The Economics of Attitude

This is my actual Econ 101
"Equilibrium" chart
from my notes in college:-)

   Well, the DOW took a huge plunge yesterday (8/4/11) and the related article in today's Daytona Beach News Journal screamed:  "Markets Gripped By Fear."


     It then went on to explain how "desperate traders" were trying to find safe havens for their money, as news of economic woes swept through Italy and Spain.
Gold spiked at an all-time high...  Unemployment figures were disheartening...  GDP numbers were less than we hoped for...  More manufacturing jobs went to China and Malaysia.  O! M! G!  "Run, Chicken Licken, the sky is falling!"  Surely, the world is coming to an end!

Economics, I believe, is nothing more than our reaction to a set of circumstances.  It has been said that, "Nothing is, that our thinking does not make it so."  The life expectancy of a trader on the floor of the New York Stock Exchange can't be very long, because they say that stress can kill you.  Back during the Vietnam War, we Lieutenants used to take sick pride in the legend that:  "A Platoon Leader's life expectancy in combat is only 15 seconds!"  It must be the same sort of thing for traders on a bad market day!

   Now I'm not a preacher, but I sure appreciate what the Bible has to say about everyday life issues.  On the topic of "worry," the evangelist Matthew wrote:

• "Can any one of you by worrying add a single hour to your life?"
• and  "Therefore do not worry about tomorrow, for tomorrow will worry about itself. Each day has enough trouble of its own."

   Terrific advice, I'd say.  But maybe they were blessed 2,000 years ago, by not being overwhelmed by Facebook, Twitter, Text Messages, FOX & MSNBC and constant/instant Cable coverage of the minute details of life?  I wonder if Matthew had his own QR Code? 


NEWS FLASH:  The media makes great sport of whipping breezes into tornadoes.  News reporter: "Do you believe that today's market losses will PLUNGE THE ENTIRE WORLD INTO AN ENDLESS DEPRESSION... AND POSSIBLY WORLD WAR III?... WELL, DO YOU!!!???" 

The modern day evangelist, Yogi Berra, would say, 

• "Hey, 90% of economics is half mental!"

I say this:  "The measure of an economy is not what happens to it, but rather how we react to what happens!"  Or, as my brother used to say, "S--t Happens.  So what.  Now what?"