Lehman Sisters? Probably

New research suggests women are just as dangerous as men.

Finally, a proper study on the matter: knowing you're a girl won't tell us much about your gambling habits. The study in question comes from a paper released by Bundesbank, and finds gender to be a poor predictor of risky investment. I've always thought this, so to avoid repeating myself, here's something I wrote last year on the subject:

There's a persistent opinion knocking around that blames the financial crisis on one small molecule: testosterone. It is testosterone, apparently, that makes traders go feral as stocks rise, taking bigger and bigger risks until Lehman Brothers happens, or someone falls out of a window.

Women, then, goes the argument, are safer traders - so let's fill trading floors with the ladies. Naturally cautious, milder creatures, they make better investors. If women ruled the world, continues the logic, getting jovial now, lighting its pipe - there would be no stock-market crashes, and probably no wars either.

The argument is, on the face of it, pro-women. After all, it's saying women are good at something; they're good at not being overconfident. But is it feminist? Not really. Broad behavioural generalisations based in biology rarely do women much good. Along with "risk aversion" goes "less competitive" and "less confident". Banking may need these traits but they aren't attractive to employers, and it's damaging to saddle an entire gender with them.

In that article I referred to a study from Stanford, which looked at how women's behaviour towards risk changes as a result of gender stereotyping.

When the experimenters brought up gender stereotypes before the trial, women became overwhelmingly more cautious, whereas men took more risks. When such stereotypes were not used, men and women performed almost equally.

Any differences in financial risk-taking owed a great deal, I suggested, to social conditioning.  Now Bundesbank's paper addresses the matter more directly. The reserachers looked at households in Austria, the Netherlands, Italy and Spain, and found that a great predictor of risk-taking behaviour was not in fact gender but age. As subjects got older, their tendencies to make risky choices fell gradually, (the steepest fall was between the late teens and 30s). Gender did not have that much impact - and crucially, varied according to social factors. In Italy, where sexual inequality is seen as higher, gender had more influence on attitude to risk.

Clearly, there is more evidence to be gathered, but it seems to be mounting up.

 

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Leader: Trump and an age of disorder

Mr Trump’s disregard for domestic and international norms represents an unprecedented challenge to established institutions.

The US presidency has not always been held by men of distinction and honour, but Donald Trump is by some distance its least qualified occupant. The leader of the world’s sole superpower has no record of political or military service and is ignorant of foreign affairs. Throughout his campaign, he repeatedly showed himself to be a racist, a misogynist, a braggart and a narcissist.

The naive hope that Mr Trump’s victory would herald a great moderation was dispelled by his conduct during the transition. He compared his country’s intelligence services to those of Nazi Germany and repeatedly denied Russian interference in the election. He derided Nato as “obsolete” and predicted the demise of the European Union. He reaffirmed his commitment to dismantling Obamacare and to overturning Roe v Wade. He doled out jobs to white nationalists, protectionists and family members. He denounced US citizens for demonstrating against him. Asked whether he regretted any part of his vulgar campaign, he replied: “No, I won.”

Of all his predilections, Mr Trump’s affection for Vladimir Putin is perhaps the most troubling. When the 2012 Republican presidential nominee, Mitt Romney, warned that Russia was the “number one geopolitical foe” of the US, he was mocked by Barack Obama. Yet his remark proved prescient. Rather than regarding Mr Putin as a foe, however, Mr Trump fetes him as a friend. The Russian president aims to use the US president’s goodwill to secure the removal of American sanctions, recognition of Russia’s annexation of Crimea and respect for the murderous reign of the Syrian president, Bashar al-Assad. He has a worryingly high chance of success.

Whether or not Mr Trump has personal motives for his fealty (as a lurid security dossier alleges), he and Mr Putin share a political outlook. Both men desire a world in which “strongmen” are free to abuse their citizens’ human rights without fear of external rebuke. Mr Trump’s refusal to commit to Nato’s principle of collective defence provides Mr Putin with every incentive to pursue his expansionist desires. The historic achievement of peace and stability in eastern Europe is in danger.

As he seeks reconciliation with Russia, Mr Trump is simultaneously pursuing conflict with China. He broke with precedent by speaking on the telephone with the Taiwanese president, Tsai Ing-wen, and used Twitter to berate the Chinese government. Rex Tillerson, Mr Trump’s secretary of state nominee, has threatened an American blockade of the South China Sea islands.

Mr Trump’s disregard for domestic and international norms represents an unprecedented challenge to established institutions. The US constitution, with its separation of powers, was designed to restrain autocrats such as the new president. Yet, in addition to the White House, the Republicans also control Congress and two-thirds of governorships and state houses. Mr Trump’s first Supreme Court appointment will ensure a conservative judicial majority. The decline of established print titles and the growth of “fake news” weaken another source of accountability.

In these circumstances, there is a heightened responsibility on the US’s allies to challenge, rather than to indulge, Mr Trump. Angela Merkel’s warning that co-operation was conditional on his respect for liberal and democratic values was a model of the former. Michael Gove’s obsequious interview with Mr Trump was a dismal example of the latter.

Theresa May has rightly rebuked the president for his treatment of women and has toughened Britain’s stance against Russian revanchism. Yet, although the UK must maintain working relations with the US, she should not allow the prospect of a future trade deal to skew her attitude towards Mr Trump. Any agreement is years away and the president’s protectionist proclivities could yet thwart British hopes of a beneficial outcome.

The diplomatic and political conventions embodied by the “special relationship” have endured for more than seven decades. However, Mr Trump’s election may necessitate their demise. It was the belief that the UK must stand “shoulder to shoulder” with the US that led Tony Blair into the ruinous Iraq War. In this new age of disorder, Western leaders must avoid being willing accomplices to Mr Trump’s agenda. Intense scepticism, rather than sycophancy, should define their response.

This article first appeared in the 19 January 2016 issue of the New Statesman, The Trump era