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The Economic Crisis of the Mind

By TheGimp in Media
Mon May 14, 2001 at 10:42:23 AM EST
Tags: Culture (all tags)
Culture

Right now, we are in an economic crisis. How do I know this? Time, The Washington Post, The New York Times, and every other news organization has told me so. I do not know the actual reasons why this time is labeled an `economic crisis' but I do know, thanks to nightly news, that I should be hoarding my savings and not spending it, that I should never invest in the stock market, and most of all, I should be pulling all of my money out of technology stocks. But the questions arises, how much of this crisis is caused by the thinking that we're in an economic crisis, and how much is caused by actual economic factors?


I do not have a master's degree in economics so I cannot begin to comprehend the total economy of the United States. However, I do live in it so I believe I have sufficient experience to tell everyone what I have noticed during this whole crisis. It is, in my mind, a snowball barreling down the hill -- picking up more snow and more speed as it continues. It might have had a decent reason for starting, but now it's going on pure momentum.

The main reason behind the beginning of this was the over-hyped technology sector. Everyone knows all the stupid dot-com's and their brethren that had no purpose but to spend money (i.e. boo.com). Unfortunately, the destruction of all the websites that did nothing led many people to believe that no web corporation could make money, leading to massive layoffs at dot-com's that could potentially make money. This led to a decline in demand for computer hardware (and subsequent firesales lowered the prices quite a bit -- i.e. Cisco's recent problems), which led to a decline in the entire technology sector. That's fine -- they were overpriced anyway.

But by now it should have leveled off. All the dot-com's are gone; there's nothing left to lose (except the ever-present Amazon, but we shall soon see if she floats or sinks). Why is this still going on?

My theory: the media. The media told the American public that we were in an economic recession, and told us why: tech stocks. "Everyone sell your tech stocks -- they're going to go down in price because everyone is selling them!" Gee, why is everyone selling them? Publishing an article such as that will no doubt inspire fear into a person who has money invested in the technology sector, causing them to sell their tech stocks. It's a self-fulfilling prophecy.

This phenomenon is very interesting to analyze because of its circular nature. It just keeps on going and going but has to stop somehow. I think it is until one of two things happens. Either the media beings to publish articles about how the market has bottomed out and it's a good time to buy, or a majority of the population realizes what's going on and corrects itself. Something's got to happen eventually - which one is the question? I'm betting on the first choice; I never bet on the wisdom of the public (then again, why bet on the wisdom of the media?)

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The Economic Crisis of the Mind | 45 comments (44 topical, 1 editorial, 0 hidden)
finally... (2.71 / 7) (#1)
by V1ct0r Ch4rl3y on Sat May 12, 2001 at 09:33:41 PM EST

<rant>

I totally think that the 90's economic madness is a result of what 'analysts' have projected on to the public through the media. These analysts used the ignorant media (or starving for hot news) to fuel the average persons thoughts thus controlling the markets.

People beleive what they see on TV. They trust the news, and the news organizations have violated the trust in a most obscene way. Of course this just isn't with the economy, the media influences government policy, workplace policies, and how people conduct themselves.

The media fuels paranoia and what has happened is in every western society the government has taken more and more controls.

Another example is using GPS to track 'sexual predators' after their release. This is alright because the news says these people are a menace and are everywhere so we need to control them. But does anybody think that once law enoforcement has the power to do this they won't want to track everyone all the time?

The media tells us what to think, the governments of the world support it by reacting to the media, and we are left mindless drones... yippie.

</rant>

__________________________
'Me love you long time GI...'

Media is one of many factors (4.00 / 2) (#2)
by Osama Bin Laden on Sat May 12, 2001 at 10:10:23 PM EST

While I agree that the media can affect consumer confidence, consumer confidence is only one of many factors driving the economy.

In particular, this latest economic slowdown wasn't caused by the media "telling people" to hoard their money rather than spend. In fact, consumer spending is still strong. Spending by businesses is down, but it's hard to blame the media for this, because your typical Fortune 500 company doesn't make investment decisions based on articles in Time.

Bad Business Models, defininately. (3.50 / 4) (#3)
by rebelcool on Sat May 12, 2001 at 10:32:23 PM EST

The vast majority of the .commery were started by very naive people who didnt know a thing about running a business. Though this did catch on for few months there, tempting even experienced people who should know better into the industry.

The model of giving things away while trying to support with advertising and other product complements simply doesnt work, unless you've got an absolutely massive audience and can charge advertisers ridiculous rates. Even then, you'll still run into money troubles.

Take a look at television as being the only businesses that can support themselves merely from advertising. They have massive audiences. Earlier this week I read about the xfl was canceled due to pitiful ratings. Mind you, the exact rating they got was in 29th place with a mere 2 million households watching. Imagine what shows like survivor and the superbowl get with literally 10s of millions of people watching commercials they cant skip through.

