The Grand Game Of Perception Management

Thursday, February 16, 2012
By Paul Martin

by Charles Hugh Smith
ZeroHedge.com
02/16/2012

The economy will expand if you believe it is expanding–because you’ll be “animal spirited” into buying a lot of stuff on credit that you can’t afford.

It all boils down to perception–that’s the insight at the heart of the Grand Game of Perception Management. Economists speak of magical “animal spirits” that fuel economic expansion, but this is simply a colorful term for perception management: when people perceive others reaping outsized gains in profits or pleasure from taking risky bets and freely spending borrowed money, then they will feel an overpowering urge to follow the herd and leverage their capital (if any) and disposable income (if any) into risky bets and zealous over-consumption, i.e. “animal spirits.”

Conversely, when said risky bets blow up and participants have lost their ever-loving derrieres by following the herd, then “animal spirits” quickly dissipate as the herd thunders off a cliff to its financial demise.

The task of the financial/political/media Status Quo is to convince Americans to overlook the abundant evidence of economic deterioration and focus on heavily juiced “evidence” of robust “growth.”

The Rest…HERE

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