Glimmers of Economic Hope vs. Pessimism Porn

It’s 11 o’clock in the morning (PST). Do you know where your market averages are?

Unlike with your children at 11 o’ clock at night, you may not want to know the answer to the question about the markets.

In keeping with my “optimalistic” outlook on our economy, I will not go there today. Suffice to say, our market averages presently are “down there,” somewhere, not in a very nice place to be.

However, today might be a good day to give equal time to those who are not as optimalistic about the economy. Those who, in fact, are fixated on, addicted to, bad news about the economy.

Note that I did not say “those who hope our economy will fail.” That’s an entirely different category of people, and an entirely different subject.

A recent article in the New York magazine actually coined a new term for this phenomenon: “Pessimism Porn.”

In “Pessimism Porn—A soft spot for hard times,” Hugo Lindgren starts as follows:

My wife busted me again the other day. I had slipped away from her and the kids and into the fantasy world of the web. But not the kind of fantasy you’re probably thinking of. This was pessimism porn. A friend had turned me on to a futurist named Gerald Celente, who anticipated the Asian financial crisis and other calamities. Now, Celente says, the U.S. is heading for a middle-class tax revolt, food riots, and a Central Park engulfed by shantytowns.

Lindgren concludes:

Like real porn, the economic variety gives you the illusion of control, and similarly it only leaves you hungry for more. But econo-porn also feeds a powerful sense of intellectual vanity. You walk the streets feeling superior to all these heedless knaves who have no clue what’s coming down the pike. By making yourself miserable about the frightful hell that awaits us, you feel better. Pessimism can be bliss too.

Lindgren singles out the blog Calculated Risk as “always a reliable turn-on.”

Since the New York article, there has been a lot of press given to the subject of “pessimism porn.”

ABC’s Dan Harris has been talking about it, too. On April 9:

People are logging onto the Internet to read all sorts of dire economic predictions: a new Great Depression, bread lines, riots, you name it. And with the recession taking hold, many have become addicted to apocalyptic news about the economy.

One of the stars of this new genre is Gerald Celente, a trends forecaster who’s credited with predicting the fall of the Soviet Union, the war in Iraq, the crash of 1987, the dot-com bust and, very early on, the housing collapse.

Harris had another segment on the subject this past weekend. It can be seen at the Huffington Post.

Other names and web sites mentioned where one can get his or her daily dose of pessimism porn are Peter Schiff —star of a YouTube video, “Peter Schiff Was Right,”—and the person whom Gawker refers to as The Joe Francis of Pessimism Porn, Nouriel Roubini.

Paul Kedrosky periodically offers links to further sources of pessimism porn, for example, “The New Paranoia: Hedge-Funders Are Bullish on Gold, Guns, and Inflatable Lifeboats.”

Thomas P. M. Barnett, at Thomas P.M. Barnett :: Weblog, asks, “Sounds like any sites you frequent?”, and gives the following advice on pessimism porn:

I made a decision a long time ago not to make my career a bet on bad things happening. I think that approach simply corrodes your strategic thought capacity. Human history is progress, so if you’re constantly having to screen out the good to spot the bad, your vision will unduly narrow. If you bet on progress, you can easily contextualize the bad, because progress is never linear. But if you bet on retreat, you must consistently discount advances as “illusions” and “buying time” and so on, and after a while, you’re just this broken clock who’s dead-on twice a day.

As I’ve said earlier, porn desensitizes. If you want to dull your senses along with the pain, it’s a great way to go, but it narrows the intake capacity. After a while, you’re simply blind from all that self-pleasuring.

Sounds like pretty good advice to me.

Tomorrow, hopefully, more glimmers of economic hope.

[Notice, not a word about Fox News as a purveyor of pessimism porn. It wasn't easy]

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Author: DORIAN DE WIND, Military Affairs Columnist

  • mikkel

    This characterization of CR and Roubini, et al. hits close to home because I've been reading them since '06. Apparently they started trying to warn people in '03-'04. If the leaders in charge had listened most of what's going to happen could have been avoided. I owe them my family's security as I got them out at the right time.

    This is no knock on you Dorian, but I absolutely hate it when people that have a solid thesis and mechanism for what's going to happen and then get proven correct are pushed to the side because people can't stand it. Between Iraq and this, it's really shaken my faith that people are going to respect wisdom and analysis instead of collective seeing/hearing/speaking no evil.

    Other than Schiff (who is a wild armageddon type for political reasons and actually lost tons of money because he did the wrong things) the others are no where close to being economic doom snake oil salesmen. CR thinks that the recession will end soon even as housing continues to fall and Roubini thinks we're in for a long period of lower growth but eventually a strong rebound. The vast majority of people I respect for seeing it are fundamentally optimistic about long term prospects…but they are all in agreement that if everyone is pollyannish and refuses to look at the numbers and take losses then things could fall apart.

    When people were smearing Krugman as a Cassandra for saying there were problems, he pointed out that Cassandra wasn't a doomsayer that was wrong…her predictions were accurate but never believed and that was the tragedy.

    This description on Wikipedia is where I'm at at the moment:
    “The Cassandra effect is when a person believes he or she knows the future happening of a catastrophic event, having already seen it in some way, or even experienced it first hand; however, the person knows there is nothing that can be done to stop the event from happening and that nobody will believe it even if he or she tries to tell others. For example, in finance, the more you warn your colleagues about the tail risks—the rare but devastating events that can bring the bank down—the more they roll their eyes, give a yawn and change the subject.”

  • D. E.Rodriguez

    Thanks for the comments, mikkel.

    Since I don't frequent “pessimism porn” sites, the references I included were taken from–as disclosed–other sources.

    But I do understand where you are coming from on CR and Roubini, and it is a point well taken.

    I also understand, and appreciate, the “Cassandra effect” you describe, but I would differentiate between those who describe or predict an upcoming event–devastating or not–based upon belief and knowledge and those who wish for such events to occur based solely on hate, greed, political convenience, etc.

    Dorian

  • DaGoat

    DDW making too much of short term market movements is a dangerous game. People like Hannity and Limbaugh got burned by it and you could too.

  • Snowcrash

    mikkel, you say that Peter Schiff is a “wild armageddon type for political reasons”. Please explain. His predictions have been sound. And contrary to what you claim, his clients at Europacific Capital are doing well. How is it wild to forecast that the Federal government can't continue to print money out of thin air and expect that inflation won't be a major problem?

    To say that Schiff engages in pessimistic porn is simply wrong. I've met him and he is not really about the doom and gloom. He's pragmatic and realistic. His books emphasize the positive, not the negative. It's about what you can do to secure your wealth, not about how to live in a post-apocalyptic world eating wild dogs freeze dried food.

    This bottomless spending and the systematic encouragement of consumers to eschew production and to overuse credit along with the idea that we are somehow going to print and spend our way out of debt – Now that's porn.