ECOVIS / Wingrave Yeats
Business Advisors Chartered Accountants Registered Auditors
Can Facebook, YouTube and MySpace save the economy? - Blog 30.09.09
Can Facebook, YouTube and MySpace save the economy?
When the bombs went off in London on July 7th 2007 I was sitting at my desk in the city, a 3 minute walk from the site of one of the explosions. Naturally it was my mother who broke the news to me about the terrorist attacks; she had telephoned me from a rural village in Dorset just after her friend had received an email from her mother in Germany.
Could it be said that the last great economic crash in 1929 lasted for so long because news travelled so much slower and speculation was only posted by experts in official journals and pink newspapers?
If that is true does the same apply in reverse? Can the speed of the world’s media networks get us out of the recession as quickly as it got us into the recession? The current economic climate is now a common dinner party topic, the words credit crunch and recession ever more common place, people with no prior interest in economics now know about the issues between Blanchflower and King like the knew about the spat between Sir Alex Fergusson and David Beckham.
As soon as somebody speculated that there were signs of an economy in decline, an article was posted on the ‘net’ and word was out. As soon as the word recession was used in a blog or within an article on a mainstream website it hit the world with the impact of a Spielberg blockbuster. The world knew and instantly we were teetering on the edge of a depression. The next ski trip was postponed, as was moving one step further up the property ladder, unless of course it was in an appealing catchment area which might lead to Isabella and James not necessarily going to public school until they really needed to.It is one thing to believe that we talked our way into the recession, but it could almost be deemed fact that it was expedited by the speed of data transmission.
The Wall Street Crash of 1929 initially occurred on Thursday 24th October, but the catastrophic downturn was not until the following Tuesday, this was because over the weekend the events were covered by the newspapers across the United States.
Countries started to recover by the mid-1930s, showing signs of recovery from 1933, but in many countries the negative effects of the Great Depression lasted until the start of World War II. The U.S. did not return to 1929 Gross National Product (GNP) for over a decade and still had an unemployment rate of about 15% in 1940, albeit down from the high of 25% in 1933.
As we officially come out of the recession, has the information overload meant that we now know so much that we will not fall into the same traps again and recovery will be slower as we are all wise economic ‘experts’ or will the speculation of green shoots of recovery have a global snowball effect across the cyberspace and lead to the credit cards being dusted off, debt no longer being seen as the enemy and perhaps Waitrose replacing Aldi once again?
Daniel Smith
Client News: IQ
Congratulations to Lee Robertson who has just been listed as one the UK’s top 50 High Net Worth Wealth Managers in the influential Spear’s 2010 Wealth Management Survey
