As I have said before, I don't understand economics. The economics that I have some inkling of relate to the pound in my pocket, the price of bread & milk and hoping that the money doesn't end before the month does.
Cross fingers, touch wood etc, despite the headlines I don't think that the credit crunch has affected me yet. So why am I panicking like the rest of the herd?
This time last year I was worried that my family and I were going to be wiped out by avian flu. It was a crisis that was mentioned day in day out by every newspaper, TV and radio channel. We were doomed, all doomed; but me and mine survived, as did everybody else!
Isn't the current economic crisis just a repeat of last years news? The 24 hour news agencies HAVE to have a crisis to report in order to justify their existence.
Wouldn't pulling the plug on BBC News 24 and similar channels that peddle pessimism, doom and gloom every hour of the day be a cheaper option than nationalising the banks?
It's a matter of risk, not certainty.
ReplyDeleteThe fact that the risk from avian 'flu was high didn't mean that it would certainly happen, just that it was quite possible and the consequences would be devastating if it did.
It's like Russian Roulette. The risk is high because you stand a one in six chance of blowing your brains out. The fact that you played it once and lived to tell the tale doesn't mean it was a safe thing to do.
The fact that avian 'flu hasn't (yet) struck doesn't mean that it was a fuss about nothing.
Ditto the Credit Crunch. We may get through it lightly, but there's a strong possibility that we won't.
The problem is that the media and public don't understand risk and only think in black and white terms of certainty. It's either "We're all going to die" or "So there wasn't anything to worry about after all".
yeah BUT, what can Dai Public do about the credit-crunch? Nothing. Force-feeding them "markets! slide! crunch!" 24/7 is just causing the kind of financial panics we are starting to see, it becomes a self-fulfilling prophecy: "The banks are failing!", so everyone runs on the banks, so the banks fail.
ReplyDeleteIMO credit-crunch is a matter for the Financial Times and No.11, NOT for The Sun and Western Mail. They say "Britons are the most miserable people in Europe"... is it any wonder? It's the diet of doom-and-gloom we're fed. The cure? Switch off the 24/7 news channels. Filter the news you read on the internet, or just avoid it all together.
Lately, I've been focusing on local news: if it doesn't affect my town, I don't want or need to know about it. Bird-flu in Vietnam - that affects me how exactly?
Pessimism peddlers - nice phrase.
ReplyDeleteand of course we can always press the terrorism button
ReplyDeleteComing back to Wales First, it seems like the opposition are getting organised - look what I just found.....
ReplyDeletehttp://true-wales.blogspot.com/
Completely agree MOF.
ReplyDeleteWe can't do a thing about this market meltdown - but we can be softened up with fear to get us to ok huge payments to incompetent bankers...
The media like to pedal the fear!
ReplyDeleteRobert Peston of the BBC has a lot to answer for.
ReplyDeleteAT least when the panic was limited to stories about Falling house prices in the Daily Diana (sorry Express) they could just be laughed at.
Daily Diana!! HAHA. Is the Mail the Daily Chaz then?!
ReplyDeleteSorry Jacobite, but this scare story is not a case of those in the know making risk assessments, and the rest of us just seeing the matter in black and white.
ReplyDeleteThe share value of the Royal Bank of Scotland at close of trading today is less than its projected net profit for this financial year.
That sort of situation doesn't arise from genuine "risk assessment". It happens because of one of two things:
A) panic caused for panic's sake. In which case the government should act to stop the panic. This shouldn't have to cost billions of tax payer's money. As Gareth notes Robert Preston is one of the biggest panic peddlers - he is employed by a government owned organisation the BBC! Why is he being allowed to undermine the banks in this way?
B) Spivs and speculators deliberately undermining the banks in order to make mega bucks out of the problem. Mega bucks which they are going to gain from taxpayers' bail outs. The government should be rounding these people up and slinging them into the clink - not using my meagre earnings to feed them.
"this scare story is not a case of those in the know making risk assessments, and the rest of us just seeing the matter in black and white."
ReplyDeleteThat's a slightly different point, Alwyn, from the one I was making. Be that as it may, it's worth discussing.
This is not a view I should support. In fact, "those in the know", both in government and the financial sector, are also very poor at assessing risk (I speak from professional experience).
This deficiency is, moreover, one of the root causes of this current mess. Nicholas Nassim Taleb gets it absolutely right. Banks and government seriously overestimated their ability to manage financial risk (they had some quite rational reasons for this - unfortunately these turned out to be dead wrong). They have now swung to the opposite extreme and are in a state of blind panic. Peston is only channelling the attitudes of his contacts. If anything, he is being more rational and detached than they currently are (I speak from direct experience).
I suspect your intuition is correct: that the problems are basically soluble, but panic is exacerbating them (and thus in danger of becoming self-fulfilling). The difficulty is that panic and irrationality aren't confined to the public and media, but are affecting decision-makers too.
"B) Spivs and speculators deliberately undermining the banks in order to make mega bucks out of the problem. Mega bucks which they are going to gain from taxpayers' bail outs. The government should be rounding these people up and slinging them into the clink - not using my meagre earnings to feed them."
ReplyDeleteAnd you're the guy who left Plaid because you were too right-wing for them??