In August, economist Dan Ariely, author of Predictably Irrational: The Hidden Forces That Shape Our Decisions, wrote about the "yoked dog" syndrome. In an experiment PETA surely disapproved of, two dogs received a series of mild shocks. One had a switch which turned off the shocks, and rapidly learned to use it. The other had no switch, though the other dog's switch turned off its shocks, too. At the end of the experiment, the second dog ended up whimpering in a corner.

In case you haven't figured it out, we are the yoked dog. Ariely warned that it would take just one more shock to send us over the edge. Instead, we've had a series of them — the disappearance of Wall Street, the reduction of Detroit's automakers to beggars, the largest job loss in decades.

And we've experienced these shocks not as complex stories, but as 140-character Twitter messages, emails, IMs, and Facebook status updates. The entrepreneurs behind Facebook, Digg, and Twitter have always styled their websites as the future of news, filtered by friends rather than editors. The result is that we have been constantly shocking ourselves. No one thinks to hit the "off" switch, even if we could find it.

Zuckerberg, more than anyone, has set his sights on having us share the entirety of our lives online. In a recent GQ profile, he wondered out loud about whether his site could capture our emotions in real time.

Is that really a good thing, to broadcast every passing mood to every casual acquaintance we connect with online? Behavioral economists like Ariely, who study the interplay of psychology with our economic decisions, have found that human beings are more motivated by fear of loss than hope of gain. And our biochemical evolution has set us up for fight-or-flight reactions to every flicker of shadow that crosses the savannah.

One can see how a real-time, computerized reporting system on other people's feelings can be helpful to, say, sufferers of Asperger's Syndrome, the autism-like condition that limits the ability to understand and react appropriately to emotion. But for the vast majority of us, who react like the yoked dog, the endless stream of data about just how bad things have gotten amounts to death by a thousand shocks.

Here's how Zuckerberg could do his part to save the world: An algorithm already rules what information shows up on our Facebook news feeds. By tweaking that to ban bad news and play up anything cheery, Zuckerberg could help us fight our urge to whimper in the corner. Otherwise, he's just leaving the world to go to the dogs.

Except it won't, really. Because Apple CEO Steve Jobs, unlike Franzen, occasionally acts like a grownup — and always acts like a businessman.

Walmart is planning to start selling two iPhone models around Christmas, according to store employees interviewed by Bloomberg. This is surely the end of the iPhone's upscale brand image, argues scary-smart economist Stephen Dubner in his Freakonomics blog.

There are two problems with that. One, Dubner bases his argument on the rumor that Walmart will sell iPhones for $99, less than half the cheapest price they go for today. Yes, dumping the iPhone at a cheap price will piss off customers who spent a hundred dollars extra at an Apple Store.

But it's not going to happen. Apple is notoriously controlling about prices. And there's no way Jobs is going to put his pricey retail palaces at a disadvantage. Sure, Wal-Mart demands discounts when it can play one supplier against another. But Apple, not Wal-Mart has the advantage here. In the past, when Wal-Mart started selling iPods, it didn't get any special discounts. Bloomberg asked a Walmart employee how much the iPhones would cost. The answer: $199 to $299, just like they do today.

Lots of analysts believe that Apple will eventually sell iPhones for $99. Hardware gets cheaper over time, and AT&T actually pays most of the bill, hoping to make up the subsidy with wireless subscriptions. So sure, Apple might drop the price — but it will drop the price everywhere at once rather than cut Wal-Mart a special deal.

But the Walmart-will-ruin-everything line is a great theory, and one that plays especially well in places like San Francisco and Manhattan, which have many Apple Stores but no Walmarts, and dislike Oprah as much as they love their iPhones. Points to Dubner for combining so many cultural touchstones in a single post. Wish we'd thought of it first!

