The answer to the above question is yes, both economists and the media are definitely lying to us about the economy. The recovery they keep promising us has turned out to be limited, and if you live in the real world, nonexistent.
The interesting thing is that there are some economists and people in the media that tell the truth. The problem is that we rarely hear what they say; editors and producers cherry-pick the information they put out. That is, they put out the news that people most want to see.
There are several reasons why this happens, but the main one is obvious: we don’t like to see or hear bad news about the economy. Readers and viewers only like bad news when it happens to somebody else. If it affects them, they don’t want to hear or see it. Since the economy affects us all, bad economic news affects us all, and we don’t want to see it. The companies that generate the media know this, so they downplay bad economic news and overplay good economic news.
How And Why Economists And Journalists Deceive Us About The Economy
Not all economists are exactly honest and insightful. Many of the economists either work for big hedge funds, investment banks, and other Wall Street firms, or they want to work there. If they get the reputation of someone who tells the truth about the economy, they won’t keep their jobs or get the jobs they want. Others tell journalists what they want because they want to be invited back to give their opinion.
Something to consider is that a lot of the good news and numbers we’ve been hearing about real estate and housing lately is coming from The National Association of Realtors. The news is trumpeted by the association’s chief economist, Lawrence Yun, and is reported without question by reporters. Yun would probably lose his job if he said anything bad about real estate or housing. The realtors want you to think real estate prices are going up to trick you into buying more of their product. After all, they make their living from commissions off real estate sales.
Realtors and real estate companies buy a lot of advertising. If a reporter actually questioned Yun’s rosy estimate, he or she would probably get fired. His or her story would never see the light of day because it threatens the advertising revenue of media companies. Somebody at the association would call the reporter’s boss or her boss’s boss and explain that realtors will buy less advertising if such a story were to run.
What goes for real estate goes for economic indicators about other industries such as automobiles, mortgages, investments, and insurance. Any bad news that might stop people from buying and benefiting advertisers gets suppressed. They want you to hear the good news to keep the advertising revenues rolling in. Most reporters learn early on not to rock the boat by not questioning the advertisers and their paid mouthpieces; those that don’t find a new line of work quickly.
Economics Is Not A Science
Another problem is that economics is not that reliable or predictable. Contrary to popular belief, it is not a science, and there isn’t necessarily any science to back it up. It is usually based on the theories and beliefs of economists rather than any sort of verifiable evidence.
An example of this is that liberal economists regularly produce statistics that show why increased government spending is good for the economy, while conservative economists produce statistics that show government spending is bad for the economy. Isn’t it interesting how the theory and the numbers verify the economists’ beliefs? That obviously isn’t science, and it is definitely not the truth.
Nassim Nicholas Taleb, the author of The Black Swan and one of the few people who predicted the Great Mortgage Meltdown of 2007 and the economic crisis that followed it, has even suggested that the Nobel Prize in Economics be abolished. Taleb wants it abolished because he thinks economics is not a science. He noted that Nobel Prize-winning economists are often wrong about the economy.
More recently, Taleb has noted that economists often know less about the way the economy works than largely uneducated traders. Taleb noted that when a hedge fund, Long Term Capital Management, tried using theories developed by Nobel Prize winning economists Myron S. Scholes and Robert C. Merton, it lost $4.6 billion in less than four months and eventually had to be bailed out by the Federal Reserve. The reason Long Term Capital Management failed was that the economists didn’t predict the Russian financial crisis of 1998.
Economists Cannot Predict What The Economy Will Do
The big problem is that there are many factors that affect the economy that are beyond the ability of economists to predict. These factors include natural disasters, politics, wars, human behavior, terrorism, and other random acts of violence, technological progress, and emotions. Taleb calls these “Black Swans” and believes that they make it impossible to predict what the economy will do.
This means that any economist that says the economy is about to get better or worse because of “this or that” statistic is simply making a guess. The problem is that the media reports that guess as a prediction. In reality, all the economist can honestly say is that “my theory predicts this or that may happen if the numbers stay the same.”
So it is a good idea never to listen to economists or at least view whatever they say with a lot of skepticism. If you see a “news article” that quotes an economist, be doubly skeptical. There is no way that an economist can be certain about the economy, and if the article says so, both the economist and the journalist are lying to you. It is impossible to predict what the economy will do.
The truth is that both economists and the media effectively lie to us about the economy all the time. Economists cannot predict what the economy will do, and they are often wrong. When the media reports that economists are predicting that something will happen and treat it like fact, it is lying.
Why You Should be Prepared
The failure of economics and the media’s lies about it prove why living a “prepper” or preparedness lifestyle is always a good idea. You don’t know what the economy will do, and neither do the economists. Instead of relying on economic theory, rely on good old-fashioned common sense. That way, you won’t be taken by surprise when the house of cards collapses on all the people who believe the economists and the media.
Keep a cash reserve and a stockpile of extra food and supplies in case of economic collapse. Take other measures to protect yourself, such as paying off your debts, starting a small business, growing a garden, developing marketable skills, and generating your own electricity so your family will survive. The media and economists are lying to us about the economy, and if we listen to them, we are nothing but fools and suckers.