Psalms 2:4

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4 He that sitteth [yashab] in the heavens [shamayim] shall laugh: [sachaq] the Lord ['Adonay] shall have them in derision. [la`ag]    KJV-Interlinear

4 He who sits in the heavens laughs, The Lord scoffs at them.    NASB

‘He,’ refers to God.  ‘That sits in the heavens,’ refers to the unique and only God.  The Lord, ‘Adonay,’ refers to the personal address of God, namely the Lord, namely Jesus Christ the promised savior, messiah, etc.

God sits in His heavens the place of His throne and power and authority.  The place that sits higher than any place on this earth or in this universe, possessing sovereignty over all things.

Laughter is a human feeling or characteristic attributed to God, an anthropopathism.  It typically ascribes some human characteristic, such as hate or love, to God, which God does not display as we do, per se, but this helps us to understand Gods policy in dealing with humanity.

Laughter toward heathens (anyone who lacks truth or understanding), is a mocking characteristic.  Mocking is a sin, and God cannot sin, therefore this describes His attitude or policy toward those who pursue their own plans. Those who pursue plans with total ignorance.

God will have them in derision or scoff at them, is another type of human characteristic used here to describe not only Gods policy, but to also describe heathen mans own policy.

Derision, or scoff, ‘la`ag,’ means to deride, to stammer, to speak unintelligibly.  And this indicates not only Gods attitude, but the perfect description of human policies.  They are empty, stammering, and unintelligible views of life, of the world, of truth.  They miss the boat completely when it comes to being able to decipher facts and reality.

In summary, then God smiles in complete and total poise and quiet and control, executing His divine plan systematically and methodically, without any skip or bump along the way, while humanity stammers along with no clue as to what he is doing or where he is going, pursuing empty goals, and the result is rage for humanity.

All of mans plans, though numerous, fail.

Gods single and all inclusive plan, succeeds despite the many attempts of humanity to derail and disrupt and reject and sever themselves from Gods plan.

Anything that man does which is not in compliance with Gods plan, is empty, unfulfilling, and will result in total failure.  That inevitably results in frustration, anxiety, hate and eventually rage (the inability to control ones own life and destiny).