June | 2026 | Civic Studies

I am absolutely no expert on Iran or international relations more generally. I happen to hold a theory, for whatever it might be worth. I think that the Iranian regime is hoping that the current war will cause a real economic crisis in the US–not a modest uptick in our inflation rate, but a serious recession.

For the Iranian leaders, a crisis would have two major advantages. First, once the American public believes that tangling with Iran can cause a recession, that would deter future US attacks. Second, once we’re in crisis, the Iranian regime may be able to get substantial cash or put pressure on Israel at the negotiating table.

They may be surprised (as I am) that a recession has not begun so far for the USA. (Other countries are already in serious pain.) But they are betting that the US will hit a recession before they lose power.

If this theory is true, then we would expect repeated news stories about negotiations (offers, counteroffers, boasts, and promises), yet no real progress. All statements about a pending “deal” would be meaningless.

If I were an investor who made independent decisions about stocks, then my prediction would have encouraged me to get out of the market early in the war. In that case, I would have missed a 16 percent increase in the S&P between the first day of bombing and June 1–a lot of profit. Even today, the market is well above where it was on Feb. 28.

On an hourly basis, the markets have risen when either combatant suggests that a deal is on the table but have fallen whenever either side acts aggressively. From my perspective, these moves are irrational because no such news has any meaning. But again, my superior wisdom would have prevented me from earning a 16% return if I were an independent investor.

For me, the interesting question is how to think about the predictive power of markets. Millions of decision-makers who have the means to obtain specialized information and the motivation to focus on reality should make better decisions than any individual. In this case, investors have been right, and I have been wrong.

Yet I suspect that many of those investors expect a crisis to hit, or at least they view it as a risk. One explanation for their behavior is rational but short-term thinking. Even if we treat any statement from Donald Trump as hot air, it is also reasonable to predict that the market will rise immediately after he says something optimistic. So it is rational to bet on the short-term gain.

Another explanation is that masses of investors are being misled by mistaken premises, including the assumption that the two parties are motivated to negotiate and that the US side is competent.

Friedrich Hayek made a powerful case for markets, but his theory would not rule out systematic bias in a situation like this. He argues that the world at large is too complex for anyone to model it, yet alone predict it. No one knows what will happen. However, markets typically function because actors need not predict the future state of the society or the world. If you own a business, you must only predict the costs of your inputs and the willingness of consumers to pay for your products. External events like wars and elections may affect those variables a bit, but usually you can make predictions by knowing your own market. Such choices aggregate to produce prices and market conditions.

When the critical variable is a non-economic event like a war, then large numbers of investment decisions do not reflect such local knowledge. Like surveys, markets simply aggregate what lots of people believe about the world despite their cognitive, informational, and motivational limitations and biases. And in this case, the demographic traits of many investors (based in the US and the global north, familiar with business, but unaccustomed to war) may make them systematically biased to trust Donald Trump to resolve a problem that he cannot come close to managing.

I recommend do-it-yourself (DIY) phenomenology. It is good for mental health to attend closely to our own experience, especially the ambiguous aspects of our inner lives, such as how we experience the will, the past, or our relationship to our own bodies. We should think about what we find when we introspect.

The goal is not to discover truths that will make us happy. Instead, we want to reveal complexities and depths that we can appreciate. By seeing ourselves as much more than suffering machines, we can increase how much we can enjoy being ourselves.

Here is an example of a phenomenological question that might attract your curiosity: Is your consciousness (or, you might say, your attention) a single “stream”?

William James coined the phrase “stream of consciousness” in 1890 as part of an argument that consciousness “does not appear to itself chopped up in bits. Such words as ‘chain’ or ‘train’ do not describe it fitly as it presents itself in the first instance. It is nothing jointed; it flows. A ‘river’ or a ‘stream’ are the metaphors by which it is most naturally described. In talking of it hereafter, let us call it the stream of thought, of consciousness, or of subjective life” (James 1890, p. 239, italics in the original).

James acknowledges that we can be interrupted, but he thinks that interruptions are always absorbed into the stream. For example, “what we hear when the thunder crashes is not thunder pure, but thunder-breaking-upon-silence-and-contrasting-with-it” (p. 241). He also acknowledges that our consciousness has an uneven pace. He says,

As we take, in fact, a general view of the wonderful stream of our consciousness, what strikes us first is this different pace of its parts. Like a bird’s life, it seems to be made of an alternation of flights and perchings. The rhythm of language expresses this, where every thought is expressed in a sentence, and every sentence closed by a period (p. 243).

However, other close observers of themselves do not find anything that looks like a “stream.” The philosopher Galen Strawson finds this metaphor “inapt.” For him, “Thought has very little natural continuity or experiential flow—if mine is anything to go by. It keeps slipping from mere consciousness into self-consciousness and out again” (Strawson 2018, p. 350). Strawson observes that his own consciousness seems to launch repeatedly from “prior state[s] of complete, if momentary, nonconsciousness. …. It’s as if consciousness is continually restarting. It keeps banging out of nothingness. It’s a series of comings-to.” (p. 380)

I do not think this dispute has been resolved, which is good news if you want an open question to whet your curiosity about your inner life.

It could be (as Strawson thinks) that people vary. Some of us have streams of consciousness, while for others, experience comes in disconnected blocs. If that is the case, an interesting question arises about what consciousness is, if it is subject to such variation. (This question is relevant to debates about whether a computer can be conscious.) Or it could be that either James or Strawson is right about consciousness, and the other one is interpreting his own inner life wrong.

Meanwhile, you are free to decide for yourself.

Sources: William James The Principles of Psychology, 1918 (first edition 1890); Galen Strawson, Things That Bother Me: Death, Freedom, the Self, Etc. (New York Review Books, 2018). See also: joys and limitations of phenomenology; some basics; people as clusters of attention

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Monthly Archives: June 2026

how markets predict news

is your consciousness a stream?