Reading newspapers makes you stupid
Reading a newspaper is probably more of a signalling mechanism than an actual expression of interest and curiosity about what’s happening in the world. By publicly reading a newspaper, you signal a certain intellectual sophistication and declare yourself as part of a cultural and political group, depending on the paper you’re reading. If you really cared about getting smarter, you’d stop reading daily papers.
Newspapers have an incentive to invent controversies as they have to fill their pages somehow, they don’t differentiate between what’s really important and what’s just noise clearly enough – the pages to fill.. – and they’re necessarily short-sighted as they need to sell a paper daily and today’s news is of no interest tomorrow.
If you do care about getting smarter, the dangers of reading a daily paper are manifold: The more news you read out of daily papers, the more you automatically buy into certain storylines about ‘the truth’, and what you believe to be true is increasingly dependent on how the news is presented to you. There are virtually no newspapers in the world who objectively report just the facts – the economics of the business don’t support facts, they support pandering to pre-existing biases and world-views in order to increase sales. And that’s before even considering that no one is able to discertain the true historical importance of facts within a few hours instead of weeks or months. The more daily noise you try to remember, the less capacity you have for acknowledging the really important undercurrents of our times.
Also, you tend to overestimate the importance of certain news pieces just because they get reported a lot and you tend to underestimate the importance of other news that doesn’t get much play in mainstream media. A recent case in point: the problems e.g. BNP Paribas is having. While Greece is all over the news, the (liquidity) problems French banks are having get vastly underrepresented in mainstream media while having a potentially catastrophic short- to medium-term impact on the financial markets and not being that far-fetched. French banks own $ 57 billion of Greek sovereign and private debt, more than all German and British banks combined. So you just might think that liquidity problems for a few of them might get more play in the news instead of the umpteenth story of politicans bickering about Greece.
While we’re on the topic of Greece: The business of reporting the news is necessarily so short-sighted – else why would you buy a daily instead of a monthly paper? -, it’s actually dangerous. During the last days (here in Germany at least), lots of front-page stories have been ‘debating’ (oh, the signaling value of being critical of political leaders, it makes your readers feel superior) whether or not Greece can ever be allowed to undergo whatever form of insolvency proceeding or even a debt restructuring.
The markets meanwhile, having actually thought about the liquidity and solvency of the Greek state, have rendered a verdict that couldn’t be clearer: “Everyone’s pricing in a pretty near-term default and I think it’ll be a hard event“. Not to say that markets don’t ever fall prey to irrational behavior. But it’s just intellectually dishonest to ‘report’ about politicians debating whether or not to restructure Greek debt if it’s a sure thing that Greek has to default in some way or another on at least part of its debt.
If you can’t trust (daily) newspapers as they’re just not helpful how can you satisfy your information needs?
- Find sources you trust (the most) and consciously account for their biases – a glaringly obvious example: don’t read Krugman in the New York Times and think he doesn’t have a worldview to sell. Differentiate between reporting mostly facts (e.g. Bloomberg) vs. ‘news’ as (political) entertainment (e.g. Krugman, also nearly every daily paper). Place emphasis on sources that often openly declare their views if relevant (e.g. The Economist).
- Don’t buy into explanations of why things happened; reporters have mostly no clue either, it’s often just conjecture - just try to absorb the facts and try to make up your own mind (have you ever read ‘explanations’ of why flash crashs happened? It’s hilarious).
- Read a huge variety of sources, so that biases tend to cancel each other out – especially on politically charged topics, you need to get different viewpoints (e.g. read The New Yorker and The Weekly Standard).
- Make use of modern media – there is excellent reporting out there, you just have to find it (e.g. Felix Salmon for financial markets and business reporting), also use aggregators (e.g. Hacker News, Abnormal Returns; Long Form; Metafilter etc.), also read out-of-mainstream sources (the little crazy ones, e.g. Zero Hedge).
- Try an information diet as recommended by Rolf Dobelli or Nicholas Nassim Taleb, find out why it doesn’t work for you, but still improve your reading habits.
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