This was the catchy headline message from Robert Shiller's, New York Times piece yesterday. His premise is quite interesting. Based on historical data, it seems that the more we (Americans) talk about an impending depression, the more likely it is going to become a reality.
Everyone thinks that the 1930s Great Depression was the largest to hit our country. Not so. According to Shiller, we had two pretty significant ones in the 1870s and 1890s, as well.
He claims that it's important to understand that each depression was partly driven by the retelling of earlier depression stories. In fact, in the 1930s, there was such incessant talk about the previous depressions before, that this partially led to a reduction in consumers' willingness to spend and businesses' want to hire and expand.
Thus, the Depression storyline could easily end up as a self-fulfilling prophecy for us now.
It's also interesting to note that in each depression, an "accident" created a way out for America. For the ones in the 1870s and 1890s, the combination of European famine and a hugely successful crop at home stimulated our economy. And, of course, we all know how World War II greatly alleviated the economic pain of the 1930s.
So, if one believes this analysis, it seems to make sense that we (as a nation) need to stop obsessing and communicating so many negative fears about this terrible economy and start focusing (and acting) more positively about what's to come. Of course, that's not an easy thing to do. This strategy clearly needs to begin with our President. It's time for him (and his administration) to start reinforcing why this stimulus plan will work. They need to provide real details that we can believe and also should stop worrying about the political blame game. Meaning– we all know that George Bush helped to get us into this mess. There is no longer a need to continue to dwell on the fact that Obama’s administration didn't cause this economic downturn, and it will "take a long time" to get out.
Next, we need to find a way to create trickle down positive thoughts. If these optimistic viewpoints could make their way to state and local politicians, business executives, our media, the blogosphere and finally the American public, well... we just might fool ourselves into thinking that this recession will dissipate sooner than we think and the D-word was just a bad dream, with no chance of becoming a reality.
But, how do we really convince ourselves that life will get better? Maybe the real trick is to start putting faith in one component of our economy or society that will save us from this ugly malaise (i.e. "the accident.") Could it be the billions of dollars that will soon fuel alternative energy technologies that will change our fortune? Maybe, when we remove our hundreds of thousands of soldiers (and billions of $$$ in cost) from Iraq, we'll see an upbeat surge in consumer behavior? Maybe, just maybe the media will actually get sick and tired of writing about all the negatives and decide that they will be the collective group that brings the wind of change by only focusing on those nuggets of happy stories/indicators that exist, but are never in plain view. This in turn will create a ground swell of positive sentiment, changing our perceptions for the better. (OK, this one is clearly a long shot.)
I don't know what will change our luck. If I did, then I probably would have already bet my farm on it and certainly wouldn't be writing this blog. But, I do know that this is one blogger who can do his share by trying to avoid past mistakes. My doom and gloom depression-discussions are history now. It's time for me to look for positive signs and figure out new ways to prosper. Hopefully, that one small step will begin to make our day to day lives a tad more gratifying.