Posted by Cognito on Mon, Dec 08 2008

All Posts by Cognito

Fear Begets Fear

There was a fascinating article in the New York Times today by David Carr, titled "The Media Equation: Stoking Fear Everywhere You Look." 

In it, he quotes: “When everyone is talking about recession, we all feel like something has to change, even if nothing has changed for us,” said Dan Ariely, author of “Predictably Irrational,” a book that explains why people do things that defy explanation. “The media messages that are repeating doom and gloom affect every one, not just people who really have trouble and should make changes, but people who are fine. That has a devastating effect on the economy.”

It's incredible to see how these "doom and gloom" messages permeating the media are trickling down to those consumers who remain still unaffected by the current economy. Friends of mine who remain still safely harbored from the crisis - still with jobs, no mortgages to pay for, no real retirement plans that have lost 40% of their value - even they nervously chatter about the recession and think twice about any sort of spend.

David Carr writes, "The recession was actually not officially declared until last week, but the psychology that drives it had already been e-mailed, blogged and broadcast for months."

It's amazing to see how powerful the media is and the sort of influence it yields on so many people, particularly when combined with this psychology of panic. One has to wonder what would happen if we turned off the TV, shut down the Internet, and stopped printing newsapers and magazines for a day - would the Dow finally inch over 10,000?

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In it, he quotes: “When everyone is talking about recession, we all feel like something has to change, even if nothing has changed for us,” said Dan Ariely, author of “Predictably Irrational,” a book that explains why people do things that defy explanation.

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In it, he quotes: “When everyone is talking about recession, we all feel like something has to change, even if nothing has changed for us,” said Dan Ariely, author of “Predictably Irrational,” a book that explains why people do things that defy explanation.

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