The bad boys on Wall Street and in the shadow financial markets were high on testosterone: manic euphoria led to more aggressive, high risk taking behavior– it’s all about me, win-at-all-costs, no ethical principles apply. And, now we are all paying the price.

Women have been hammered for many years about the impact of hormonal cycles on behavior and women are much more likely to consciously make adjustments to accommodate the impact. Men, it is your turn now.

Men are vulnerable to hormonal highs.
It is not an issue of whether or not testosterone is good or bad. The issue is too much or too little, without awareness of the consequences to others. And, yes, women have testosterone, too - just not enough, often enough, or in enough power positions to be a significant issue when we look at the impact of high testosterone behavior on our politics and markets.

When testosterone is up, so are aggression, sensation seeking, risk-taking and impulsivity; men are more inclined to see things in fight or flight, win-lose, invade-appease, you or me terms; their adrenalin is pumping oxygenated blood into their extremities and away from the frontal lobes of their brains (the seat of altruistic, rational behavior).

Testosterone-adrenalin highs lead to reductions in peripheral vision and focus brain/eyes on what is right in front. Men become tigers in the jungle, players on a Big Gameboard, senses hyped for the next move against the perceived foe. “Whose on my team?/Who is the enemy?” replaces, “Who are all the stakeholders and what are their issues?” System-thinking goes by the boards; genuine strategic thinking is confused with tactical maneuvers. And, yes, the testosterone high flyers win some, although it would be interesting to assess how many of big winners win at everyone else’s expanse, and whether any of them truly create win-wins (e.g. ethical profit-taking, which would be the grownup, beyond I-am-the-center-of-the-universe behavior).

When testosterone levels are too low, men tend to see themselves on the scared-little-boy side of it’s-a- jungle-out-there, and act or act out accordingly. (No principles need apply, Jack Bauer is my hero!)

Some strong female thinking might have effectively balanced the Dick C. Brains under the Bush II administration who talked fear, fear, fear, and only saw two options: shock and awe bombs or another attack on the U.S.; get-no information or torture; pillage the environment or cripple American business; agree with me or be a traitor.

High and low hormones
Testosterone levels go up when a man’s team wins and down when it loses. Testosterone levels also go up when a man makes a good profit on a sale or a bet. The higher the testosterone levels, the more inclined to act more aggressively and to take greater risks. In the unregulated shadow financial system, deliberately designed by mostly men to follow the law of the jungle, mostly men traders made literally billions of dollars moving fast and rolling enormous dice in the early days of a grand hedge-pyramid scheme. The wins increased the testosterone levels, led to even greater risk-taking and pulled in the maybe-I-can-too-beta males. Clinical gambler’s mania – euphoria, high-risk taking, sleeplessness– took over. And, here we are.

For a trader on a roll in the midst of a bubble, for instance, that suggests “several rounds of winning means testosterone so high they start taking stupid risks,” says John Coates, a former Wall Street trader turned senior research fellow at Cambridge, and lead author of the study. Time (4/2008)

We’re human animals.
Our lizard and dog brains kick in under a lot of circumstances. It takes a conscientious and conscious effort by mature, rational adults to override lizard/dog brain responses personally, and to collectively create systems that recognize both our limitations and our potential to rise above those limitation. Our laws must set limits that acknowledge that some people will always be acting in what they perceive to be their own best interests without any regard for the interests of anyone else.

Hormonal surges are one driver of animal-like behavior. Until men, who dominate the heights of power, pay attention to the impact of testosterone on their behavior and keep it within healthy parameters, we’re doomed to keep doing what we’re doing and getting the same results.

A balance of men and women in the halls of power could also have averted the financial market collapse, just as a balance of gender can NOW avert further catastrophe.

President Obama, How many women are balancing your teams? You’ve got a lot of men on your economic team who were lead players in creating the problem; as losers, this means they have diminished testosterone levels that will lock them into defending their old positions, and prevent them from really hearing challenging concepts from the people who called the problems way early. Again, an equal balance of female brain/bodies could help ameliorate this problem. What’s standing in the way of balancing your team?

And, how are you strengthening our system of checks and balances, so that it recognizes that some people will always act in selfish, foolish, dangerous and hurtful ways? How are you creating a balance between the freedoms that allow creativity and the limits/responsibilities that support healthy, productive and stable economies?

…:

Mistakes Were Made (but not by me); Why We Justify Foolish Beliefs, Bad Decisions, and Hurtful Acts by Carol lTavris and Elliot Aronson. President Obama, please read this or have someone give you a precis. The makeup of your economic advisory teams suggests that you do not fully understand the concept of cognitive dissonance, and the impact it will have on the quality of decisions you get from this team.

More discussion of gender and Wall Street:

Justice, Gender and Investment Banking, Matthew Yglesias, Think Progress

Wall Street on the Tundra, Vanity Fair

This blog is also posted at Great Democracy