Narrative spin by SpaceX and the Federal Reserve shows scepticism is the need of the hour

SpaceX casting its rocket’s failure in a positive light and the US Federal Reserve’s insistence that inflation was transitory are examples of attempts to gloss over bad news
Meanwhile, the advent of ChatGPT, which convincingly mixes fact and fiction, means caution should be the watchword

Richard Harris

Published: 4:00am, 5 May 2023

Why you can trust SCMP

The SpaceX Starship spacecraft is intended to repeat the achievements of the Saturn V rocket that put US astronauts Neil Armstrong and Buzz Aldrin on the moon in 1969 and then to go onwards to Mars. It is about 30 metres taller than the Statue of Liberty and its 33 rocket engines produce twice the thrust of the Saturn V.

It lifts a 150-tonne payload into low-Earth orbit, which is more than Saturn V’s capacity, on two rather than three rocket stages. It is an awesome feat of modern engineering.

The latest suborbital flight plan was for a 90-minute flight with splashdown in the Pacific. That was the plan, at least. Five of its engines broke down, which caused the detachment of the first stage to fail. Seconds later, SpaceX officials decided to destroy the whole assembly.

The globally televised launch was accompanied by the kind of jokey commentary expected at a football match, not the serious, breathless voice-overs that followed the moon missions. SpaceX’s rocket failed to reach the targeted altitude, but the company hit planetary levels of scripted narrative.

While the whole spacecraft disappeared in a cloud of smoke, flame and pollutants, SpaceX tried to cast the mission as a success, as it allowed it to collect launch data. It even has new vocabulary to describe the controlled destruction of its spacecraft: “rapid unscheduled disassembly”.

01:55

SpaceX Starship, world’s largest rocket, explodes minutes after lift-off on first test flight

Unlike the launch of Starship, the company narrative was an enormous success – a wide array of media outlets reported the positive spin almost verbatim. Every space programme has its share of failures, but tests tend to seek to succeed rather than be designed to fail, as Space X tried to pitch to us.

In 1969, children like myself followed every mission in our waking hours. There was no room for error or glossing over the facts.

More is learned by admitting failure than with a cover-up. It is hard to put a huge, untested vehicle into space loaded with explosives. And yet, as narrative psychology suggests, people would rather lie to support their egos, even when they do not need to.

I had an eerie view into the narrative future when I made a simple request of the latest version of the ChatGPT generative word processing app: “Write a page on Richard Harris of Hong Kong”. I received an instant biography that would make my mother proud, if a bit confused to find that she was Hong Kong-born. My birthday was noted precisely but not accurately, making me four-and-a-half years younger.

I am told that I excelled academically at the Diocesan Boys’ School in Kowloon, which will baffle my Island School classmates. I apparently did a degree at the University of Hong Kong – when I actually studied in London – and at Harvard in 1986, the one correct fact.

I was described as having founded Harris Capital Management and the Richard Harris Foundation and as being a prominent and successful financier and philanthropist. I am apparently married to China-born Linda, which caused a frosty moment when read by my wife Helen.

‘Godfather of AI’ Geoffrey Hinton quits Google to warn about the tech’s dangers

ChatGPT appears to think that I am an all-round great guy, but the details were wildly incorrect. It was like the best propaganda; a well-written fake, spinning reality with believable untruths, and there is no way that I can get the chatbot to correct any of it. Readers should try generating text on their own names.

ChatGPT will surely become a source of narrative to forecast the probabilities of moves in financial markets, but only in conjunction with human judgment. Meanwhile, tests by economists at the Federal Reserve Bank of Richmond found that ChatGPT demonstrates “a strong performance” in decoding “Fedspeak sentences”.

Financial authorities are increasingly glossing over bad news for fear of upsetting the markets. The US Federal Reserve maintained for two years that inflation was transitory and kept interest rates low.

Headline inflation rates in Europe, Britain and the United States are still at 6.9, 10.1 and 5 per cent respectively, well above the 2 per cent target set by most central banks. The result of the delay has interest rates being raised in Australia and in the US, together with a flurry of bank runs amid asset impairment.

Pedestrians walk past the headquarters of First Republic Bank in San Francisco on May 1. The US Federal Reserve’s interest rate decision comes against the backdrop of both still-high inflation and the persistent turmoil in the banking industry. Photo: AP

Money created by central banks in the last 15 years to prevent economic slumps is worth less. Inflation is caused by too much money chasing too few goods, yet recessions are the other side of the growth coin and are impossible to restrain forever.

Recent data shows factory activity contracting in China and US economic growth slowing, while prices have gone up significantly. I bought my first house in 1986 for 3.5 times my salary; that same house is now worth 12 times in 2023 terms. Workers are now demanding more – that is the real narrative.

News outlets around the world swallowed SpaceX’s line that Starship’s failure was actually a success. Lazy researchers might take me for a Hong Kong tycoon, and some economists claim to prevent recessions. It is encouraging to think that even using Google to quickly check original sources might allow investors to become more sceptical of narratives coming from authorities around the world.

Richard Harris is chief executive of Port Shelter Investment and is a veteran investment manager, banker, writer and broadcaster, and financial expert witness