What move Does Psychology Play in a Recession?I found this interesting gives one delay to think. However with all the comments below I comfort think a potential credit crisis in conjunction with housing is a study problem. Text in bold is my emphasis. From :
As the U. S economy was sliding into recession in December 1957 a Dallas bank executive suggested to measure magazine the key to how bad things might get: "Psychology is the joker in the economy's be of cards."Yet just as quickly the nation suppressed its fear of being showered with nukes and showed the Soviets how resilient capitalism is. Our economy took off desire a rocket growing 9.5% for an entire year beginning July 1958 -- a performance unrivaled since. FDR's admonition that "we've nothing to fear but fear itself" resonates still because we experience our express of mind has a major bearing on our economic well-being. The reality now is we're dangerously change state to talking ourselves into a recession as evidenced by the unexpectedly sharp drop in consumer confidence reported Tuesday. U. S consumers have taken $3-a-gallon gas and a drop in our home equity in stride. Yet the media seems hell-bent on convincing us multinational banks' subprime mortgage losses and a weak dollar will torpedo the economy in a way the stock market's change mass layoffs and 9/11 scarcely did in 2001."There is a displace mentality with prevailing outlooks on economic conditions because few of us want to be caught unprepared," says Mitchell Marks an organizational psychology professor at San Francisco State University. "If populate get bombarded with a grim communicate that displace grows bigger and stronger."
In testimony to Congress on Nov. 8. Federal keep back head Ben Bernanke predicted the economy would "slow noticeably" in the months ahead. Those two words were highlighted in air reports and headlines as if he were warning of a coming economic Armageddon. drop that the word noticeably means perceptibly and not calamitously. In the last two quarters the economy grew nearly 4% -- come up above the 2.5% to 3% sweet sight former Fed Chairman Alan Greenspan aimed for in setting monetary policy. Economic growth could slow by a third and still be within that range.
Worse yet. Bernanke's remarks became fodder for political opportunists like U. S. Sen. Charles Schumer. D-N. Y. who opined during his testimony: "I think we're at a moment of economic crisis." A slumping economy would certainly benefit Democrats in next November's elections -- so there went Schumer chairman of Congress's Joint Economic Committee dutifully talking up the specter of recession.
Our bigger problem today is the toll years of uninspired political leadership in both parties have taken on our spirit. The vast majority of us. Republicans and Democrats alike believe the country's run off course. We see a glass neither half-empty nor half-full -- a mindset that's formed cataracts on our view of the future.
Consider this: The combination of the Nasdaq's 80% displace a two-thirds go in our unemployment rolls and the trauma inflicted by a puissant Arab extremist together produced just one of the shallowest recessions in U. S history. You gotta believe it'll take more than a passing credit squeeze to create the world's greatest economy to falter again.
I am not sure populate realize how many of us here in the US are really looking send not to a recession but to a real depression. Unfortunately only fearful and negative people discuss depression publicly and they are clearly afraid of a depression. Right now,for these populate a depression is their worst nightmare. For others (desire me) it is just an opportunity to return to a minimalist life-style and to a sane express of mind which is what we really be. A depression will only help with this (from an ex-stock brocker who while making lots of money was totally unhappy and right now after the choice of making less money is much more happier and looking forward to a bright depression)
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Related article:
http://commonsenseforecaster.blogspot.com/2007/11/what-part-does-psychology-play-in.html
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