The online encyclopedia, Wikipedia, defines consumer confidence as “the degree of optimism on the state of the economy that consumers are expressing through their activities of savings and spending.” In other words, consumer confidence is little more than the public’s opinion, or perception or how good, or bad, the economy is doing, at any given time expressed by how much they spend, or don’t spend. This can be easily seen in the stock market.
Positive and negative trends in the stock market are largely driven by the perceptions and expectations of the investors. Actual events are not nearly as important as what the public expects to happen. If investors believe that the economy is strong, they are more inclined to invest in the expectation of larger gains. If they fear a downturn in the economy, they are more inclined to sell off their investments to protect their savings. Once panic sets in, negative expectations become a self-fulfilling prophecy and we have a crash in the market. The market is relatively easy to manipulate, positively or negatively, depending on what investors can be convinced to expect. Savvy manipulators of the market can cause major shifts in the market for their own personal gains or purposes.
I was recently reorganizing some old files in my home office and rediscovered a letter to the editor that I had written during the buildup to what has come to be known as Gulf War I. The letter was written in January 1991, during the time that American troops were staging in Saudi Arabia, preparing to visit Sadam Hussein. It referred back to the prior November, when Americans back stateside were beginning their annual Christmas shopping.
My letter addressed what I saw as a curious scam being perpetrated on the American public. I made mention of how Congressional Democrats and the news media had been insisting for quite some time that America was on a collision course with either a major recession or an economic depression. Both groups had, in fact, been predicting economic doom and gloom for much of George H.W. Bush’s term in office, not to mention Ronald Reagan’s two terms, prior to that. Such prognostication has become something of a liberal Democrat tradition during those periods when Republicans occupy the White House.
As shoppers began filling the stores that Christmas season, the TV news shows sent their reporters out among them to determine just how bad the shopping season was going to be for merchants, based on the media’s expectation of low consumer confidence. Shopper after shopper was interviewed. Much to the obvious surprise, and dismay, of the reporters, folks were spending quite heavily. By all appearances, merchants were going to have a very profitable holiday season.
Shoppers were repeatedly asked why they were spending so much on gifts when the country’s economy was on the verge of a major recession. Most of the folks acted somewhat confused by the question and its dire prediction. Several stated that they did not know about any pending recession. What they did know was that they had had a very prosperous year and they were planning on having a nice Christmas for their families.
The news media were persistent, if nothing else, as night after night, they returned to the malls and shopping centers, with the same questions and dire economic predictions. It took about two weeks of this nightly assault before the media achieved their goal and finally began to convince the shoppers that doom and gloom were just around the corner. Many folks began responding that, although they themselves were doing pretty good financially, they were concerned that their neighbors might not be doing so well. A rather severe damper settled in over the remainder of the 1990 Christmas season. Shortly thereafter, the economic downturn that Democrats and the media had lobbied so hard for began to materialize.
It was clearly an orchestrated event that was designed, first, to toss a possible roadblock in front of President Bush’s commitment to removing Sadam Hussein from Kuwait, a commitment which many Congressional Democrats and media members had not supported, and second, it provided an opportunity to give a Republican administration an economic black-eye, which was never a bad thing to the media. It also provides a good example of how easily the media can manipulate consumer confidence in the economy.
One of the concepts at the heart of any good marketing strategy is the ability of the marketer to influence his intended customer’s perception of a new product, or an idea. One of the best strategies for achieving that goal was best expressed by Vladimir Lenin when he said, “A lie [or idea] told often enough, becomes the truth.” In other words, the more an idea is repeated to the general public, the more familiar, comfortable, and accepting the general public tends to become of that idea. Eventually, the new idea becomes an accepted part of what most of the public believes to be an undeniable truth.
For the past few months we have been under a near daily barrage of media reports that we are either in the midst of an economic recession or on the precipice of one. The recent downturn in the housing market, higher prices at the gas pump, higher prices at the grocery store, and the public’s overuse of credit are all offered up as proof of serious economic doom and gloom. Within the past few weeks, Congress, with the encouragement and support of President Bush, has passed an “economic stimulus package” supposedly designed to jumpstart the economy by giving away tax “rebates” to the general public. Little more than a redistribution of wealth in an effort to buy votes, the stated expectation is that those receiving the government checks will launch a major spending spree that will improve the nation’s stagnate economy and improve consumer confidence.
This is the same consumer confidence that the media have spent the last few months trying to negatively manipulate in order to produce a downturn in the economy. As of the last week or so, the media has been largely successful, since consumer confidence is indeed dropping. The media reports that folks are finding it increasingly difficult to put food on the table, make the mortgage payment, put gas in the car tank, or pay for their prescriptions. It is getting increasingly difficult for folks to stretch their paychecks far enough to buy the essentials they need to sustain their families, ergo; the tax rebates are sorely needed.
