The latest Netflix hit, Stranger Things, features a dark alternate dimension controlled by a horrible monster. That makes the show similar to the coverage of Donald Trump, the Republican Party’s monstrous nominee for president, who is repeatedly cast as a serious contender to win the White House despite overwhelming evidence to the contrary. Trump likely never will get to implement his isolationist trade agenda, but there is reason to think he already has hurt the U.S. economy by putting a chill on investment. The mainstream press could have contained the damage, but it didn’t. Editors and reporters probably made it worse.
Several academic studies have documented the media’s ability to frame investors’ perceptions of the economy and markets. In April, economists William Goetzmann and Sasol Kim, with the help of Nobel laureate Robert Shiller, showed in a paper published by the National Bureau of Economic Research, that the financial press tends to emphasize the negative over the positive, distorting perceptions of the likelihood that bad things will happen.
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