The economy is bad only cause people say is bad

[crow01]

I have a solution to the economy, based on a war-movie i watched recently. Where they made up a fake war.

The government should get together with the media, and say the economy is good. yes, this is a little bit of a lie. But it might be the only way.

As it was explained to me by a stock broker. Company A can have stock at $40/share, let's say they make cars.

The gas is relatively expensive, historically and in comparison to other products. Let's say the gas is $4/gal. People complain is expensive, but they still buy an apple mac for $2,000 or an iphone for $300. Was that expensive, hell yeah!

So the media says gas is so expensive and economy is bad. Company A's stock goes down to $20. How? Investors, could be anybody you or me, think they should take their stock from Company A to company B. So I dump the stock and so 500 more people.

Gas starts going down, now gas is at $2/gal. Media still says economy is bad. But then didn't they say it was bad, cause gas was high, and now it's still bad?

People keeps on dumping shares of stocks, stock goes down to $10, $5, $.50. Company A goes bankrupt. It is bought by Company B.

Media says 10,000 layoffs. Company B buys cheap, they liquidate Company A. Think of it as Lego, and they just put it apart into pieces.

People run for their lives, they think Company C is next and so on.

The same with housing. Yeah companies made bad calls, really bad. Who really gets affected, not the CEOs or upper management. They either get richer or go to jail. The rest are just screwed. So no matter how much money you saved for retirement, you are still screwed.

So what the media should say from now on is:
- The economy is good. Gas is low. You got a new president
- Go ask for a house loan, prices are low
- Go on vacation
- Everything is gonna be alright

People wont panic and they will stop dumping shares like crazy. Stock doesn't go down. Companies won't go bankrupt. No layoffs, etc.

[Georynn]

Why would the media want to put themselves out of business...

Most of the news is just there to scare you... thereby influencing you.

If they told you everything was going to be fine, you wouldn't watch the news anymore...

[mimaz]

Originally Posted by Georynn

Why would the media want to put themselves out of business...

Most of the news is just there to scare you... thereby influencing you.

If they told you everything was going to be fine, you wouldn't watch the news anymore...

I've always heard...........it's tough to sell a newspaper full of GOOD news.

[tycobb73]

Companies don't go bankrupt becaus their stockprices go down. They go bankrupt and thier stockprices go down because their expenses exceed thier sales. This is happening to a lot of companies, mainly the big 3 and the banks.

[thefruitfarmer]

There's a lot of psychology in economics but there are market forces as well.

[Georynn]

Originally Posted by thefruitfarmer

There's a lot of psychology in economics but there are market forces as well.

The psychology is an indirect force, when the news reports something bad about a product or company, people react negatively to this, sales go down... etc...

[spade2you]

Yes and no. The economy is a complex web of things part of the stocks are based on "faith" in the economy and futures. If there's no faith in the future of stocks and bonds, people sell like mad, which can further devalue them. Yes, the media is driving home the fear and this could potentially be significant, but there are plenty of other factors to consider. One econ prof of mine said that economic cycles are usually based on what was laid out a decade ago.

[DudeistMonk]

Lets not forget this is international as well...you would need to get practically every country in the world in on your scheme.

The only reason gas is "low" (when I started driving only 6 years ago it was still under a dollar a gallon and that was "high" then) right now is because its winter, summer rolls around and the prices will be back.

I also would credit energy with being the #1 cause for this recession, its the grandest currency of them all, every organism on earth competes for it, and we are exhausting our supply. I hope to see a solar panel industry the likes of US auto back in the day, I see this is as the single best way to bring us out of a recession and into a new era of prosperity...that or fusion.

[iamlowsound]

None of the OP would work. The US government kept saying that the economy was fine, all the while the housing crises was unfolding, all the way up until the middle of the election, when the dow dropped like crazy the first time. At which point there were still some people saying that the economy was fine. In fact, the US has been in a recession for almost a year, and it is only in the last month that people have been starting to say that the economy COULD go into recession. So, no, the OP is not a good idea. It is time to man up, admit that the economy sucks and find a way to deal with it.

lowsound

[MatticusMania]

If gas was $4 a gallon I'd be paying close to $100 a week.

An iphone purchase of $300 would only affect me one time.

I'd say gas is a hell of a lot more expensive than an iphone, even at $2 a gallon.

[hey]

Wouldn't work because it's quite obvious stocks suck right now. Dow Jones hit it's all time low (7400ish) in the last year today I believe.

[MakiSupaStar]

2+2=5. - "1984" - George Orwell.

[thefruitfarmer]

Originally Posted by Georynn

The psychology is an indirect force, when the news reports something bad about a product or company, people react negatively to this, sales go down... etc...

What I am saying is that it's the perception of a situation that influences what happens.

For example, until last year ( and back in 1987 before that crash ) people really believed that house prices would carry on going up indefinately so they carried on borrowing more and more to pay the higher and higher house prices. However, the economy is a self regulating thing and as more and more people are priced out of the market it eventually reaches a crisis point where prices crash as demand reduces and everything stops moving.

History shows us this but people have short memories and don't believe it will happen.

Boom bust is inevitable in a "western" free market type economy.

[Mark Latimour]

You know, i'm pretty sure just telling the 10's of thousands of people who have lost their job that the economy is doing okay probably won't cheer them up.

[Georynn]

That reminds me of the tag line for the upcoming movie. 2012.

"if you were the government, and you had to tell the world that the end was near how would you do it?....

You wouldn't"

[runmikeyrun]

The problem is everything is built on fear, panic, and greed. Greed makes traders and companies do things to make as much money as possibile, but when a little fear comes into play it turns into panic and things go haywire. That's one of the main reasons we have a problem now- the more people get afraid the more they panic, which leads to more fear, and more panic, until there's nothing left to fear because it's gone.

Greed is also a factor- they're finding out that the bailout money is going to multi-million dollar payouts to CEOs and the like instead of banks loaning money to people or paying off debts. Anyone who thought a blank check was going to work was stupid, but again fear and panic played into that decision- the market said if we didn't do something immediately without thinking the worst would happen. So congress got afraid and panicked and just passed legislation without a lot of regulation on how the money could be used or how to enforce it. Thank God they're using some brains with the automakers and asking for a proposal.

[Gubna]

That's not going to fix the fact that this country is pretty much bankrupt.

[Gubna]

Originally Posted by Georynn

That reminds me of the tag line for the upcoming movie. 2012.

"if you were the government, and you had to tell the world that the end was near how would you do it?....

You wouldn't"

any chance they're going to make "2112" into a movie?

[DudeistMonk]

I have a solution to the economy, based on a war-movie i watched recently. Where they made up a fake war.

Wag The Dog?

[Chunk-O-Funk]

How come I can't find an "economics fail" poster?