They still have money troubles though, and this is why we have large media conglomerates. They can only really turn money by having ALOT of them all put together.

A dinky website pulling a few thousand or a just a couple million hits a day is no comparison.

This mainly had to do with content-dealing .com's, but software companies are getting hit up to. Especially GPL software co's, and the problem is quite similar to the content providers. Giving things away for free while hoping for complementary revenue.

Some things are definately psychological. Take VA linux for example. They sell a real product - hardware. Yet they're getting beaten. Why? I feel it's the linux in the name. Linux has gotten a bad repuation among investors because of the GPL software company problems.

COG. Build your own community. Free, easy, powerful. Demo site

Actually... (3.00 / 1) (#22)
by rabbit on Mon May 14, 2001 at 10:09:42 PM EST

Actually...while most of the .coms were *started* by people with no "business experience", the actual people that caused the vast majority of the problems were VC's and old-school business people. The last .com I worked at was doing fine until we got VC funding. Then the VCs basically ignored the (somewhat sane) business plan that we had, and made up their own. Hence, unmaintainable growth and a completely unsustainable burn rate before we even had a chance to become profitable.

It is, in fact, precisely those with "business experience" and not a fucking clue about how the internet works that screwed everything up.

-- I have desires that are not in accord with the status quo.
[ Parent ]
in the mind?? (2.00 / 2) (#5)
by univgeek on Sun May 13, 2001 at 12:21:32 AM EST

What really affects consumer spending? Is it the media saying that the economy is slowing down? Is it saturation of the customers who feel that they have bought too much? In that case what should be done to bring the economy back on track.

Or is rampant consumerism really good? Or should some other model be encouraged, so that, even if we do not see the boom, we dont have to go through deep troughs.

Just some random questions... any aswers???
Arguing with an Electrical Engineer is liking wrestling with a pig in mud, after a while you realise the pig is enjoying it!

Your question (4.00 / 1) (#6)
by Mr. Excitement on Sun May 13, 2001 at 03:11:48 AM EST

Try this article.

Disclaimer: Granted, as mises.org subscribes to the Austrian school of economics (mainstream economics tends to be more Keynsian in flavor--blame the Academia nuts ;^), I could be considered to be proselytizing, so be careful to read and critique the article strictly on its own merits. ;^)

[ Parent ]

mises.org (3.00 / 2) (#9)
by streetlawyer on Mon May 14, 2001 at 05:30:02 AM EST

I'd just like to point out that Keynesian economists do not say any of the things which the linked article claims that they do.

--
Just because things have been nonergodic so far, doesn't mean that they'll be nonergodic forever
[ Parent ]
k. (none / 0) (#20)
by Mr. Excitement on Mon May 14, 2001 at 05:20:29 PM EST

Aside from the Keynes quote itself, the rest of the article states things Keynsians are purported to believe. That is, the [possibly unspoken] assumptions of their economic model.

If you can find contradictory quotes by Keynes himself or other notable Keynsians, by all means post them.

[ Parent ]

it's a lie (none / 0) (#26)
by streetlawyer on Tue May 15, 2001 at 02:22:24 AM EST

The Keynes quote is two words ("animal spirits") taken out of context (used to refer to "investors" rather than speculators, a pretty crucial distinction in the relevant chapters), and the rest of the article states things that Keynesians are purported to believe *by people who know fuck-all*.

Incidentally, this post contains exactly as many quotes from Keynes or from actually existing Keynesians as the article you linked to (in fact, since it corrects the misuse of the quote in the article, it arguably contains more). So in the circumstances, you'll understand if I don't take you up on your kind request to scrabble around doing far more research than mises.org can be bothered to do.

--
Just because things have been nonergodic so far, doesn't mean that they'll be nonergodic forever
[ Parent ]

Not so fast... (none / 0) (#28)
by Mr. Excitement on Wed May 16, 2001 at 12:48:36 AM EST

The Keynes quote is two words ("animal spirits") taken out of context (used to refer to "investors" rather than speculators, a pretty crucial distinction in the relevant chapters), and the rest of the article states things that Keynesians are purported to believe *by people who know fuck-all*

Allow me to introduce another article, which shows that the Austrian school does not subscribe to the ridiculous Keynsian notion that there is a hard, objective difference between "speculators" and investors. Speculators are investors, and most investors are, to a degree, "speculators". Exactly how risky must an investment be to be considered "speculation"? How short-term must it be?

The answers to those questions are necessarily subjective, and the distinction holds little meaning in any economic sense.

Incidentally, this post contains exactly as many quotes from Keynes or from actually existing Keynesians as the article you linked to (in fact, since it corrects the misuse of the quote in the article, it arguably contains more).

Actually, as I've demonstrated above, it does not.

