The Psychology of Sticking Your Head in the Sand. Plus, Ep. 2 of American Emergency.

9 snips

May 8, 2026

Guest

Marty Bamunde

Guest

Bryan Walsh

Marty Bamunde, a FEMA public affairs official who was on the ground during Hurricane Katrina, and Bryan Walsh, Vox senior editorial director who covers climate and economics. They explore why markets can ignore worsening realities and the biases behind that blindness. They also recount Katrina’s on-the-ground failures, how warnings were missed, and what that did to FEMA’s reputation.

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INSIGHT

Why Markets Become Blind To Real World Crises

Markets can ignore severe real-world disruptions because investors focus on signals that fit short-term narratives.
Bryan Walsh links this to biases like myopia, optimism, inertia, and the ostrich paradox during the Iran oil squeeze and early COVID trading behavior.

INSIGHT

The Ostrich Paradox Explains Economic Blindness

Six cognitive biases (the ostrich paradox) explain why people and markets dismiss unfolding threats.
Walsh names myopia, amnesia, optimism, inertia, simplification, and hurting as drivers that keep markets rising despite supply and flight disruptions.

INSIGHT

Evolution Makes Us Ignore Gradual Threats

Evolutionary wiring favors rapid, visible threats, so slow, systemic dangers rarely trigger urgent responses.
Daniel Gilbert's idea explains why climate change or protracted supply shocks fail to trip our alarm systems.

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This week, the S&P 500 hit an all-time high, despite a deepening global energy crisis. On this week’s On the Media, the mismatch between the stock market and reality. Plus, to understand how FEMA became so distrusted, we look at its response to Hurricane Katrina – and how it stained the agency’s reputation forever.

[01:00] Host Brooke Gladstone sits down with Bryan Walsh, senior editorial director at Vox overseeing the Future Perfect and climate teams, about the phenomenon of “economic blindness,” which explains why the stock market hit an all-time high this week despite the oil crisis unspooling across the globe due to Iran’s effective closure of the Strait of Hormuz. Plus, how human evolution may play a role in this cognitive dissonance.

[13:38] Host Micah Loewinger presents the second part of our investigation American Emergency: The Movement to Kill FEMA. This week, we look at the event that shaped FEMA’s reputation perhaps more than any other: Hurricane Katrina, one of the costliest disasters in U.S. history. Experts had warned about this kind of storm for years, but when it hit the agency only had one staffer on the ground–a PR guy named Marty Bahamonde. We also hear from Superdome survivor Chavon Allen, who was celebrating her 19th birthday when the hurricane made landfall.