Despite all this, in broad brush terms, there is a similarity in the general shape of the curves - with one striking exception. The stock market crash of 2001-2 is not reflected in the survey results. In addition, there is a large data gap, as there are no survey results given for any time in the years 2000 and 2001. Don't ask me why.
How can we explain this anomoly? Here are some guesses.
Since data is missing for three full years between the data points at 2/14/99 and 2/21/02 there could have been a temporary drop that is simply missed.
By 2/21/02 the Bush adminstration was deep into sabre rattling, and that always makes people feel like something worth while is happening. The spike up at 4/30/03 corresponds to the Iraq invasion.
W's folksy, down-home charm might have been comforting in what was a difficult time.
W's stubborn aggressivness was temporarily mistaken for strong leadership.
At any rate, by the end of W's second term, the perception of being on the right track followed W's approval ratings to previously unheard of lows, while the stock market crashed just in time for the election. As a nation, we are eager to go to war, but tire of it when it looks futile and endless.
Obama's election brought new hope, and a coincident rise in the stock market. Can either one last? I, for one, am not optimistic.
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/tny_au_xx_usoz_4.gif)
6 comments:
Interesting, but usually the econo-men use a few indicators, don't they: GDP, CPI, unemployment rate, etc. The GDP may be most reliable, but even that does not exactly correlate with economic trends. Any sort of national averages are likely to be misleading, however: really, the S & P index may show profits and losses, bull/bear markets but those are for the investor class, aren't they, jzb. Besides, a high-roller in stocks or futures has some sharp team of brokers to flip sides as it were, and can make just as much when the market crashes and companies fail as when it's roaring upwards (which any clever CEO knows as well--as long as he can find some way to get around the SEC rules, etc).
That's how the big colleges teach frat-boys Macro, as well, isn't it: well, look, market rallies, the system's working, everything's kosher, but actually do some research and often a bull market ,whether in stocks, or futures casino (where the big boys play crude oil, gold, bonds, etc) leads to recession, higher prices (ie the CPI rises, presumably), and the poor and middle class do not benefit (unless perhaps they are yacht builders, or involved in industries helping out the very wealthy.etc--Tom Clancy once used the yacht example to justify his support of Reagan's "trickle down"). Or in extreme cases, depressions (tho' many other factors, like banking practices involved as well). In other words, macro-voodoo's biased towards...finance capital and the bourgeois, executives, management--actually, the elite-crust of the bourgeois, mostly of New England a few urban areas, SF, westside LA, etc.
My choice of the stock market was deliberate, since I'm going for the perception of the economy, not the hard analytical truth.
I'll admit to being heavily influenced by the Elliott Wave concept of social mood. To the EW-ers, the stock market is a barometer of social mood - the subconscious, collective concept of where we are on an optimistic/pessimistic or bullish/bearish spectrum.
The underlying assumption is that the investor class and the rest of us shlubs all live in the same society, and the brokers and analysts are just as human as we are. In 2005, and even later, many very prominent economists and bankers were denying the housing bubble.
All the other stuff fits, too. Irrational exuberance is typical late in the wave form, when valuations have gotten far from fundamentals. Hence the resulting crash.
Pretty clearly, the answer to the survey question is a barometer of social mood, as well. I'm not surprised by the correlation, such as it is.
The underlying message of society as a bipolar, instinctual, semi-rational herd-following mass seems rather compelling.
Cheers!
JzB the herd following trombonist
Deleted in the interest of Consumer herd-mind harmony.
Actually I find some of the research on the supposed "rational man" standard interesting. Which is to say, he's sort of a fictive being. Keynes sort of realized that (but Keynesian analysis has other problems I believe. Marshall neo-classical stuff seems a bit "more applicable" to me--utility, however dull, still has some relevance. Some forget that Marshall at times argued for intervention and was not a lover of pure laissez-faire, but almost a Rawlsian sort, in terms of arguing for efficient markets (which were also to be "just" in some sense? at least sounds good). Somewhere between Marshall and the more rational...marxists. Marxshallists).
But real dems should support raising capital gains immediately, and progressively. Ie what is it 38% at 300 grand, all the way up to Billy Gates level? No: they should be paying 75% above a few million or so...
J -
I don't see any reason to censor yourself. I get 30 of 40 visitors most days, and I think a lot of them land here by accident, say "WTF?" and beat a hasty retreat.
Modern portfolio theory, and the efficient market hypothesis both rely on the rational man concept. Keynes exploded it, but that's all been forgotten. Don't know Marshall.
You're right about real dems. Alas, there aren't any.
Cheers!
JzB
The classical theory basically said people would generally tend to optimize, and in that regards it's not so wrong. Similarly for utility: people want many things--a porsche--, but they NEED some other things (bus fare, or a VW, bike, work, job, geisha, etc).
Stones-o-nomics-- you can't always get what you want. (Tho' you can't always get what you need either). Utility at least recognizes something like basic needs, I think (they old school like Smith was well aware of labor issues, money, prices, wages, property,rents, so forth. Neo-keynesians and the libertarian-nutbags are usually aware of ....trends, multipliers, charts, curves, indexes, etc.).
In ways I disagree with the Keynesian types who say, oh well, consumers don't really know what's best, or have imperfect knowledge, are dimwitted peasants, so forth. OK, some may be. But it's a bit naive to think govt. bureaucrats will solve all of our problems. I'm for planning and intervention. I just don't think it should be done merely by Krugmans and Delongs. The peoples need a Galbraith, or Che Guevara representin' for them.
The new bank tax actually looks fairly democratic. Many financiers are upset: a good sign. They are putting regs on trading. Actually one of Obama's first gutsy economic moves. Forward!
Contingencies gets a fairly average 50 clicks or so, tho' at times has cracked...100! Usually when nipples appear (female).
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