This idea that higher prices are going to disappear is wishful thinking.

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Photo by Morgan Housel on Unsplash.

Wishful thinking is a funny thing. It gets us into a great deal of trouble and we don’t always know we’re doing it.

That’s too bad, too; because we are great at it.

Being so good at wishful thinking, and at covering it up with a nice veneer of rationalization, is what makes it such a problem for human beings. If we weren’t any good at rationalizing how our wishful thinking is not really wishful thinking it wouldn’t be a problem.

It is a logical fallacy to practice wishful thinking to a high degree, even though we are exceptionally good at it; equally illogical to be overly pessimistic about everything, though not as enjoyable.

For wishful, overly optimistic thinking to survive, it requires excellent rationalization skills.

We use rationalizations for logical fallacies all the time: “I went to the gym, so this cake doesn’t count,” or, “I’ve have a hard week, I’ll have that one extra drink I swore I wouldn’t have,” or, “I’ve been on-budget all day, I deserve to spend money I don’t have.”

Try to get through even one week without a good rationalization. It’s what makes the world go ‘round. Rationalization can turn men into monsters, though- like Pol Pot’s top Khmer Rouge lieutenants. They finally went on trial for genocide and crimes against humanity in 2018. “We only killed the bad people,” is their defense, even after all these years.

That’s a rationalization. There is absolutely nothing logical about it. From the outside, it seems glaring, grotesque, absurd; to their minds, it makes perfect sense.

Rationalization can convince even good people to do bad things. They fall into fallacious reasoning through mental and moral traps like; “Everyone else is doing it,” and, “If I don’t do it, someone else will… and they’ll be worse,” and, “This is all for the greater good,” and, “The ends justify the means,”

Sometimes they use the most terrifying rationalization of all time: “God told me to kill you.”

Number two is probably: “If I can’t have you, no one can.”

Rationalizations have sent a shiver down many a spine.

Human beings aren’t well-known for being strictly rational creatures, so our rationalizations often leave a bit to be desired. We are, if anything, highly irrational. When we try to explain to someone else that, while it might seem as if we did the wrong thing, reacted emotionally or behaved badly, we are actually perfectly justified in our behavior, they look at us in askance.

We can spot rationalizations much easier when someone else is using them, but we aren’t as astute when it comes to recognizing our own.

We’re not that great at math either, come to that; not when risk and our emotions are involved, anyway. COVID-19 is only the most recent and glaring example. Emotional fear, and a fair amount of media fear mongering, not statistics is what is causing such a large number of us to over-estimate the risk we will be hospitalized or even die of Covid.

In general, we get confused by coincidence, distracted by anecdotal evidence, stymied by the law of averages, bamboozled by statistics. Sometimes our mistakes are just silly- like buying lottery tickets or this little gem tweeted by a freelance journalist and echoed by no less authorities than MSNBC’s Brian Williams and New York Times Editorial Board member Mara Gray :

“Bloomberg spent $500 million on ads. The U.S. population is 327 million. He could have given each American $1 million and still have money left over.”

Before some keyboard-crusading Einstein pointed out the obvious flaw in this brilliant mathematical calculation- “Well, actually…” $500 million dollars would only be one million dollars for each of 500 people- not 327 million- there was plenty of support for this idea.

Some of our confused and collective rationalization mistakes are much darker and deadlier.

After decades of strictly enforcing the one-child policy in China, the Chinese Communist Party finally reversed the draconian rule not long ago. The one-child policy, it turns out, didn’t really work at all. It did not keep the birthrate in China down.

What does reduce the birth rate in any country, as Chinese Communist Party officials found out during the last decades, is growing the middle class. Who knew? The more the median income goes up, the more the birthrate declines.

Whoops: Sorry for the one-child policy, everyone- our bad. Never mind that strictly enforcing this well-rationalized, ends-justify-the-means mistake meant forcible abortion, femicide and infanticide, in addition to other consequences.

Someone was lying to themselves; probably a great many someones. The ends can never justify the means because ends and means aren’t seperate. But deluding ourselves, the refusing to admit our errors, is why we aren’t better at learning from our collective mistakes.

“Know thyself,” perhaps should have been one of the commandments, or at least the major tenet of some world religion or other, because we aren’t really all that great at knowing ourselves, either. We don’t know when we are lying to ourselves to justify some action, or position, or emotion.

For instance, we are terrible at predicting what will make us happy and almost as bad at predicting what will make us miserable.

We tend to imagine something good happening to us in a vacuum: Nothing else going on the day you finally get that raise and you think you’ll be absolutely over the moon about it.

Instead, that was the day your kid got suspended from school, you spilled coffee down the front of your favorite pants, you had a fight with a good friend and dropped your keys down a subway grate. So when you got the news about the raise you’d been wishing for, it barely registered.

Likewise, you might think losing your job would be the absolute worst thing that could ever happen. But on the day the axe finally descends, the sun is shining, you just fell in love, and it doesn’t feel as bad as you thought it would.

The real terrors in our lives, of course, the real barn-burners, and even sometimes the real joys, often come out of nowhere and weren’t even on our radar.

So we aren’t good at assessing risk, we aren’t good at telling ourselves the truth, we tend to be a self-deceiving lot and we can’t predict the future- though we constantly try. What are we good at?


Are we ever creative thinkers- which poses something of a problem in this context in particular. Creativity isn’t always a good thing; creativity gave us the arms race, after all.

Our boundless creativity plus our need to rationalize our emotional reactions is what gets human beings in the most trouble. This combo probably caused the arms race in the first place, come to that.

We are so good at doing what we what- whatever we want- then using our powers of creativity to build a case to justify our behavior after the fact, we do it without meaning to. We call this “being logical.”

We sure can tell a good story- to ourselves and others- but it isn’t logic; it’s fiction. We’re so good at our fantasyland rationalizations, we often believe them ourselves.

For this reason, the chorus of voices a month ago assuring American taxpayers and consumers that the inflation we are seeing, the higher prices on everything from groceries to lumber, was soon to pass have fallen silent.

Experts are now warning in all sectors that capital “I” Inflation isn’t going anywhere, however much overly-optimistic politicians would like it to. With no way to justify contiuning to say so, Team Transitory is saying nothing at all. Rosy-outlooks, fantastical promises and a refusal to consider the evidence can only get you so far.

Eventually- whatever clever rationalizations we’ve managed to come up with in order to justify what we want to say or do- reality usually catches up.

Your rationalization worked fine about the cake…until your pants stopped fitting. Telling yourself you’d do it tomorrow felt great…until it was tomorrow.

Well-meaning but overly-optimistic politicians and policy makers have been assuring the public that inflation is nothing to worry about- as if higher prices on everything weren’t worrying enough.

Well-meaning but cautious economists- it is a well-known fact that there aren’t any optimistic economists, only cautious, gloomy, bullish and bearish- say otherwise.

The Greek Chorus of voices formerly assuring everyone to brace for lower prices are falling silent because reality is taking hold. The growing clamor of voices warning consumers to brace for more inflation, more supply line issues, more labor shortages and other delays are becoming impossible for even the staunchest to ignore.

The sooner politicians and elected officials start leveling with us- or even better, leveling with themselves, the better.

(contributing writer, Brooke Bell)