So in the circumstances, you'll understand if I don't take you up on your kind request to scrabble around doing far more research than mises.org can be bothered to do.

And, as the circumstances have shifted in my favor, your proposal seems increasingly ludicrous. If, however, you persist in ignoring my earlier call for quotes, I shall show you just enough mercy to consider the matter closed.

[ Parent ]
typical Austrian (2.50 / 2) (#29)
by streetlawyer on Wed May 16, 2001 at 02:46:46 AM EST

You have taken an accusation that Keynesians do not believe what the article says they believe, and attempted to refute it by linking to an article which says that Austrians believe Keynesians are wrong. Score 10 out of 10 on the von Mises intellectual honesty scale, but minus a million on all others. The article lies about Keynesianism, and your post is pure smoke-blowing.

Actually, as I've demonstrated above, it does not.

Actually, you've demonstrated fuck-all, and made the charge that you are dishonest rather than ignorant far more plausible by attempting to cover up a sneaky smear with a Clintonian half-attached assertion.

If, however, you persist in ignoring my earlier call for quotes, I shall show you just enough mercy to consider the matter closed.

Well, bring it on, motherfucker. The quality of mercy is not strained, but your wheedling evasions are.

--
Just because things have been nonergodic so far, doesn't mean that they'll be nonergodic forever
[ Parent ]

Tsk, tsk. (3.00 / 1) (#30)
by Mr. Excitement on Wed May 16, 2001 at 04:44:59 AM EST

Such a fiery display of emotion, yet so few quotes. I'm afraid, as you've successfully countered none of my claims, that I am obliged to make good on my word, and consider that matter closed.

As for the quality of the aforementioned post, be not so quick to accuse, as you seem to be quicker in stooping to or below what you consider "my level".

If it's a flame war you want, I'm afraid I'll bore you to tears before giving you any satisfaction whatsoever. Feel free to rail on my supposed ancestry, your fantasized delusions of what I allegedly do to mothers, even my alleged lack of intellectual rigor, ye of little quotes, or whatever travesty your fevered imagination may concoct. For all you know, I am merely a collection of words staring at you from your screen, chuckling nimbly at your seething rage over what was once (and could have remained) a trifling difference in definition of a single word. Seethe on, O Composed One. As you have abandoned any last remnants of logic and diginity, I care little of what you may say, save as a petty curiousity and source of mild amusement.

Cackle shrilly with your blind assertions, your vague threats, your childish, ranting insults. My divertment grows even as you sputter your delerious, lunatic ravings. Anything you say at this point will necessarily fill me with rollicking laughter. I call your every bluff, and eagerly await your response. (And I shall interpret any lack thereof as fuming silence, much to my uproarious mirth.)

[ Parent ]

you are purely delusional (1.00 / 1) (#31)
by streetlawyer on Wed May 16, 2001 at 05:00:52 AM EST

As for the quality of the aforementioned post, be not so quick to accuse, as you seem to be quicker in stooping to or below what you consider "my level".

Your level is that of a liar; I'm telling the truth. You lied about what "Keynesians" believe; I've exposed your lie. On that basis, the matter is indeed closed.

--
Just because things have been nonergodic so far, doesn't mean that they'll be nonergodic forever
[ Parent ]

Here we go again... (none / 0) (#32)
by Mr. Excitement on Wed May 16, 2001 at 05:25:44 AM EST

Your level is that of a liar; I'm telling the truth. You lied about what "Keynesians" believe; I've exposed your lie. On that basis, the matter is indeed closed.

I'm afraid, Good Sir, that you have done no such thing. You have merely pushed us both into an impasse, and one from which you can easily recover and gain the upper hand, if you can find even a single attributable quote (please, one that you do not produce from your posterior, like so many allegations).

Good Sir, delusional as you insist I may be, I'm afraid that today you just may have snapped, in a very real sense, and had I known earlier I assure you I would not have threatened your well-being so goadingly in my previous post. Sir, I entreat you: get some rest, and perhaps seriously consider seeking professional counseling, or at the very least have your blood-pressure checked.

If my persistence in this argument is truly harming your physical or mental health, simply say the words and I shall gladly cede the point and wish you well. Failing that, I shall consider myself the rightful victor in this argument until I die or you logically convince me otherwise. (Upon either of which, feel free to celebrate.)

[ Parent ]

here's a quote for you: (1.00 / 1) (#33)
by streetlawyer on Wed May 16, 2001 at 06:14:17 AM EST

"Eat my shorts" -- Bart Simpson.

I have provided exactly as many quotes as mises.org has. The circumstantial evidence is sufficient on its own -- the original article has one, two-word quote taken out of context to prop up a thousand words of accusation about what Keynesians believe, and you, dishonestly, tried to pretend that linking to an article which said that Austrians think Keynesians are wrong constituted support for an attribution of belief to Keynes. The article itself provides yet another example of Austrian lying, as it takes a quote which was clearly intended as a joke in context as if it were a statement of doctrine, and lyingly implies that Keynes' major work was the Treatise rather than the General Theory.

