Media Hysteria: Lessons From Brexit For Citizens And For Investors – OpEd
The coronavirus epidemic has instilled real terror in the hearts of many investors, triggering a rude awaking to the actual state of the economy and panic unseen since 2008. This fear, that has spread among investors as it has among the general public, has been largely fueled by the coverage of the threat. Mainstream media, having themselves been threatened with extinction over the last decade, due to rising public mistrust, irrelevance in the age of the Internet and social media, and vastly reduced ad revenue, undoubtedly saw an opportunity in the Chinese virus story.
A mysterious contagious disease, out of China of all places, with the potential to develop into a full-blown pandemic – it really was a gripping narrative, like something out of a movie. Of course, when it all started, there were no studies or even projections, and nobody actually had any reportable facts about the virus or its impact. But that didn’t stop global media platforms, many of them tax-funded, from reporting rumors, opinions, and pure conjectures; anything to publish an attention-grabbing headline, one that would hopefully scare people out of the wits and compel them to keep on reading.
Sensationalism at its worst
While the coronavirus epidemic is indeed a concern, and does pose some serious questions about the economic impact it will have and its scale, the only honest assessment one can really make at this point is that it’s too early to tell. What we can tell, however, without a doubt, is that the coverage of the story is eerily similar to the kind of reporting we saw of another scary story: Brexit.
Today, of course, and with the great benefit of hindsight, Brexit is just a thing that happened, which we knew was going to happen for years, because 17 million people in the UK clearly and loudly decided they wanted it to happen. In this light, it barely seems like a story worthy of making the headlines unceasingly for four years and definitely doesn’t appear to justify any kind of apocalyptic editorializing of the actual facts. And yet, this is precisely what we saw, from that fateful day in February 2016 when David Cameron announced the date of the Brexit referendum, up until the very last second before it actually came to pass.
Mainstream media in the UK and all over the world latched on to the story immediately. Of course, there were no reliable statistics or forecasts, other than the ones produced by the Leave and Remain campaigns, all heavily biased, intentionally misguiding and propagandistic. Nevertheless, much like the coronavirus case, they didn’t let the lack of facts get in the way of a good headline. They just started reporting assumptions and hypotheses instead; the scariest, the better.
Predictably, the victory of the Leave camp in the referendum was a clear sign that the people simply weren’t buying the doom-and-gloom narrative. If anything, it justified the public’s mistrust against mainstream media, which nevertheless decided to double down on the scaremongering strategy. As time went by, the stories became increasingly terrifying, targeting people’s deepest fears and recklessly fueling mass panic. Headlines threatening shortages of food, medicine and even toilet paper eventually became commonplace. They even published stories warning parents their children would have to “show their papers” or they would be “taken away”.
There’s a great example from the Guardian, a serial offender in this regard, that demonstrates the scale of this kind of irresponsible reporting. After spending all of Q4 2018 publishing story after story “warning” people of imminent shortages of essential, lifesaving drugs in UK pharmacies and in the NHS, the paper then published an article in January 2019, entitled “Revealed: UK patients stockpile drugs in fear of no-deal Brexit”. Showing a fantastic lack of introspection, the newspaper clearly acknowledged in the piece that hoarding drugs is dangerous and can present real risks to the patients to who need them to survive, but explained that people were doing it anyway because they were afraid. Where that fear might have come from remains a mystery that goes unsolved in the article.
As for the coverage regarding the UK’s economic outlook, there was no question that the country was headed for total annihilation. A no-deal Brexit was presented as the economic equivalent of a nuclear winter. A deep, long recession was all but a certainty. A wave of bankruptcies lay ahead, as a “quarter of rural businesses” could be shut down because of a no-deal Brexit, according to the Guardian. Mass layoffs were also in the pipeline apparently, and the inevitable surge in unemployment would cripple households financially and have far-reaching social implications. The welfare system, police, emergency services, public healthcare, schools, were all facing an existential threat too. If all the doomsday headlines were to be taken at face value and believed, one would be certain that Britain was about to devolve into a failed state in a matter of months. The very near future held nothing but riots, looting, burning cars and, following the imminent collapse of the pound, a full return to the barter economy.
It must have been quite shocking to wake up in Britain on the 1st of February, the day after Brexit finally happened, and to find that literally nothing had changed. An even greater surprise must have come a few weeks later, when economic data kept coming in showing improvements on many fronts, a development that’s since been dubbed the “Boris bounce”. By the end of February, instead of long lines forming outside of food banks and soup kitchens, unemployment dropped to a new 44-year low, at 3.8 per cent, while weekly wages reached their highest levels since March 2008.
Old dogs, old tricks
For the standpoint of today, it’s hard to fathom the level of irresponsibility and of pure recklessness that allowed this type of reporting to go on for so many years. And yet the roots of the problem become clearer when one realizes that the media, as is the case with politicians and state officials, are not the ones to pay the price for their own mistakes. Nothing happens when they get it wrong, they pay no penalty and face no real consequences; it is only other people’s lives and money that are affected.
This is something that is important to bear in mind as we’re being bombarded by horror stories about the coronavirus, no doubt written by the same type of journalist that brought us the Brexit hysteria, and the Trump hysteria before that. Other memorable instances include the ad absurdum exaggeration of the Ebola threat, the SARS virus and the H1N1 epidemic, and of course, the most recent and ongoing Climate Change panic that delivers weekly threats of the imminent extinction of our entire species.
Of course, this is not meant to dismiss the possible impact or the seriousness of the coronavirus epidemic. After all, Brexit also was a very important event too, of historical significance and with monumental consequences down the line. Just not in any of the ways that the media exploited.
Finally, let us not forget that in the run-up to the 2016 US election, CNN raked in over a billion dollars in gross profit above the previous year, a record amount that was mainly driven by advertising attached to Donald Trump coverage. Thanks to the Brexit drama, according to Financial Times reports, the Guardian, the Times and the Sun, all enjoyed much needed and very rare increases in print sales in 2016. It is therefore imperative, as investors and as citizens, to do our own homework and to always ask ourselves “qui bono?”, or “who stands to benefit?”, when analyzing any important development and assessing all its aspects and prevalent opinions.
Last but not least, it is worth highlighting that every crisis brings more power to the governing systems, and less freedom to the masses. This one will be no different. If you don’t like it – Sapere Aude! Use your free will to switch from the collective reality created by the mass media to your own by using your own mind, independent of the guidance of another person.
