From the time I went online in November 2000, until his death in 2003, I read him daily.
God! I loved him! Nobody -- Nobody!! --is doing anything like what he did. Here's some of his work to whet your appetite to study his archives:
Economic Spring
THIS PUBLICATION'S struggle against irrational negativity takes many forms. But over the last year—with so much success evident in the War on Terror and so little bad news to report on that front (despite the bleating of the appease-for-peace crowd)—negativity has most often occurred in economics. Despite rapidly accumulating evidence that economic activity is not only picking up, but has been relatively robust since the fall of 2001, the pessimists nevertheless abound. We see it in the grumbling of the world's economic ministers, in the downcast biases of certain federal data agencies that seem to specialize in keeping good news from the public, in ignorant politicians who prattle about the "demise" of the US dollar (last year they whined that it was too strong!) or about the public being too stupid to invest wisely, and in the ever-catastrophic claims of scores of Internet and other media columnists. Sometimes I call these people—with a Nod to former US VP Spiro Agnew—the Nabobs of Negativism.
One wonders why the Nabobs persist. Their negativism seems so outdated. Just think about it a second. If 25 years ago you had tried to anticipate today's magnificent living standards—replete with amazing products, inventions, services, and entire industries that didn't even exist then—many people would have buried you in a hailstorm of rotten eggs. You would have seemed foolishly Pollyannaish, even callous, or, as the Democrats like to redundantly say to Republicans, you'd have appeared mean-spirited. (Doesn't just "mean" say enough?) Those were bad days. No, not Great Depression stuff. But they weren't anything to write back to the home planet about, either.
For younger readers, a one-phrase history: A quarter-century ago, we were in the clutches of a deep recession, ruinous inflation, high unemployment, low overall confidence, and ridiculous regulation. Today—despite the brief 2001 slowdown—we are in another American golden age of prosperity. Productivity has run at an envy evoking 4% for the past 18 months. Core economic output is once more chugging close to historical norms, averaging around 3%. Unemployment is unexpectedly falling, down from its fairly low peak of 6%--and far below the rates seen in the last major recession of the early 1980s. Inflation is hiding under the rug. Oil prices are again plunging in anticipation of the Iraqi conflict's settlement. The Dow Industrials are again soaring, up a whopping 10% in the last week; the NASDAQ is up even better, percentage-wise. Retail sales—the true measure of consumer sentiment, far more reliable than any confidence polls—have chugged along at a 5% rate for the last several quarters. From an utopian standpoint, it's not the best of all possible worlds. No, it's just the best that the world has ever seen.
So why all the fallen faces and moaning mugs?
"Well," you may say, "with billions flooded away in the 2001 stock market turmoil, the resulting smell is not exactly that of the flowers of spring." True, the market downturn—mainly in the tech-heavy NASDAQ—drew a lot of Sulking Sams out from under their economic rocks. The media have given them their usual, unwarranted snivel-time. And, as usual, the hubris of the sectorially disaffected remains high. The first-time recessioners continue to predict that their economic sector determines the fate of the world. "When tech goes, we all go," I heard one 20-something econo-seer spout, depressed about his Web stock having lost a huge hunk of its value—and never mind that his company never actually produced any tangible service or product, but only promised to do so. (A trap, by the way, that "too rich" Bill Gates never fell for—one big reason why he remains the world's richest man here in early 2003.)
Let's not whisper that most over-projecting, conceited grumps have proven themselves wrong throughout history. That never stops a new crop of catastrophists from making overwrought forecasts and denigrating any who question them. They tend to be oblivious to the wider trends of their times. For example, long-time readers will remember how three years ago we told you about a Forbes columnist who claimed that a Dow decline to 3,600 was likely, and could last for years? Didn't happen. Not even close. The Dow as I write this is in the 8000s. And while the NASDAQ remains off its highs, it's also well off its lows and is rebounding faster than the Dow.
The truth is that the super-doomers are usually wrong in America. It's normal for them to be wrong. To this day, they vastly underestimate the synergistic power of optimism, resilience, and ambition in the modern US economy. Much like the ultra-greens, they snatch at short-term problems in order to argue for long-term catastrophe. They try to stretch short-term recoveries into long-term debacles.
Baffling Boom
Spring begins tomorrow. As we say here at TOA Daily, the positive is part of the objective. The forthcoming rebirth of nature's annual growth is a good time to reexamine our economic positives. There are quite a few.
Despite the tech stock shock, real consumer confidence—i.e., retail sales—are doing well. It's not as strong as it was a couple months ago—mainly due to the war uncertainty—but it's not bad. When a high jumper clears seven-and-a-half feet, he's still jumping well even if it's not his record. Investment money continues to move into America, as do brains and talent. New business start-ups are rebounding. Internet sales have quintupled in the last two years, soaring right through the so-called recession of 2001. With 238 months of growth out of the last 245, this remains the longest growth-to-decline period for a major nation in modern Western history. (I don't buy the theory that we actually hit recession in 2001. At worst, the economy might have experienced a negative blip for a month or two—but even that is unclear from revised data. It's not as cut-and-dried as the media tell you. In fact, don't be surprised if the recession is rescinded in one of the more red-faced "Oops!" episodes we've ever seen among the datacrats.) Despite the official Neandertal numbers, our own growth estimate suggests that the pace of US expansion is not 3%, but closer to 5 or 6% (roughly paralleling retails sales, which is often a better proxy for true growth as well as for true confidence.)
