The past few weeks have been great, the economists have been on holidays so I have not been inundated with end-of-the-world scenarios.

I must say it has been very nice, AND you may have noticed the world has gone on. Now some are trickling back to work so the calamity columns begin again in earnest.

The sell-everything brigade has at least pulled back a bit and life goes on. They keep saying ‘sell, sell, sell’ but if you had listened to them you would have nothing left to sell anyway.

It eludes me as to why people were selling Telstra at a yield of nine per cent not including franking credits to invest at around four per cent and pay tax on that.

But, for the start of the year I would like to ask the question: Are the current generation of kids ‘investment grade’ or are they just spoilt brats who feel they have no future to risk, so they just go on protesting but offering no positive input?

A friend of mine recently travelled to the US for business and he commented how the front end of the plane (business class) was full of kids on their way to Aspen to enjoy the snow and their parents’ credit cards.


I may be in a minority but I am no fan of a strong Aussie dollar. To me it crimps productivity and limits our economic options more than people realise.

You can also forget the manufacturing industry in our country these days.

What really worries me at the outset of 2012 is the decline of morality in our younger generation, and much of this is caused by social media and in particular Facebook.

While this column is meant to be about the share market, how can we prosper and prepare for the future when our ‘living and life’ investment strategy is so bent out of shape?

I would like to begin my writings of 2012 by addressing the issues of how social media is impacting on our lives, both the positives and the negatives.

Raising teenagers is a challenging and tricky business to be in. One of the most worrying and perplexing issues that I found over 2011 was the huge growth in social media and the implications that this brings to ours, and to future generations, in particular over the past two years I have studied how technology is impacting how we communicate.

  • How do we teach our children to use technology thoughtfully?
  • How do we connect with others in a world driven to distraction?
  • How can we preserve the aptitude to think deeply in a world increasingly catering to multi-taskers who skim the surface snacking on bits and tweets?
  • What are the long-term implications of a rising generation that is increasingly fearful of interacting and emoting face-to-face?
In particular some articles from the New York Times, Rolling Stone Magazine and 13D Research stayed top of mind.

The stories of our youth are becoming sadly familiar. They are consumed by their online existence. Their opinions are an amalgam of the likes and dislikes they monitor on their friends’ Facebook pages. Real-world communication has become torturous for many who have little opportunity to practice eye contact, read body language, or hone real-time emotional intelligence skills.

I read the story of how on a recent visit to their daughter’s college dormitory, the parents described walking down the hall. In room after room, all eyes were averted. None of their daughter’s peers could bring themselves to look up at who was there, let alone muster a salutation. Like a scene out of a Twilight Zone episode, this incident reflects a disquieting shift in young people.

Because their reality exists increasingly in cyberspace, navigating the face-to face world is growing more challenging. This is deeply, deeply worrying.

In Sherry Turkle’s new book Alone Together she notes, “Technology has changed the rules of engagement. Today’s adolescents have no less need than those of previous generations to learn empathetic skills, to manage and express their feelings, but they are less likely to do so because of their tethered existence. When do they have time to discover themselves, if they spend five or six hours a day obsessively scripting and re-scripting their Facebook personalities?”

When the internet first emerged, we viewed it as the most bullish development of the 20th Century; it heralded the possibility of connecting all of mankind with all of human knowledge. While we continue to be awed at how the web has changed the world for the better in many ways, we are increasingly concerned by the dark forces it has brought to the surface.

Pedophiles, perverts, voyeurs, sociopaths and sadists have always existed. But, the internet has made it easier for them to congregate with like-minded degenerates, and, more alarming still, to act out their fantasies.

People do and say things in cyberspace that they would not ordinarily say or do in the face-to-face world. They loosen up, express themselves more openly and share secret emotions, fears and wishes. This so-called ‘disinhibition effect’ can be benign.

Sometimes people share very personal things about themselves and this can be wonderfully cathartic. But disinhibition can also be toxic. Rude language, harsh criticism and anger spill out. Or people are compelled to explore the dark underworld of the web, depths of pornography and violence – places they would never have visited in the real world.

