What causes market bubbles, and are we in one?

An all-star group of media economics experts gathered at the University of Navarra Dec. 13 and 14 to exchange ideas and research results on the role and behavior of media during periods of economic or financial boom and crash.

Their approaches were varied: historical, media effects, content analysis, journalistic practice, political economy, etc.

(The full program is here.)

Many of the presentations centered on media coverage of the global financial crisis of 2008-2009 and its impact in countries including Ireland, England, Greece, Spain, the U.S., the Netherlands, Germany, and Denmark. The papers provoked lively debate among the participants, since there was significant time between presentations for questions and comments.

The studies used ingenious research methods and rigorous statistical analysis to tease out surprising insights. I had the unenviable task of providing a summary at the end, on a Friday night, in just 10 minutes. So here is the cheeky result, with apologies to my learned colleagues:

Cause of bubbles: audiences
    •    Overwhelmed by complexity
    •    Uninterested in economics
    •    Ignorant
    •     . . . even willfully ignorant
    •    Lazy, complacent
    •    Delusional

Causes of bubbles: journalists
    •    Overwhelmed by complexity
    •    Lacking training in economics
    •    Excessive sourcing from handful of public officials and financial industry experts
    •    Excessive sourcing from charlatans posing as experts
    •    Overworked, underpaid, forced to write click bait
    •    Self-censorship, serving ownership interests
    •    Uninterested, ignorant
    •    Lazy, complacent
    •    Unethical
    •    Sometimes corrupt

Why digital networks are ruling the world

For the last few years, the name Manuel Castells kept popping up in things I read about digital media, social networks, and mass communications. He is a Spanish sociologist who spent much of his career at UC Berkeley.

Recently I have been reading his "The Rise of the Network Society," the first of three volumes in a series "The Information Age." He wrote them two decades ago, but he seems to have predicted many of the trends we are living through now.

The free flow of money, information, and power through global networks means those networks, not nations, are the source of power, he wrote. Institutions, societies, and ethnic groups with rigid structures that cannot take advantage of these flows will be left behind.

He wrote a new preface for the 2010 edition, before the Arab Spring, before the Syrian civil war, before Brexit, before Trump. He pointed out that structural changes were taking place in society because large sections of the world's population were being excluded from the global networks that accumulate knowledge and wealth.

Highly educated elites from financial and technological centers were profiting from the flow of money and power, while the rest of the world was being left behind.