference in lending between races. If a bank can prove the differences in lending can be completely explained by the variables they use to predict default rates, they are legally in the clear. There is no discrimination. It might surprise you to learn that some regulators out there have actually heard of regression before…well, yeah, they have. Unfortunately, the research out there still strongly suggests that discrimination still exists beyond what the credit worthiness of the borrower says. I’ve worked on some of it – and yes, we do realize the need to control for credit worthiness. If a bank is guilty of discrimination, like the one in the article you linked to – then no, the discrimination can not simply be explained away by variables that are used to predict default rates, as you mistakenly think.

  69. [...] The Cognitive Dissidents (my term for a those politically dissenting from reality); their brains simply will not allow them [...]

  70. [...] things started with 3 great articles courtesy of Barry Ritholtz at The Big Picture. Barry calls out Cognitive Dissidents, says the U.S. Is a Corporate Monarchy, and highlights 29 Systemically Dangerous Global Banks. All [...]