“It’s a recession when your neighbour loses his job; it's a depression when you lose yours.” These wise words from a former U.S. president made me question how true this really is in reality. It is obvious that our minds and what we think play an enormous role in what goes on around us. Our thoughts seem to take over, causing us to act or react in a certain way. These reactions in reality are caused by our immediate perceptions of the given subject, issue or concern. What if recessions are caused by our reactions to things around us such as the media and so called “experts”? The recession had to start somewhere. How many times have you turned on the news hearing “we are in a recession, we have to save our money and stop spending”? The majority of people will hear this and follow along because of the constant charts and graphs supposed experts bombard the public with. Contrary to popular belief, people’s perspective of a recession, can in actuality, cause and fuel it even further.

The famous Greek philosopher Plato, in his work Allegory of the Cave provides insight into how a recession can be perpetuated due to the public’s perspective. In his allegory, humans are depicted as prisoners chained in a cave only seeing shadows from the light and creatures that walk behind them. One of the prisoners was released and was exposed to the reality outside the cave. Allegory of the Cave can be interpreted in many ways. The way I see it, people accept reality from the perception that is available to them. It is only natural as a human to accept your surroundings as reality because it is all you know and have seen. This concept is very similar to how individuals accept the idea of a recession and follow what the media says to try and lessen the chance of it getting worse. Their perception is focused on what the media and so called “experts” state on improving the economy. Vast majorities of people listen to the media and start making decisions such as cutting back on spending and saving their money.

Human beings have endless material desires and as a result, they like to spend money. It makes them feel good and it is human nature to want to feel this way. Sometimes people will go as far as spending money they do not have, being in debt, using services such as credit cards and loans. People do this to feel that sense of satisfaction which they get from material happiness. This is a downward spiral that if multiplied by millions of people in the world, can lead up to major debt and trigger a recession. Consequently, financial experts begin giving out their so-called advice which in turn causes majority to stop spending. Although, massive amounts of debt can trigger a recession stopping the circulation of money can perpetuate it. At first, people see that you are capable and it is okay to borrow money. After a point in time, their perspectives change and start thinking to cut down on expenditures to pay their dues. This becomes a common thing amongst individuals and there starts to be a decline in purchasing. Eventually, businesses lose money and the economy declines. Peoples’ materialistic wants cloud their perspective of reality. Their wants is the issue that they react to listening and following what the media says.

A self-fulfilling prophecy is a prediction that directly or indirectly causes itself to become true. It is a statement that alters actions and therefore comes true. “The economy is tight with money, so I have to cut back on spending. We are entering a recession.” People saying this act in a specific way that makes what they say become reality. This prophecy can be very true especially when our mind and our perception are involved. For example if a depressed person were to continually tell themselves they are depressed will likely never recover. Conversely, when they say to themselves they are okay, they feel better and think in ways that benefit themselves. I have come up with my own example of the self-fulfilling prophecy relating to recession. There was a boy who had a lemonade stand. He was uneducated and his mother never allowed him to watch television. This boy however did have smart ideas to attract many customers. His sales increased a lot so he purchased more and more amounts of lemons, ice and water. One day, his sister who just came back from university told him that a recession is coming and that he should be prepared for the bad times. The boy listened to his sister because she was educated, she always read newspapers and watched the news. He stopped purchasing such big amounts of materials. Eventually, fewer people stopped coming to his lemonade stand. He thought his sister was right and he was so glad that he was warned early about the recession. The boy’s perception was changed and fixed to one thing after what his sister said. It was in his head now that a recession is coming. He reacted by lowering his amount of materials. This is the recession and peoples’ perception is the cause.

There are other possibilities of what could have caused the recession. There are possibilities such as governments, corporations, and global economics. The majority of the public blames the recession on the above factors, and though these factors have undoubtedly contributed in some way to the current recession, the public is as much to blame by convincing themselves that they must stop spending. Numerous individuals find the government the cause of the current recession, when in actual fact they are as much to blame by stopping the flow of money. Governments bail out citizens whenever they are in trouble. They use the public’s tax money to benefit others. Sometimes it can seem as if there is no freedom from the government as they are always intervening in people’s lives. Also, in some parts of the world, they print money whenever in need of more, which causes inflation. If peoples’ perception were not clouded from the media, they would be able to see they have more control than they think. People would make better financial decisions if they did not use what they hear around them as all the justification they need. Corporations can also seem like the cause of a recession. A corporation is a legal entity separate from shareholders and employees making them a dominant part in economic life. People rely on corporations for employment. With more people being unemployed less money is circulated. Also, some companies and corporations use debt as a part of their overall corporate finance strategy. This means that corporations have a lot of power, however if more people started seeing how corporations function deeply and not look at the outside picture, they would better understand and would make better decisions. People perceive what corporations try and represent on purpose and that makes the peoples’ perception something else. With them perceiving things the way corporations want them to inflict them on making different decisions.

Global economics would make a lot of sense as the cause of a recession. It is the production, consumption and transfer of wealth globally. With that going through a crisis can seem like it could cause a recession. Also in certain places they were selling sub-prime mortgages to large numbers or consumers with inadequate incomes. In all with global economics, the evolving global and financial crisis leads to a massive unemployment. Despite how global economics can seem like the cause, it was peoples’ perceptions that lead them to the decisions they make.

In all, it should seem clear that people’s perspective of a recession is the central cause. If people kept their same spending habits despite what the media is saying, we would not be in a recession. It is clear that people believe whatever they can justify. They use the media and other resources as enough justification, but do not realize they are making a bad decision. If people did not depend on corporations for employment and get their mind open to everything that goes around, they would make decisions that would benefit themselves and the economy. Therefore peoples’ perception is still the original cause of a recession. From all the thought about recession and perception, I came up with my own formula to better understand the whole concept. It starts with the issue leading you to perceive it in a specific way, it then moves on to the reaction and the counteraction and then you have your outcome or end result (ISSUE->PERCEPTION->ACTION+REACTION=OUTCOME). To support that people’s perspective of a recession is the original cause is using Plato’s concept of reality from his Allegory of the Cave interpreting it as people believe in their reality from the justification they have, people’s materialistic wants, which is the issue and the self-fulfilling prophecy where it becomes our reality.