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Online community reacts to financial crisis
Al Jazeera analyses internet behaviour of users' economic concerns five years after first signs of financial meltdown.
Last Modified: 09 Aug 2012 08:15

From trading floors in New York and London, to kitchen tables in Greece and foreclosed houses in Las Vegas, people around the world have been discussing the financial crisis since it began in 2007.

Social media has been a common form for people to vent their frustrations and aspirations. It’s a place where individuals can explain how the crisis is affecting them.

When people want to understand what a recession means, or how austerity could effect employment, Google is usually the first research tool.

Google searches

The chart to the right shows data from Google searches entered over the past five years, from August 2007 to August 2012. 

The numbers on these charts represent the amount of searches conducted for a particular term, relative to the total number of searches done on Google over that time. 

The popularity of key terms “austerity” “bailout” “recession” and “financial crisis” changed depending on the public mood. “Recession” as a search term, for example, peeked in 2007, indicating that citizens were looking for more information on how to classify the looming economic problems of the time.

After it became clear that most of the world economy was in recession – defined by two consecutive quarters of economic contraction - people were less interested in searching for the term.

Searches for the term “bailout” spiked on September 14, 2008 – hardly surprising as this was the day Bank of America bought Merrill Lynch, which was teetering on the edge of insolvency, for $50bn.

In 2008, Bank of America received a $55bn bailout from US tax payers under the Trouble Assets Relief Programme (TARP), infuriating many citizens who were not extended the same government largess during the financial turmoil.

Banks were blamed by many for causing the crisis in the first place, through risky lending practices – especially through backing subprime mortgages in the US.  

That banks would receive government money infuriated some citizens, who wanted to learn more about the bailouts and how the billions would be spent.   

Also in September 2008, Lehman Brothers, the global investment bank, filed for bankruptcy protection and stumbled towards liquidation after being unable to find a buyer. Formed in the 1850s, Lehman Brothers did not receive a government bailout, furthering the debate about who should get government money and under what circumstances. The term “too big to fail” became part of the public lexicon during the bailout debate and public interest is reflected by Google searches.

In 2007, “austerity” was only a blip on the chart, but the term would become notorious around the globe in the years ahead, as governments slashed public services and raised taxes. Searches for “austerity” spiked in June 2011 and May 2012, when the European institutions bailed out Portugal and Greece. 

Social media reactions

The economic crisis affected various regions and countries differently.

To understand the regional effects of the crisis, we analysed over 25 million relevant mentions of the words “austerity”, “bailout”, “recession”, “financial crisis”, “stimulus” and “debt” using Crimson Hexagon's Foresights™ platform.

 

Social media posts per capita in the US

Nevada and New York State, two areas hit hard by the financial crisis, had some of the highest levels of tweets per capita in the US discussing economic problems. New York was affected due to large-scale lays-offs in the banking sector, after the collapse of Lehman Brothers and other firms. Nevada was severely affected by the subprime housing crisis, as homes were built across the state on cheap credit, fuelling a construction boom. When mortgage rates went up, many residents defaulted, leaving the economy injured and many houses in foreclosure.

Social media posts by topic

When we fed our search terms into the search function Barack Obama’s name featured prominently in online conversations. It is unclear how his association with the financial crisis will effect November’s presidential election.

Many users were interested in connecting the recession to their own businesses, student debt levels and the bond market. Over the past year, the term “bailout” was most commonly associated with Greece, Spain and banks.

Social media posts by gender

For our analysis, 66 per cent of postings came from twitter, 2 per cent from public Facebook posts, online forums clocked in at 11 per cent while blogs and news sites each accounted for 10 per cent.

More than 60 per cent of twitter users are female, according to research from Ignite Social Media, a marketing firm. In contrast, posting about the financial crisis and bailouts were dominated by men by a ratio of about three to one.

This could be because the recession disproportionately affected traditionally male occupations, with construction and manufacturing shedding jobs. It is also possible that men are more outspoken in their views on the economy, and banking and high finance often employ more men than women.

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Source:
Al Jazeera
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