Whenever I write about anything with even a vague political component, I always get the strangest correspondence. Much of it is unpublishable and sometimes amusing, and usually worthy of nothing more than a Twitter block. And yet these missives offer something useful about one of my favorite subjects: Why our brains are not wired for finance.
That was the case last week, when President Donald Trump tweeted the following: “It would be really nice if the Fake News Media would report the virtually unprecedented Stock Market growth since the election.”
That statement about the stock market can be easily checked. This has nothing to do with your party affiliation or political views; it is a very simple mathematical question. The statement is either true or false, and not subject to debate.
That is what I did in an article that examined the historical record (as did Bloomberg News). As it turned out, his statement was false. The Trump rally is OK, but it is nowhere near unprecedented.
Some of the pushback from readers was -- hmmm, how can I say this? Fake news.
I won’t mention anyone by name, but a few excerpts are worthy of discussion. They are wonderful examples of how we have trouble reconciling facts with our biases, and why partisans and investors alike are predestined to make certain mistakes over and over.
The emails, among other things, said my analysis of Trump's claim was “disappointingly facile,” that I “ignored other economic indicators,” or that I was “overly focused on the numbers.” And my inclusion in the comparison of “international markets” was biased.
More specifically:
You overlooked several points that would strengthen Trump's case. FDR's recovery had the advantage of rebounding from the Great Depression, and JFK also benefited from a rebound from a recession.
This is an odd statement: I was discussing market performance, not an analysis of how different presidents did relative to the economy under their predecessor. This is a classic case of cognitive dissonance -- the refusal to acknowledge a fact because it contradicts a strongly held belief or ideology. Oddly enough, it came from a professor of psychology at a well-regarded southern university.