At the same time, however, the media have reported that contributions to the campaign coffers of the presidential candidates are at historically record setting high levels. Just in January and February alone, the two remaining Democrat candidates have posted contributions of $86 million and $49 million. For all of 2007, the four remaining candidates in the primaries reported contributions of: Barak Obama: $75,139,618.04; Hillary Clinton: $95,132,696.86; John McCain: $30,753,091.76; and Mike Huckabee: $5 346,101.45. Most of these campaigns claim that the vast majority of these donations have come from average middle class folks, not wealthy contributors.
How can the economic conditions in the country be so dire that, on the one hand, folks can barely afford the essentials, necessitating tax rebates from the government to low income folks who pay little or no taxes, yet on the other hand, these same folks have little or no trouble setting records with contributions to presidential candidates’ campaign coffers? There is an obvious chasm between what is being reported about the state of our economy and reality.
If folks stopped sending their excess money to political campaigns and began spending that money on their own personal expenses, maybe that money would produce the “heat” that the media, Congress, and the President tell us is necessary for the economy’s salvation. The Congress could then send the excess funds they planned to use for the tax rebates back to the folks who actually paid the taxes in the first place. Failing that, perhaps the government should screen prospective tax rebate recipients to identify those who contributed to political campaigns. Those folks who apparently had more money than they needed and were able to share their excess with the candidates would not be eligible for a rebate, since they had too much to begin with.
I propose an experiment. Suppose we see what the effect would be on consumer confidence if the media reported only positive economic news for the next six months. All negative economic news could either be downplayed or reported as mostly insignificant. After all, we’ve seen what happens when the media reports only negative economic news and downplays any positives. More than likely, if the next occupant of the White House is one of the two liberal Democrat candidates currently running for the job, this will be the format followed, not just for six months, but until such time that another Republican takes up residence at 1600 Pennsylvania Avenue.
Perhaps the best advice of all for combating the media’s desire for manipulation of consumer confidence was offered by Rush Limbaugh. On his radio show recently he advised his listeners that, when faced with the media-driven economic downturn, he simply chooses to not participate. In other words, media manipulation of the economy, and consumer confidence, only succeeds to the extent that the general public buys into the manipulation. If we ignore the media’s efforts, we, the public, remain in control of the economy.
That’s my view……..what’s yours?
Sgt. Eaglebeak
Positive and negative trends in the stock market are largely driven by the perceptions and expectations of the investors. Actual events are not nearly as important as what the public expects to happen. If investors believe that the economy is strong, they are more inclined to invest in the expectation of larger gains. If they fear a downturn in the economy, they are more inclined to sell off their investments to protect their savings. Once panic sets in, negative expectations become a self-fulfilling prophecy and we have a crash in the market. The market is relatively easy to manipulate, positively or negatively, depending on what investors can be convinced to expect. Savvy manipulators of the market can cause major shifts in the market for their own personal gains or purposes.
I was recently reorganizing some old files in my home office and rediscovered a letter to the editor that I had written during the buildup to what has come to be known as Gulf War I. The letter was written in January 1991, during the time that American troops were staging in Saudi Arabia, preparing to visit Sadam Hussein. It referred back to the prior November, when Americans back stateside were beginning their annual Christmas shopping.
My letter addressed what I saw as a curious scam being perpetrated on the American public. I made mention of how Congressional Democrats and the news media had been insisting for quite some time that America was on a collision course with either a major recession or an economic depression. Both groups had, in fact, been predicting economic doom and gloom for much of George H.W. Bush’s term in office, not to mention Ronald Reagan’s two terms, prior to that. Such prognostication has become something of a liberal Democrat tradition during those periods when Republicans occupy the White House.
As shoppers began filling the stores that Christmas season, the TV news shows sent their reporters out among them to determine just how bad the shopping season was going to be for merchants, based on the media’s expectation of low consumer confidence. Shopper after shopper was interviewed. Much to the obvious surprise, and dismay, of the reporters, folks were spending quite heavily. By all appearances, merchants were going to have a very profitable holiday season.
Shoppers were repeatedly asked why they were spending so much on gifts when the country’s economy was on the verge of a major recession. Most of the folks acted somewhat confused by the question and its dire prediction. Several stated that they did not know about any pending recession. What they did know was that they had had a very prosperous year and they were planning on having a nice Christmas for their families.
The news media were persistent, if nothing else, as night after night, they returned to the malls and shopping centers, with the same questions and dire economic predictions. It took about two weeks of this nightly assault before the media achieved their goal and finally began to convince the shoppers that doom and gloom were just around the corner. Many folks began responding that, although they themselves were doing pretty good financially, they were concerned that their neighbors might not be doing so well. A rather severe damper settled in over the remainder of the 1990 Christmas season. Shortly thereafter, the economic downturn that Democrats and the media had lobbied so hard for began to materialize.
