quinta-feira, 19 de fevereiro de 2009

The Great Depression of 2009

Fellow Investor,

Having just returned from a week in the United States, I have concluded that the Great Depression has arrived. But it's not the economic kind. I'm now convinced the media is making the United States mentally ill.

It wasn't always so. When I visited the real "Situation Room" in the White House a couple of years ago, it was the place that presidents and their closest advisors gathered to deal with exceptional events like Pearl Harbor and 9/11. Today, "The Situation Room" is a daily program on CNN, boasting almost Orwellian presence in every airport across the land. Living as I do in Europe, and not inured against the relentless onslaught of "breaking (bad) news," it's hard not to come to the conclusion the U.S. media is populated by a dedicated army of Chicken Littles on a relentless quest for the next sky about to fall.

When a friend of mine in London -- a card-carrying member of the European Left -- found out that I appeared on Fox Business regularly, she asked me if I was forced to "spin" my comments. She was genuinely shocked when I said they did no such thing. As long as it was "good television," you get invited back, no matter what you say.

That doesn't mean that the media can be anything but breathtakingly distorted. I was reminded of this when I heard Federal Reserve Chairman Ben Bernanke speak in London about a month ago. Bernanke gave a speech on the creative measures that the Fed may undertake to address the financial crisis. It showed him for what he is: the brainy college professor turned technocrat you had in college if you studied at MIT, Stanford or Princeton. But when I read the newswire stories about it, they seemed to be about a different speech. One story in particular Bernanke's one sentence reference to Barack Obama and his proposed fiscal stimulus package, put it in the headline, and somehow argued that it was evidence of the Fed's own impotence and incompetence. I was genuinely flabbergasted.

Furthermore, it's no secret that bad news sells. Sex crimes, scandals and accidents sell papers and increase ratings. As the old saying goes; "If it bleeds, it leads." As a rule of thumb, the media broadcasts 13 negative stories for every positive one. And psychologists have shown that a negative story has three times the negative psychological impact on you as a positive story does on your well-being. Even more insidiously, bad news is addictive. It literally releases chemicals in your body -- a manifestation of the "fight or flight" response -- which gives you a perversely satisfying jolt. That's why some psychologists have called strong emotions "the most addictive chemicals in the world." And in terms of generating a daily dose of bad news, positioning the current economic slowdown as the "Second Great Depression" is a worthy successor to the Iraq War. The all-news channels also need to generate a lot of (addictive) content. After all, they have more than 8,700 hours to fill every year.

But once you stop and think about it, it's naïve to think the media's "job" is to report objective "facts." And it's not a matter of whether you look to Paul Krugman on MSNBC or Hannity on Fox News to validate your pre-existing opinions. You may be surprised to learn that financial television owes its origins to sports broadcasting. The similarities are apt. After all, financial markets are a non-stop "game" with their own "star players" and plenty of opportunity for "play by play" commentary and "post-game locker room" interviews. No wonder many of the producers of financial news programs got their start as sports show producers.

The Great Depression of 2009: Try a Mental Diet

Yes, there is some high-quality reporting which offers some novel perspectives. I just completed watching Alastair Cooke's series "America" from the early 1970s, which offers a terrific insight into American history from the Alexander De Toqueville of his day. But I now think of day-to-day media as a kind of mental junk food. It may taste good and may be even addictive. But if you eat too much junk food or watch too much TV news, don't be surprised if you wake up fat and depressed.

So what should you do? Go on a mental diet. Start by turning off the TV. Visitors to my home in London are often surprised to find I don't even own a television. It's a conscious decision. Life looks better when you don't have the talking heads telling you how bad everything is.


Nicholas A. Vardy
Editor, The Global Guru

Nenhum comentário:

Minha lista de blogs