The "Perception Management" Economy

Rather than actually address the fundamental issues at the heart of the "jobless recession," the Status Quo has engaged in a massive campaign of perception management, a.k.a. propaganda.

A number of euphemisms are used for the concerted Status Quo effort to convince the public to maintain their belief in faltering institutions and a debt-based consumerist economy. The most neutral euphemism is "persuasion," followed by the slightly more sinister "shaping the context" and "setting the agenda." More directly, the effort is known as propaganda.

Perhaps unsurprisingly, perception management is a psychological-operations (psych-ops) term of Pentagon origins. The basic mechanisms are classic propaganda techniques. From the Wikipedia entry:

There are nine strategies for perception management. These include:

Preparation — Having clear goals and knowing the ideal position you want people to hold.
Credibility — Make sure all of your information is consistent, often using prejudices or expectations to increase credibility.
Multichannel support — Have multiple arguments and fabricated facts to reinforce your information.
Centralized control — Employing entities such as propaganda ministries or bureaus.
Security — The nature of the deception campaign is known by few.
Flexibility — The deception campaign adapts and changes over time as needs change.
Coordination — The organization or propaganda ministry is organized in a hierarchical pattern in order to maintain consistent and synchronized distribution of information.
Concealment — Contradicting information is destroyed.
Untruthful statements — Fabricate the truth.

Why expend treasure and resources on a propaganda campaign that is doomed to run aground on the sharp reefs of reality? Two reasons: it's cheaper and less risky than real change. The Status Quo has a tremendous stake in maintaining the present structure and hierarchy of control, power and wealth. Enabling real change introduces uncertainty and thus risk, and so the lowest-risk response to devolution is to convince people that the erosion is not actually happening.

This is also much less costly than actually introducing potentially destabilizing real change.

But reality, unlike perception, cannot be changed by propaganda. The Chinese buying Italian debt, for example, does not make the debt or Italy's insolvency go away.

Thus the Status Quo's campaign of "solving" fundamental problems with perception management will necessarily fail. A noteworthy example is the Eurozone's Status Quo attempt to convince everyone that Greece, Portugal, Spain and Italy will not default, when their default is already unavoidable.

Human behavior, as reflected by the stock market, can be manipulated in the short-term: yet another announcement that Greece has been saved is followed by a 200 or 300-point rally, which fades as the tides of reality soon wash over the sand castles of perception management.

The Status Quo in Euroland can set all the agendas it wants and announce all the rescues it wants, but none of that propaganda will reduce the crushing debts by a single euro. Sand castles are no match for the tides of reality.

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My new book An Unconventional Guide to Investing in Troubled Times is available in Kindle ebook format. You can read the ebook now on any computer, smart phone, iPad, etc. Click here for more info about Kindle apps and the book.

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