In prepared remarks before the panel investigating the roots of the financial crisis, former Federal Reserve Chairman Alan Greenspan blames the subprime crisis on foreign investors, nonbank lenders, the spread of securitized mortgages and financial firms for failing to manage their risk. The one person he did not blame was himself, or his institution -- the Fed.
--Shahien Nasiripour, The Huffington Post, reporting on Greenspan's testimony before the Financial Crisis Inquiry Commission on April 7, 2010
Despite the fact that the Federal Reserve, as the nation's largest bank, did not take any significant action to curb the reckless lending that precipitated the Great Recession, Alan Greenspan seemed to apportion blame everywhere but to himself. At one point in his testimony, he even appeared to blame the fall of the Berlin Wall. (His logic: Seeing the truly awful job the Soviets were doing running their economy brought about distrust of "central planning" of any kind. So evidently, the excesses of Capitalism are Communism's fault.)
Alan Greenspan was instrumental in determining U.S. financial policy for 19 years, but he doesn't feel that he was responsible for the failure of the policy he helped create, or that it's failure was to some extent avoidable. Is he crazy? No. Did he consciously and willfully mislead the Commission (and the rest of us)? Very probably not. Without actually being Alan Greenspan, I can't say for sure, but the odds are good that he really does believe he's not to blame. And as much as we might like to think otherwise, many of us would feel the same way if we were in his shoes.
Psychologists call this the self-serving bias -- the tendency to see ourselves as responsible for our successes, but to see other people or the circumstances as responsible for our failures. We reason this way to protect our self-esteem, and to protect our image in the eyes of others. We also do it because it really feels right. Think of an actor on stage: As a member of the audience, you are focused on what he is doing, but if you're the actor, you see everything but yourself. You see your fellow actors, the scenery and the audience, but you can't actually watch you. Because of what's called the actor/observer difference, it's easy for Alan Greenspan to look back over his 19 years at the Fed and see all the factors that played a role in screwing things up, and harder for him to see his own role in it.
Psychologist Tony Greenwald's 1980 American Psychologist article1 on this topic cited some very amusing examples of the self-serving bias, taken from a San Francisco Sunday Examiner and Chronicle article on the explanations drivers gave to their insurers after an accident. You'll notice that some of these people went to remarkable lengths to deflect blame:
Studies show that in fact, nearly us fall victim to this kind of bias (though we tend to think that only other people do -- yet another example of the bias at work). The upside of all this self-protection is that we don't feel so bad when things go wrong, and can stay optimistic about our future chances for success. The downside, particularly for the leaders on whose judgment we must rely, is that we don't learn anything from our mistakes if we don't recognize that we made them in the first place. How can you do a better job next time if you won't even admit you did a bad job this time?
From a motivational perspective, the best way to handle a failure is to look honestly at how your own actions contributed to the outcome, emphasizing what you can change so that your performance improves from now on. And even though, in his mid-80s, Alan Greenspan is unlikely to serve a second round as Fed Chairman, he would probably like to get an accurate handle on what went wrong -- something he will never do unless he admits that he was actually driving.
1 A. Greenwald (1980). "The totalitarian ego: Fabrication and revision of personal history." American Psychologist, 35, 603-618.
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Self-serving bias - Wikipedia, the free encyclopedia
Should we listen to our inner critic?
Those that have an external locus of control blame everyone but themselves for their mistakes. They don't believe their is anything to learn if they believe the problem/mistake was caused by someone else.
And you certainly, ( I assume) do not control all the circumstances of your life. One can spend their life working thru the issues cause by external circumstances, and even in death, you may not be exonerated.
Most of us on here don't have personal experience with 'world leaders'. I related my personal experience with a person unable to admit or learn from their own mistake because I thought most here could relate to it with similar experiences in their own lives. A self important person like yourself must have MUCH experience with World Leaders since you have so much time to pa-t.r.o.l.l on here to point out what YOU perceive as others inappropiate comments. You must be SO proud of yourself.
