All of us have watched the financial world crumble, either on our televisions or computers.  The faces of distraught stock brokers on Wall Street were flashed in newspapers, on television and across electronic media worldwide.  Has this ability to instantly transmit and view disasters and potential disasters, deepened our economic downfall?

In this computer savvy age, we can quickly look up the facts and figures surrounding previous economic downturns.  Hell, there are even websites devoted to Stock Market Crashes. We can even provide instant insight into the causes, and the possible futures that will emanate from this current Stock Market.

Depending on whether you adhere to the “it’s the current administration’s fault” camp or it is “the prior administration’s fault” camp doesn’t really matter.  You can find news stories, blog entries, and analysis that will support your viewpoint to your rabid heart’s content.

No, what I am talking about here is not the amazing amount of contradictory, spurious and sometimes even laughable commentary on the crisis.  I am talking about the underlying reason for the crisis.

Stock Market Crash describes what happens to stock markets this way:

But what exactly is a crash, and why do they occur? The answer lies within human psychology. People love bull markets. Bull markets have the uncanny ability to change the collective attitude of society. In a quickly rising market, even the words of rather prosaic business pundits become a form of entertainment. This is what happened in the tech boom as Fed Chairman, Alan Greenspan, became a worshipped celebrity. Eventually the euphoria changes into downright pessimism as the inevitable market crash occurs. Later on, the cycle repeats itself.

From a psychological point of view, our ability to obtain instant information can feed into these psychological cycles almost to a psychotic extent.  The dive in the American stock market created a dive in the European and Asian stock markets which caused a dive….. Well you get the drift.

Our ability to instantly get the news from around the world (and get it translated into our language) promotes feeding frenzies whether the news is good or bad.  Previously, it took at least a little time for the general public to hear news and act on it.  Days even weeks could pass before negative influences in one place were heard in another.

This time lag in communication allowed leaders more breathing space to analyze problems and develop solutions.  One area of the world could avoid possible disaster by developing solutions as it saw the crisis looming.

Not anymore.  We literally have watched as our world leaders have debated and developed the financial plan of the moment.  Believe me, watching sausage being made is a lot easier than what we have seen over the past few weeks.

Images like the above Associated Press (AP) photo of Treasury Secretary Henry Paulson don’t inspire confidence in the current situation.  President Bush has looked like he has aged ten years in the past two weeks.  The visuals have contributed as much to our depressed and demoralized psyche as the words we have read or heard.

The fact that European countries have agreed to partially nationalize their banks in an effort to instill confidence in the financial sector, forced the U.S. to follow their lead.  No one would have thought two weeks ago that President Bush would ever allow the partial government takeover of financial institutions like banks.

Whatever steps have been taken, there will be further refinements of the current solutions and clarification of what exactly the new initiatives will do.  The $700 billion bailout still doesn’t contain specifics on how all of that money will be used.

Along with instant access to information, we have also fallen into the expectation of instant gratification, which in this case means immediate positive results from the current rash of legislation here and abroad.  Unfortunately, all news coming from the financial pundits states that the recovery will be slow and long.

Both of the U.S. presidential candidates have issued financial plans to handle the current economic crisis.  Tonight we will watch as they have their final debate.

How will tonight’s debate psychologically affect the current financial situation?  Who knows, but tomorrow you can read all about it all over the Web.  And if you like you can get instant analysis from the pundit of your choice.

Related:

Entry was posted on Wednesday, October 15th, 2008 at 10:53 am under Internet, Opinion, Science and technology.

Read more entries by Susan Wilson.
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