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I just finished teaching a MacroEcon undergrad class and one of the articles in the text that we used covered the issue of the press and (my words) - 'self fulfilling prophecies'. Since the late 1800s, we have had numerous economic down turns and we've always swung around. Basically what the author said, and supported with graphics, was that you tell someone that things in the economy are going down hill, and they increase savings, they stop buying, and businesses see declines in sales. This results in people being laid off, less product being purchased for inventory, etc., and more people get laid off because of the economy going full circle. However, when we are told things are rosy and getting better, businesses increase inventories in preparation for increased sales, this leads to production increases and investment increases for future gains; more people are hired to make the product, to sell the product, and more money is then available for more purchases. More people earning a check (or more of a check), more things bought, more inventory ordered,more made, etc. and we see an increase in our economy.
Bottom line -- if we see tomorrow as dark and dreary, we prepare ourselves for dark and dreary; the press is helping to sustain us in this mode. As someone else mentioned above, we need to get about our daily business (within reality of the market and our means), but look at tomorrow as a great day, and start to lift this great country out of its doldrums and back into the light where we belong!!!
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