Yes, we're growing more slowly than during the hottest part of the last boom, but we're still in a long-term, healthy expansion. As our younger market participants are finally realizing, booms have slowdowns—and even sectoral contractions (e.g., the NASDAQ and much old-line manufacturing)—and are never smoothly continuous.
There's more positive news. Despite the bad-weather driven slump last month in new home sales, home ownership is at its best level in decades. Regardless of Fed chairman Greenspan's periodic grousing over the last seven years about imminent inflation, inflation is probably true deflation right now. TOA estimates that with quality improvements and other factors taken into account, deflation is running at about 1.5% a year. Gold prices, after having briefly hitting $370 an ounce a few months ago, have been sinking again as the dollar rebounds rapidly. Industrial investment in new companies is cruising close to the average of the best three years ever. Research and development are still picking up and there is no shortage of brainpower and talented labor—yet pay is good. TOA's index of individual income growth, after taxes, is moving ahead at about 5% annually. On top of all that, we're in the midst of a 10-year cut in US taxes, the good effects of which we're only beginning to feel. And new cut packages are moving through Congress.
The list of positives is long and deep.
In the face of so many optimistic economic facts, what accounts for the perpetual whining and griping—and at times, near panic—among certain media, academics, politicians, and professional bureaucrats—not to mention more than a handful of economists? As with the human condition itself, the reasons are multiple:
First, it's partly an ancient psychological phenomenon: As conditions improve, expectations rise faster. Man's imagination and desires always outpace his achievements. This is not exactly news. Socrates and others talked about it in Ancient Greece. Jewish and Chinese intellectuals have said as much for millennia. This is characteristic of any vigorous economy—not just ours. Ireland (still Europe's best by several measures), Spain, Australia, England, Taiwan, and others have reported the same phenomenon during periods of growth. It is a psychological impression that one is falling behind although he is moving ahead, sometimes briskly.
Envy is also involved. As some people look around and see others getting ahead faster, they resent it. They feel that they are losing ground, regardless of the fact that they may be gaining at a record rate compared to their own pasts. That shows why it's always important to judge yourself by where you've been, not just by some preconceived ideal or, worse, by what the Joneses are doing.
Press Pessimists
Even in the best of economies there will be people sliding into tough times—or rather, tougher times. With its astonishing "job machine," they are a relative rarity in America and therefore become news. They stand out. Good economies cannot solve everyone's problems. I doubt they ever will. People's perceived problems are always relative. Problems expand with the times. Definitions stretch as cultural prosperity and opportunity evolve. What people see as a problem today (e.g., lack of a widescreen HDTV or of DSL service) people yesterday didn't even think about. Nor does every down-and-outer want his problems solved. Welfare can be more than adequate to sustain a standard of living above subsistence in America and most of the West. Because the media tend to readily focus on hard luck stories, actual or exaggerated, the attention they get is disproportionate to their reality—especially when a slowdown occurs. The TV networks and major newspapers are masters at creating the impression that under the surface of the economic roadway there is a huge sinkhole ready to swallow us all.
Then there's a philosophical problem. Certain economists and politicians operate on outdated principles. For example, many analysts believe that prosperity inevitably generates runaway prices. Never mind that advocates of this school have been around since the early 1980s and have been proven wrong again and again as inflation has spiraled down. Old hypotheses die hard. Old advocates of them die harder. Misconceptions are the barbiturates of economic thought.
Finally, there's evidence that the media seek out sourpusses simply to get more variety in the name of "human interest." (Why does human interest always have to be negative?) That's why—as has been true every year or two in this long, long boom—we're seeing more hard luck stories, cases of people "falling through the cracks" (if not here, then overseas, maybe in Lower Mumbojumbo or some similarly enlightened place), and of endless interviews with off-beat economists and newsletter authors predicting the demise of good times or the worsening of "bad" ones. The latest fad is that the War on Terror will "soak up" economic vitality and cause a double-dip recession.
This gloomy media season won't last, so let's try not to take it too seriously. Here on the eve of Spring 2003, let's remind ourselves of the underlying positives in America. Let's recall that economic corrections can happen even in the best of times, just as they can in our personal lives—but that with resilience and reason we will survive them quite nicely. Let's keep our economic counsel and integrity and give optimistic facts their deserved place. Things are looking up. The Worriers of Winter are about to dive back into their caves. The Optimists of Spring are coming out, stretching and smiling in the sun. Things will be just fine.
This was his last in-depth post before the stroke that eventually killed him. With his opposition, I was able to stand reading Anti-War.com.
I haven't been able to do so since March, 2003. Their positions seem too much in line with the "blame America first" crowd.
News alert! Gunter Grass admits to having been drafted into the Waffen SS in WWII.
Crap! I'm tired! I think I'll head off to bed.
Oh! By the way! Jason Lewis is back in the Twin Cities. I've been enjoying his broadcasts since Tuesday.
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