Inflating the Enemy's Power: The Status Explanation

In the last post I mentioned some interesting research about the psychological tendency to fixate on enemies, inflate their powers and imagine that they are behind most of our problems.

There is an obvious status explanation for these phenomena.  Admitting that you are struggling against the chaos of life can appear as very low status since each aspect of the chaos is generally some minor obstacle that by itself should not be much of a problem. However, if the problems are all caused by a great enemy plotting against us then it is higher status both because the powerful enemy decided to focus on us and because the problems are not a combination of minor issues.  Even if this was only going on inside a single person's head (as opposed to being a constant theme of the media and blogosphere), lying to others starts with self deception.

About

I studied Bioengineering at the University of California at San Diego. While there I served as a trustee on the investment committee of the UCSD Student Foundation, a group that manages an endowment to fund scholarships. While in college I applied my interest in finance and economics by working as a summer associate at Clarium Capital Management, working part time my senior year, and joining full time when I graduated in 2006, staying there through August 2010. I am currently working as a portfolio manager at another global macro hedge-fund in the Presidio (And blogging about more directly market related ideas at their restricted blog). I’ve been focusing on quantitative finance, currencies, commodities, the interplay between finance and politics, demography and other long term trends.

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