I heard on one of the news programs on NPR the other day that economists say the economy is doing fine and that consumers say it's not. Maybe this is nothing new but it got me thinking about perception. I remember talking in my high school economics class about why things happen the way they do; the consensus among the old white guys we read was that the perception of the people is the primary factor. That is, if people in general thing things are going well, they'll spend and invest more and thus things will be going well. And if they start to panic and think things are going sour, they'll spend and invest less and thus things will indeed go sour. It's a self-fulfilling prophecy.
Of course, there are outside factors including wars and natural disasters, but the state of the economy seems to be largely based on how we feel about it. Makes one wonder if the Depression could have been avoided if folk either hadn't known about the Stock Market numbers or hadn't assumed the worst and taken all their money out of the banks. It also makes one wonder how much we buy into the collective consciousness--just because we hear things aren't good doesn't mean we should panic. Unless of course you're one of the unlucky who are let go from a job because your employers have gotten concerned about the downturn.
Because in that moment, the theoretical, collective consciousness, vague theory of economics becomes hard and sharp and real. What do you say to someone who's lost their job or had hours cut in the face of rising gas and medical costs? Just think happy thoughts?