How much of the financial crisis is psychological?

Ps104_33 · Oct 2, 2008

I have found over the years that there is often a huge disconnect between belief about the economy and the true economic state of affairs. Until the statistics are actually published, people tend to assess the economy through the eyes of the national media. In 1992, when Bill Clinton won the presidency based on worries about the economy, the statistics that came out after the election showed that the period leading up to November had actually been a period of record growth. . . . In his 1996 State of the Union speech, President Clinton said we had the best economy in thirty years -- a statement that sent a flurry of reporters to check actual statistics rather than popular political movements and sweeping, politically motivated statements. The more people looked at the facts, the more they agreed, and six months later, there was near-unanimity that the economy was in good shape. Had the economy changed? No, what had changed was knowledge about the true facts of the economy.
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http://drhelen.blogspot.com/2008/10/how-much-of-financial-crisis-is.html

ReformedBaptist · Oct 2, 2008

Absolutely true. And those wise enough to see it are buying...like Warren Buffett.

How much of the financial crisis is psychological?

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How much of the financial crisis is psychological?

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