In an October poll conducted by CNN, 6 in 10 Americans believe that it is somewhat likely or very likely that we will head into a depression. Personally, I blame the media for this. With several 24 hour news channels, we are constantly bombarded with negative news stories talking about how bad things are. I don’t see a majority of people living in mud huts, do you? Who did these people poll, 100% of the unemployed?
I feel that there is NO WAY that we will see another depression and even the experts seem to agree. Mark Riepe, a CFA at Charles Schwab, gives a great explanation on how a depression is highly unlikely. Here is a snipit of some of the numbers that were used to debunk depression fears:
GDP Growth
-27% in Great Depression vs. 1% today
Unemployment
25% in Great Depression vs. 6.7% today
Industrial Production
-52% in Great Depression vs. -2% today
If my eyes are seeing this right, these numbers are nowhere near Great Depression figures. Yet, when you watch the nightly news it seems like cardboard boxes are only a few months away. I think we may be getting to the point where we just have too much information available to us. Many people also fall into the trap of not forming their own opinion or doing the research for themselves. Many of these reporters can say anything that they want to and many people believe every word they say.
Where you one of the original people who thought a depression was probable? What made you come to that conclusion?
Anyone think the media is getting too powerful?
photo by: onohoku
I think that the media is definitely overdoing it and that the American media is garbage. I also think that they do have a point in that this is a serious matter and it still might take a few months for the extent of these layoffs to really figure in to the economic figures. Until then expect overdramatization, Our media cares about ratings NOT good news!
We have too many checks in our system today than we had in 1930s. We did not have SIPC, FDIC and a bunch of other regulators that are constantly adjusting the system. The media is definately over doing it.