“It’s this recession, pushing prices up and that.” Oh dear (poor grammar aside). This was the comment made to me a couple years ago by a patron in a bar. As an economics student at the time, I felt compelled to intervene and correct the poor chap. Cue a long, impromptu (and highly brilliant) introduction to macroeconomics.
I remember this exchange for several reasons, not least because it made me realise that the financial sector, the economy, were quickly becoming a mainstream news item on an ever-increasing basis. Unfortunately – as is often the way – the public was being exposed to an area that it didn’t (and probably still doesn’t) understand fully, by a media vehicle forecasting the end of the world as we know it, a satanic banking sector, everlasting [economic] depression, our live in tatters. No wonder there was – and still is – widespread malaise.
As is often stated, a good day in the markets is a quiet day in the newsroom, with media outlets’ growing focus on the negative to sell a story (probably much to the delight of a country renowned for its moaning). Recently, this has got me thinking; where would we be (economically) if things were different, if there wasn’t an omnipresent sense of doom and gloom when we turn on the news or open a paper?
A key stimulus in the recovery of an economy is consumer confidence and an injection of demand. UK consumer confidence fell to its lowest-recorded levels in October. Perhaps a large part of this is caused by a negative media outlook depressing expectations of consumers who don’t fully understand. Consumer demand falls, spending contracts. As a result we have a stagnating economy with a prolonged and faltering recovery. Would a more positive media angle quicken recovery? Germany, Australia, Ireland etc are all well on the way after all. It’s an interesting thought…