Semi-Fake News

I found something Tennessee’s extremely popular Governor Bill Haslam said in a recent interview quite interesting — and eye-opening in some ways. Probably because he is term-limited and not running for re-election this year, several profile-type pieces about him have appeared in the media lately. Before using his remark to bring out what was eye-opening about it for me, let me just share the remark itself with you [emphasis mine]:

“Gov. Bill Haslam said on … that 2018 is ‘really important political year’ but that he worries how the business challenges facing the news media will impact coverage of the race to succeed him. [Expanding on] what irks him about their business’s current state of affairs, he said, ‘This is going to be a really important political year. This is a real governor’s race. We have a [U. S.] Senate race that’s really important, not just for the state but the country, and a number of congressional seats in play. My fear is that all of these won’t be covered in the detail they traditionally have.’ “Furthermore, Haslam said when he asks most people where they get their news, many name dubious sources without editors.

What caught my attention when I read that was his apparent perception that “traditional media” is what it used to be “back in the day …” — subject to considerably more “editing” by real “journalists” than is actually the case today. And interestingly, although “traditional media” are a long way from being totally dead, the percentage of people [particularly those in the 18-36 age range] who get most if not all of their “news” [and of course, “fake news”] from internet-based sources and social media is increasing by leaps and bounds.

“Fake News” Is Real, But What About “Semi-Fake News”?

The term “fake news” has become commonplace these days, particularly outside the “mainstream” media [which folks in the “non-mainstream” media describe as the purveyors of fake news]. I’ve written about this before [e.g., see Fake News or Just Meaningless News? and News [Or NNTN?] Circa 2017], but the eye-opener in Governor Haslam’s remark made me realize that there is also quite a bit of what I’ll call semi-fake news out there. My point here is that both fake news and semi-fake news are causing problems that are getting worse by the day. Other than tampering with our election machinery itself [vote gathering and counting processes] — of which there is absolutely no evidence — those problems are much worse than any meddling by Russians [or anybody else] into our election campaigns. Before developing that point, let me first define the two terms:

Fake News. Segments reported in the media that are clearly false. These segments often show up as lead stories on TV and major front-page headlines in papers, quoting “undisclosed sources.” Retractions [if any] come days if not weeks later, as brief mentions on TV just before going to commercials, and short paragraphs on page 14E of newspapers. Just one of thousands of examples: “ABC News suspended a star reporter, Brian Ross, after an inaccurate report that Donald Trump had instructed Michael Flynn, the former national security adviser, to contact Russian officials during the presidential race.” [The report fueled theories about coordination between the Trump campaign and a foreign power, and stocks dropped after the news. In fact, Mr. Trump’s instruction to Mr. Flynn came after he was president-elect.]

Semi-Fake News. Flashy attention-grabbing headlines designed to attract readers/listeners/viewers rather than just accurately and factually communicate the underlying story. A classic example of semi-fake news is what was arguably the dominant item in media coverage during the week of February 5-9 — the long-predicted “correction” in financial markets. I’ll get into why I call most of that coverage semi-fake news in the next section. …

A Recent Classic Example Of Semi-Fake News

An appropriate headline for a story the night of 2/5/18 about the “correction” in financial markets would have been something like “Dow drops 4.6%, possibly signaling long-anticipated correction in financial markets” [I should mention here that the percentage drop that day was nowhere near the largest ever (22.6% on 10/19/87) — in fact, it ranked as only 25th largest since 1960]. Yet look at this sampling of headlines:

CNN … ”A stock market lesson for Trump — the hard way.”
USA Today … ”Trump Has Often Taken Credit For The Stock Market’s Climb. Will He Own The Drops Too?”
USA Today … “Politicians Who Crow About Stock Market Gains Face Hazard When Market Drops.”
New York Times … “Has Trumphoria Finally Hit A Wall?”

Interesting backdrop on this one … Paul Krugman, this article’s author, doesn’t exactly blame Trump for the market drop, but suggests gullible market investors are guilty of falling for Trump’s childish idea that the economy can grow 3% a year, not the 1.5% pace that he believes is the speed limit. And people forget that not only were prognosticators predicting that the stock market would plunge if Trump were elected president, but they seemed at times to actually be hoping for it to happen. Krugman’s famous comment along that line, published the day after Trump’s election, is instructive: “It really does now look like President Donald J. Trump, and markets are plunging. When might we expect them to recover? … If the question is when markets will recover, a first-pass answer is never.” [For the record, since those words were published, the S&P 500 Index has risen 26%. And that’s after the recent big market drop.] On election night, Nov. 8, 2016, as Investor’s Business Daily wrote a week and a half later, “fear consumed traders. At one point futures on the Dow Jones industrials index plunged 800 points.” Democrats were everywhere in the media, gloating. [Oops. “By Friday, the index finished the week up 959 points, more than 5%,” IBD wrote back then, making the case for a Trump bull market that later became reality.]

There are two takeaways from calling these attention-grabbing headlines what they are — semi-fake news. First, they are misleading at best, and insidiously furthering an anti-Trump narrative at worst [the former because they unnecessarily overdramatized the actual story; the latter because the more liberal (which is most) media outlets were gleefully reporting this in an anti-Trump context]. Second, it’s not just fake news we need to be on the lookout for — semi-fake news can be just as bad from the perspective of having adverse affects on our already disappointing political climate.

A Very Short Math Refresher …

Here’s a very short math refresher for anybody not getting my point about coverage of this “correction” being semi-fake news. If the Dow Jones Industrial Average [DJIA] is at 2,246.74 [its value on 10/16/87, the Friday before the largest percentage drop in history — 22.6% on Monday 10/19/87] and “drops” by 1,175.21 points, that’s a drop of 52.3 percent — and if the 2/5/18 “drop” had been 52 percent, the entire world would probably be in a state of financial chaos right now. But if the DJIA equals 25,520.96 [its value on Friday 2/2/18] and “drops” by 1,175.21 points [as it did on Monday 2/5/18], that’s a “drop” of only 4.6 percent. Although 4.6% is certainly not a trivial “drop”, it ranks as only the 25th highest since 1960.

No Extra Charge

I won’t charge extra for the extremely useful information I’ve shared with you in this post 😀. My reward will be in any use you derive from it in filtering through whatever “news”, “fake news”, and semi-fake news” you access every day.

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And by the way, this post has not been about the stock market. I have followed the markets for many decades, and the bulk of my income is from investments. But the main thing I’ve learned is that markets go up, and markets go down. Generally, they have gone up by about 4% more than inflation when viewed over decades and not months or even years. So if anybody thinks I’m implying with the post that we’re not in for any more “corrections,” go find some experts. You’ll find many “doomsday” predictors and you’ll find many “sky’s the limit” predictors — so the bottom line is, just as with filtering out fake news and semi-fake news, you’ll have to read / listen to / watch all of those “experts” and make your own decision about where you think the markets are headed from here.

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