(Photos via nayrb7 and ILoveMyPiccolo via Freakonomics)

1. Because money is overrated!
We know this. We know it so well. And just to prove it we pay billions of dollars to science to prove it to us, year after year after year. And yet. As a society we totally live and die (no not really, we just act like we live and die!) by the tiny nuances of the trajectory of the aggregate of all the flows of all that money, as if it Really Totally Matters. We do this, obviously, because we're obsessed with making comparisons — am I at least doing as well as last year? Am I really smarter than his last girlfriend? Shouldn't I buy a house now that all my friends are doing it? — because it is just so much easier than the Is This Bringing Me Joy question that seems so totally sappy and sentimental we find it to be a hilarious joke when some little Third World country like Bhutan pragmatically invents a Gross National Happiness Index because no one actually thought of that first. But as the Times reminds us today:

Research has shown a significant level of depression, for example, among lottery winners. Other research has shown that above a household income of $50,000, there is little or no correlation between income and happiness.

2. Because It is already making New York more fun funner!
Nick wanted me to point out that the Great Depression was good or some industries — electrical engineering, film — that are maybe more worthwhile and exciting than the freaking stock market, but that brings me to a larger point. On Saturday I got this email from a friend who is a specialist on the New York Stock Exchange:

Last week was one of the most exciting weeks of my life. I think traders who had previously taken psychedelics had an unfair advantage.

Which kind of neatly underscores an important truth of this city: we are here for the "action." We are not here for the riches or because Guiliani made it so tidy and safe and Singaporean like our relatives always annoyingly assume when we so graciously leave it to endure family gatherings. I mean, if our relatives ever visited us they would know that New York is still fundamentally gross, and THAT'S SORT OF WHY WE'RE HERE. It is fucked up, but we chose to live among the tenements and the rats and all that once-proud peeling buckling infrastructure and all those whiffs of strangers' body odor because something about it makes us feel alive, even as the constant unquenchable thirst for that feeling also exposes the parts of our insides that we're slowly choking to death. But look! The New York Observer reports people are actually talking to strangers on the subway again. It's a paradox, and creative destruction, and possibly sector rotation — so the action leaves the Street for a little while, it will return in some gross new neighborhood the haters will instantly hate just as much. In the meantime, it's like that time all the power went out! Everyone loved that, remember? Oh and remember the subway strike? People loved that too. Shit, they probably secretly loved the cholera epidemic. Moral of story: we love that the economy is as fucked-up as we are. Like, there is a reason they call it "depression" duh!

3. Because Haters are tired of Hating!
I am not such a hater that I did not find it touching how right after 9/11 the Two Americas united to declare War On Haters. Petey Pablo penned that patriotic remix of his "North Carolina" song and Ja Rule and Kid Rock hung out together at some military base, etc. etc. Fast forward seven years, and the New York Times brings us the amusing news that Sarah Palin actually refers to her critics as "haters." This nonsense rapper concept reached all the way out to Alaska! Can we kill it now? It turns out yes! Because the very next week, following comparisons of the professional stock market haters known as shorts to terrorists and homicide bombers, the SEC actually outlawed short-selling! It outlawed hate. You would think this action would have gotten more hate from the shorts, but I have a theory: Haters really like nothing more that to be put out of their Hating-Ass Misery, at least for a few weeks. (Remember 9/11?) And this way they got to be proven right in the process, which is really all they care about. In any case, the Depression will sort of force Hateration Nation to acknowledge the symbiotic nature of its relationship with the Plutocrats, Jocks, Preachers, Republicans, Bloviating Public Intellectuals, Venture Capitalists and Self-Help Gurus that Make This Country "Great" and vice versa. Fittingly, this grudging detente was prophesied by the rapper Maino in the remix to his song Hi Hater.

