More talk, but not more truth.

More talk, but not more truth.

Asked what it's been like to work in "interesting times", a retiring mutual fund manager quoted in the latest Vanguard newsletter, In The Vanguard, replies, "We've always had interesting times. What's different today, perhaps, is that there is more financial news coverage, which can make the situation of the moment feel very intense".

Not to mention "very loopy".

I don't read or watch financial news if I can help it, partly because I've successfully resisted the temptation to micromanage my stock portfolio and partly because I've developed a certain skepticism—not that you've noticed—about the media's coverage of anything more nuanced than tomorrow's weather.

Mind you, I used to think I followed the stock market. In fact, I used to flatter myself that I followed the stock market. Then it turned out that what I'd been following all those years wasn't the stock market but expedient reporting, mindless financial market boosterism and wishful thinking.

Well, imagine my disappointment. The bring-down came not so much from losing money in the stock market—after all, stuff happens. No, it came from the dawning realization that the people I'd depended on for clear, unbiased analysis knew less than they were letting on and were more swept up by events than even they were aware, let alone the poor sods who thought they could take every printed and spoken word to the bank. In other words, I discovered that financial reporters were human, and not inevitably the best of that breed. My disappointment was sharpened by the shock the closet idealist feels when he discovers that, inevitably, yet another last honest man is nothing more than a poseur or, worse, an opportunist.

The last time I watched financial news coverage was a few months ago while in the waiting room of an auto dealership's service department. The room was otherwise deserted, perhaps because everyone watching had dashed out and slashed his or her wrists. Because the "coverage" was doing a bang-up job of pandering to our apparently insatiable appetite for disaster-is-just-around-the-corner reporting: a talking head, wallowing in ersatz empathy, reading emails from viewers laboring under the illusion that they were coping with hard times. One in particular sticks with me, a viewer tightening his belt by eating out one less night each week—when the going gets tough, the tough still go out to dinner—and spreading the misery around by tipping less. I wondered if this kind of "financial news coverage" is a) helpful, and b) a slightly more respectable day-time TV alternative to Judge Judy.

There's symmetry here, because faithful readers will recall that I've also wondered whether real estate coverage is a) helpful, and b) a slightly more respectable alternative to the comics section. My skepticism about the Internet's ability to shine a light on real estate is also well documented. Because, as improbable as it may sound to anyone under 30, the consumers I meet these days are no more savvy about the nuts and bolts of real estate than were their 1998 counterparts. Yet since then the 'net has exploded with real estate sites and blogs.

How can this happen?

Partly it's what might be called the "Internet placebo effect". The Internet assures the real estate consumer that it empowers him, therefore he thinks it empowers him, feels empowered and therefore must be empowered, certainly far more empowered than he imagines was the hapless real estate consumer of ten years ago. Except that today's real estate consumer often has no way of knowing how empowered or un-empowered consumers were ten years ago.

And partly it's due to the fact that it'd be a miracle if the real estate consumer found anything empowering on the Internet, because 99 percent of real estate content and discussion is just as informative as a talking head mournfully reading self-pitying emails. This morning I spent an hour cruising the 'net for information on Palo Alto neighborhoods, looking at maybe twenty or thirty sites ranging from glitzy venture-capital backed efforts to ratty shoestring blogs. I found obviously wrong "facts" mixed haphazardly with statistics that were confusing or meaningless outside their context. I found stuff that sounded like it'd been lifted from a Chamber of Commerce brochure and garbled for good measure, and a page or two of useful information written so pedantically that my eyes glazed over after a few sentences. I found discussion groups where the narcissistic get to strike heroic poses and watch themselves think, where the unknowledgeable and inexperienced get to empower each other by sharing their unknowledge and inexperience.

How can this be an improvement?

Up until now I've been talking about—and from the point of view of—the real estate consumer, entering the market without an axe to grind or a belief system to uphold, as opposed to the real estate zealot. The zealot, whether he's fer or agin real estate, but for some reason especially if he's agin it (perhaps a hint that the agin position is less tenable) is a special case. So at this point I'd like to introduce our guest expert for this evening, George Orwell, political writer during an era of hyper-extremism and leading authority on the subject.

I don't know if high school and college students still read Orwell's dark political novels Animal Farm and 1984, but back in my day we saw him as a scary visionary (the bad haircut probably didn't help). But Orwell's journalism and essays of the 1930s and '40s show him to be an Eton-educated intellectual with compassion for the little guy, committed enough to put his life on the line in war yet scrupulously fair in debate, a writer in full command of the language who (nonetheless) wrote carefully and plainly to educate and not to impress.

His "Notes on Nationalism", written in May 1945, is as relevant today as his better-known novels, because in it he addresses the idea that information, selectively processed, reinforces rather than eliminates ignorance. "Okay", you think, "I've hung in with you this far, but when you start throwing around words like 'nationalism' I start wondering what's good on TV right now". Okay, just substitute the word "zealot" or perhaps "moralist", because by "nationalism" Orwell means "first of all the habit of assuming that human beings can be classified like insects and that whole blocks of millions or tens of millions of people can be confidently labeled 'good' or 'bad'".

An attitude that gets full expression in certain dark corners of the Internet.

But beyond that, Orwell is talking about "the habit of identifying oneself with a single...unit, placing it beyond good and evil and recognizing no other duty than that of advancing its interests". Even at the expense of truth and rational thought. The zealot's thoughts "always turn on victories, defeats, triumphs and humiliations", the black-and-white of big headlines ("Home prices down 40%!") rather than the grays of reasoned insight ("...but not in all markets").

When confronted with a question, the zealot sallies from his impregnable position and begins "searching for arguments that seem to support his case". This selectivity explains "the remarkable failure in our time of...prediction". "Commentators, like astrologers, can survive almost any mistake, because their more devoted followers do not look to them for an appraisal of the facts but for the stimulation of...loyalties."

In other words, the zealot seeks out information not to learn the truth but to fortify his beliefs. Unremarkable bloggers and economists become symbols and rallying points in the battle for justification.

Orwell examines the pressing questions of 1945, questions which like those of September 2008 lacked easy answers, and says, "probably the truth is discoverable, but the facts will so be dishonestly set forth in almost any newspaper that the ordinary reader can be forgiven either for swallowing lies or for failing to form an opinion. The general uncertainty as to what is really happening makes it easier to cling to lunatic beliefs...endlessly brooding on power, victory, defeat, revenge, the nationalist is often somewhat uninterested in what happens in the real world."

Which may explain why the zealots do their best not to live in it.