The recession of the last four years has been abnormal in many ways but one sign of normality is appearing – the US recovery being the beacon of wider global recovery.

The US approached the recent crisis in the same manner as Europe, with such things as TARP (Trouble Asset Relief Programme – for buying up bad debts such as Freddie Mac and Freddie Mae), ultra low interest rates and large amounts of quantitative easing.

In fact the US QE1 was $1.4 trillion, QE2 in 2011 was $600billion and a QE3 is a strong possibility. UK QE by comparison has been £275 billion so far which in relative terms is 50% larger than the US QE – this shows how parlous our finances had become.

But there is a rub. The UK and much of Europe sees the long term recovery coming from austerity, not spending. For the US there is an ideological aversion to this which is widespread. I don't hear Americans speaking wistfully of George Osborne's pronouncement that 'we are all in this together'.

The US just does not see it like that plus which since the mid terms there has been political paralysis in Washington only compounded of late by the campaigning already under way for this year's election.

I am of the firm belief that the US four year presidential term model is not fit for purpose and should be five years or more.

So the US economy has not succumbed to the levels of austerity that are approved of in Europe and many are saying that this is why the economy is now recovering faster than most. The problem remains that the deficit is huge and their debt is now at $15.6trillion and rising at $4billion a day making it $50,000 per us citizen. The deficit is 9.5% of GDP, matched by Japan and Ireland but Greece is in fact only 7%.

The silver lining to this is that the US economic indicators are now showing a consistent and probably sustainable up-tick. Unemployment continues to fall and is now at 8.2%. A major new theme is 'on-shoring' of jobs. GE has notably opened up a new washing machine plant in the US. Only a few years ago this would have been off shored – likely as not in China. But US efficiency methods have improved and Chinese have not – indeed their costs are rising.

US retail sales are up; car sales are at a five year high and even housing is showing positive trends. All of this of course has had the crucial effect of increasing confidence in the economy on the part of consumers, investors and producers.

Despite all this good news the US economy is fiscally stressed and long term growth is far from certain. How the US government handles taxation and how the economy does in international trade will govern its 2-4 year growth after that. The debt will remain a headache for many years to come.

The dollar remains somewhat in the doldrums but this is convenient for the US now with its trade growth requirements. That aside, the dollar has been looking threatened as the global reserve currency. Even if and when the US is overtaken by India and China as the world's largest economy the greenback will hold many trump cards to keep its reserve currency status. This is an extraordinary claim given the US level of indebtedness. But for sheer scale, manufacturing ability, legal security, strong democracy and lack of corruption the US will take a lot of beating. The democratic and corruption angles are proving awkward elements for the Indian and Chinese economies right now.

The tradition always used to be that the UK economy would follow the US economic trend by two years. This came down to one year with tighter globalisation and even with the risk of our austerity measures we will see the benefits from the US upturn reach our shores by the end of 2013.

I start from the standpoint that ALL decisions are in fact investment decisions. This in itself can sometimes change the way people view all their decisions which are, in fact, allocations of scarce resources under conditions of uncertainty. This is why the formalised science of decision making (and in fact the subconscious process) uses the same kind of calculation that all investment calculations are based on and why this is the same as the classic risk calculation - multiplying probabilities of events by the impact of their occurrence. Indeed, this is origin of the oft-used but little understood term: "calculated" risk.

Most decisions are not actually investments of money (though some are) most are investments of other limited resources such as time, energy, status or reputation in a world where the exact outcome of the decision are unknown. At the point of making the decision, however, the decision maker actually projects themselves into a series of uncertain futures and assesses potential upsides and downsides of a variety of different courses of action.

This future-projection is fascinating because sometimes we do it in an instant without being consciously aware of it and sometimes we do it thoughtfully over the course of hours days or weeks. Sometimes we call this scenario planning. And, again, we can see that what we call a "decision" is, something which sometimes feels "instinctive" but is also something that we have codified and formalised and have a variety of different names for such as "strategy", "planning" or "risk assessment".

In all these situations however, the most important point is that the decision-maker - both the CEO in the boardroom and the ten year old in the playground - are actually trying to optimise their return on investment. Within this process - which forms the meeting point of psychology and micro economics - is the whole arena of behavioural economics, that is the extent to which the people making decisions are actually rational and capable of maximising their ROI in what we might meaninglessly call a mathematically accurate way.

