Monday, July 21, 2008

Not as Dumb as They Think

By Alan Caruba

One thing that both journalists and politicians hold in common is their belief that the American public is really dumb. This is why politicians keep telling us that there’s only enough oil in Alaska for six month’s use, that puddles left over from a rain storm should be regarded as “navigable waters” and every species known to man and God is “endangered.”

It is written that the fear of God is the beginning of wisdom, but I would add that contempt for some politicians and journalists is also a sign of maturity and insight.

Rasmussen Reports conducted two telephone surveys and posted news of them today (7/21/08). In one it revealed that most Americans are confident about the U.S. banking system. “Nearly seven out of ten Americans (69%) are confident in the stability of the U.S. banking system…” Will some banks fail? Probably. Are deposits secure? Yes. In fact, 65% of those surveyed expressed little or no worry of losing their money.

I thought it was interesting that Rasmussen noted that, “Democrats are twice as likely (39%) as Republicans (19%) to be worried about the money they have in the bank. Once, long ago, I was a Democrat, but as St. Paul says in Corinthians, when I became a man I put aside childish fears.

It was also reported today that the results of another Rasmussen survey revealed a whopping 50% of Americans believe “the media makes economic conditions appear worse than they are.”

No one is suggesting that the economy is not having a difficult time navigating through $4-a-gallon gasoline or that some have seen the value of their homes decline, but overall the economy is remarkably resilient and people know that. This is the filter they apply when they read or hear dire reports and predictions served up by journalists.

“Only a quarter (25%) think reporters and media outlets present an accurate picture of the economy and 18% believe they actually portray it as better than it is. Just 34% trust reporters more when it comes to news on the economy, and 32% see stockbrokers as more reliable.”

That’s an impressive 75% who are wary of what reporters have to say about the economy, though it would be well to keep in mind that stockbrokers often have no better idea than the rest of us. Their job is to sell stocks and any reason to do so is sufficient. Stock market going down. Great bargains to be had. Time to buy. Stock market going up. Don’t miss out on great opportunities. Time to buy.

In truth, given the volatility of the stock market, one can see the role that emotion plays in the whole buying and selling equation. A wafting rumor is sufficient to create a wave of buying and selling.

This is also why the siren call of “change” and “the future” is likely to lose a lot of momentum by next November.

Part of the reason for the present volatility is the gradual expansion of economic power in Asia, but recall too that Japan, South Korea, China and India will be subject to the same limits on energy resources, an educated workforce, the introduction of new technologies, and other factors that affect the entire global marketplace.

Proceed at your own risk, but risk is what Capitalism is all about!

The good news is that the majority of Americans who actually take time to pay attention to the many sources of information about events, issues and personalities are capable of sorting through it to conclude that the U.S. economy is essentially sound, that will we get passed this mortgage loan bubble and debacle, and barring something horrid like another 9/11, we shall get on with our lives with relatively little discomfort.

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