Regardless of your feelings about the election, inauguration, or national politics in general, they do make for great settings in which to explore the classic themes. No, not Hope and Change and Unity and Freedom, those are themes for Presidents, not Overcoming Bias. I mean the ways in which our monkey brains lead us into messes, and how sober reflection can lead us out.
First, IOZ nicely captures why Obama's economic program is counterproductive:
The central conceit of Obama's inauguration and the crisis-wracked program he began to lay out is that given our troubled times, we must put aside difference in favor of "unity" and seek common purpose in collective action. Subsumed beneath an overwrought paean to national character and responsibility is the notion that only through centralization can crises of such magnitude be met and bested. This is precisely the wrong lesson to draw. Each of our current crises, whether imperial overreach or economic calamities, are at root problems of scale. If you really wanted more a more flexible, resilient, and self-sustaining economy, you would seek means to increase regional and local enterprise at the expense of State-subsidized national and transnational corporations; you would notice, for instance, that most small banks are doing just fine, and you'd let Citigroup go belly-up.
It would be foolish to lay this at Obama's door – I think Hillary would do worse, and quite possibly McCain as well. The erroneous focus on scale and centralization and "pulling together in times of crisis" is a general human irrationality which politicians specialize in catering to.
Like many (?most?) irrationalities, it is likely a relic of our tribal past. In the ancestral environment, pulling together to help the tribe in a time of crisis was the best way for an individual to survive. In our modern environment, however, we are often led to identify with an entire nation as our "tribe", and it turns out that this is an inefficiently large group for most types of collective action. We evaluate the prospect of unity with ancient mental modules optimized for Dunbarian tribes, and that sphexishness leads us into disastrous collective ventures.
Yes, distributed systems can display systemic risk and amazing synchronization – see the Firing Squad Problem. But it takes special effort, while centralized systems do it automatically. Calling for large-scale government solutions is a triumph of rhetoric over economics and systems engineering.
Anytime you get excited about collective actions in supra-Dunbarian groups, you should be suspicious that you may be in monkey-mode. Actually, as Eliezer points out, it's worse than that – anytime you are arguing about politics as if you can do anything about them, then unless you are very wealthy or powerful, you are probably in monkey-mode. Put down the soapbox and repeat 3 times "My tribe is too large for me to influence policy". (If it's me that's on the soapbox, as is often the case, you may have to yell – I get deaf when I'm in monkey-mode).
Another example comes from Arnold Kling, who quotes Douglas Rushkoff's book Coercion (a book I mainly remember as being a less-good version of Cialdini's Influence: The Psychology of Persuasion, which I consider a must-read in the OB genre):
When we are part of a crowd, we are free to experience heightened levels of emotion that just aren't possible for smaller groups. Relieved of our responsibility to make considered judgments, we can allow ourselves to be swept away by the enthusiasm of the greater body.
Throughout history, nations and their leaders have used this sense of mass complicity and celebration to unite their constituencies, especially against foreign threats.
For emotional, religious, and even poiltical effect, Speer commandeered 130 antiaircraft searchlights and spaced them at 40-foot intervals around a giant field…The immense rays of light rose more than 20,000 feet before diffusing into the heavens…
Speer's intentions were to overwhelm rationality with grandeur and to mask naked rhetoric with emotion. His theatrics worked so well that the architect found himself drawn into the spell. He reported in his autobiography that he remembered attending the rallies and admiring Hitler's speeches. But on rereading them years later, Speer claims he had no idea what it was that he had admired
I agree that the use of the Third Reich in the examples smacks a little of Godwin's Law in action. I think the intent was to illustrate that spectacle is so powerful that it can be used to beguile people into going along even with ideas that with just a moment's sober reflection everyone (hopefully) would find abhorrent.
To use a nerdly analogy, when you participate in a spectacle you are giving the organizers superuser access to your emotions. Are you sure you trust them not to use it to install a rootkit?