This article talks about how our mood plays a significant role in the way events take shape. It states that our mood dictates the market and not the other way round. This can be related to speculators and arbitragers who invest in stocks because they are confident about it or have a positive feeling about it. This confidence can translate into a market experiencing a boom.
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I think that most (if not all) decisions we make are influenced by emotion - whether it be on the stock market, how a particular good is advertised, or confidence in a particular firm. For this reason, the government plays an important role in the economy. For better or for worse, the government is a recognized method of getting opinions out into the public. Therefore, if the public have confidence in the government, it can prove to be a useful tool for increasing optimism in the market, thus increasing consumption. Isolationism effectively did the exact opposite of this, by bringing fear into an already unstable market.
After reading this and seeing how important emotion or mood is in our buying habits I can see why presidents are so big on saying that the economy is good shape. Obama or our next president needs to work hard to get Americans to think positively about our economy so it can return to how it was before the recession.
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