The "other" side

It's hard to believe, but you might be wrong

As long as governments have engaged in warfare, they have used propaganda as a tool to dehumanize the enemy.

A steady diet of this kind of material serves to make any alternate views seem fringe and heretical. That’s the point. Repeat anything enough times, with enough conviction, and a captive audience comes to believe it as true.

And so we have arrived at the age of social media, where each of us creates our own “news” feed of approved editorial news sources (meaning those we already agree with). A slow drip of biased opinions cloaked as “facts” is enough to convince even the most enlightened and educated citizens that they are on the right side of any debate.

Compounding the problem, most “news” today is consumed by scanning a series of headlines, and only rarely by clicking through and reading a story in its entirety. The tone of a headline is enough to plant a seed, regardless of the detail within the article itself. Nuance is lost. The “facts,” as far as they exist, are defined by each side of the debate for the consumption of their own adherents. 

The result? A society that has become more polarized than ever.

We now willingly submit ourselves to the propaganda. We know that there’s another side to the argument - it’s just a click away. But we refuse to even entertain it because we think we know the answer already. We have willingly succumbed to the propaganda. We have successfully brainwashed ourselves. 

As much as this degrades the quality of public discourse, just as important is how it infiltrates our thinking and impacts the decisions we make in our daily lives. Think about how your opinion on the state of the economy might impact your investment portfolio. If the “other” guys are in power, you’re more likely to believe that we are headed in the wrong direction. Four years ago, over 80% of Republicans felt that economic conditions in the US were “excellent or good.” Today that number is 10%.

If you’re pessimistic on the outlook for the economy, you might be less likely to own equities or take risk in your portfolio. And that would be bad.

Counterintuitively, the stock market has done far better under Democrat leadership by a significant margin, outperforming by almost 6% per year! 

A cranky Republican investor who let their political views influence their portfolio composition would have done relatively poorly as a result. 

The research backs this up, as evidenced by this paper.

We show that people's optimism towards financial markets and the macroeconomy is dynamically influenced by their political affiliation and the current political climate. Individuals become more optimistic and perceive markets to be less risky and more undervalued when their preferred party is in power.

The politics of division are the most cynical way of dividing a population by casting us against one another. Resisting such crude propaganda is important to maintaining perspective and relationships with others who might be on the “other” team. It takes work, because your team will do its best to paint the other side as stupid, ignorant, and/or evil. 

Understanding that your opinions are being manipulated will help you invest more successfully. Because no matter what your opinion on any given matter, there are smart people who disagree with you. Remembering that every time you buy, there’s a smart seller on the other side of the trade (and vice versa) will help you maintain the humility that successful investing demands. 

I think it’s pretty damn good for your mental health as well. I marvel at the Twitter accounts who are simultaneously experts on economics, foreign policy, climate change, and epidemiology, and insist on making sure the whole world knows it. Sometimes it’s a lot more healthy to just say “I don’t know.”

While it is our responsibility, as citizens and voters, to have an informed opinion, we need to leave room on the margins to allow new information to change our minds, and not be so wedded to the orthodoxy of our own specific team. You might just find that doing so allows you to see opportunities that others who are so certain of their worldview might miss.