President Barack Obama's top economic adviser said Friday the nation's economic crisis has led to an "excess of fear" among Americans that must be broken to reverse the downturn.
It's a classic problem: when does rational fear drive itself into irrationality... which leads to behaviors, the analysis of which leads us to be even more afraid.
In the meantime, he told a forum, a problem has been that "fear begets fear."
I Twittered on a related point today. Ed Webb referred to the financial collapse as stripping away excess:
it's more like when a browser shows mess of code instead of shiny webpage: the structure is exposed, & it ain't pretty
you remind me of Elliot on Webster - the bit about him seeing the skull beneath the skin. Gothic economics.
'The economy' is a (mostly) consensual illusion, a hugely complex network of conventions, beliefs, emotions. The discipline of economics (a valuable and essential social science) has the effect most of the time of helping to convince everyone that there is an actually-existing thing called the economy 'out there' in the world. Well, there is, but it is only as 'real' as culture, society, faith, or any other abstraction you choose. Madoff, Cramer et al are helping show how illusory 'wealth' is in modern society.
Posted by: Ed Webb | March 14, 2009 at 13:21