Is the economy really just "in our heads".

[Fleshofthegods]

Obviously the economy is a man made creation. Do people's frames of mind affect the economy? If the media reports that the economy is bad, inflation is up, food prices are out of control etc etc. Then doesn't that cause people to spend less money, which makes the economy even worse than it already is? Maybe the economy hasn't gotten better, because the media reports on how bad the economy is so people think that they need to hold on to their money rather than spend it which is obviously not good for the economy.

 

[1Perry]

Obviously the economy is a man made creation. Do people's frames of mind affect the economy? If the media reports that the economy is bad, inflation is up, food prices are out of control etc etc. Then doesn't that cause people to spend less money, which makes the economy even worse than it already is? Maybe the economy hasn't gotten better, because the media reports on how bad the economy is so people think that they need to hold on to their money rather than spend it which is obviously not good for the economy.

It has a bearing on it. What has an even bigger one is that prices are up.

 

[Fleshofthegods]

It has a bearing on it. What has an even bigger one is that prices are up.

Yeah which is caused by inflation, which is caused by the Fed printing too much money. IMO the government is purposely trying to make people poor.

 

[Slartibartfast]

Obviously the economy is a man made creation. Do people's frames of mind affect the economy? If the media reports that the economy is bad, inflation is up, food prices are out of control etc etc. Then doesn't that cause people to spend less money, which makes the economy even worse than it already is? Maybe the economy hasn't gotten better, because the media reports on how bad the economy is so people think that they need to hold on to their money rather than spend it which is obviously not good for the economy.

Any economic system is a man made creation that is as natural or unnatural as any idea.

Like any social construct, its not objectively real.

 

[Fleshofthegods]

Any economic system is a man made creation that is as natural or unnatural as any idea.

Like any social construct, its not objectively real.

Yes so an economy can also be subjective in nature? A person's state of mind can affect the economy?

 

[Slartibartfast]

Yes so an economy can also be subjective in nature? A person's state of mind can affect the economy?

Of course it can, if enough people believe something and act on it, that will become a factor in economic activity.

 

[Temporal]

I think supply/demand theory as it is currently being applied is bunk, as there is not true scarcity. Prices are rising due to greed and collusion between government and corporations.

Consumer capitalism is inefficient at distributing resources and innovations, especially when the wealth of nations is being transferred to private hands.

We are returning to a de facto plutocracy. The financial elites have successfully usurped democracy, via the economy. Our forefathers predicted this accurately, but it's a shame they built nothing into the Constitution to guard against it.

 

[Fleshofthegods]

Of course it can, if enough people believe something and act on it, that will become a factor in economic activity.

So if the media were to talk about such things as inflation, recession, inflation, gas prices, and food prices. They could essentially create a recession out of fear and misinformation?

 

[Harry Guerrilla]

Obviously the economy is a man made creation. Do people's frames of mind affect the economy? If the media reports that the economy is bad, inflation is up, food prices are out of control etc etc. Then doesn't that cause people to spend less money, which makes the economy even worse than it already is? Maybe the economy hasn't gotten better, because the media reports on how bad the economy is so people think that they need to hold on to their money rather than spend it which is obviously not good for the economy.

Economies are built on a base of human psychology.

 

[Temporal]

Economies are built on a base of human psychology.

Which in of itself is not always accurate.

 

[1Perry]

Yeah which is caused by inflation, which is caused by the Fed printing too much money. IMO the government is purposely trying to make people poor.

Completely on board with you here with the caveat that there are some that benefit from inflation. Geithner's buddies.

 

[1Perry]

So if the media were to talk about such things as inflation, recession, inflation, gas prices, and food prices. They could essentially create a recession out of fear and misinformation?

I guess you are speaking about some made up scenario here? Because all of those things are factual with our current situation.

 

[Harry Guerrilla]

Which in of itself is not always accurate.

