One of the claims Bryan Caplan makes in The Myth of the Rational Voter is that people overwhelmingly tend to think the economy is in worse shape than it actually is. He calls this pessimistic bias.
George Will’s Newsweek column puts some fresh numbers on pessimistic bias:
“Recent polls, taken just before the announcements that third-quarter growth was a robust 3.9 percent and that 166,000 jobs were created in October, showed that up to 46 percent of Americans think the economy is in a recession.”
This is a significant, systematic intellectual error on the part of the public. We need to fix it.
As I’ve said earlier, we could blame the media for this, with all of the dire warnings and misleading headlines out there, but that would be a mistake. They’re just giving the people what they want. We humans seem to have an innate psychological predisposition towards doom and gloom. The only way I can think of to counteract pessimistic bias is with facts.
Too bad no one listens.
Inertia Wins! 