How much of it is in our own heads?

Gori · 07-10-2008, 01:18 PM

...and what can anyone do about it?

Saw a couple headlines today that made me think about how mentality affects things. It has been talked about somewhat recently with comments from OPEC people and other analysts forecasting higher oil prices and how that sort of becomes a self-fulfilling prophecy courtesy of the market (futures trading, specualtion, etc...). Today I saw these two headlines:
Bloomberg.com: Worldwide

McCain Economic Adviser Calls US 'A Nation of Whiners' | The Trail | washingtonpost.com

I do think our mentality plays a part in this, and a negative part at that. I wonder really how much a part it plays? I wonder how/if we can get this "attitude" turned around?

Otis · 07-10-2008, 01:58 PM

Yes. It’s all in your head.

And I fully endorse the Republican proposed solution of sprinkling some magic pixie dust on the economy and wishing it all better with happy thoughts.

Which ties in nicely with their new healthcare reform policy of kissing your boo boo.

aduros · 07-10-2008, 03:53 PM

I have to agree with Otis.

Years ago, people were saying "it's all in your head" to issues like the economy, and global warming. Even the recent housing crisis had some nut jobs on the right trying to spin it off like no big deal. It doesn't surprise me in the slightest that someone from his camp would come out with something like this, on an issue he's already been quoted as saying he doesn't understand much about.

Osime · 07-10-2008, 04:03 PM

Not all in your head per se. However I think that we need to stop giving time to the speculators/forecasters of financial/economic news the way we do currently. The 24 hour News cycle is also a major part of the problem, as "everyman" has instant access to the normal undulations of the world and domestic markets, they react with herd mentality. Panic sets in and triggers mass (relatively) hysteria. Which causes the normal minor swings up and down in the markets to become larger as more people react and sell or buy or move assets from one type to another etc.

Reading articles in multiple sources that quote 2 or more "market forecasting professionals" you can't even get the same story out of them about what's happening... so how is Joe Blow supposed to make informed decisions?

Widem · 07-10-2008, 04:09 PM

Quote:

Originally Posted by aduros

I have to agree with Otis.

Years ago, people were saying "it's all in your head" to issues like the economy, and global warming. Even the recent housing crisis had some nut jobs on the right trying to spin it off like no big deal. It doesn't surprise me in the slightest that someone from his camp would come out with something like this, on an issue he's already been quoted as saying he doesn't understand much about.

Seriously, for the last fucking time. The repeal of the Glass-Steagall Act by Bill Clinton in 1999 was the fuse lit to start the mortgage meltdown.

For those not informed, it basically separated Institutional Investment Banks from your local demand deposit banks. There was conflict of interest issues which Bill just decided to rely on reserve amounts to take care of. It failed.

Anyways to address the overall point. Some things are in our head that caused this recent downfall, but IMO the only thing that Bush did incorrectly was how the problem was handled.

Instead of handing out the stimulus package he should have taken that money instead and bought up forclosed properties heavily in the most afflicted area and burnt those homes to the ground. To much supply? Fix the problem. It worked in the 30's it will work now.

Otis · 07-10-2008, 04:26 PM

Quote:

Originally Posted by Widem

Instead of handing out the stimulus package he should have taken that money instead and bought up forclosed properties heavily in the most afflicted area and burnt those homes to the ground. To much supply? Fix the problem. It worked in the 30's it will work now.

But I thought big government intruding into our lives = bad

I'm confused.

Next you'll want to regulate the free market or something.

Widem · 07-10-2008, 04:36 PM

Quote:

Originally Posted by Otis

But I thought big government intruding into our lives = bad

I'm confused.

Next you'll want to regulate the free market or something.

Definately. No market will ever be completely free. It was regulated as soon as something as simple as taxes were implemented.

The trick is to find the least amount of regulation possible.

Gori · 07-10-2008, 04:36 PM

Quote:

Originally Posted by Otis

Yes. It’s all in your head.

And I fully endorse the Republican proposed solution of sprinkling some magic pixie dust on the economy and wishing it all better with happy thoughts.

Which ties in nicely with their new healthcare reform policy of kissing your boo boo.

My OP wasn't really meant as an attempt at partisanship. I truly do wonder how much people's perception play into the economy.

Ever been in a situtation where you were miserable, only to dwell on that fact and make yourself more miserable, etc..? I wonder how much all the pundits and news saying "the economy is tanking" affects peoples decisions about day to day buying and stuff. I mean purchasing managers are just people too, same for investment bankers, etc...

Laodaron · 07-10-2008, 04:47 PM

Its called a scare tactic, or fear mongering. What happens is all of these bought and paid for analysts get on the air talking about an incoming recession, and its all <insert political figurehead's name here>'s fault. (Most recently GW). What happens then is like clockwork. Comsumer spending goes down, people get scared, the futures market plummets, and everyone can lay blame on <political figurehead's name here>

Orochan · 07-10-2008, 04:48 PM

The fact is, if you think about anything being true long enough and hard enough, it will be your reality forever.