This may come about as a result of competitive advantage (being first or fastest) or by special ability (patent or inimitable talent) and is defined in poker (and sometimes business too) as having "the edge"! The more efficient and fast moving/liquid the market the quicker the edge is eroded and so it is crucial to the decision-maker to keep and maintain this edge by whatever means.

The bottom line is that in a world of uncertainty we are all impacting each other. Our world is so complex that accurately and effectively predicting the future at the point of making a decision is always going to be an unobtainable ideal and therefore all we can do is make an assessment; a probability assessment of what is to come.

So if all decisions are investment decisions then all judgements and assessments are effectively probability assessments. At the simplest level, these assessments are "I think I trust this person" or "I don't think it's going to work". In more complex scenarios, we assess how a process refinement will likely impact those down the production line. But we never know for sure. We're just assessing: projecting ourselves into unknown futures and applying emotional or mathematical probabilities to likelihoods of different outcomes.

Whether consciously or intuitively, information about the past and the present is the raw material we use to hone our assessments and scenario plan for the future. As decision makers in the twenty first century, the decisions that we make are being hugely informed by computers ability to crunch vast amounts of data. But ultimately predictions made about the future in this way will always depend on the algorithms and models that we create to assess it. For the foreseeable future it will require intuition and insight to establish how to process that data in order to more accurately assess the future. For the future is not the past and computers are currently incapable of applying the insights necessary to know what to do with information about one in order to predict the other.

By completely understanding the decision-making process however we can get a better handle on what information we should be supplying and demanding to ourselves and those around us. By appreciating what is happening inside our heads in a split second or in discussions over many months, we can gain insight into how we decide at the moment and how we can do so better in the future. And the better we can use this information and accurately assess the future the more prescient our decisions become and the more likely we are to have that competitive advantage and beat the market forever or most likely for a while!

When The Titanic set sail exactly 100 years ago today, nobody imagined that just six days later, the ship they said was unsinkable would do the unthinkable. It hit an ice berg and sank. And ever since its name has been synonymous with failure.

The sad thing about the event is that the signs of impending disaster were there for all to see. Unfortunately, the people who should have seen them chose to ignore them. It's called the 'paradox of power' and one hundred years on, we're still trying to understand why it happens.

Dacher Keltner, a psychologist at the University of California, tried to shed light on the problem by conducting an experiment with students at the start of the new academic year. Along with free pizza, he asked them to give their first impressions of every other student in their dorm. At the end of the school year, Keltner returned with the same survey and more pizza. Comparing the results, he discovered that the students at the top of the social hierarchy who were the most 'powerful' and 'respected' were also the most considerate and outgoing, and scored highest on measures of agreeableness and extroversion. In other words, the nice guys finished first.

From this he concluded that people give authority to people they genuinely like. But to test the theory further, primatologist Frans de Waal extended the experiment to chimpanzees. I can't say for certain if they were coerced with pizza or peanuts, but the results were remarkably similar. It was discovered that the size and strength of male chimps is a poor indicator of which animals will dominate the troop. Instead, the ability to forge social connections and engage in 'diplomacy' is often much more important. Staring in a few PG Tips ads also helps enormously.

However, there's a 'but'. You see, whilst empathising helps us climb the corporate ladder, once at the top we end up morphing into a very different kind of beast. I'm talking humans again now not primates. To explain this, Keltner compares the feeling of power to brain damage, noting that people with lots of authority tend to behave like neurological patients with a damaged orbito-frontal lobe, a brain area that's crucial for empathy and decision-making.

Apparently, once bestowed with authority, we become less sympathetic to the concerns and emotions of others. Instead, we often rely on stereotypes and generalisations and spend much less time making eye contact, particularly when a person without power is talking.
So how does this explain the Titanic disaster and the huge loss of life? Well, powerful men in positions of great responsibility simply chose to do the wrong thing. J Bruce Ismay, Managing Director of the White Star Line, ordered that the Titanic's lifeboats be cut from 48 to just 16 despite it carrying more than 2,000 passengers. Why? Because he was sure they would not be needed.

