Should We Be Optimistic about the Economy?

Mr. Sunshine?

Yesterday I attended a breakfast that included a talk by financial consultant Brian Wesbury. Some people love him; others seem to despise him. The knock on Wesbury by some is that he is much too optimistic, hence the nickname “Mr. Sunshine.”

We were all given copies of his new book, It’s Not as Bad as You Think: Why Capitalism Trumps Fear and the Economy Will Thrive. I have to admit I was skeptical of a book with that kind of title in the midst of what we are experiencing currently. I asked myself if he might not be seeing roses where thorns actually existed.

When he spoke, I found him not only to be quite articulate but also well-grounded in a Biblical/conservative worldview with respect to the economy. He opposes the bailouts that have occurred, the “stimulus” package, cap-and-trade, and the government’s attempt to take over the healthcare of all Americans. He won brownie points with me for those views.

He also had some choice, though appropriately moderated, words about President Obama and his philosophy of government. It’s obvious he doesn’t accept any of the Obama agenda and is concerned about the growth of government and the massive spending increases.

Yet, in spite of all this, he believes the economy will grow this year, that housing will rebound, and that what we are experiencing is temporary. His premise is that you can’t keep capitalism down. He used charts to demonstrate how various sectors of the economy are presently in a sharp rise after suffering from a similar fall.

He formulated this quandary: if the economy does actually rebound, will the public learn the correct lesson? He put it this way: liberals want the economy to stay bad because that allows them to use the government to control more and more of it; conservatives want the economy to continue to tank because that will show people that Obama is to blame and the Democrats will lose a lot of seats in the congressional elections in November. But if the economy does rebound, will people believe it was the Obama policies that created the new prosperity? That would be entirely the wrong lesson, he said.

I don’t know if Wesbury is correct, but I would like to think he is. There are other factors that have to be taken into consideration. He posits no other disaster that may interfere with the rebounding market. What if we have another terrorist attack, particularly if that attack is more along the lines of a cyber-attack that could take down our computer-dependent society? How would the economy continue to function under those circumstances?

I’m going to read his book. I think it’s important to see all sides of this issue. As I said, I want to believe him. I certainly hope he is right.