4. Because everyone feels a lot better about capitalism now that Warren Buffet is the guy who will be making another few billion dollars profiting off its near-collapse!
If you are a capitalist, Warren Buffet was your hero when you were, like, eight. By the time you started your first private equity internship or whatever you were more like "Ah, Buffet, sentimental old sucker, making his money the hard way like that." Why? Because Warren Buffet made $62 billion over a six decade career investing in real companies over the Very Long Term, and that is just so unnecessary when you can make like at least a billion dollars in like a year just by taking a 20% fee on some money you got from rich folks plus a whole lot more money you got to borrow from banks at superlow rates, and throwing all that into some algorithm whereby the money makes a gazillion trades a day on some supercomplex financial instruments made up by bankers who got bored of collecting fees splitting up and re-packaging the weary pieces of the American economy and in any case, now you somehow make a half penny on the dollar every time some ratio goes below pi and none of it requires any entanglements with companies that actually produce stuff at all (thank god because that would be awkward.) Well, putting all that money through all that pointless action was not for Warren Buffet. Not because he worries about detachment from labor or any of that Marxist crap, but because it actually did just seem so pointless. (Buffet once said of gold: "It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.") Anyhow, so all this madness goes on for a few decades, generates a little "liquidity crisis" and suddenly Goldman Sachs has to become a real bank, which basically means the Smartest Richest Most Elite Motherfuckers on Wall Street are forced to sit acknowledge the existence of the Actual Economy. Put a wonkier way: Exchange Value, Meet Use Value! And Buffet sees that investors are worried about this, but he knows it's a good plan for the Long Term everyone laughed at him for caring about, so he plows $5 billion into it at supergood terms and suddenly everyone's like, "Damn, that Buffet, he really is pretty smart." And smart turns out not to be incompatible with good!

5. Because there is a reason they call it the "Dismal" Science!
At some point the economists of America got sick of no one listening to their earnest well-intentioned prescriptions for making globalization not so shitty, so they launched a hostile takeover of psychology and wrote ninety different books full of highly detailed "analyses" of why people do the things they do. The message of these books was generally: "Hey, Starbucks Is Smart And Other Crazy Ideas!" These books became bestsellers because in times like these there is a huge market for books that state true facts without being totally depressing or resorting to "self-help," which is to say they basically amounted to self-help, which is to say they kind of dumbed down the profession. Well, here is a true fact: last week chief Freakonomist Steve Levitt made the following admission on his own damn Freakonomics blog:

As an economist, I am supposed to have something intelligent to say about the current financial crisis. To be honest, however, I haven’t got the foggiest idea what this all means.

Anyway, the point is, the fiftieth anniversary of The Affluent Society came and went and no economist managed to write a more relevant book about the economy. Although The Affluent Society author John Kenneth Gabraith's son James is apparently trying to do that now!

ABSURDISTBANKER: Last year, I built a fund that invested solely in a hedge fund, but it leveraged 2X to do it - so it was a leveraged vehicle to enhance returns on a leveraged equity long/short hedge fund
MOE:: oh god
a SINGLE hedge fund?
ABSURDISTBANKER: Yes
MOE: That is fucking nuts. Not even a "fund of funds." A fund of fund. A truly innovative investment strategy.
ABSURDISTBANKER: I remember saying to the product team that designed it
"People who buy this are insane"

Okay people, here is my attempt at an explanation: at some point everyone with money was all, "Wow. Buying regular stocks and bonds in a company is for suckers obviously, look at that stupid 'Internet' thing and you have to understand like seventy thousand different variables about all these companies. I just want my money to be safe. Putting my money in a hedge fund, now that is what genuine rich people I think are 'smart' do. Because I don't really want to be able to follow what is going on with my money, and the hedge funds won't tell me because I wouldn't understand anyway. But I'll feel good about it because only rich people get to invest in hedge funds, and we wouldn't be rich if we didn't make wise decisions about money."

And the hedge funds were all, "Yippee, money, and we get 1% of that upfront, but shit, how are we going to justify our colossal fees now that there are a trillion dollars of the market invested in hedge funds? Oh well, all these people want is for their money to safe so we will just make a few very safe bets infinitely more complicated because that is like 'adding value.' For instance even regular mortal rich people aren't allowed to buy fancy complex derivatives like credit default swaps unless they are very rich and incredibly pushy, and regular people are not allowed to borrow 50 times their net worth so they can make 50 times as much when their safe little trade yields a safe little return. Regular mortal people also can't usually 'short' stocks especially without buying them first so we will do that. You know, regular mortal rich people get a headache just thinking about all this crap, which is good, because if they thought about it long enough they would probably elect to never again pay a bunch of guys a 20% commission so a bunch of guys could borrow 5000% of their net worth to pay a few dozen guys making 1% commissions pooling together and splitting up and insuring and re-insuring thousands of 9% loans because, hello, that is just some Ponzi shit right there, just ask the last stupid rich person who invested in a 'FUND OF FUND.'"