The New Age Of News Fatigue

Any human being who put his ear to the heart chamber of the world and heard the roar of existence, the “innumerable shouts of pleasure and woe,” said the philosopher Friedrich Nietzsche, would surely break into pieces.

Nietzsche lived long before the Internet which provides an endless stream of shouts of pleasure and woe that 21st it is bad: global warming, the parade of death in Syria, the endless killing among Islamic sects, civil strife in Iraq, the degenerating situation in Afghanistan, Vladimir Putin’s mindless rule of a great nuclear power, rampant poverty and disease in the Third World, China’s suppression of human rights, disappearing animal species and errant airliners – the grim tidings just never stop.

And it should come as no surprise that a growing number of Americans are tuning it all out. Call it news fatigue. It isn’t that we don’t care, but the world is awash in problems we cannot control. We have a mighty military armed with high tech weaponry that costs many billions, but it struggles to cope with suicide bombers. A $5 improvised explosive device will blow up a $500,000 armored vehicle and send brave young soldiers into perpetual struggle with missing limbs and post-traumatic stress disorder. If we had no mighty military, perhaps we would be less inclined to get involved in these kinds of situations.

Even great issues not involving terrorists or armies leave us vexed. The scientists say our production of greenhouse gases is altering the Earth’s climate irrevocably, but most of that comes from burning coal which produces almost half of our electricity. In other nations, such as China and India, the proportion is even higher. To stop burning coal we would have to basically shut down our economy and throw countless millions of people into abject poverty. That is not a viable option, but then neither is climate change. Just thinking about it will give you a headache.

I believe this is a major reason the younger set is turning away from newspapers and TV news in favor of the Internet. You can pretty much get the information you want on the Internet but you have to know what you’re looking for. In contrast, if you pick up a newspaper or turn on the network news, you will be inundated with reports of terrible things you knew nothing about. I suspect people are moving to the Internet to escape from the deluge of bad news.

The challenge of news fatigue is one of perspective. We have to keep in mind that the world has always been a mess. Certainly the 14th church, breakdown of civil order was worse than this one. Indeed the previous century with two great world wars, the holocausts in Europe and Cambodia, flu and AIDS epidemics, etc., was probably even worse in terms of total lives lost.

Most of us in the west live lives of relative security and increasing longevity. There are potential disasters everywhere; that is part of life and always has been. We can take comfort in knowing that intelligent people are striving to deal with the endless problems and challenges we face. There are positive news reports among the media bedlam if you look for them. Our most pressing challenge is not to lose heart or faith in the future. Our children will do better than we have. Our species will survive.

 

The Demise of Economic Dogma

 Economists have long relied upon certain consensus truths that are universally shared by others in the profession, or at least were until recently. Economists might have disagreed – and in fact often disagreed – on how these basic truths should be applied to particular situations, but the truths themselves were sacrosanct.

But the last few years have witnessed some extraordinary economic developments that have stood the basic tenets of economics on their ear. I have heard prominent economists – most notably former Fed Chairman Alan Greenspan and columnist Bob Samuelson – express the same complaint. It is as if religious leaders suddenly discovered that the Ten Commandments were a forgery.

The first and most obvious of truths to bite the dust is the assumption that flooding the marketplace with money will stoke inflation. For as long as I can remember, fear of inflation has been the one solid cornerstone of economics. In the late 1970s, inflation was in the double digits and the result was economic chaos. Fed Chairman Paul Volcker hiked interest rates, touching off a severe recession, but he escaped unharmed because it worked – we squeezed inflation out of the system, teeing up the longest and deepest expansion of our history.

But the last few years have undermined fear of inflation. The outgoing Bush Administration and incoming Obama Administration collaborated with Congress to pump massive amounts of money into the economy to prevent what appeared to be a looming depression. Economists disagree on how effective that was, but they agreed all that extra money chasing a finite supply of goods and services would spark inflation. It did not happen.

The next consensus truth of economics is that the Federal Reserve can stimulate economic expansion by lowering interest rates. The Fed has held interest rates at basically zero for years. According to all we know about economics that should have both stoked robust economic growth and evoked a round of serious inflation. Neither happened – not yet, anyway.

More recently, the Fed embarked upon its Quantitative Easing program that has pumped trillions more into the economy, a move that many predicted would lead to inflation.  The QE is still in operation, though slightly reduced, but still we see no sign of significant inflation.

At the risk of promoting economic heresy beyond the pale, I have a sneaking suspicion that yet another basic truth of economics – that tax cuts stimulate economic growth – is another candidate for the dustbin. At the behest of conservatives in his party, President George W. Bush pushed tax cuts through Congress that transformed budget surpluses into deficits, but had little discernible impact on growth.

Conservative supply siders still contend cutting taxes is the one sure path to restoring economic growth. It is like a religion for them and without it they have nothing to say. But I don’t think the old theory works any more. An unprecedented combination of downward pressure on prices for goods and services coupled with anemic consumer demand mitigates against inflation – and also economic growth. What we need is a new economic theory to explain what is going on and presumably offer a way back to growth.