You are lying, intentionally, in order to try to cover up the loathsomely poor scholarship of the von Mises institute. It is truly pathetic.

Keynes' actual views on speculation were summed up in his statement: "Speculation may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation." The ludicrousness of attributing the view to him that all speculation was evil can be seen perfectly well in the fact that the Treasury of Kings' College Cambridge was boosted by over 2mn during his tenure as Bursar, the result of Keynes' own speculation on foreign exchange. What d'ye say to that, Stevie?

--
Just because things have been nonergodic so far, doesn't mean that they'll be nonergodic forever
[ Parent ]

Oh? (none / 0) (#35)
by Mr. Excitement on Wed May 16, 2001 at 01:22:49 PM EST

You are lying, intentionally, in order to try to cover up the loathsomely poor scholarship of the von Mises institute. It is truly pathetic.

You, good sir, are gibbering, insisting that there is any meaningful distinction between investment and speculation at all, which I have shown there is not. Your line of thought seems to be, "I am a rational person [we won't get into this just yet]. I have come upon my theories by rational means. Therefore, any statement which contradicts my theories must be irrational, and anyone who knowingly persists in contradicting me after I have shown them the light is therefore a liar."

I'm afraid, sir, that the real world is a bit more complex than your rubik's-cube little mind can fathom. Perhaps a liar I might be, if I were using an unrelated article to directly prop up my original argument, but instead, I used a very pertinent one to shoot down your objection. You have persisted in your cowardly clinging to your original, once-trifling point, and have resorted to accusations which frankly have no basis in reality.

Keynes' actual views on speculation were summed up in his statement: "Speculation may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation." The ludicrousness of attributing the view to him that all speculation was evil can be seen perfectly well in the fact that the Treasury of Kings' College Cambridge was boosted by over 2mn during his tenure as Bursar, the result of Keynes' own speculation on foreign exchange. What d'ye say to that, Stevie?

Hmm.... "my speculation is all right, as long as others don't follow my example." Beautiful.

[ Parent ]
Clintonian parser (1.00 / 1) (#38)
by streetlawyer on Thu May 17, 2001 at 02:04:17 AM EST

You, good sir, are gibbering, insisting that there is any meaningful distinction between investment and speculation at all, which I have shown there is not.

We were not discussing that point. The specific lie on which I picked up the Von Mises Institute was whether *Keynesians* believed that *investment* was motivated by animal spirits. You have in fact shown fuck-all, but that is beside the point. You were caught in a lie about Keynes, not one about speculation. Please stop this Clintonian parsing.

Hmm.... "my speculation is all right, as long as others don't follow my example." Beautiful.

This would only be a useful point if Keynes had actually said that speculation was bad, which he didn't, even though you dishonestly claim he did (see above ad nauseam).

--
Just because things have been nonergodic so far, doesn't mean that they'll be nonergodic forever
[ Parent ]

so that would be no response then (1.00 / 1) (#34)
by streetlawyer on Wed May 16, 2001 at 10:52:32 AM EST

Chicken.

--
Just because things have been nonergodic so far, doesn't mean that they'll be nonergodic forever
[ Parent ]
Ahem. (none / 0) (#36)
by Mr. Excitement on Wed May 16, 2001 at 01:27:59 PM EST

I've already shown that I've got the balls to debate economics with a madman. What've you got? (Besides a comfortable place on the wrong side of Truth.)

[ Parent ]
Other factors (4.33 / 3) (#7)
by dennis on Sun May 13, 2001 at 01:21:28 PM EST

It's not just the dot-coms shutting down. Other factors include:

1) Very high debt by historical standards, both among consumers and businesses. Aside from being dangerous in itself, this limits how much the interest-rate cuts can help--how much more can people borrow?

2) A slowdown in manufacturing, not just high-tech.

3) A stock market that bubbled way higher than historical norms, and is now on its way back to where it ought to be. It's not there yet--if the S&P gets back to its historical average p/e ratio, that puts it at about 800 (from over 1200 now). A p/e of 50 for a company like CocaCola, with stagnant growth, is just silly. As stocks retrench, the "wealth effect" happens in reverse.

In short, it's the same old same old. About a year ago I picked up a copy of the first edition of Graham's Security Analysis, in which he summarized the wild years of the late 20's and how it all shook out afterwards. The parallels between then and now were striking. Not saying it's gonna be that bad, but I'm keeping a lot of my money in cash-equivalents for now.

i don't hate bush, but... (4.00 / 3) (#8)
by Seumas on Mon May 14, 2001 at 05:23:37 AM EST

I don't hate Bush (and I don't like him either), but it's pretty difficult to avoid the fact that stocks were doing fairly well the week of January 12 through 18. The day after Bush came into office, they took a dive and really haven't recovered.

