People prefer good news over bad news.
That bias is theme of Jeremy Grantham’s new quarterly message to GMO’s clients.
“As a bear in the bull market of 1999 I was banned from an institution’s building as being ‘dangerously persuasive and totally wrong!'” the investment legend wrote. “The investment industry also has a great incentive to encourage this optimistic bias, for little money would be made if the market ticked slowly upwards. Five steps forward and two back are far more profitable.”
To illustrate how this bias pervades society, Grantham identified 12 ways the US is thought to be a global leader. And in his charting, he reveals how the facts tell a different, more depressing story.
“It is my attempt to bring home how extreme is our preference for good news over accurate news,” he said.
We grabbed his charts to give you a quick summary of what he’s talking about.
America is the only place where death rates are actually on the rise, thanks to share increases in alcoholism, drug use, and suicides.
Americans complain that too much is going to the government, but relative to GDP it's not that much.
America is not fair if you think income inequality is a good proxy for this.
America isn't much of a democracy if you consider the fact that the financial elites can double the chance of a legislative bill getting passed or blocked.
America's maths and science test scores raise doubt that this country has the best education system in the world.