We've harped on the far-too-dour media for months now. Entering the second half of 2008, don't expect us to relent: it remains a verifiable and observable fact today's sentiment is completely displaced from reality.
But that in itself isn't anything new; today's sour sentiment is just far more severe and dislocated from reality than usual. For decades polls have shown most believe we have it worse than our parents, and the world is in decline.
Greg Easterbrook, in his book, The Progress Paradox, offers a detailed analysis of how things continue to get better even as we continue to feel worse.
The Progress Paradox: How Life Gets Better While People Feel Worse
By Gregg Easterbrook
Here's a short list (which goes on and on in the book) of what's consistently trending better across the globe today:
Once upon a time poverty was linked to starvation. Today poverty and obesity are linked in this country. What a staggering reversal…a crisis of abundance! Accuse Easterbrook (and us) of being Pollyannas if you will, but it's almost impossible to overstate the significance of that.
All of this is to say: Take a step back from daily media haranguing and see the bigger picture once in awhile. There, it becomes abundantly clear those who truly believe "this is the worst economic period in memory" by definition must be five years old or less, mentally deficient, or perhaps both. Frankly, we don't want kindergartners setting public policy.
But gloom also has its uses. One of the great features of the American spirit is its pursuit of happiness. Notice it's never enough for us. We want more, we strive for more. Sure, poverty might be near all time lows, but we want it eradicated. Yes, crime might be anemic, but we prefer it didn't exist altogether. This house is okay, but we want one with a pool and a rec room too. And the old TV was fine, but it sure would be great to have a 42" flat panel.
America's forefathers were more right than they knew in calling it the pursuit of happiness. Pursuit is precisely what it's all about. It remains a human universal we are not ever satisfied. Contentment, happiness, whatever you want to call it, is a matter of relative standing. Behavioral studies have shown this time and again. There's an innate and irrepressible drive to continually get better from where we were yesterday and in comparison with our peers. That truth explains why we continue to feel angst even as things get markedly better.
The American experiment aligned the individual will to do better with collective progress. The crux is independence, and that's where free markets step in: Freedom and capitalism are synonymous.
Capitalism has been so explosively successful, and for so long, we often diminish or forget that fact in the daily nitpicking. Capitalism isn't an ideal. It's no more perfect than humans are. That is, it's precisely as imperfect as humans--a collective system aligned with individual intention.
The Declaration of Independence underpins an economic system allowing resources to be allocated efficiently, to cross borders and interlink economies, to make more, make better, renew, and allow individuals to freely enrich themselves as they simultaneously contribute to the economy.
This is different than all human history. Yet, the thrum of America's impending doom is still a common refrain:
America's Days Aren't Numbered
By Thomas F. Madden, The Wall Street Journal
Books by the dozen line the shelves today declaring the "last days of the republic." But the reason we're not Rome, we're not the Soviet Union, nor Her Majesty's Empire, is this feature of free market capitalism. The empowerment of the individual to collaborate with the world as he/she sees fit is a mechanism creating ever-growing wealth, agnostic to nationality. Microsoft doesn't provide the world's software in the name of the "USA Empire." It could barely care less what country it does business in. Microsoft provides goods and services to the world for its own profit. So too with Wal-Mart, Apple, GE, and countless others. And just as important, the US freely allows foreign entities to invest and do business here too.
Skeptics are good. They make good scientists and good parents and good investors. Stay skeptical. Celebrate that it's not enough today. There is more to do, more to make better.
But once in awhile, it's good to appreciate we're not all doomed in the pursuit.
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*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.