Of course, the economy isn't exactly "in the toilet". We've been hovering close to 11,000 points ont he DOW for a month or so. That's fucking good, even if it is around a thousand points less than the previous year. Anyone holding stock in reputable well-established companies isn't worried becuase they are probably investing on the long-term outlook anyway and they're sure to recover in the next few years.

The economy -- outside of Wall Street, is doing somewhat poorly in a lot of areas because of several things. First, taxes -- as always -- are higher and higher. Second -- and most likely the biggest factor, is that the west coast has a major energy problem (even in Oregon we're looking at our rates trippling in the next several months) and a major water shortage. Both of these effect almost every business there is. Everything from your average restaurant that has to pay $2500/mo on their electric bill instead of $700 and farmers who can't grow a single green plant because their irrigation has been turned off without warning to save the endangered sucker fish.

People are spooked easily. While I have a stake in the market, I wouldn't be disapointed if the whole thing tanked anyway. Greenspan and his non-accountable ass does nothing but perpetuate the unnatural state of our capitalist system by "tweaking" elements of it here and there. I'm all for capitalism (as it seems to be the most natural of human economies), but if you have to make massive changes to keep the economy moving one way or the other, then it isn't a free-market at all. It's a very controlled market established on rumor, fear and total ignorance (hear me loudly -- DAY FUCKING TRADERS! -- ahem...).

Then, of course, you also have the fact that 50% of everyone (and, without saying, a majority of idiots) are invested in the market now whereas not long ago, only 10% of people were. Now, instead of established, proven companies being traded and rewarded accurately with stock prices, you have solid companies that should be at 80 points selling at 20 points while dot-coms with absolutely no history (or even profit for that matter!) sell at 300 points. And thanks to the insurgence of uneducated (and unwilling to be educated) morons, when dumbass-dot-com tanks, they shreik out of the worth-while companies, too.

Perhaps this will serve to weed out some of the more idiotic of traders and investors and leave the next round of increases for the more level-headed of the world.
--
I just read K5 for the articles.

Incorrect (4.00 / 3) (#10)
by finkployd on Mon May 14, 2001 at 08:55:10 AM EST

The economy has been slowing for a year now. Economists have been predicting a downturn for a while now (hell, econ students in my classes have been doing so). As usual, the President has very little to do with the market, unless he does something drastic (declaring war usually affects it).

Finkployd
Sig: (This will get posted after your comments)
[ Parent ]
somewhat correct (none / 0) (#16)
by Seumas on Mon May 14, 2001 at 04:45:29 PM EST

You're correct that the economy was visibly cooling for well over a year, preceding the change in office. You still can't deny that the 'cooling' turned into 'overnight freezing' the moment Bush took office.

The market is cyclical (some people take a cycle or two before they take that to heart), but politics and current events absolutely dictate the attitude and response of people on wall street.
--
I just read K5 for the articles.
[ Parent ]

FYI: You're wrong about the Dow (none / 0) (#39)
by dmontoya on Thu May 17, 2001 at 10:03:17 AM EST

Check yahoo! finance

1 year chart

[ Parent ]

Fund managers don't listen to CNNFn (2.50 / 2) (#11)
by Woodblock on Mon May 14, 2001 at 11:23:08 AM EST

Although, the media could affect consumer spending to some degree, I doubt it can have that much effect on stock market valuations. Most of money in the stock market is not Granny's: it is controlled by professional fund managers. I doubt many of them are going to base their decisions on what the nightly news says about the economy.
-- Real computer scientists don't use computers.
You're crazier than the article! (4.00 / 2) (#12)
by cretin on Mon May 14, 2001 at 12:06:57 PM EST

Where do you think the money that the fund managers invest comes from?

"Truth in Labelling" - with thanks to Steve B.
[ Parent ]

You're a cretin (3.00 / 2) (#13)
by Woodblock on Mon May 14, 2001 at 02:53:38 PM EST

Sure, the money is in Granny's pension is managed by a fund manager, but it's not like she can tell the manager to sell Nortel stock since her local news says so.
-- Real computer scientists don't use computers.
[ Parent ]
Most if not all (none / 0) (#27)
by retinaburn on Tue May 15, 2001 at 08:59:01 AM EST

of the money invested in the stock market is large funds where there is little movement. They make their money by sitting and waiting over a large amount of time. Sure Granny sticks her coins in but on a whim she cannot bail out of a particular stock and stick it in another. She has to choose a different plan and that takes time AND at a loss to her for bailing out of her current plan before she was allowed to.

