Gordon Brown and the fundamental attribution bias
This is great, from Iain Martin at the Wall Street Journal, who has been given the grim task of reviewing Gordon Brown's 'I saved the world' saga: Beyond the Crash, which he says is 'as much an unwitting psychological self-study as it is a history of the crash'. He gives what is a great example of the fundamental attribution error - attributing events to your own or other people's actions, when they're actually caused by external events. A bias politicians are particularly prone to...
Brown takes us back to mid-2008 when it looked like boom was turning to bust (which wasn’t supposed to happen). It’s not just the state of the banks that suddenly concerns the then prime minister:“Volatilities other than the financial also dominated my discussions with global counterparts. I could see that rising food prices, highly volatile energy prices, and the disruptions on the stock markets and in bank lending were not isolated events.”He grows increasingly concerned by rising oil and gas prices. So what does he do? In his book he gives the impression that he took charge.
“I spoke by video and telephone with the Saudi, French, Australian, and German governments and on video link and then in person with President Bush. I addressed other European leaders at the European Council meeting on June 19th and oil producers and consumers at the Jeddah oil summit. The oil summit, held at my initiative, took place when oil was trading at record-high prices; by May 10 it was $125 a barrel, by May 21st at $135, before soaring to its peak of $147 in early July. When we met in Jeddah we did secure a small victory via an agreement on more supply of oil production, so that oil prices were to peak at $148 a barrel two weeks later, before falling by 75 percent by December.”
I love that little line tucked in at the end. Oil prices fell “by 75 percent by December.” The implication, from the juxtaposition of top-level summitry with the prices, is that his personal intervention stalled the rise in oil prices and that having been dealt with by Gordon they went on to right themselves.
Meanwhile, back on planet earth…The reason oil prices collapsed by 75% by the end of that year? Could it have anything to do with the world economy suffering a massive heart attack? Economic activity plummeted (that’ll have been the credit-driven asset bubble boom turning to bust), so demand for oil plummeted, so the price of the stuff went down.