Query: Is optimism always the better way to go?
It would seem so. After all, a positive attitude is certainly the great American way: Westward ho! Pull yourself up by your bootstraps (bootstraps?)! If I can make it there, I’ll make it anywhere. Land of opportunity, culture of self-improvement. Work hard, fly right. No contest.
Consider this: Recession 2009
Rising unemployment. Declining real income, industrial production, wholesale-retail sales, consumer confidence. In the U.S., in the world.
The Optimist – sees bad events as temporary setbacks and presumes personal power to alter them.
We are on our way! The dollar’s the global reserve currency. Let the stimulus package, health care system overhaul , new lending programs and industry rescues do their work. Declining consumer prices mean we’ll keep inflation in check.
We are solving this! Roll up your sleeves and buy, invest!The worst is over!
The Pessimist – sees bad events as likely to last a long time and presumes no personal power to alter them.
Are we on our way to hyperinflation? stagflation? All this new money meets lack of demand. Higher prices in a weak economy with rising unemployment is a dangerous combination. Countering stagflation can worsen inflation, and vice versa.
We are sunk! Roll up in a ball or sell, short! The worst is coming!
Query: Did irrational optimism play a part in getting us (You and me. We’ll get into the financial institutions and the government another time.) into this overspending, overleveraging, living on credit cards, investing in things we didn’t understand, taking out mortgages we couldn’t afford, not saving enough for the future (along with a whole lot more) mess?
Did we see what we wanted to see (think Bernie Madoff), believe what we wanted to believe (housing prices always go up), spend what we wanted to spend (doesn’t it seem that everything’s “designer” now?), get lazy and not do our due diligence and trust the experts instead – all because we want to believe things always get better? If only…
Maybe, just maybe, we need to see the glass as both half-empty and half-full. Couldn’t hurt, might help.
Copyright © 2009 Marlin S. Potash. All rights reserved.