Email of the day on coronavirus hysteria from David Brown
Comment of the Day

September 29 2020

Commentary by Eoin Treacy

Email of the day on coronavirus hysteria from David Brown

I agree. Moreover, the number of positives is likely over-estimated. The false positive rate is significant yet every ‘positive’ is counted without a retest. By my calculation, less than half the reported positive infections are real.

We are paying the price for electing politicians without any training in STEM subjects and a press that thrives in negativity and misinformation. 

Eoin Treacy's view

Thank you for this insight which I’m sure will be of interest to subscribers. There is an additional issue with the press that many people are unfamiliar with. They reflect sentiment. They do not predict it.

That’s why magazine covers and big bold headlines so often mark major turning points in the market. By the time journalists have gathered all of the public information and formed an opinion they believe will resonate with their readers, the market has already moved on because it is forward looking.

Additionally, the polarization of the political debate has increasingly resulted in a balkanisation of how news is covered. This has always been a feature with some news outlets appealing to one demographic over another but it has been greatly amplified by the internet. That’s leading to a very lopsided debate about what the best course of action is for the economy and just about everything else.

Politicians are perhaps even more sensitive to sentiment than journalists. In fact, a good number were journalists before they because politicians. The complete reliance on the results of focus groups to inform policy has been a significant contributing factor in the rebellion of the self-described disenfranchised portion of the population. The lurch to the fringe of the political spectrum, both left and right, will continue until a new equilibrium is found. That might take some time.

As product of the Philosophy program at Trinity College and having spoken with many graduates of Oxbridge, the primary skill you learn is to spoof your way through a tutorial. Getting all the reading done in a timely manner is next to near impossible. It’s is much more expedient to arrive a little late and make sure you present last. That way you get to listen to the arguments made by the other attendees. You then get to riff and get credit without doing the work.

The vast majority of politicians are a product of that environment. It can certainly help to get through Prime Minster’s question time and to poke holes in the arguments of others. Those kinds of skills allow people to sift through lots of information in a timely manner. It certainly helps me to look at the markets but I have the benefit of price charts as a reality check. Politicians often don’t have that foundation on which to make decisions. At the same time, technical expertise and bookishness are not usually the best attributes to help one get elected if the majority of politicians are any guide.    

The response to the coronavirus can then be viewed as part of the wider tapestry. It also helps to explain why it has become so politicised. The biggest challenge is that the scientific community has also been subject to emotional responses. The exaggerated death estimates produced by Niall Ferguson at Imperial College were a leading cause of lockdowns being introduced in March. The fact they were wildly inaccurate has not resulted in the lockdowns being eased. The big lesson here is people do not act rationally in highly emotional fearful situations

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