In denial about the economic crisis

How do you communicate with people who are in denial.

The question was raised while reading this article that suggests a lot of Greek people believe they will never leave the Euro zone.

The question also applies to a lot of economists, most of the world’s seven billion people and politicians  –  although politicians have an excuse.  They won’t be reelected if they try to tell people they will have to accept a lower standard of living.

The economic  crisis is not just a Greek or European problem, it is a world-wide problem.  The rest of us will probably have our turn soon.

I believe there are things we could do to reduce the impact but so long as so many people are in denial, there is little hope.


One Response

  1. We do not have a recession, we have a Depression. The difference is first, the appearance. There is long term unemployment. The economy just does not recover, or recovers very slowly. Secondly, form the economic technical point of view. You can recover from recessions by reducing interest rates. This does not wwork foer a depression, as you go into a liquidity trap. The way out of a depression is toatlly different. Governments must increase expenditure on high multiplier items such as infrastructure expenditure.

    So we are in a Depression. Not as bad as the 1930’s as Paul Krugamn says, but a Depression. And that is not just a bad recession, it is something technically different.

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