In the debate over economic stimulus, I hear many otherwise brilliant people making a lot of baseless conjectures about mass psychology about consumer and creditor “fear” and “uncertainty,” and what to do about it. But, as far as I can tell, none of them has even a rudimentary theory about the causes of micro-fear or how it scales up to aggregate consumer demand or aggregrate credit supply, etc. So I feel like I’m hearing a lot of smart people talking out of their asses about a subject they’ve never actually studied the psychology of coordinated expectations and pretending it is “economics,” a subject with much greater rhetorical prestige and political power than amateur psychology.
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