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Did Obama lose to the Bankers?

December 14, 2009

Yes, big time! Obama is naive. He does not understand Behavioral Economics. He thinks that his sleek brand of Social Influence will work on shrewd bankers. His speech on CNN on December 16, 2009, after his meeting with the CEOs of Wells Fargo, Bank of America and others, indicates so. Sure, the president has charisma, but bankers respond only to power. They will not extend credit to small business owners unless the law forces them to do so, or the feds raise interest rate so landing can compete with buying cheap properties, paying old debt, giving bonuses to retain top executives, or investing overseas. Obama is naive to think that anything but law enforcement can make a big difference! This is unfortunate for the small business owner and the small investor, but especially the small business owner who can’t get credit. Behavioral economics states that banks that were helped by the tax payers to recover from their financial crisis, will help the tax payers to recover from theirs only if compelled to do so by law!

In my book The Psychology of Investing During the Obama Years, I caution small investors about keeping their money in the stock market after 2011 and 2012 unless Obama changes. As CEO of the country, he must accept that creating and enforcing behavioral economic contingencies is more effective them social influence and pressure. Research in social psychology indicates, time and again, that people respond better to powerful leaders than to likable leaders. You do not bail out anybody unless they sign a contract what they will do for you and what will be the consequences of not doing it. This is behavioral economics. This is contingency management. This is the good life! This is Darwin! This is nature! This is God! It works!

2 Comments leave one →
  1. December 15, 2009 4:55 pm

    Obama’s meeting and “scolding” of the bankers…just political theatre to assuage or placate us. In the meantime, the banks are coming back stronger…more of a threat…

    • December 27, 2009 8:10 pm

      Yes, and the American people are duped. I like writing, but I am an action person, as you have seen from my work. I started a posting campaign to teach people the difference between what you call appropriately “scolding…political theater..placating us” and ACTION TO GET RESULTS. I like Obama but he is a ‘hot air balloon” for now until he learns that “banks coming back stronger” undermine his presidency!

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