If you seem to be predominantly negative about most subjects and especially economic or market ones, then you mightn’t be to blame. You simply might be biologically wired up for pessimism and any effort to change your ways might be a waste of time!
And if your nastiness towards those who see the optimistic opportunities leads you to aggressive correction or terrible tweets, my brush with a social psychologist has helped me understand your challenging genetics.
The revelations of Alison Ledgerwood came in a week when one of my regular tweeting critics told us that we’re entering the “Twilight Zone” when it comes to matters monetary and economic. And ironically, my reaction to that was to think: “Mate, your life is permanently in a fearful Twilight Zone”. But I resisted the urge to be nasty. However, poor blighters like this guy could well be trapped in their own inescapable inclination to the negative, and his task of being objective is much harder than those who are more naturally positive.
Alison hails from the University of California and in addition to her academic appointment in the Department of Psychology, she is the principal investigator for the Attitudes and Group Identity Lab. Her recent TedTalk has attracted over 4.5 million views and has helped me understand the economics or market commentator who’s always predicting gloom. I’ve been positive on markets since late 2008 and expect to see a recession in 2021, or maybe a bit later. But it seems like some poor coves have been expecting one for years.
A newsletter business based in Melbourne that allegedly has a big group of subscribers has been tipping a recession for over five years and the doubters who follow their experts seemingly forgive their bad calls, despite the fact that they have missed the bull stock markets in Australia and the USA, as well as the property booms in Sydney and Melbourne.
It would be even more tragic if they were victims from the GFC stock market crash that halved the wealth of those who were fully invested in late 2007.
But enough of that, let’s look at the findings of Alison and her academic colleagues.
Conducting a series of controlled experiments, they told one group that a new surgical procedure had a 70% success rate, while another group was simply told that the procedure had a failure rate of 30%. The first group was then told that the procedure had a 30% failure rate as well and as a consequence many who had held a positive view on the procedure changed their mind.
However, when the second group was told that the procedure had a 70% success rate, only a small number changed their mind from negative to positive about the procedure.
Over a series of tests, Alison said it was clear that our minds, if programmed to the negative find it much harder to shake off that inclination. It also says it has to be harder for someone to embrace objective analysis when they’ve been converted to the negative view on emotionally-important subjects.
We see this with politics, religion, social attitudes and also economics. Intolerance towards others views might not be any different than it was decades ago but through social media we get to see it more easily because outraged Aussies have email, Twitter, Facebook, etc. That said, I suspect we are more tolerant nowadays but that’s an argument for another day.
Alison took her view on how being stuck in the negative is harder to shake and showed how the US economy had recovered from the GFC (or the Great Recession as the Yanks called it) but consumer confidence showed that the negative effects on Americans hung around for a very long time, despite the improved economy.
I suspect our economy has been stuck in a negative funk because of the headlines about the trade war, the house price drops, lending restrictions, the Royal Commission, the stock market sell off late last year, recession talk, low wage rises, energy bill shocks, Bill Shorten’s aggressive policies, the election itself and the revolving door that exited too many Prime Ministers.
Of course, not all people were negatively affected by these headlines but collectively they pretty well would have captured just about all Aussies.
The economic readings are on the improve, albeit slowly, and so it might require some vocal, positive leadership out of Canberra to pull a lot of us out of the negative zone. But as Alison has pointed out, this doesn’t happen easily, if at all!
And it’s one of the reasons why I’ve stopped debating my Twitter critics because they are unlikely to embrace a change of view and it’s not their fault — they’re just built or programmed that way.
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