Ismay took another bad decision in appointing his friend, Henry Wilde as Chief Officer at the last minute. This meant that Chief Officer William Murdoch was demoted to First Officer and Second Officer Charles Lightoller made Third Officer. Second Officer David Blair was asked to leave the ship. And took with him the key to the cabinet that held the binoculars on the bridge. And if the look out, Fred Fleet, had had binoculars on the fateful night of April 14 he would have sent the iceberg before he did.

And the disaster would have been avoided.

And no, I am not making that up.

Captain Edward Smith knew there was a major ice field ahead but kept the ship at 20 knots - too fast to avoid an iceberg when the look out had no binoculars. Jack Phillips the wireless operator, was too busy sending telegrams from First Class passengers to notice a key ice warning. And when the warning message was finally picked and taken to the bridge it was not seen by Captain Smith. He was busy having dinner with the wealthy George and Eleanor Widener.

I could go on. It was an abuse of power that directly led to the deaths of 1,509 people.
A hundred years on and it seems that lessons have still not been learned. It is claimed that Captain Francesco Schettino was not wearing his glasses on the evening when the Costa Concordia ran aground last January. He asked his first officer to check the radar for him. Presumably, he wasn't wearing his either. And there's also a suggestion that the captain's attentions were maybe more focused on the blonde dancer, Domnica Cemortan, with whom he was having a relationship. He has since acknowledged that he brought the ship too close to the shore and should have pulled out much earlier. She declined to comment.

There is no easy cure for what is known as 'the paradox of power'. But if there is transparency and people know they're being monitored, it can help discourage them from doing bad things. People in power tend to reliably overestimate their moral virtue, which leads them to stifle oversight. They lobby against regulators, and fill corporate boards with their friends. The end result is power at its most dangerous.
Beware hubris.

It's the message at the heart of my book. 'The Seven Golden Rules' which talks about the lessons we could and should have learned from the reigns of Henry VIII, his three children and, of course, the tragedy of 'The Titanic' that set sail on its fateful journey 100 years ago today.

Philip Hesketh is a professional speaker on the psychology of persuasion and influence.

They may have had their critics, but Bananarama were right about one thing. It's not what you do, it's the way that you do it – and that's what gets results.

Take designer clothing. New research confirms that it's not the design itself that counts, but rather the label. And who better to prove this theory than those European style icons with their bright orange trousers, the Dutch. Okay, so maybe the Italians or the French would have been better, but it was Rob Nelissen and Marijn Meijers of Tilburg University in the Netherlands who got there first.

Their pioneering work studied the effect of wearing designer labels in a variety of situations. For instance, when collecting money for charity, being recommended for a job, or simply seeking co-operation from another person. They discovered that wearing designer labels made people more likely to react positively to your request than when wearing normal, non-designer labels.

To prove the point, volunteers were shown a picture of the same man and asked to rate him from 1 to 5 in terms of his wealth and status. The only difference between the pictures was the branding on his polo shirt. Those who were shown a picture of him in a Lacoste or Tommy Hilfiger shirt rated him around 3.5, whilst those who saw the same man in a non-designer shirt rated him just 2.9. The bad news for Slazenger is that they fared even worse than wearing no logo at all.

Ouch!

To see if perception influenced actual behaviour, a female researcher then conducted a 'consumer survey' in a shopping mall. One day she wore a sweater with a designer logo, the next, an identical sweater with no logo. Some 52% of people agreed to take the survey when faced with the Tommy Hilfiger label, compared with only 13% who saw no logo. The day she wore no sweater at all no one batted an eyelid. This was Holland, after all.

Only joking.

I spoil you sometimes.

Anyway, to test the theory further, volunteers were asked to rate a man's suitability for a job simply by watching his interview on video. Again, the presence of a designer logo on his shirt in one of the videos led people to rate him more highly. They even suggested a starting salary 9% greater too. The same outcome was recorded when researchers collected donations for charity. Wearing clothing with recognisable designer logos brought in twice as much money.

So why do labels count so much? According to Nelissen and Meijers it's the same reason that the peacock with the best tail gets the peahens. People react to designer labels as signals of underlying quality. And they assume that only the best can afford them. And that's why people will willingly buy counterfeit goods if they bear the right label. It's the little logo that says everything and is so influential. Mind you, if you get stopped at customs with a suitcase full of them you'll probably need a lawyer too.

The bottom line? Designer logos work. Just make sure you're wearing the right one.

Philip Hesketh is a professional speaker on the psychology of persuasion and influence.