Irrationality as a policy driver

US Presidential candidate Barack Obama speaks:

We have been operating under a politics of fear: fear of terrorists, fear of immigrants, fear of people of different religious beliefs, fears of gays that they might get married and that somehow that would affect us. We have to break that fever of fear … Unfortunately what I've been seeing from the Republican debates is that they are going to perpetuate this fearmongering …It's absolutely true there are 30,000, 40,000 hard-core jihadists who would be happy to strap on a bomb right now, walk in here and blow us all up. You can't negotiate with those folks. All we can do is capture them, kill them, imprison them. And that is one of my pre-eminent jobs as president of the United States. Newsweek

Not all fears are irrational of course, and of course there are some things we ought to fear more than we do and make policy accordingly (species extinction springs to (my) mind). All the same, as Sharon Begley continues:

The fact that a candidate whose campaign is built on optimism and a positive message is not above evoking terrifying images of suicide bombers and nuclear bombs—and doing so two breaths after he denounces fearmongering—reveals the power of fear to sway voters. Half a century of research has shown that fear is one of the most politically powerful emotions a candidate can tap, especially when the fears have a basis in reality; jihadists, of course, are indeed bent on suicide bombings. ... "In politics, the emotions that really sway voters are hate, hope and fear or anxiety," says political psychologist Drew Westen of Emory University, author of the recent book The Political Brain: The Role of Emotion in Deciding the Fate of the Nation. "But the skillful use of fear is unmatched in leading to enthusiasm for one candidate and causing voters to turn away from another."

Fear can easily over-ride our rationality. For instance, we fear plane crashes more than we ought, and don't fear car crashes enough, and unfortunately policymakers react accordingly. Social Policy Bonds, which would target broad outcomes - accidental deaths, in this instance - would lead to more rational policy than that likely to follow a spectacular plane crash - especially one for which copious visual footage is available.