It was clearly an orchestrated event that was designed, first, to toss a possible roadblock in front of President Bush’s commitment to removing Sadam Hussein from Kuwait, a commitment which many Congressional Democrats and media members had not supported, and second, it provided an opportunity to give a Republican administration an economic black-eye, which was never a bad thing to the media. It also provides a good example of how easily the media can manipulate consumer confidence in the economy.
One of the concepts at the heart of any good marketing strategy is the ability of the marketer to influence his intended customer’s perception of a new product, or an idea. One of the best strategies for achieving that goal was best expressed by Vladimir Lenin when he said, “A lie [or idea] told often enough, becomes the truth.” In other words, the more an idea is repeated to the general public, the more familiar, comfortable, and accepting the general public tends to become of that idea. Eventually, the new idea becomes an accepted part of what most of the public believes to be an undeniable truth.
For the past few months we have been under a near daily barrage of media reports that we are either in the midst of an economic recession or on the precipice of one. The recent downturn in the housing market, higher prices at the gas pump, higher prices at the grocery store, and the public’s overuse of credit are all offered up as proof of serious economic doom and gloom. Within the past few weeks, Congress, with the encouragement and support of President Bush, has passed an “economic stimulus package” supposedly designed to jumpstart the economy by giving away tax “rebates” to the general public. Little more than a redistribution of wealth in an effort to buy votes, the stated expectation is that those receiving the government checks will launch a major spending spree that will improve the nation’s stagnate economy and improve consumer confidence.
This is the same consumer confidence that the media have spent the last few months trying to negatively manipulate in order to produce a downturn in the economy. As of the last week or so, the media has been largely successful, since consumer confidence is indeed dropping. The media reports that folks are finding it increasingly difficult to put food on the table, make the mortgage payment, put gas in the car tank, or pay for their prescriptions. It is getting increasingly difficult for folks to stretch their paychecks far enough to buy the essentials they need to sustain their families, ergo; the tax rebates are sorely needed.
At the same time, however, the media have reported that contributions to the campaign coffers of the presidential candidates are at historically record setting high levels. Just in January and February alone, the two remaining Democrat candidates have posted contributions of $86 million and $49 million. For all of 2007, the four remaining candidates in the primaries reported contributions of: Barak Obama: $75,139,618.04; Hillary Clinton: $95,132,696.86; John McCain: $30,753,091.76; and Mike Huckabee: $5 346,101.45. Most of these campaigns claim that the vast majority of these donations have come from average middle class folks, not wealthy contributors.
How can the economic conditions in the country be so dire that, on the one hand, folks can barely afford the essentials, necessitating tax rebates from the government to low income folks who pay little or no taxes, yet on the other hand, these same folks have little or no trouble setting records with contributions to presidential candidates’ campaign coffers? There is an obvious chasm between what is being reported about the state of our economy and reality.
If folks stopped sending their excess money to political campaigns and began spending that money on their own personal expenses, maybe that money would produce the “heat” that the media, Congress, and the President tell us is necessary for the economy’s salvation. The Congress could then send the excess funds they planned to use for the tax rebates back to the folks who actually paid the taxes in the first place. Failing that, perhaps the government should screen prospective tax rebate recipients to identify those who contributed to political campaigns. Those folks who apparently had more money than they needed and were able to share their excess with the candidates would not be eligible for a rebate, since they had too much to begin with.
I propose an experiment. Suppose we see what the effect would be on consumer confidence if the media reported only positive economic news for the next six months. All negative economic news could either be downplayed or reported as mostly insignificant. After all, we’ve seen what happens when the media reports only negative economic news and downplays any positives. More than likely, if the next occupant of the White House is one of the two liberal Democrat candidates currently running for the job, this will be the format followed, not just for six months, but until such time that another Republican takes up residence at 1600 Pennsylvania Avenue.
Perhaps the best advice of all for combating the media’s desire for manipulation of consumer confidence was offered by Rush Limbaugh. On his radio show recently he advised his listeners that, when faced with the media-driven economic downturn, he simply chooses to not participate. In other words, media manipulation of the economy, and consumer confidence, only succeeds to the extent that the general public buys into the manipulation. If we ignore the media’s efforts, we, the public, remain in control of the economy.
That’s my view……..what’s yours?
Sgt. Eaglebeak
2 comments:
Reminds me of the story about the guy in the 30's who was running a very successful business, making plenty of money while those who bought his products and services were financially strapped.
Turns out he was deaf and illiterate. :)
Love the blog, Sarge!!!! Am passing the link along to Joshua as well. I'm posting under "anonymous" 'cause I can't remember my log-in :)
Valerie
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