Usually, they get their first real taste of the world when they get their first paying job and have to meet the monthly bills. Their world, in the teen years, is simplistic and filled with the morality of TV shows and video games. They have a cockeyed view of right and wrong, most have a sense of unjustified entitlement, they are "owed" but they do not have any obligations to those who are supposed to "give them things" or, here comes their favorite, "cut them some slack". Come to think of it, this may well apply to many in the under 50 generation. The real problem are adults who "cut them too much slack", this is why teens have a difficult time entering the "real world" and perhaps why suicide rates are so high among teens. Truly, reality bites.
His willful ignorance, in the face of evidence and analysis that was available to him, not just now in the post-mortem years, but *then*, year after year after year, for 19 years, is beyond this bias analysis.
His self servingness coincided, funnily enough, with immense power and wealth for himself and his friends. Didn't that have something to do with it? But mostly it came from an entire, completely conscious *ideology* of wild deregulation that is way, way, way beyond "actor/observer differences".
Those drivers described in the newspaper I guarantee you had to take accountability and weren't let off the hook by their insurance companies. Is there research to show what they learned *after* being forced to be accountable? Bet they learned the lesson then.
It seems just as likely to me that Greenspan and all of them don't learn because---why should they? They continue to be rewarded and are never punished. They often get promoted up. They continue to appear on Sunday morning TV. They are still in the elite power circles with barely a hair out of place. The bonuses this year on wall street for example, are higher than ever before.
Seems like it's we, the American voter, who needs to wake up and learn. Go Wisconsin!
Not regulating the OTC derivatives market was an issue long before the bail outs. All western leaders -- liberal and conservative -- followed the same strategy with bailouts for the too-big-to-fail. In retrospect the strategy worked. A global banking collapse was averted. The recession was short. Millions of jobs were saved in the financial, auto and peripheral industries. All the large banks have repaid their bailout funds with dividends for the taxpayers. Even AIG is in about to bring one of the largest secondary offerings in history to market, as the government extricates itself from its position.
We never should have gone to WAR with countries that had nothing to do with 911 !
We never should have let "w" loosen the regulations on trade and business.
We should have learned , BUT we didn't.
We need to get out of the WARS and we need to regulate these GREEDY corporations and enforce safety regulations!
At the time it was ruled by one of the most evil regimes of our time, who had given al Qaeda a safe haven to train its terrorists and plan attacks, most specifically in this case 9/11. If the US and NATO had not gone to war with Afghanistan, the Taliban would still be in power, abusing women, preventing girls from being educated or working and providing terrorist training camps to insurgents from other countries.
Look at Egypt, we left them alone to their own devices. What came of that?
The Egyptians saw that they were not enjoying the freedoms of democracy and they rose up and took control of their future.
The peoples of Iraq, Afghanistan , and the other countries are emerging into the internet and have a way to see what they don't have . We need to support the freedoms of those who want to gain democracy.
That is how democracy will spread. We do NOT have to force it down their throats!
It also tends to not allow them to see errors in their ideological belief systems.
When bad is seen as good , why change ?
Funny how every thing flipped when Reagan too office.
Could there be a connection?
"Think of an actor on stage: As a member of the audience, you are focused on what he is doing, but if you're the actor, you see everything but yourself."
What/who is involved in a play? The work of the actor, the playwright, the producer, stage manager, director, fellow actors, light and sound people, the venue, the weather, audience turnout and reaction, the declarations of reviewers, etc, etc.
Neither actor nor audience are able to see 'self'. The actor sees everything listed above, but not 'self'. The audience cannot see 'self', but sees only the actor. Recalling the other factors that affect the performance, let's consider the question, "Who has the more accurate and complete understanding of the situation?
This audience/actor thing is an amusing intellectual parlor trick. It's been fun considering it, but the logic is fatally flawed. It is only useful for deflection and transferrance. Maybe Greenspan was guilty, maybe he wasn't, I don't know. But I do know the truth won't be found through this kind of analysis.
In closing, let's not ignore the self-serving bias of the audience....