Would the economy be great if everyone though it was?

[Spray_resistant]

Now, it didn't study this in school and don't know very much about this sort of thing, I just have an idea and if it is wrong please explain why, don't just flame me. I am prospectively under the opinion that if everyone thought that the economy was just fantastic then it would be. Like for instance if the prez just goes on tv and says that the economy is great now its all fixed nothing to worry about anymore and enough ppl believe than it would eventually be great and it would happen quick. What makes the economy tank is doubt and fear. Investors sell, ppl don't spend as much and as a result companies out of fear of not making a profit lay off workers. If the fear wasn't there and everyone thought everything was good then companies would starting hiring more, so ppl have more disposable income and spend more and investors have all the more reason to invest in companies making profit.
So, iy seems to me that the nations wealth is all a matter of perception and only equals what the public believes it equals. Take goods and services for instance, they are only worth what ppl are willing to pay for and so in turn is paper currency. These views fluctuate and the values of good, services, and paper currency fluctuate with these views.....since the nations economy is based on these three things then so is the state of the nations economy based all on majority point of view.......Am I wrong here and if so where did I go wrong? Discuss....

[Drunken Cat]

There is a prominent perspective in the field of economics that people's perceptions and expectation about the economy play a significant role in the direction which the economy takes, including whether that direction is favorable or not (an example of this is the concept of "consumer confidence").

Still, expectations/perceptions is merely a factor, and if an economy has underlying instabilities, these instabilities will nevertheless exert pressure upon the economy. In the present climate, it is my personal contention that the underlying instabilities and inefficiencies are too great to be overcome through a mere "business as usual" approach alone.

Also, it is worth noting that as far as my opinion is concerned, while I do believe that public perception/expectations do indeed play significant roles in determining the direction of the economy, I believe that the extent of this significance is generally overstated among the mainstream.

[- v e t -]

short answer...

NO...

nothing w/o hard work and GOOD economic policy

[Mr Gruber]

I think it does have a lot to do with the mind. It's mindless people in the world, that's why the gov and media can control them as well as they do. Say there's a hurricane coming you need to get all your supplies, the stores will be wiped clean, people fighting over items and gas. Then there on the air every few minutes, it's coming, it's gonna be bad, go hide, better have your supplies. It comes...and it's like wtf?? nothing. It happens a lot, being that I live in FL. Now I'm not saying that they're not occasionally right, there have been times. But increasingly over the past few years, they've been taking tropical storms serious. Just stupid..

[Drunken Cat]

I think it does have a lot to do with the mind. It's mindless people in the world, that's why the gov and media can control them as well as they do. Say there's a hurricane coming you need to get all your supplies, the stores will be wiped clean, people fighting over items and gas. Then there on the air every few minutes, it's coming, it's gonna be bad, go hide, better have your supplies. It comes...and it's like wtf?? nothing. It happens a lot, being that I live in FL. Now I'm not saying that they're not occasionally right, there have been times. But increasingly over the past few years, they've been taking tropical storms serious. Just stupid..

It's sort of a case where the foxes guarding the hen houses repeatedly mislead the masses into believing they are not traveling in a sinking ship, while the foxes steal all of the lifeboats (to overuse metaphors).

[Mr Gruber]

It's sort of a case where the foxes guarding the hen houses repeatedly mislead the masses into believing they are not traveling in a sinking ship, while the foxes steal all of the lifeboats (to overuse metaphors).

yea..it's propaganda

[Glamour Puss]

No because Wall st. tells Barky what to do.

You can think that being stung by a bee is a great thing, but it'll still hurt like a motherfuker.

The truth is, we are in a thermo dynamic economic breakdown that was caused by Wall st. derivative speculation and both Bush and Obama work for Wall st.

As long as this is the case, the dollar will continue to crumble and everyone will lose what they have in their savings, Ira's and 401'ks.

Hallucinating about Pollyanna scenarios won't save you.

We need to kick these finance oligarch fuks out.

[- v e t -]

So, iy seems to me that the nations wealth is all a matter of perception and only equals what the public believes it equals. Take goods and services for instance, they are only worth what ppl are willing to pay for and so in turn is paper currency. These views fluctuate and the values of good, services, and paper currency fluctuate with these views.....since the nations economy is based on these three things then so is the state of the nations economy based all on majority point of view.......Am I wrong here and if so where did I go wrong? Discuss....

Dont get me wrong, it sounds good in theory but the problem is, the perception eventually runs into reality....

you'll hear economics defined as "the production, distribution and consumption of goods and services" but even further it has to do with the scarcity of them as well. and right now, the market is adjusting due to the current terms and the previous false inflation it has received over the past 10-15 years.... capital has to be revalued and reallocated due to market needs...

however, all of this would long be done by now if there were no govt intervention to slow it down

[!! Shawn]

There is a prominent perspective in the field of economics that people's perceptions and expectation about the economy play a significant role in the direction which the economy takes, including whether that direction is favorable or not (an example of this is the concept of "consumer confidence").

Still, expectations/perceptions is merely a factor, and if an economy has underlying instabilities, these instabilities will nevertheless exert pressure upon the economy. In the present climate, it is my personal contention that the underlying instabilities and inefficiencies are too great to be overcome through a mere "business as usual" approach alone.

Also, it is worth noting that as far as my opinion is concerned, while I do believe that public perception/expectations do indeed play significant roles in determining the direction of the economy, I believe that the extent of this significance is generally overstated among the mainstream.

Ramble ramble ramble.

Real answer, NO. Peoples feelings are only useful as a judge of the direction the economy might be heading. Recessions don't happen because people think the economy is bad, they happen because people spend too much money, over invest, lose money, and can no longer spend money.

That loss of ability to spend money is what effects the economy, not that persons feelings about the economy.

For example. A company incorrectly forecasts demand for their product. They end up building 3 factories instead of 2 factories. The demand is less than they predicted and is well within the ability of 2 factories to supply.

They are left with an extra factory of overhead, are forced to layoff employees to compensate, and as a result negatively effect the economy.

Bottom line, recessions occur because of cash shortages, not because of market attitude. Market attitude is a fickle measure of what is actually happening, not a force that is shaping what is happening.

[Glamour Puss]

Ramble ramble ramble.

Real answer, NO. Peoples feelings are only useful as a judge of the direction the economy might be heading. Recessions don't happen because people think the economy is bad, they happen because people spend too much money, over invest, lose money, and can no longer spend money.

That loss of ability to spend money is what effects the economy, not that persons feelings about the economy.

For example. A company incorrectly forecasts demand for their product. They end up building 3 factories instead of 2 factories. The demand is less than they predicted and is well within the ability of 2 factories to supply.

They are left with an extra factory of overhead, are forced to layoff employees to compensate, and as a result negatively effect the economy.

Bottom line, recessions occur because of cash shortages, not because of market attitude. Market attitude is a fickle measure of what is actually happening, not a force that is shaping what is happening.

Thats all that guy does. And he throws out his meager academic achievements as some sort of merit and authority.

If he's in a grad program, then what does that say about what kind of pedestrian people are being allowed to participate in these grad programs?

When people like him have degree's, they may as well be worthless.