Panic at the Speed of Light

On self-fulfilling prophecies

There are two kinds of prophecy. 

We’ll get to the familiar kind in a moment. 

Allow me to illustrate the first with a story. 

In 2011, Harold Camping, a civil engineer turned radio preacher in Oakland, California, predicted that the world would end on May 21.

He came to this conclusion as other doomsayers before him had done: by meticulous calculation of figures he derived (erroneously) from the Bible. 

The difference was Camping’s reach. 

His nonprofit media empire, Family Radio, paid $5 million for 5,000 billboards announcing the endtimes. It distributed millions of tracts. It dispatched a fleet of a dozen neon-painted RVs to blast his warning by megaphone. 

I rode in one of these rapture-mobiles—Caravan One—through Providence, Rhode Island on May 20: the day before the end times were expected to come. 

I was there not as an acolyte of Camping’s, but as a guilty-feeling reporter at The Daily. (No, not the New York Times podcast). 

Brief interlude: The Daily was the world’s first iPad newspaper, allegedly a joint brainchild of Rupert Murdoch and Steve Jobs. (I enjoyed imagining their meetings.) It recruited writers from the New Yorker, New York Times, Wall Street Journal, and The Atlantic (me), among others. It ran up losses, had an editorial identity crisis (was it a highbrow magazine, or a tabloid?), and like so many buzzy media startups of the last 10 years, swiftly crashed, sending its staff on to the next buzzy startup. 

Back to Judgment Day: Why did I feel guilty as a reporter riding on Caravan One? I wasn’t there to help people. I was there to report voyeuristically on people who were on the verge of the biggest disappointment of their lives. 

One man named Steve (not his real name; he should be free now to leave this in his past) told me he had sold his house and ended his marriage in order to take part in this quest. Another quit a job with a $140,000 salary that once sent him on consulting junkets around the world. 

When May 21 came and went, they were devastated, depressed, and deeply confused. 

I called up a number of the 12 people I had met on Caravan One afterward. I still have my notes from those calls. 

“Everything was right on, except there was no rapture,” one said, insisting that the real date of the Feast of Tabernacles would be five months later, on October 21, 2011.

“If 2011 comes and goes, then I myself don’t know.” 

When October 22, 2011 came, I did not call him again.

What went wrong? 

Even with thousands of people heeding his words, Camping could not cause the apocalypse he had predicted—crust-rending earthquakes at 6PM Pacific Time—to happen. 

Let’s call this kind of prophecy the Feckless Prophecy. That is, the prediction itself has no effect on whether it comes true. 

The second kind of prophecy is more familiar. I’d like to call it the Feckful Prophecy. (Yes, this is a word.) 

But it’s more commonly known as the Self-Fulfilling Prophecy. 

Bank panics are self-fulfilling prophecies. 

Benjamin Carlson @bfcarlson

SVB's fate may seem to matters only to Silicon Valley. But as Nobel-winning economist Milton Friedman explains, the collapse of the banking system during the Depression began under similar circumstances. In 1930, a run occurred on the Bank of United States, a large regional… https://t.co/FaGcvJTcVO

The fact that everyone is talking about bank panics (including me, here) is itself a factor in whether or not a bank panic occurs. 

There’s a strange part of human nature that seems to crave chaos, and that part of human nature is on daily display on social media. 

One of the factors that drove the astonishingly fast downfall of Silicon Valley Bank was the speculation about its fall on Twitter, with VCs urging startups to pull out their cash. 

Lo and behold, they did, and the bank failure they feared happened faster than anyone had imagined. 

Panic is different from fear in that panicking people have an almost irresistible urge to move, to flee, to do something. 

When banking was a physical process involving tellers and passbooks, delaying tactics could be used to defuse the intensity of the urge.

Such tactics were used by George Eccles, banker and brother of legendary Fed chairman Marriner Eccles, who saved his Salt Lake City bank by understanding how to calm the madness of crowds. 

Benjamin Carlson @bfcarlson

How to handle a bank run, a guide. Fascinating tactics from an owner who halted a run on his bank exploiting shrewd intuitions about human psychology.

Today, such transactions are frictionless.

Digital banking allows for instantaneous, simultaneous impulsivity.

How do you stop a stampede when there’s no physical limit—no entrance or exit, no lines, no tellers, no need to find parking?

Social media is the world’s worst technology for inducing calm. But simple strategies of persuasion can still be used to calm jittery nerves.

Panic at the speed of light can be combated by increasing the friction of taking action. Adapting from Eccles example:

1. Slow down: within the limits of good service, add time to every interaction.

2. Demonstrate strength: display finances, a commitment to serve.

3. Social proof: Show business as usual, customers and staff modeling patience and confidence.

The other way to battle a social-media panic is to leverage the strength of social media: distraction. 

Time is the enemy of all panics. 

Distractions buy you time. 

So: let’s change the subject.

What I’m Working On 

On my nights and weekends, I’ve been developing a course on how to attract the attention of highly-influential people.

It’s something I think about a lot.

I’ve had good luck interacting with a number of people with large audiences.

I expect to have something to share in a few weeks. Stay tuned.

Until the next time,

Ben