3 Approaches to social media effect in today´s economy

I was shocked a few days ago after reading the most bizarre news I have read in a while. “Loss over 1.300 million dollars: A tweet from Kilye Jenner it makes Snapchat tremble”, what? Is that all it takes?

Yep!!! That is all it takes. The so-called “socialité”, more like a fake celebrity tweeted “sooo does anyone not open Snapchat anymore? Or is it just me… Ugh this is so sad!!”

Normally, in a sane world people would have reacted with a laugh or not reacted at all.

However, it seems we are not living in a sane world anymore. How can a stupid comment put at risk the stability of a job-giving company?

This situation got me thinking and made me realize social media holds a real impact on society. Not only to explore the shifts of society, but also to determine it, and in cases like this, not in a good way.

With that in mind, maybe we may approach social media considering three aspects:

1 Reality versus perception of reality

What is real in our society? A shallow-minded girl with no sense of responsibility or a job-giving company with many employees depending on it?

Until this week, I would have chosen the second, today, I´m not so sure.

What possible explanation, based on economic theory can we give to such effect?

I can´t think of any, but it scares me the deep impact of a shallow-minded comment on the economy.

2 The REAL power of social media

Based on financial market´s reaction to the news, we can assure fortunes can be made and lost because of social media.

Social behavior it is been changing quickly for some time now, induced by this way of communication, but how to be vaccinated from such uncontrolled environment?

Perhaps that is why big stream media have been investing enormous amounts of money on behavior changes through social media researches´, and we can say without hesitation it is been well-spent money.

Today, it is not important if something you put out on social media is true or false. It really doesn´t matter, all it matters it is to raise the doubt and the people will decide whether to believe it or not.

Nevertheless, you should know social media also creates a context to guide the response on behave of what´s been said, so it is a lost battle from the beginning.

3 The speculative and volatile nature of the financial markets against the gossip effect of social media

Everybody without a formal education on economics or finances may believe the economy obey the so-called “Rules of Economics”, but it really doesn´t.

Today´s economy and especially financial markets are deeply influenced by a sense of speculation, and proof of it represents the news originated these lines.

Formerly, entrepreneurs and financial investors used to base their directives on effort, production, and revenue. Today, it is only revenue, and they don´t seem to care how to get it.

These change of behavior among businesspersons created the “bubbles”, or earnings through financial speculation without productive investment.

Because of these change in the way of making money, we see every day the rise and fall of ventures without logical explanation.

In the end, these ways of conducting businesses will end up creating more misery than wealth. It is a troubling future when a meaningless comment has the power to tremble a multimillion dollar company.

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