You Can’t Always Get What You Want

If you listen to the business news even occasionally, you’re familiar with this phrase or some variant of it: “the market doesn’t like uncertainty.”  Entering a few versions of the phrase on Google alone yields over 1.5 million results.  The phrase is as ubiquitous as the sports cliché “we’ve got to play one game at a time.”  But the more you think about it, the more the phrase splits into two parts, one trivial, the other irritating.

            The markets don’t like uncertainty.  Who does?  Does the employee hearing rumors of layoffs or plant closures like uncertainty?  Or the patient waiting for test results, the athletes wondering if they’ll be drafted, the couple trying to have a baby, or the older person concerned about the value of their IRA?  The list could go on interminably, but the message is simple: no human being, and probably no sentient creature, likes uncertainty.  Like the auto in The Phantom Tollbooth, the statement “goes without saying,” even though nearly every financial analysts says it.

            I suppose there are exceptions. Many thrill-seekers do appear to like uncertainty, whether they’re trying a new Xtreme sports trick or gambling everything they have in Las Vegas or on their new software idea.  John Keats even praised the “the Man of Quality” for possessing “Negative Capability, that is, when a man is capable of being in uncertainties, mysteries, doubts, without any irritable reaching after fact and reason.” 

            But these special cases aside, uncertainty is, perhaps only second to mortality, the most universal and universally stressful parts of the human condition.

            That said, why do the economic pundits sing this refrain daily?  There are, I think, three reasons:

            First, it is a fact, and often a fairly successful explanatory fact.  Given the burdensome task of explaining why the stock market dipped, or why businesses are not hiring, the interviewee reaches for an incontrovertible fact, however bland that fact may be.  More specific attributions, such as concern over some country’s debt, some large corporation’s poor earnings, or simple profit-taking, are more debatable.  No one is going to counter Jim Kramer with the reply, “oh yes they do like uncertainty.”

            A more important reason, or maybe assumption is a better word, is that the speakers have elevated business’s or the markets’ uncertainty to a privileged position.  You and I may have to live with uncertainty, but the business world certainly shouldn’t have to.  After all, a major goal of entrepreneurs, big investors, venture capitalists, and the rest of those whose life is in the markets, is to achieve such a level of financial security that they can personally minimize uncertainty.  Having millions spread among a variety of assets, living in a gated community, being able to hire security guards, afford the best medical care, and possessing all the accoutrements of great wealth enable the a select few to feel secure from almost everything except death, and maybe even, delusionally, that too. 

            So the first unquestioned assumption is that the markets, business, or corporations, despite the Supreme Court’s contention that they are people, should really be free of the uncertainty that plagues the flesh and blood person. And remember, the corporation in all its forms is founded on the notion of persistence beyond the lives of it members.  Too bad they’re not self-aware, so they don’t know they’ve achieved immortality.

            The second, and more insidious assumption is revealed in one of the most common contexts of the phrase.  Very often the uncertainty the pundit is lamenting is an uncertainty owing to government deliberation or action.  Will there be a shutdown?  Will taxes go up?  Will the Fed continue the stimulus?  The hidden critique is that bad old government is upsetting good old business, which is a lamentable state of affairs.  The odd paradox is that, at least in recent times, the party of business creates most of the uncertainty that it deplores, then blames the government it is hampering.  Of course, conservatives can have it both ways: if government can’t get anything done, even if they are responsible for the inaction, then they can point to the fact that goverment can’t get anything done to prove their position.  But that’s matter for another time.

            For now, let’s remember that uncertainty is far more harmful to the average person than to Tom Wolfe’s “Masters of the Universe,” and let’s remind the experts of that whenever we can.