Thursday, January 22, 2009
President Obama is starting out well with an approach that is both pragmatic and positive in outlook. We do not yet know how successful he will be as he tackles the many problems facing the United States, but the important thing is that he is giving the strong impression that he knows how to get from here to positive results. Probably the most immediate problem facing the U.S. and the world as a whole is resurrecting the economy. There are many ambitious programs planned, but perhaps the most important thing is to generate a positive outlook in the marketplace. If we think things will get better, they will. We tend to act out our expectations. If we feel things are falling apart, we delay large expenditures and curtail spending on avoidable things such as dining out and home improvements. If we can convince ourselves that we are on the way back, people invest in the stock market because they expect to make a profit, they buy cars, and they consider moves to better jobs and homes. One counterproductive trend is that corporations take advantage of down times in the economy by cutting their payrolls and costs so that they will be more efficient when the economy improves. We are also seeing the greedy investment swindlers trying to disappear with their profits before they have to face the justice system. The stock market and our attitudes are leading indicators of the health of the economy. When they both turn positive, we will be on the way back. So, have a positive outlook. This is one time in history when we have nowhere to go but up.