Perception is Everything

Do you know that lions usually won’t attack a herd of zebras?

Even though they are fierce predators, when all the zebras keep together as a big group, the pattern of each zebra's?stripes?blends in with the stripes of the zebras around it.?This is confusing to the lion, who sees a large, moving, striped mass instead of many individual zebras. Lions will wait until they see a single zebra, usually a young or injured one, to attack.

This phenomenon is considered to be a form of camouflage. Ultimately, it's a perception problem for the lions.

Perception plays a very powerful role, both positive and negative in our economy, our businesses and even our personal lives.

Take as an example the idea that large numbers of people are leaving California for Florida. This opinion was recently espoused in Sean Hannity’s interview with California Governor Gavin Newsom.

Hannity was blaming it on California's income tax rate.

Jennifer Lynne Van Hook, director of the Population Research Institute at Penn State University, reviewed 2021 Census data, the latest available, and calculated that 1.16 per 1,000 Floridians moved to California in 2021 and 0.96 Californians moved to Florida that year.

Further, the reason most people gave for moving out of California was the cost of housing, not income tax rates as Sean Hannity stated. Hannity was using this perception problem to make a case that higher income taxes impede growth.

But if taxes are that prohibitive to growth, why does California have nearly double the GDP of Florida? In fact, California remains the 5th largest economy in the world. ?

So Hannity was wrong with his basic statement. And he was wrong about the cause of his wrong statement.

Back to the idea that an improper perception can be a sort of camouflage. Sometimes that can convince people whatever it is that you want to get across even if the information behind it is not true.

Sometimes, however, it can be used to your business advantage. I have a good example of that in Thursday's newsletter.