Humans aren't perfect, just like everything else in the world.
Not news to me.

It's all ebb and flow.

 

[gmeyers1944]

I think supply/demand theory as it is currently being applied is bunk, as there is not true scarcity. Prices are rising due to greed and collusion between government and corporations.

Consumer capitalism is inefficient at distributing resources and innovations, especially when the wealth of nations is being transferred to private hands.

We are returning to a de facto plutocracy. The financial elites have successfully usurped democracy, via the economy. Our forefathers predicted this accurately, but it's a shame they built nothing into the Constitution to guard against it.

View attachment 67117705

I agree with the Thoman Jefferson quote. Did you know that the biggest threat is what many people believe to be part of the government, but in reality is only a bank? The Federal Reserve BANK.

 

[Cameron]

Obviously the economy is a man made creation. Do people's frames of mind affect the economy? If the media reports that the economy is bad, inflation is up, food prices are out of control etc etc. Then doesn't that cause people to spend less money, which makes the economy even worse than it already is? Maybe the economy hasn't gotten better, because the media reports on how bad the economy is so people think that they need to hold on to their money rather than spend it which is obviously not good for the economy.

All of that definitely effects the stock market, with a speed and substantiality that seems pretty ridiculous to me. It also effects consumer demand and investment decisions, in a more understandable fashion. So my answer is yes.

That is why it would be especially good to have two parties interested in working together. Cooperation would get both consumers and investors feeling more comfortable spending their money. Instead, we have both parties predicting complete disaster should the other get their way. No wonder we haven't seen any significant recovery.

 

[Fleshofthegods]

I guess you are speaking about some made up scenario here? Because all of those things are factual with our current situation.

Yeah, but the corporations control the prices so they can create an artificial recession.

 

[Aunt Spiker]

Obviously the economy is a man made creation. Do people's frames of mind affect the economy? If the media reports that the economy is bad, inflation is up, food prices are out of control etc etc. Then doesn't that cause people to spend less money, which makes the economy even worse than it already is? Maybe the economy hasn't gotten better, because the media reports on how bad the economy is so people think that they need to hold on to their money rather than spend it which is obviously not good for the economy.

You know - per the food prices - I don't think it's that bad. Maybe it's just me and my stringent shopping habits: but I'm still buying many of the same items without paying a lot more. Things shot up years ago - before the election - all over 'the cost of oil rising so all of our costs are going up' (which people have completely forgotten about) but things have seemed to stabilize since then.

 

[Fleshofthegods]

You know - per the food prices - I don't think it's that bad. Maybe it's just me and my stringent shopping habits: but I'm still buying many of the same items without paying a lot more. Things shot up years ago - before the election - all over 'the cost of oil rising so all of our costs are going up' (which people have completely forgotten about) but things have seemed to stabilize since then.

Yeah, but there is no doubt that the economy hasn't gotten better and people are still talking about how bad the economy is. IMO there is a direct correlation.

 

[FluffyNinja]

I think supply/demand theory as it is currently being applied is bunk, as there is not true scarcity. Prices are rising due to greed and collusion between government and corporations.

Please explain how there is not "true" scarcity? The vast consensus of modern economists seem to disagree with you on this point. Also, you are mixing two completely different aspects of modern economies. The law of supply and demand can and does act independently of the concept of scarcity. Supply and Demand are used to explain trends in a focused market while scarcity is a very general concept used to apply to any and all resources as they apply to unlimited human needs/wants. :thinking:

 

[FluffyNinja]

Yeah, but the corporations control the prices so they can create an artificial recession.

This smells of "corporate conspiracy"....................corporations acting in collusion rather than in competition to intentionally "shrink" productivity and to forestall economic growth? Not very logical and not very likely. There are those of us who still believe that, in general, prices are determined by market activity. :shrug:

 

[sookster]

First, the private banking sector has to go. I do not understand why people let the private banking sector exist when there is such an easy way to collapse it all, and it would require a lot of work in organization, but the act itself of collapsing the fractional banking system is completely legal. EVERYONE would have to demand a withdrawal of all their money. Boom. Private banking sector will collapse eventually.

