I Blame the Media for our Current Financial Crisis.
Posted: Tuesday, July 21, 2009
by Michael Jillions
Mill House Data Solutions Ltd
Why are we in a credit crunch? I see people all day long who seem to have money stashed in banks, pensions, investments and under the mattress. The problem is they are too scared to spend it. That is where the whole thing is wrong. Back when house prices were escalating, every day the newspapers would report that the bubble will burst soon and there will be a property crash. If influential tabloids keep telling people that, then naturally people will stop buying houses in fear of the dreaded crash, which then causes the dreaded crash! It is all about confidence; people don't want to spend money because of the uncertainty in the country's finances. When people don't spend money, trades don't get income, redundancies are made, unemployment costs rise and taxes go up. The irony is, the fact that people aren't spending is exactly what is reinforcing their reasons not to spend and is what is creating the poverty.
I think banks have been a scapegoat for all of our problems. Banks always have and always will take risks based on current financial conditions, that is what banking is all about. The banks wouldn't be in trouble if people were spending their money and trade was good and employment and taxes were low. Times would be fruitful, less people would default and the banks would not have had to write off so much debt.
Again, what has caused all of this? The media and their doom and gloom.
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Top-level comments on this article: (7 total)You have a very interesting point of view, but still people should know what is happening in the world. Mass media is the best and the cheapest way.Thanks for your comment. I know the media are important, I guess I just feel they have had a large part to play without any of flack that the banking sector has received. They do, rightly or wrongly, have a lot of influence over the public and perhaps they should start using it a little more positively!
To my mind the media are directed by someone. Let me explain why I think so... People were petrified because of the crisis and mass media were a kind of a director of peoples fear. Someone had profit of it I have no doubts. Media are without questions a kind of hypnosis for people. That is why, it is necessary to read respective press. And as for TV - I do not watch it and do not recommend anyone :-) Thanks for the article one more time.Thanks Helen, I entirely agree, they are directed by political motivation and I am sure the drivers behind all of this gain immensely, after all, when one persons loses money, another gains. It is the law of the economy.
Michael-Thanks for bringing up some really good points. I am not sure the media is all to blame as layoffs continue to rise. But I agree they should take some responsibility in this mess! Thanks for sparking the conversation!Thanks for your comment Abigail, I know it isn't just the medias fault but I think they have done nothing but compound the problem. Recession is all about confidence and everyday you read nothing but negative reporting. They really could make a positive difference. To take Helen's point, yes the media are directed and you have to get a balanced view but the masses are brainwashed by it all!
Hi Michael, Thank you for sharing this well-articulated piece. Your opionion is shared by many. I agree to some extent, but part of the problem is that there is no personal accountability. People always want to blame others for their problems, and I think we do have to realize that many (NOT ALL) people are in a financial crisis because they were already living well above their means before the crash.Again, thanks for a wonderful and thought provoking piece. Great job! Blessings to you, TeresaHi Teresa, I agree that not everybody is in the same boat, but the masses rule. The whole world is governed by the masses (well not entirely but you know what I mean). Decisions are made for the majority not the few. It is general consensus that dictates how we live whether you are wealthy or poor, or anything in between.There is no arguing with this point. - it is o - so true. :-)Way to get the conversation going! 10 Stars to you!
The media alone did not (could not) cause the collapse of the housing market. The market fell apart because the lending institutions took advantage of the rules for lending and began granting mortgages to so many people that could never begin to pay back the loans. That was the root cause of the bubble. You can argue that nobody (politicians who should have known what was going on as well as the media) was paying attention, but a more important question is what have we learned from it? There are politicians today who want to encourage banks to hurry up and start lending money again to high risk borrowers in order to "jump start" the housing market. Brilliant.As long as politicians have as their primary objective their own personal re-election rather than the interests of their constituents, our economy is going to suffer. They will keep passing spending bills without reading them and the Hope for the best down the road.
"Banks always have and always will take risks based on current financial conditions, that is what banking is all about." No it's not. Ask Wells Fargo, a very non-risk taking, traditional, money maker. I've gone from a silly risk taking bank to Wells-Fargo simply, soely becasue of their stable, conservative, non-risk taking policies. And there's really nothing you'll ever be able to do about the media. It's really about being self-informed. Know the trends, know history, know the economy national / international. And you can blame banks for what happend, but the blame also needs to be put on the shoulders of consumers who were allowed to buy a house with money they knew they didn't have. Buyer beware, better informed, and better disciplined.Banks have allways taken risks, it is inherent in the business. There are varying degree's of risks but risks nevertheless. If every bank in the world only ever operated on extremely low risk enterprise where would we be now!
Michael,This is an interesting look at the media. I feel it is so slanted that we never hear the truth no matter what is happening. Isn't it a shame that the media is unable to just report the news instead of helping to create it?Nancy
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