Why are we all getting the feeling that the current downturn in economic activity is somehow worse than other downturns we have experienced in the past? There was 1975, 1980, 1990, 2001. Some of them were pretty rough, but we were not beset by panic and no one thought, "this is 1929 all over again."
True, most the others were not preceded by a stock market crash and the one really serous one did not develop a major long-term recession. 2001 experienced a crash of sorts but it was mainly in one sector and was a long decline rather than a sudden
crash. The bank situation has been the most frightening, but I think we will weather it.
We've been in recession since mid 2007 and the real estate market has also turned down since the beginning of that year. The sub-prime borrowers became front page news long ago and the lenders have been reporting losses for several quarters now.
So what has now caused the panic? The media!
Check the constantly appearing stories on the economy. Each one points out the desperate situation of one or another family or business that has hit a particularly rough patch. Our hearts go out to them, and the lesson to be learned from this is that everyone is in the same boat and that you are next. The fear this generates paralyzes everyone.
We all know someone who has lost his job or whose job is teetering on the brink. We all know someone whose house is in or close to foreclosure. We all know a business that has experienced a large drop in sales. But I can't help thinking that if the media were not putting gasoline on the fire, we might all become a bit more optimistic and start spending some money.
Subscribe to:
Post Comments (Atom)
2 comments:
I would have to agree. This is one of the reasons I am so upset about the passage of the stimulus bill. they rammed this through congress pretending that if it didn't get passed immidiately (with all the democratic social engineering it contains) than we were all doomed. The worst of it is that when the economy recovers (and I believe it will) they will be praising themselves till the next election that is was all because of their forsight in passing this stupid nonstimulating deficit causing behemoth that we will still be paying for when the next recession hits.
All this really is is that people nowadays can't live without their Wii or Starbucks.The stimulus package will supposedly give them enough money for McDonald's and baseball games.
Post a Comment