Amidst the vast bulk of discussions on the economy, and when we will be getting out of this deep recession, we overlook the role of psychology.
Psychology is what gets us into recessions to begin with, and eventually, it is what gets us out. Certainly psychology gets us into booms that cause busts. And helps foster downward economic spirals.
Yes, there was the subprime mess. But that was only accentuated by a jittery market that affected pricing of those assets. I have commented on that in the past.
We were in the midst of a presidential election campaign, when Democrats wanting to get in, painted an even bleaker economic picture, and succeeded at that effort by aggravating subprime market pricing.
Much of what happens is our outlook on the economy’s future.
No comments:
Post a Comment