The stock market is not run by Joe executive that calls his broker 12 times an hour, its run by big big funds. They just don't get the coverage on your nightly news.

I think that we are a young species that often fucks with things we don't know how to unfuck. -- Tycho


[ Parent ]
Fund managers probably watch the news closely (none / 0) (#18)
by smokedjam on Mon May 14, 2001 at 05:12:59 PM EST

From what I can remember, its pretty well accepted that folks perception of the economy has a greater influence on the economy than any non-human economic influencer. hehe does that make sense?

[ Parent ]
The Dillusion of the Tech Economists (2.00 / 1) (#14)
by oshox on Mon May 14, 2001 at 03:08:59 PM EST

The technology economy was everybody's get ritch scheme for a few years. All of the E-Business people were treating the IPO's and dot com's, fuelled by the excess of money flopping around the techmarket, as real assets. The DotCom economy was just a phantom, it wasn't real money. It was just a bunch of mediocre and rapidly deteriorating ideas.
--ELH
Manufacturing Consent (4.00 / 2) (#15)
by Mad Hughagi on Mon May 14, 2001 at 03:11:07 PM EST

Nice theory. Ever watch "Manufacturing Consent" by Noam Chomsky? (I know I'm putting myself in the line of fire here - more left-wing activist bashing is sure to ensue!)

Basically he believes that the media is a social engineering tool that the "higher-ups" use to help us decide what choices to make in our lives, hence manufacturing consent.

I strongly suggest that people watch it... it definately has an air of conspiracy theory to it, but I wouldn't be too quick to overlook his views on the media and how much of a factor it plays in our lives. Watching Manufacturing Consent was like being hit in the head with a baseball bat - I don't think I've ever viewed media in the same light since.


HUGHAGI INDUSTRIES

We don't make the products you like, we make you like the products we make.

Read the Book (4.00 / 2) (#24)
by Jacques Chester on Tue May 15, 2001 at 12:26:00 AM EST

I am locally considered a right-wing scumbag - nevertheless, I read the book.

His approach in the book was far less "Vast Right-Wing Conspiracy", and more "This is the system. These are the driving forces which make it tick".

The latter approach is, however, unemotive and unlikely to ring true with a lot of your common- or garden-variety twits. The fact is that it is a self-perpetuating, self-reinforcing system. But to think that it is self-consciously oppressive or "evil" is really quite amusing - shades of fundamentalists seeing the hand of the Devil at every turn.

Yes, the system is broken. But it's got less to do with "The Media" or "Capitalim" as it has to do with skeptical, free-thinking citizens. See Carl Sagan's "The Demon-Haunted World" for more on the topic.

--
Well now. We seem to be temporarily out of sigs here at the sig factory. We apologise for any inconvenience this may cause.
[ Parent ]

You both should re-read it. (none / 0) (#37)
by Eric Henry on Wed May 16, 2001 at 02:05:23 PM EST

Yes, the system is broken. But it's got less to do with "The Media" or "Capitalim" as it has to do with skeptical, free-thinking citizens. See Carl Sagan's "The Demon-Haunted World" for more on the topic.

You're right, and I was with you pretty much up until the last paragraph. You're right that there isn't any sort of conspiracy. Chomsky specifically adresses this point on like the second page of the preface. The liberals reading the book tend to ignore it though, which isn't particularly surprising.

But your statement that it isn't about the media, or about capitalism is ridiculous. Your second paragraph you refer to "...the driving forces which make it tick." That driving force is capitalism. Chomsky says it himself, "We do not use any kind of "conspiracy" hypothesis to explain mass-media performance. In fact, our treatment is much closer to a "free market" analysis, with the results largely and outcome of the workings of market forces."

Chomsky talks about five different "filters" that result in the creation of propaganda supporting those in power: concentrated ownership, advertising, the use of gov't and corporate "experts", flak (complaints and criticism), and anticomunism as the US national "religion". With possibly the exception of the fourth, they are all the direct result of capitalism and of the state.

Eric Henry

[ Parent ]

Contra-indicated (4.00 / 1) (#17)
by ichimunki on Mon May 14, 2001 at 04:57:21 PM EST

If the media is saying there is a recession on hand and their solution is to horde your savings, they are actually contributing to further recession. While it is a distinctly Keynesian idea, the Federal Reserve has been clipping interest rates lately for the precise reason that they want to make it easier for people to get money to spend (lower rates = cheaper loans) and to reduce incentives to save.

I mean, why leave money in a savings account at low rates when you want a new appliance, television, or computer? If consumers expect the price of the goods to rise (due to inflation) at rates that exceed the interest that money would earn in savings, then it is a good idea to buy now. .

Remember... (4.50 / 2) (#19)
by BloodmoonACK on Mon May 14, 2001 at 05:16:51 PM EST

"Everyone sell your tech stocks -- they're going to go down in price because everyone is selling them!"

