Last weekend, I attended a Christmas party with several of my friends. After getting a cup of hot apple cider, our polite conversation quickly turned to our mutual concern for the economy.
It seems that everywhere you look, the news is bad. The media drone on and on about the sub-prime mortgage crisis and high gas prices. While the outlook may not be apocalyptic, it is certainly pessimistic.
But not all the news is bad. On Sunday, the New York Times ran an article entitled, Not If Exports Save Us. In the article, they noted three positive economic indicators:
- Macroeconomic statistics are still good, including a 4.4% annual growth rate in GDP.
- Because of foreign investment, banking losses are spread around the world thus minimizing the pain in any one location.
- The weak dollar is actually helping U.S. exports, since foreign currencies buy relatively more U.S. goods than they did previously.
While there is certainly bad news to counter this, not everything is negative. My biggest fear is public perception and its impact on the economy. We don’t need to talk ourselves into a recession.
Frankly, some days I think the best thing for the U.S. economy would be if everyone stopped watching the news for a few days.