Proliferation of media leads to scaring consumers about economy

David Carr of the New York Times writes for Monday’s paper about how the increase in media reporting about the economy’s problems is causing people to become more scared.

Carr writes, “Every modern recession includes a media séance about how horrible things are and how much worse they will be, but there have never been so many ways for the fear to leak in. The same digital dynamics that drove the irrational exuberance — and marketed the loans to help it happen — are now driving the downside in unprecedented ways.

“The recession was actually not officially declared until last week, but the psychology that drives it had already been e-mailed, blogged and broadcast for months. I used to worry that my TiVo thought I was gay — doesn’t everyone enjoy a little “Project Runwayâ€? at the end of a long, hard week? Now I worry that my browser knows I am about to lose my job.

“‘When everyone is talking about recession, we all feel like something has to change, even if nothing has changed for us,’ said Dan Ariely, author of ‘Predictably Irrational,’ a book that explains why people do things that defy explanation. ‘The media messages that are repeating doom and gloom affect every one, not just people who really have trouble and should make changes, but people who are fine. That has a devastating effect on the economy.'”

Read more here.