As psychologist John Suler explains, several factors contribute to online disinhibition:

  • Dissociative anonymity – “You don’t know me.” When people have the opportunity to separate their actions from their real world and identity, they feel less vulnerable about opening up. Whatever they say or do can’t be directly linked to the rest of their lives. They don’t have to own their behavior by acknowledging it within the full context of who they ‘really’ are. When acting out hostile feelings, the person doesn't have to take responsibility for those actions. In fact, people might even convince themselves that those behaviours “aren’t me at all”.
  • Invisibility – “You can’t see me.” In text communication such as email, chat, blogs, and instant messaging, others may know a great deal about who you are. However, they still can’t see or hear you and you can’t see or hear them. Even with everyone’s identity visible, the opportunity to be physically invisible amplifies the disinhibition effect. You don’t have to worry about how you look or sound when you say (type) something. You don’t have to worry about how others look or sound when you say something. Seeing a frown, a shaking head, a sigh, a bored expression, and many other subtle and not-so-subtle signs of disapproval or indifference can slam the brakes on what people are willing to express.
  • Asynchronicity – “See You Later.” Not having to deal with someone’s immediate reaction can be disinhibiting. In real life, it would be like saying something to someone, magically suspending time before that person can reply, and then returning to the conversation when you’re willing and able to hear the response. Immediate, real-time feedback from others tends to have a very powerful effect on the ongoing flow of how much people reveal about themselves. In email and message boards, where there are delays in that feedback, people’s train of thought may progress more steadily and quickly towards deeper expressions of what they are thinking and feeling.
  • Some people may even experience asynchronous communication as ‘running away’ after posting a message that is personal, emotional, or hostile. It feels safe putting it ‘out there’ where it can be left behind. In some cases, as Kali Munro, an online psychotherapist, aptly describes it, the person may be participating in an ‘emotional hit and run’.
  • Dissociative imagination – “It’s just a game.” People often feel that the imaginary characters they ‘created’ exist in a different space, that one’s online persona along with the online others live in a make-believe dimension, a dream world separate and apart from the demands and responsibilities of the real world. They split or ‘dissociate’ online fiction from offline fact. Once they turn off the computer and return to their daily routine, they believe they can leave that game and their game-identity behind. Why should they be held responsible for what happens in that make-believe play world that has nothing to do with reality?

Many personality types are vulnerable to the disinhibition effect which blurs the boundaries between reality and cyberspace. Yet, as a child psychologist recently pointed out, we spend years preparing our children to drive a car, but we give them little if any guidance on how to comport themselves online.

And increasingly the damage that can be done online is almost as damaging as that which can be caused behind the wheel.

Consider the case of Kiki Kannibal, the subject of a haunting profile by Sabrina Rubin Erdely in the April 2011 issue of Rolling Stone, which was recently re-visited by New York Times’ OP-ED columnist, David Brooks. Erdely’s column is worth reading in its entirety because it is such a shameful indictment against bad parenting in the information age.

Moreover, it shows us the ugliest side of the web and reminds us of the disquieting powers of the disinhibition effect.

By way of synopsis, Kristen ‘Kiki’ Ostrenga, age 13, lonely and ostracised at school created – with her parents permission – an online persona, Kiki Kannibal. The sexually charged pictures she posted on MySpace quickly drew the attention she longed for.

As Erdely writes: “Her friend count on MySpace quickly boomed. She was excited by her new popularity. Each time she logged on, more friend requests were waiting: first a handful, then dozens, and then 25,000 within three months. Flattered, Kiki accepted everyone. “It was kinda like a video game,” Kiki says. “I didn't see it as real people, more like as a number”.

In addition to attracting legions of fans, Kiki’s online persona provoked a tsunami of defense and ridicule which spilled over into real life, including a punch to the face at a concert, and the suicide of an ex-boyfriend/stalker. When a detractor spray-painted the word ‘Slut’ across the side of the family’s house, the Ostrenga’s were forced to relocate – a move, which ultimately resulted in foreclosure and bankruptcy.

Five years in, the cyber-stalking nightmare shows no signs of stopping, and threat assessment has become the backdrop of Kiki’s life. She doesn’t take any of it lightly, especially since the message she got last spring: “I know where you live and I’m gonna kill your … cat.” Soon afterward, her cat Sebastian disappeared. “It’s scary,” says Kiki, her words muffled by her braces. Seated at a cafe near her current home outside Orlando – she prefers I don’t reveal the precise location – she’s stick-thin in a black minidress, a heavy quartz-skull necklace and a skull ring; despite her tough-girl accessories, she comes across as tentative and frail, hugging her studded purse for comfort. “I never thought I would run into these types of people,” she says. “But on the internet, you’re exposed to people that will do anything.”

