The Cause of the “GREAT RECESSION” Revealed!
December 2, 2009
So now that we are thawing out of what many call “The Great Recession” I am still having a problem with what the masses believe is the cause of it all. I think we can all agree that there are a handful of reasons why most people and/or experts believe that the global economic markets shuddered as they did in 2008/2009. Was it the greedy banks preying on people with poor credit, was it the Bush administration’s DEREGULATION frenzy, or was it the Clinton administrations REGULATION frenzy? Perhaps it was the skyrocketing energy prices last summer? Oh wait, we can’t forget the real estate “bubble” collapse and lest we disregard the death of the investment bank.
I have an altogether different theory.
The near collapse of the Worlds Economy was fabricated and exacerbated by……GLOBAL MASS MEDIA.
You heard right, this is no conspiracy theory lets look at the facts. Not the kind of facts you read every day which include countless talking head experts analyzing numbers and trends, I am talking about the fact that all of us see in our daily lives. How many people do you know that didn’t buy a new Ipod touch last September because Lehman Brothers declared bankruptcy? How many people removed the Showtime/HBO package from their cable lineup because they heard their house (which is not for sale) has depreciated in value for the first time in two decades? How many hard working Americans sat at home in early 2008 cursing their banks for giving them 2% returns on their money market savings accounts or for giving cheap credit to them even though their credit history was spotty at best? The answers to all these questions and other similar to them is… NONE. That’s right ZERO.
We can all agree that ours is a consumer based economy, this also reflects a vast majority of first world countries across the globe. Companies like Microsoft don’t start laying off thousands of employees because they have suddenly lost money overnight. People ask why do companies lay off employees when revenue are high and profits increase? The answer is….FEAR!
Where did this fear come from?
It certainly didn’t come from bustling shopping malls across America in August of 2008. It didn’t come from fortune 500 corporations planning holiday parties and huge executive bonuses, and it certainly didn’t come from cash rich investment banks such as Goldman Sachs and JP Morgan Chase. This fear was created by the money hungry self-righteous and highly irresponsible mass media outlets of the world. Not a single day went by without a story reminding us how screwed we all are. Nary would a morning commence without a news anchor telling you to horde every penny of cash you posses sell your house ASAP and fear the impending apocalypse. Literally every single day for 6 plus months!
Fear mongering has been a very lucrative profession (cough, cough, religion, cough, cough) for ages and rarely has it been more obvious than the winter of 2008. I say stop blaming the “greedy” banks who where only giving us what we wanted and craved. Stop blaming your uniformed real estate agents guaranteeing huge appreciation (we should have been smart enough to know that value doesn’t go in one direction infinitely). Stop blaming our impotent figurehead leaders who are simply following what they perceive the public wants at the time, and have nothing to gain from a financial systems collapse, I can assure you!
Start blaming yourself for making rash and poor decisions and falling for the filth that you where fed on the nightly news. We stopped buying because we where scared our jobs would evaporate. Companies starting laying-off employees en mass because people stopped spending money and everyone was certain our economy was doomed (surely revenues would plummet for years to come). This self perpetuated itself until the self fulfilling prophecy we where fed every night, came to fruition! There was absolutely no reason for insanely cash rich and highly hedged companies to fold in a matter of weeks (any expert who proclaims otherwise will never be able to produce solid facts). This recession wasn’t caused by a typical economic ebb and flow! It is a vicious yet fabricated cycle and I think that any so-called reporter who continues to write stories about how pessimistic we need to be should cry themselves to sleep every night.
We all need to relax, our economy will recover. We will find jobs again. Energy prices will skyrocket again. You will spend another $300 on next years Ipod because your 1 year old touch looks so stinking old…..and people with horrific credit who have no business buying expensive cars will once again be able to drive BMW’s.
…..and the media will once again scare the crap out of us and another recession will occur….just because FEAR SELLS!
December 3, 2009 at 8:50 pm
They cover all these topics in a new show called CSI: The Mentalist. Booooooooring.
December 4, 2009 at 3:26 pm
I think the media does contribute to downward trends in the economy, but not the extent that you are suggesting. I have often thought if media outlets reported good news about economy, then people would be more encouraged to invest.
I do think that banks are a big problem. You can’t even get a straight answer from them as to where the bail out money has gone. That bail out money was intended to thaw a credit freeze. Banks are not lending any more after the bail out even to qualified people. They are all holding on to that money. The problem is everywhere you look the so called “experts” on the Fed or consultants that are supposed to be helping this mess are all ex Goldman or other big bank board members. Their only concern to keep making money for themselves and their cronies.
Our country has a lot more hard working and not financially savvy people than hard working and financially savvy people. Large banks and credit card companies depend on this every day to make money. Financial management should be a requisite course from high school on, because people just dont know anything else to do with money but spend it until they get into a situation where they owe more then they make.
December 4, 2009 at 4:50 pm
Thank you so much for your comment Nieko…There are a couple of things I can challenge with your argument.
First is that the TARP money has in fact thawed out the credit markets and many banks have already paid the government back. The whole business of “banks cant tell us where the money went” is just more media embelishment. These types of lies make headlines…..dig a little deeper and you will find out that just last week, Bank of America was the latest mega bank to pay back their TARP money! Credit is available and cheap right now, you just need great credit to obtain it….I dont see anything wrong with that.
Secondly, yes the fed is populated with ex Wall Street types, but I disagree that they do not care about the concumer or the economy. Their lined pockets wont mean much if the economy crumbles. The idea that these “bankers” are only out to get us is another media fairy tale. They have nothing to gain from this country failing. They want a healthy and functioning economy just as much as we do!
And thirdly, you are definitely correct that there are way more people in this country who are not financially saavy, does that mean that they need to be protected from themselves? I dont think so! I think that adults should be held accountable for their actions. If you make poor uninformed business decisions, you should have to pay the price if they fall through. This is more evident than ever before considering how much free and available information there is at people fingertips. Yes even if you dont own a computer!
Keep in mind, these banks did plenty well when they refused to give cheap money to high risk borrowers. This entire sub-prime lending industry is barely a decade old. Before the turn of the millenia, sub-prime lending was a niche market…beleive me I worked for one.
I am in no was a blind supporter of the elite and I certainly beleive that most people who have made a fortune off of other peoples money have done plenty of cheating and lying, but I can’t hate them for it because I can only control my own destiny. I am ready to take the consiquences of someone bamboozles me out of my money.
I won’t be happy about it, but I’ll take it like a man…..and I think most Americans need to as well!