Expert: Consumers Are Too Emotional, Media Exaggerates 'Catastrophes'
By KATE SNOW and LEE FERRAN
July 13, 2008
This week, former Sen. Phil Gramm, R-Texas, economic adviser to Sen. John McCain, R-Ariz., gave an interesting persepective on the nation's economic concerns by calling the U.S. a "nation of whiners."
Are we whiners or is the economy really that bad?While the comment ruffled feathers across the nation and prompted swift condemnation from presumptive presidential candidates Sen. Barack Obama, D-Ill., and McCain, according to consumer psychologist Kit Yarrow, Gramm was on to something.
"I think the way consumers feel about things is very emotional," Yarrow told "Good Morning America" today. "Those emotions are trumping reality, creating a snowball, which makes the economy worse. It's not as bad as consumers feel like it is."
Yarrow, who is also the Russell T. Sharpe Professor of Business at Golden Gate University, says that lack of consumer confidence has been caused by an negative overreaction to recent economic trends...
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