Optimistic Sign #1: Media Defaults to Pessimism

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I've been optimistic that we're nearing the bottom of the recession since January 2008.  Long enough that I'm starting to feel foolish.

But you know what?  I've decided that I don't care.  My company is doing OK (never better, in fact), and the only way to deal with this murk we're in is to keep your head down and push forward.

So I decided a couple weeks ago that I would make a point of looking for signs that the economy is bottoming out, or even maybe starting to improve a little.  Maybe this is early, maybe we've got years to go before the recovery starts, but in the meanwhile I'm going to search for the signs of hope.

And someday the economy will recover, and when it does, you heard it here first.

On to my first Optimistic Sign: The Media Defaults to Pessimism

All through 2008, the media (and especially the financial media like the Wall Street Journal) wrote articles about looking for the bottom: how great the stock market prices were, the great deals you could get on a foreclosed house, etc.

Since January, however, I've noticed the tone of the articles change.  Now they say that things could get much worse, don't buy into a sucker rally, the recession will last much longer.

On NPR a couple weeks ago, there was an interview of a government official (I think it might have been Gordon Brown, Prime Minister of the UK) where the interviewee mentioned a forecast that the economy would bottom (that is, stop getting worse) sometime in the second half of 2009 and show some modest growth in 2010.

The striking thing was how hostile an skeptical the interviewer was to this pronouncement: "Really?  Do you honestly think we're going bottom out any time before the end of 2010?" (or words to that effect).

Remember, Gordon Brown does not know when we'll hit bottom.  Neither does the interviewer.  Nobody does.  We could be at the bottom right now, and we would not know it for months.

But the default position seems to have become that this recession will last at least until the end of 2010.  That's almost two more years of recession, and a recession lasting over three years total--exceptionally long in postwar history.  Is it possible?  Sure.  Plausible?  Maybe.  Certain?  No way.

I consider this irrational gloominess (the opposite of Alan Greenspan's famous irrational exuberance) an optimistic sign, if for no other reason than the pundits are always wrong.

But less cheekily, it means that we are emotionally accepting the fact of the recession which is an important step to moving on.  It's the moving on which produces a recovery.