Do you fall victim to soundbite economics?

Jacoline Loewen

At a recent book club, one of my girlfriends who teaches fashion and clothing at Ryerson, brought along a women's magazine from the early 1900s. I was startled by the quality of the content and the depth of the stories.

It made me realize that there has been a steep decline in the sheer complexity and structure of the written word. In comparison, the media and economic sources have simplified and shortened their features. It made me reflect on just how do we cull our daily information? How does this impact on how we view the markets and our investments?

Likewise, I do believe that the quality of economic analysis in financial markets has suffered in recent years. This is not a comment on the quality of my peers in the industry – there are many excellent economists and I do see the very best. 

However the trend in the broader market has been inexorably towards soundbite economics; superficial analysis with little attempt to challenge the wisdom of established authority or "rule of thumb" relationships. 
Call it the economics of the airport bestseller (am I bitter that my books are not stocked at Pearson? Maybe). 

We can see this in the way markets overreact to underlying data, even in the questions that are asked in the media. 

And do not get me started on the blogosphere.