Via Newbusters;
KATE SNOW, HOST: So, things are certainly bad for a lot of Americans. I don’t think we want to discount that. But you say this is a psychological recession. What do you mean by that?
KIT YARROW, PSYCHOLOGIST: It’s a snowball, really. I think the way that consumers feel about things is very emotional. And those emotions are trumping reality, creating this snowball where they’re pulling back on spending which is then making our economy worse. It’s not quite as bad as consumers feel like it is.
SNOW: How so? How is it not as bad as we think?
YARROW: Well, you know, we’ve had really great prosperity for the last few years. We’ve had very cheap gas. We’ve had a lot of increase in our home values. We’ve had it really pretty good as stock market increases. And, emotion is always caused by this mismatch between what we perceive and reality. Right now, I think there’s a big mismatch between what we perceive should be, basically our expectations of the economy and now what we’re getting. And that’s causing people to feel fearful, and upset and angry. And, really, it’s that emotion, the psychology that’s contributing to our economy right now in a negative way.
SNOW: To fall on our sword here a little bit, do you think part of it’s our fault, the media’s fault for constantly talking about how bad things are?
YARROW: I do actually. Yeah, I have to say some of it does there. Everything is described as a crisis. And you know there’s been a preponderance of information coming at consumers, I think just the volume of it. And, it’s described in anecdotal terms as well, which causes consumers I think to feel especially fearful. When you describe an individual’s personal situation, I think people empathize with that, and it makes them feel really afraid for their security as well.
SNOW: How much is about expectations though also, in terms of, things have been going so well for so long, do we sort of think that’s what we deserved, and now things aren’t going maybe quite as well, we suddenly think it’s terrible?
YARROW: Absolutely. It’s very well put. So I think we’ve become quite entitled to a sense that we’re going to have continued prosperity, and, you know, if we hadn’t had it so good for so long, I don’t think there would be this level of emotion that’s causing us to drawback on our spending. It’s really more like, we expect it to be great growth, and you know any sort of normal growth is considered a catastrophe now.
Three things:
1) …there is no need for a psychologist to comment on the “perceived” recession. The bottom line is that the Democrats require (REQUIRE) that the economy be perceived as in a recession for their best hopes at grabbing the White House. That why Barrack “is there anything he can’t do” Obama continuously pounds the work “recession” out with each speach. People vote their pocketbooks. They always will. Chuck Schumer (D-NY) went as far as sabotaging IndyMac Bank by passing comments in the media that it was bordering on insolvent. This caused a run on the bank as everyone pulled their assets…and presto.
2) The media is relentless in their efforts to use the word “recession” at every turn. They are only regurgitating the Demo talking points, and doing so with vigor.
3)… Ah, but we are not in a recession. The GNP grew. A small percentage, but grew none-the-less. And, I defy anyone trying to get a table for dinner on a Friday night in most parts of the US to claim there is a recession. The great unwashed have throw away income, and they are out spending it when they have time away from their record employment numbers.
Country Wide should have been a blip in the American economy but was deliberately blown out of proportion by the press for political means. The total mortgage industry represents less than 5% of the US economy, a band-aid fix was all that was needed. This is truly a snowball run on the economy.
The emergency Fed bailout over The weekend of the troubled Freddie Mack and Fanny May mortgage approval institutions which controls trillions $ are another story though.
Join that with General Motors on the brink of bankrupcy and a ‘REAL SNOWBALL ON A STEP HILL’ effect could incur disaster.
“Stop the money printing press Joe, the shit’s not even worth the ink used”
What I think is funny is the mtg crisis where they are lowering the rates to 2%. but from what I can tell that goes for new owners as well.
Easy credit is bad, when I bought my house I bought 1/2 the mtg they said I could afford. I am often glad of that.
Economics is muchly psychological, if you think a house in Toronto is worth 10,000 and everyone else does what would happen. Collapse in demand?
What you’re looking at is nothing less than a propaganda campaign designed to get a DemocRat in the White House and keep the DemocRats’ seats in Congress. Roosevelt started this process after the 1929 crash, and it has worked beautifully ever since.
As JR says, UpChuck Schumer, D-NY has been fingered personally in the IndyMac case. Named, in fact. By a federal regulator. Publicly. Chucky’s got some ‘splaining to do. He could go to jail for this, potentially.
The Dems stay in business by stabbing their own countrymen in the back every day. Why on earth would you vote for that?
“To fall on our sword here a little bit, do you think part of it’s our fault, the media’s fault for constantly talking about how bad things are?”
Ya think ?
Amongst the worst offenders – The Weather Network and The Weather Channel.
A How-To-Guide for Politicians;
#1) Creat a problem for the Citizens.
#2) Seek the Media’s help – fearmongering.
#3) Come to the “rescue”.
Pierre Trudeau may not have written the book but he sure applied it.
Nevertheless ………….. It would be prudent for most people to get their financial house in order by doing the fundamental things like:
1- Minimizing debt
2- Lowering expenses
4- Saving and investing
Pissing money away on extravagant toys and entertainment will not in the long run do anything for the economy.
ron
governing can be a difficult (impossible) task for some, thusly other methods are required
and as far as the media goes, if you can’t “find” a good story, create one
JR, have you somehow missed the fact that many people are currently fearing that Freddie Mac and Freddie May, who collectively own about 5.2 trillion dollars in American mortgage debt, have the potential of being bailed out by the American government. Incidentally, current American federal debt is sitting at 9.2 trillion.
Now, I honestly don’t believe those two institutions will fall, however, the fact that there’s questions about their ability to stay afloat is a serious serious indicator as to how badly the credit markets have become. I agree the GDP increased, that right now the U.S. will experience stagflation, but you cannot deny that the current economic outlook is not very great right now.
I figure 3 or 4 years and things will be booming again, though maybe the U.S. will have learned some lessons on accountability.
The first guy in the lineup (4:00 am) at the Indymac bank ($32 billion assets) that went toast on the weekend had a snowball hit him in the face.
He had $236,000 deposited there and only got $171,000 out today.
He says hopefully that he may get most of the rest of it later when all of the final accounting is done.
This bank failure and the fact that the feds are estimating that there are 200 to 300 mostly smaller banks that could fail, had one wag say ‘aw, this isn’t a recession, its a depression’.
Ah yes, the fiat currency monster strikes again.
2) The media is relentless in their efforts to use the word “recession” at every turn. They are only regurgitating the Demo talking points, and doing so with vigor.
With the MSM (reader)ship going down and blog readership going up, no wonder they think “recession”.
It’s a recession when others lose their jobs, it’s a depression when you lose yours. The MSM is reflecting their own reality and are scared.