That BS You’re Reading Could Be Costing You

Many of us these days get our news from algorithms, none of which are designed to give us an accurate view of the world. They’re all designed to keep us clicking and thus stuffing the pockets of their corporate overlords.

None of that would matter much, except that bull you’re being fed could cost you money. Maybe a lot of money.

I couldn’t believe this

Consider these results from a recent Harris poll conducted for the Guardian:

• 55% of Americans believe our economy is shrinking.

• 56% think the U.S. is experiencing a recession.

• 49% believe the S&P 500 stock market index is down for the year.

• 49% believe that unemployment is at a 50-year high.

• 72% believe inflation is increasing.

An alarming number of Americans think our economy is in terrible shape. And if you’re saving for retirement, that could keep your investing dollars on the sidelines rather than where some of them belong: in the stocks of great American companies.

Would you invest in a shrinking, recessionary economy with high unemployment and a falling stock market? I wouldn’t.

Here’s the truth

Here’s the truth about the economy:

• The economy isn’t shrinking — and hasn’t for a long time. The last time the U.S. economy shrank was in 2020, when the COVID-19 pandemic started. In 2021, the nation’s gross domestic product (GDP) grew by 5.7%. In 2022, it grew by 2.1%. In 2023, it grew by 2.5%. So far in 2024, it was up 1.6% in the first quarter and 3% in the second.
• The economy isn’t in recession. A recession is generally defined as two consecutive quarters of negative growth. While there has been concern in recent months about the economy slowing, due mostly to higher interest rates, as you read above, our economy isn’t in a recession. It’s growing.
• The stock market isn’t down for the year. Not even close. As of Oct. 25, the S&P index, which is made up of the 500 largest American companies, is up 21.98% since the start of the year. Last year, it increased by 24%. That’s a historical run for stocks.
• Unemployment isn’t at a 50-year high. Not even close. As of September 2024, per the U.S. Bureau of Labor Statistics, the unemployment rate is 4.1%. That’s close to a 50-year low. (According to the U.S. Department of Commerce, the unemployment rate hit a 54-year low of 3.4% in January 2023.)
• Inflation isn’t increasing. According to the Bureau of Labor Statistics, the annual inflation rate fell to 2.4% in September. That’s the lowest it’s been since February 2021. Important to note: Prices are higher now than they were in 2020, about 20% higher overall. A lot of that is because of the inflation spike we had in 2021 and 2022, when prices spiked 4.7% and 8% respectively. The rate has been trending down since then.

A note on inflation: Inflation can be a tricky concept. Some people assume that if inflation is falling, prices of the stuff they buy should also be falling. But that’s not the way it works. A falling inflation rate means that prices are still increasing but at a slower rate.

Falling prices are a symptom of deflation, which is about the worst thing that can happen to an economy. Deflation is bad because if you think everything you buy is going to be cheaper tomorrow, you don’t buy anything. Result? The economy goes off a cliff, a situation that’s difficult to fix.

Inflation, on the other hand, is easier to fix. Proof? The Federal Reserve is on the verge of doing exactly that. The Fed’s goal is to keep inflation at a modest 2%: enough to ensure we don’t experience deflation, but not enough to fuel rapidly rising prices.

Now, back to the topic at hand.

See Also:

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Why is everyone so misinformed?

Contrary to what you may have heard, the truth isn’t hard to find. All you need to do is check reputable sources of news. Not the kind served up by an AI-driven, click-hungry algorithm or ratings-obsessed talk show idiots. I’m talking about the kind of information served up by actual unbiased, human reporters who went to college to learn this stuff.

It’s been around for a long time, and it still is.

You can also believe government agencies paid with our tax dollars to research and disclose the truth.

So, why the mass ignorance? Simple: because so many people are seduced by biased news.

One source of biased news I’ve already discussed: algorithms that are specifically programmed to show you new articles or social media posts like those you’ve historically responded to, accurate or not.

The other major source of biased news comes from theoretically reputable news sources. Unfortunately, these sources are in the same business as the algorithms: pandering to your political leanings and prejudices in an effort to make money.

In this group we have major networks like Fox News on the right and MSNBC on the left, along with countless less-popular shows and sites. Like social media algorithms, biased news is designed to reinforce whatever political prejudices you have. Not to help you, but to boost their ratings, clicks and, ultimately, profits.

In short, these sources of news don’t give a damn about you. Their only purpose is to convert your human emotions into their cash.

As you might imagine, many of the massively incorrect conclusions above coincide with political party affiliation. For example, these days, Republicans are more likely to believe fake news about the economy because that feeds their belief that President Joe Biden is the devil.

But it runs both ways. When a Republican next reaches the White House, expect the same in reverse. Those on the left who choose to believe biased sources will think the sky is falling, and those on the right will think everything is divine.

The bottom line

If you want to walk around hating the other side, I get it. I’m a person with strong beliefs, too.

But what if the bad information you’re ingesting is costing you money, your retirement and your future?

I’m urging you to stop believing nonsense, at least the financial kind. Even with accurate information, making money by investing is hard. Don’t handicap yourself and your family by ignoring the truth.

So, what sources of information should you be paying attention to? What I read and watch are sources like CNBC, MarketWatch, Reuters, Bloomberg and The Wall Street Journal, among others.

But I’ll never make financial decisions based on anything on social media, nor any news source that’s laughingly biased.

I’ll bet you know somebody who needs to read this article. Take a minute right now and send it to them.

While you’re at it, have them subscribe to the Money Talks Newsletter. We’re one of those news sources with real, trained journalists who don’t publish bull.