You have to remember that this is the way it is with _ALL_ stocks. If a stock is crashing heavily, people want to get out while it doesn't slip lower. But then the SMART analysts will buy the stock when it is cheaper (a very smart move), causing the price to rise, etc.

But I'm not saying your idea doesn't have it's strong points - I've thought about this myself, before. I think one of the biggest problems in our society is that we trust the media so much when we have no idea how reliable these people are. They could just be a thousand monkeys, y'know? The media also has to worry about "ratings" causing their news to be filled with hype. What better way to generate hype than to have this great story about how the economy is going to crash - but THEY can save you! There are some decent publications out there - I enjoy Business Week, although it can still be unreliable it is usually not as bad - but the majority are crap. I dunno, I seem to be rambling, so I'll just leave now ;)

"It's like declaring a 'war on crime' and then claiming every (accused) thief is an 'enemy combatant'." - Hizonner

Bush wants to lower taxes (2.00 / 2) (#21)
by SIGFPE on Mon May 14, 2001 at 06:25:09 PM EST

Because lower taxes supposedly improve businesses Bush needed businesses to be in a state requiring improvement. Hence he manufactured a recession to push through his tax policies. At least that's what a cynic might say.
SIGFPE
Nothing But Sensationalism (4.33 / 3) (#23)
by copo on Mon May 14, 2001 at 10:32:19 PM EST

When it comes to economic news, I never listen to what the media has to say, and I recommend everyone else with an understanding of economics does the same. I do this simply because it is my opinion that few, if any, members of the media have any idea whatsoever about what they're writing.

The unemployment rate is below 5%, inflation is steady, and GDP per quarter hasn't decreased since the early 90s; where exactly is the economic crisis? Yes, the stock market has dipped, but it should be noted that the stock market is NOT the same thing as the nation's economy. Lots of poorly run dot-coms have failed, and it's had an adverse effect on the technology sector only because people were becoming accustomed to seeing these totally irrational business plans turn into stock market riches. I consider that to be a correction of the market, and something that should've happened a long time ago.

All the media is trying to do here is to add a little spice to their product with some mumbo-jumbo about a looming recession. It's the same thing when the media does another piece on how the Internet is nothing but an anonymous way to traffic porn and bomb plans. Most discerning minds see that as a media ploy to sell their product, and I think all of this talk of an economic crisis should be treated the same way. A few weeks ago, I was able to talk with Robert Lucas, a Nobel Prize winner in Economics and one of the greatest minds ever in the field of macroeconomics. Someone I was with asked him if he thought the US economy was heading towards recession; he responded with a hearty laugh at their expense. I think that response pretty much encapsulates exactly how one should react to these stories.

So, I agree with TheGimp: let the newspaper run the classifieds and report baseball scores, and let economists do the economics.

The stock market dropped 100 points today... (3.75 / 4) (#25)
by hadashi on Tue May 15, 2001 at 01:52:30 AM EST

on rumors that the stock market would drop 100 points today.

That is all...
-- If the .sig fits...

my senior project dealt with this (none / 0) (#40)
by cryon on Sat May 19, 2001 at 07:34:31 PM EST

see my senior project at http://www.geocities.com/uhdseniorproject/
HTGS75OBEY21IRTYG54564ACCEPT64AUTHORITY41V KKJWQKHD23CONSUME78GJHGYTMNQYRTY74SLEEP38H TYTR32CONFORM12GNIYIPWG64VOTER4APATHY42JLQ TYFGB64MONEY3IS4YOUR7GOD62MGTSB21CONFORM34 SDF53MARRY6AND2REPRODUCE534TYWHJZKJ34OBEY6

How old are you? (none / 0) (#41)
by Wondertoad on Sat May 26, 2001 at 12:44:22 AM EST

How you perceive the current slowdown is largely going to be a matter of how old you are, and whether you've lived through A) the last one, B) the one before that, C) the late-70s "malaise" D) the depression.

If you've lived through C or D, the phrase "by now it should have leveled off" sounds sadly naive. I say that with all due respect, because I really don't want to sound like some old guy saying "you kids today don't appreciate the value of money..."

One thing that Econ 101 teaches is that the business cycle is inevitable. (Well, if you have a competent prof.) The folks who look at these things can document the cycle happening over and over again. And who knows why? There are definitely deep psychosocial phenomena inside the economy that we don't understand, may not ever understand. But we can look at history and see how the cycle always comes around.

If we look at history, then, the current downturn has a way to go still. This week's news that fuel prices are likely to head higher is not a good thing. Higher fuel prices mean higher prices for everything that is transported somewhere.


I believe the "Economy" = "Mass Psy (none / 0) (#42)
by chazzzzy on Mon May 28, 2001 at 09:57:56 AM EST

...Media" In other words, the only reason stocks go up is because people decide that they like them and buy them and they go up. If a large enough groupd of people think otherwise, then they sell and they go down.