Despite everything, Kiki, addicted to the attention, remains online. Her parents have failed to intercede.

As Erdely writes: “Her parents thought her videos were adorable. ‘We’ve always had a philosophy of letting the kids express their creativity, as long as they’re not harming themselves,’ explains Scott [Kiki’s father] softly. ‘There’s always been supervision behind it. But we’ve been more permissive from a certain perspective. Cathy [Kiki’s mother] advised her daughter to take a block-and-delete strategy against unwanted commenters, banishing them from her chat room when they posted vulgar statements like “I want to put my **** in your mouth”.’ This was welcome advice to Kiki, who simply wanted to bask in the praise of the new friends who loved her. Their attention and approval gave her the affirmation she yearned for.”

Kiki is clearly an extreme case, but the millions of young people online face similar risks and temptations. We can only hope that few parents are as recklessly permissive as Kiki’s, but the truth is even the most diligent chaperones face a daunting challenge. It is not unusual for young people to have four or five Facebook pages – in addition to the one they show their parents.

Digital natives can easily outsmart their parents. The longer-term implications of a rising ‘disinhibited’ generation remains to be seen, but we should be concerned that they might mature with an ambiguous sense of reality and deeply compromised face-to-face social skills.

As David Brooks observes, “Kiki is an extreme case of an enormous uncontrolled experiment that is playing out across the world. Young people’s brains are developing while they are immersed in fast, multitasking technology. No one quite knows what effect this is having.

“The culture of childhood is being compressed. Those things, which young people once knew at 18, they now know at 10 or 12. No one quite knows the effect of that either.

“Most important, some young people seem to be growing up without learning the distinction between respectability and attention. I doubt adults can really shelter young people from the things they will find online, but adults can provide the norms and values that will help them put that world in perspective, and make it seems like trashy or amusing make-believe and not anything any decent person would want to be part of themselves.”

Or take the case of violent video games.

“In 2011, the U.S. Supreme Court struck down a California law that restricted the sales of violent video games to minors. In a seven-to-two decision, the court ruled that the law violated the First Amendment protection of free speech,” writes Dan Cook on “Writing for the majority, Justice Scalia said that California lawmakers had attempted to “to create a wholly new category of content-based regulation” aimed at “speech directed at children.” Scalia called that effort “unprecedented,” saying there is “no tradition” in the United States of “specially restricting children’s access to depictions of violence”.”

Purer originalist Judge Clarence Thomas took the opposite view. “Although much has changed in this country since the Revolution,” he wrote, “the notion that parents have authority over their children and that the law can support that authority persists today.”

Given the daunting challenges of the 21st century and the exponential rate of change, this should be the debate that defines our time. Civilised societies have always recognized that parents must control their children until the kids reach maturity – that’s how we’ve historically passed along morals and information.

Commenting on Justice Thomas’s opinion, Garrett Epps, a legal scholar and a former reporter for The Washington Post, notes, “Have Thomas’ clerks found legal cases from the founding period holding that entertainment for children can be restricted or banned?”

“Indeed they have not,” he continues. “Instead, the dissent conducts a survey of a century and a half of attitudes toward child rearing, concluding not surprisingly that in the 18th Century parents were pretty darn strict. Drawing on Puritan theology of a century before the framing (did you know that in 1648, a child in Massachusetts could be hanged if he ‘disobeyed’ the voice of his Father, or the voice of his Mother?), the thought of John Locke, and even the work of Lydia Maria Child (who was first active a half-century after the First Amendment was framed), he concludes that: “ history clearly shows a founding generation that believed parents to have complete authority over their minor children and expected parents to direct the development of those children”.”

Parental guidance is infinitely more critical in a world of many virtual worlds where realities are often blurred – a point articulated by Justice Stephen Breyer, in his dissenting opinion: “What sense does it make to forbid selling to a 13-year-old boy a magazine with an image of a nude woman, while protecting the sale to that 13-year-old of an interactive video game in which he actively, but virtually, binds and gags the woman, then tortures and kills her?”