Nothing to Fear but Fear itself?

News is creeping out that, because of certain statistical and measurement discrepancies (mistakes to you and me!), the UK might not have actually suffered a double-dip recession in recent years, after all! Well it sure as hell felt like it had!

The serious point in all this is that, in economics at least, it can be shown that the degree to which people believe something to be so, will the extent that it will be so. We were told we were in a double-dip recession and, dutifully, people believed that they were and the fear element thus created, took hold and ensured that people behaved economically that it was so: reluctant to spend or invest, to take risks and so forth.

So, psychologically and logically speaking, what should governments be doing now? Well, for a start, they should be trying to give us the confidence to start spending money and to begin investing in the future.

Cameron and Co should start talking us up again, stop the endless bashing of the banks (that means you Mr Cable) and try to encourage business to go about their daily, er, business, in a more positive way.

Recovery can be a self-fulfilling prophecy, if we only let it!

Otherwise, in the words of Montaigne: ‘He who fears he shall suffer, already suffers what he fears”.

Come on leaders, start leading!!

Published on May 14, 2013 by Neil Thomas