I was on Newstalk this morning, debating the question "are we talking ourselves into a depression"? The short answer is 'yes and no'. 'No' if you consider, say, the drivers of consumer confidence (still at low levels according to the latest ESRI index). My own analysis, illustrated in the chart, is that the biggest influence on consumer confidence is not the level of unemployment but rather the year-on-year percentage point increase or decrease in unemployment. The recent sharp increases in the unemployment rate have coincided with a sharp decline in consumer confidence. So to that extent, people's gloomy outlook is warranted by the trend in unemployment.
On the other hand: a delightful new study from the always excellent Social Issues Research Centre on Optimism shows that people tend to calibrate their mood in terms of personal/domestic factors through to external economic/environmental factors, as this chart illustrates:
And they do seem to blame the media for adding to the gloomy mood music:
All of which suggests that the 'mee-ja' can indeed 'talk us into a depression' - or at least make a bad situation worse. So we might as well follow this lady's advice: