Turn on the news, and it’s hard to miss headlines like “Spiraling Debt”, “Crippling Inflation”, “Rampant Crime”, and “Looming Recession.” I hear such stories often amongst family, friends, and clients.
However, lately I’ve had some trouble reconciling between what I see in data and what the media projects. Why does this disparity exist?
Let’s get this straight: news is a business. And in a world where a significant chunk of the news we consume is free, the famous saying resonates: “if something is free, you’re the product.” Nowhere does this apply better than in the realm of TV news. When revenue solely hinges on advertisements and cable deals, the primary aim for news channels is to attract viewers. This isn’t necessarily nefarious, it’s business, but it distorts the way news is presented.
The headlines I started this blog with were intentional. They are emotionally charged, meant to lead the reader to a conclusion about those subjects even before reading about them. A simple rule of thumb…if the headline has an adjective in it, it’s probably trying to tell the reader how to think about the subject, rather than just present what happened.
A study from the Nieman Media Lab from Harvard looks at the prevalence of emotionally charged headlines across 47 popular news outlets.
As you can see, words invoking fear, anger, disgust, sadness, have exploded while neutral headlines are collapsing. Why? Well it’s entertaining. A good movie makes you feel something right? “Headline CPI Comes in at 3.7%”…not very exciting. “Crippling Inflation Comes in Hot”… click! Clickbait is bipartisan too, just see the media companies listed.
The phrase “If it bleeds, it leads” is a common journalistic maxim that emphasizes the importance of sensational or gruesome news stories. A pretty good illustration of that is the graphic below:
For context, homicides and terrorism accounted for less than 1% of deaths in 2016. Yet, they constituted 58% of the New York Times’ coverage that year.
Now while I think some of those stats are surprising, everyone sort of knows that the media is filled with bias and clickbait, but that doesn’t mean we aren’t affected.
Public sentiment has become increasingly negative and partisan, as depicted by one of the largest consumer sentiment surveys below:
Pessimism is worse today than during the Great Financial Crisis of 2008, 9/11, the Dot-Com Bubble and the 1987 crash.
Yet, current data paints a different picture: record-low unemployment, average and declining inflation levels, high consumer spending, and near-record corporate earnings. Debates about the economy’s state are valid but claiming it’s worse than the 2008 crisis seems a stretch.
Or consider the divergence of opinion by party line, depending on who is president. There are several polls like this, and they say the same thing. If your party is in the white house, you assume things are better, and vice-versa.
This next survey from the Federal Reserve is one of my favorites. It asks individuals how they are doing, and how they think the local and national economy are doing. The relationship is always the same. While individuals believe they’re doing well, they perceive the broader economy negatively. Would you have answered similarly?
This is a tough topic to cover, because people’s views of the world are pretty well ingrained. Seeing something that opposes that view causes cognitive dissonance, which is that uncomfortable feeling you get when someone shares something contradictory to what you believe.
I deal with it all the time. Part of looking at a lot of data from several different sources is the choice to ignore some and overweight others. While I aim to minimize my own biases, there’s no way to be totally neutral. I have experiences and anecdotes like anyone else that paint my view of the world. My hope is that recognizing that helps minimize its effect, but there’s no guarantee.
I started writing this blog with the intention to counteract those negative headlines I wrote in the intro (bad inflation, crime, debt, etc.), but this has already gotten too long. So, I will follow this up with another post soon that shows specifically why those headlines are at best misleading, and at worst dead wrong.
