Behavioral psychologist B.F. Skinner was a major proponent of operant conditioning as a means to the modification of human behavior. Operant conditioning involves the use of positive or negative reinforcement to promote certain behaviors, and/or different forms of punishment to discourage other behaviors. It is my belief that whether or not such an approach was intended, in effect the markets have been subjected to Skinnerian behavior modification during the many years of low rates and constant Federal Reserve interventions we have been subjected to since 1998. As a result of this long period of operant conditioning, the markets now behave pretty much as the Fed wants them to at almost all times. The reason this has happened is that the Fed has stumbled upon strategies that directly reward aberrant investor behavior favored by the Fed, and equally directly punish conventional…