Announcing the 2011 Gland of the Year

I’m still waiting for the phone to ring and the editors of Time Magazine to ask me who the pick should be for Person of the Year. This will be one of those years when it’s a concept choice, of that I’m certain. You know what I mean, when the choice is a group of people or a home appliance rather than one big name recipient. The only question in my mind is whether you call 2011 "The Year of the Mob" — which is a bit uncharitable to some of the public demonstrations that championed important values with great courage…or "The Year of the Masses" or "The Year of the Street." That covers everything from the Arab Spring to Occupy Wall Street, from demonstrations in Athens against fiscal mismanagement and the burdens of austerity to those in London against raised tuitions, from the truckers strike in Shanghai to the mobs in State College Pennsylvania protesting the ouster of Joe Paterno or, one hopes, protesting the university looking the other way against charges of child abuse.

And of course, the ultimate example of mob mentality would be the performance of world markets, stampeding as though they were not on Wall Street but in the streets of Pamplona, rampaging from one crisis to another with precious little regard for facts, the long-term, fiduciary responsibility, or anything but the trade of the moment. As a consequence of this phenomenon and with an eye toward the uncertain outcomes of some of the other public demonstrations of the year, this might also be the year the editors run a thought provoking sidebar headlined "RIP: The Wisdom of Crowds." Because comforting as that notion was, crowds are only wise if all in them have equal access to the same information, have equal capacity for evaluating that information, have equal ability to move at the same speed, are playing on a level playing field. And as we know, they don’t which is why the only people who still believe in efficient market theory are the ones who are peddling the old textbooks and academic papers they wrote about it. I certainly don’t know a single major investor who believes in the idea.

Sadly, of course, we don’t get to pick the winners of such illustrious prizes here at tiny FP. So, we have to make up our own awards that capture the spirit of the moment. Fortunately, this gives us more latitude. We don’t have to limit our choices to people. We can go deeper. And in this case, that’s precisely where we will go.

And that’s why I would like to take this opportunity to announce our (my) selection for FP’s First Annual Gland of the Year Award. While the competition in this year of Kardashian marital hijinks, Bunga Bunga parties, and the patter of little feet in the Élysée Palace was fierce, once again the winner trumped by a wide margin the runners-up, which as usual included a variety of reproductive glands from many lands not to mention several organs that happened to get votes despite not actually being glands –including the heart and the brain. And that winner, by a wide margin, explaining everything that happened in the global street and once again dominating (and making havoc of) global affairs is …the Adrenal Gland.

In this age of instant media, twittering, flash mobs, You Tube, texting, and a tidal wave of technologies that ensure impulses beat reasoning every time, we have a world that moves at the speed of our secretions. You saw it last night as a gaffe by Rick Perry allegedly and instantly torpedoed his candidacy long before people had any chance to thoughtfully process any of his policy proposals. Admittedly, his gaffe was meaningless and he should have been well and truly done in by his policy errors instead, but no matter. The thundering crowd speaks and having spoken thunders on. So it was with the frenzy over Herman Cain’s sexual harassment charges which dominated the news by speaking to our adrenal glands even as those same glands had no use for taking the time to work through the IAEA report on Iranian nukes or to do the math on even longer term issues like global warming or the really troubling structural problems with the American economy not to mention our brands of capitalism or democracy.

Of course, nowhere does the adrenal gland rule with a tighter grasp than in the world’s financial communities. We saw that again and again as investors freaked from one hub of ancient European civilization to another, like the band of e-Visigoths that they were. While Italy, for example, is a mess, did its fundamentals change dramatically this week? Weren’t the issues the markets have been reacting to visible for months or years? (Rhetorical question. Yes. Move along.) The crash is ridiculous in terms of fundamentals. It is a panic. There is no wisdom of crowds here. There is no rationality or distance. There is a mob mentality that when it reaches a trigger point like a 7 percent interest rate or a certain spread or a certain market level is deemed a kill shot. The consequences of this fear and greed driven phenomenon do however last long after the adrenaline that caused the havoc has dried up. Value is destroyed for the long-term, broken ratings take years to fix, savings are destroyed, lives are undone, and the world is enduringly altered. 

Clearly our financial system is in desperate need of circuit breakers … as are our political and social systems. While we must harness the energy of the masses when revolution is called for in Tunisia, Egypt, Libya, and Syria, we need to temper it in the course of day-to-day affairs through reason. That is why judicial process is supposed to be deliberative … and why mobs are not allowed to determine who is guilty and how they should be punished. That is why we were probably better off when people got less information during political campaigns but received it in print when they could sit and wrestle with it alone at night by the fire, actually thinking about it in a placid, relatively distraction free environment. It’s why daily tracking polls probably have not really enhanced democracy in any appreciable way (I’m being facetious. They are a blight.)

Of course, adrenaline has always been the life’s blood (to indulge in bodily fluid metaphors as I so often do) of mobs and markets. There have been plenty of pogroms and tulip manias and witch trials and red scares to throughout history to demonstrate that. But we live in an era when new technologies accelerate and amplify human impulses to the point that volatility and irrationality may be the hallmarks of our age.

So, with apologies to the pituitary, the thyroid, and the lymph, once again we must reconfirm that the king of all body parts … not to mention the defacto overlord of most activity here on the modern planet earth … is the humble, powerful, tiny, pulsing source of the adrenaline that stews our brains, distorts our thoughts, drives our markets, shapes our opinions and in the end, bungs things up in a big way for pretty much everyone here on this screwy little planet.