The economy works this way as well, and the Media are simply people like you and me who repeat what they hear people saying around them, and when a lot of people say that the economy is bad, they simply support it, and help make it happen.

It's the Psychology of the Masses, it's what made people pay rediculous prices for Tulips in the old Tulip craze hundreds of years ago, and did the same thing recently with the Internet. It's not a conspiracy, because it would be tough for one person to "start" a craze like that, AND contrary to what people think, individual investors actually own more stock and thus drive the market more than the Institutional investors, that's why when the Individuals as a group freaked out about Internet stocks and pulled out, they caused a LOT of Institiutional investors to lose alot of money.

"Mass Psychology"-what heading supposed (none / 0) (#43)
by chazzzzy on Mon May 28, 2001 at 10:01:50 AM EST

Sorry.. new to this..

[ Parent ]
The Economy is F**ked (none / 0) (#44)
by tapir on Wed May 30, 2001 at 09:13:53 AM EST

In the last century we had two stock-market booms like the one that we've just lived through: in the 1920's and the 1960's. After those, we had the 1930's and 1970's -- a stock-market boom does enough harm to the economy that we'll have 10 to 20 bad years.

Now, some people say, "Don't central banks know better today? Couldn't we prevent something like that from happening again?" They're half right. In the 1930's, if a bank was failing, we shut it down. Banks fell like a row of dominoes, resulting in a massive system failure, a deflationary spiral.

In the 1970's, the Fed knew better -- rather than letting major financial institutions fail, they could just print money to keep them going. The result? Runaway inflation that led our financial system to the brink of collapse in 1980. Then we got Paul Volcker, Ronald Reagan, and the world's first "Structural Adjustment" program. Since then we've been living in the world of "globalization", a relentless war against inflation.

The boom of the 1990's was financed by a huge expansion of household and corporate debt. The Fed is currently lowering interest rates to reduce the burden that that debt places on the economy. However, that debt is growing fast than our ability to pay it, and it ultimately is going to suck money away from consumer spending. Then people lose their jobs, and can't pay their debts, and that hurts the banks, which hurts the economy, which makes people lose jobs..

Thus we're vulnerable to the deflationary spiral. The Fed can abort the deflationary spiral if they're willing to abandon the war against inflation. I think they will. Why? People are in the streets. If people between 30 and 60 see capitalism collapse before their eyes, they're going to join their kids throwing bricks at the cops outside the world bank...

This is *my* experience (none / 0) (#45)
by briandunbar on Thu May 31, 2001 at 12:18:46 AM EST

I think it is until one of two things happens. Either the media beings to publish articles about how the market has bottomed out and it's a good time to buy, or a majority of the population realizes what's going on and corrects itself. Something's got to happen eventually - which one is the question? I'm betting on the first choice; I never bet on the wisdom of the public (then again, why bet on the wisdom of the media?)

Here's my experience. I Am Not an Economist, simply a humble system administrator.

We're a printed circuit design bureau. Our work *stopped* nearly a month ago, for about two weeks. The designers tooks some well needed time off, finished up a few long term projects, and we tooka deep breath. About three weeks ago, ALL of our clients (and some new ones) started putting in orders for more work. We've got more work than we can handle, and are shopping it out to the other bureaus in the company.

The ops manager put it best when the work tapered off. All of the 'big companies' were laying off talent, shutting down production in a panic. Sooner rather than later, he claimed they would wake up and realize that they still needed to make money - and they made money by making stuff. Which requires that they spend a bit on the front end.

Corporate has officially told us to watch our spending - which means no new workstations for a few months, and I can't (yet) spend the bucks on that Sun Ultra 80 I have my eye on.

The bureau I work for was designed with a recession in mind. We could have easily staffed twice the number of staff than we have, but that would have required that we just lay them off when (as now) we go through an adjustment bobble. We're doing just fine, thank you, and it's hard to see what all of the fuss is about. It's true that we don't make as much money when times are a'booming, but we're better positioned for the long haul. The theory is that less turbulence equals more long term profit.

(We did pick up a major account who were disconcerted when their large design bureau closed up shop with little warning, and their project(s) already behind schedule).

On a side note - I went to order a Gateway Solo 9500 and was taken aback when I saw that Gateway has removed the option to purchase anything larger than a 15gb hard drive, and no more than 256k or RAM. Two weeks ago, both were valid options. The rep reported that you could still order them via a person, but it was like jumping through hoops, and he wasn't sure until he checked that the extra ram and larger hard drives were still available. More media driven psychosis?


Feed the poor, eat the rich!

The Economic Crisis of the Mind | 45 comments (44 topical, 1 editorial, 0 hidden)
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