In any case, economics isn't a true science with the current belief system. The current belief is that economic growth is infinite. And that, is extremely naive on how this world operates.

This past recession was scary for me now that I think about it. But if I step back further and think about it more, I still had a roof over my head and running water and food. GDP did go down, but 1960's GDP was substantially less than ours right? Were they living in caves? The point I am trying to convey, is that if GDP falls by a certain percent, we "aren't going back to the caves" as a lot of "intelligent" economists claim.

The problem with our recession and what faces our government is that the recession is a demand problem. The only known system that works with a demand problem, is Keynsian Theory. The conservative or more traditional approach of cutting taxes works great if there is a supply problem. The companies would take the extra revenue to hire more people to make more supply. When there is a demand problem, why would companies hire more people to make even a larger surplus of supply? That doesn't make sense. Companies still want this policy anyways because they will pay less taxes and have higher profits.

The public perception of Keynsian Theory is a negative one, and rightfully so! Keynsian got us out of The Great Depression. There is no denying that. It is a brilliant way to inflate the demand curve (remember, our recession is issues with demand, not supply) however politicians over the decades have been half Keynsian so to speak. Keynes wrote that once the government recieved a surplus of funds from the increased consumption, to then use those funds to pay back the deficit spending. This obviously was never done. So now the government is in a pickle. The know the solution is Keynsian Theory. But if they were to do even more deficit spending with the national debt that our country is at right now, that would risk everyone's power.

So I am not exactly sure what they truly know to do. They also know they have to put the image they are doing something. And, on the republican side, much of their lobbyists are big business. Therefore, the traditional approach is advertised compounded by the fact that it is different than Obama's.

In my opinion, these are the kind of issues you run into when dealing with fiat currency. There are advantages and disadvantages to everything. I am vastly intrigued about learning more about currencies that are based off of something. Further, I am a more radical thinker, and I do not think we as a people need currency anymore, and no that does not mean we will have to barter! We could create an economy that is based upon the very resources of this Earth. But that is another discussion.

 

[imagep]

Yeah which is caused by inflation, which is caused by the Fed printing too much money. IMO the government is purposely trying to make people poor.

Thats way over too simplistic. There are no "laws" in economics the same way there are laws of physics.

Inflation can be caused by a lot of things, and the fed printing money may or may not be one of them. If the fed prints money, and that money is not circulating, inflation may not occur. Also, things like a resource becoming more scarce, or neccesary, or simply poopular can make an item go up.

 

[imagep]

So if the media were to talk about such things as inflation, recession, inflation, gas prices, and food prices. They could essentially create a recession out of fear and misinformation?

I belive so.

 

[Fleshofthegods]

Thats way over too simplistic. There are no "laws" in economics the same way there are laws of physics.

Inflation can be caused by a lot of things, and the fed printing money may or may not be one of them. If the fed prints money, and that money is not circulating, inflation may not occur. Also, things like a resource becoming more scarce, or neccesary, or simply poopular can make an item go up.

I didn't say anything about laws. I know there are different reasons for inflation, but right now the Fed printing money is a big issue and people like Ron Paul want the Fed to be audited.

 

[Harry Guerrilla]

Thats way over too simplistic. There are no "laws" in economics the same way there are laws of physics.

Inflation can be caused by a lot of things, and the fed printing money may or may not be one of them. If the fed prints money, and that money is not circulating, inflation may not occur. Also, things like a resource becoming more scarce, or neccesary, or simply poopular can make an item go up.

I would disagree with this saying that, there are axioms in economics, that sometimes function like the laws of physics.
Economics is just a numerical representation of the physical world and the actions of its inhabitants.

So there is a correlation to physics, in it some where.