Tuesday, June 28, 2005

So This Is a Weak Economy?

Check out Davis Malpass’s column on the editorial page of today’s Wall Street Journal. (Here is the link but you may have to be a subscriber to get access!). His piece is entitled “So This Is a Weak Economy?”

As you can guess his thesis is that people are consistently underestimating the strength of the U.S. economy and bad-mouthing U.S. economic prospects. I happen to agree with his observation but what really interested me were the following paragraphs:

“Yet the litany against the U.S. economy is so ingrained and familiar that few disputed this spring’s ‘slowdown.’ When strong [economic performance] continued into the second quarter, the headlines shifted to other attacks - adjustable-rate mortgages, a housing ‘bubble’, the distribution of income - rather than revising the slowdown story.”

“Why the urge to look for weakness at every turn? Partly , bad news sells; even in business news, if it bleeds, it leads. Second, some of the search for weakness is pure politics - the party in the opposition has an interest in criticizing the economy….”

To me this is just more confirmation of my own observation that the press and the public are generally negative towards U.S. economic performance and prospects. It is almost inconceivable that a bull market in stocks could end in such an environment.

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