- 10,373
- Manchester
- Ardius_
I've never trusted a newspaper in my life. And I don't trust politicians either, even the ones I like.
All this mistrust.. it instills a lack of confidence; something else which was a key factor in the global crisis. My business teacher once tried to explain how a lack of confidence was the key factor in this whole farcial shambles. He's half right. Confidence, or a lack thereof, was a factor, but not the main one. It was a catalyst that basically served as a self-fufilling prophecy. People thought things were going to go bad, so things went bad. Obviously things were bad, but the lack of confidence in the markets and politicians sped the process up. It would have developed slower if people still believed in the markets.
Now, obviously it's not the absolute solution but I would not underestimate the power of confidence in this case. Think of it as an economic placebo effect; people believe the markets will become stronger, and they slowly will. But regenerating that confidece? That is the question. Our heads of government aren't doing much to fix this.
If you keep following that line of thought, you might come to the conclusion that one cannot do anything to "help confidence". "Confidence" in this sense is effectively other people's opinion on your decisions. Seeing as the government can't control that, I don't really see it as a goal. Or rather, its a rather straight-forward thought process. Government makes good decision = increased confidence. Government makes bad decision = decreased confidence.
Its a side-effect of whatever action anyone takes. Lets put it this way, no one takes decisions that they know "harm confidence". So in the same vein, no one takes a decision simply with the goal to "help confidence".
Asking the government(s) to restore confidence is like asking them to make people happy. They are obviously trying to do that.
There are certain things governments can do to inspire trading in the markets, but its not something you can easily control.