Jewish World Review Nov. 19, 2002 / 14 Kislev, 5763
http://www.jewishworldreview.com | I don't know about you, but I've just about had enough of the whining.
Economists are whining about slow economic growth. Business leaders are whining about their inability to raise prices and being forced to deal with a tougher regulatory environment. And, yes, we've all lost money in the stock market.
Maybe it's time we just got over our bad selves, as my kids would put it. What really is so bad about where we are?
The economy is barely growing, but it's growing. The forecast for GDP growth next year is 2.7 percent. Even with unemployment at 5.7 percent, it's still well below the 30-year average of 6.5 percent. And until economic recovery gathers strength, we can certainly afford to extend unemployment benefits to the 2 million jobless whose checks are about to run out.
Inflation is at the lowest level in four decades, as are interest rates. And earnings are beginning to show signs of improvement.
The Conference Board's report puts consumer confidence at a nine-year low, and that's a bad thing, if true. I have my doubts.
If consumer confidence is so bad, why are retail sales up on the year? Car sales are also still strong. According to the National Automobile Dealers Association, this year's projected sales of 16.8 million vehicles will be only slightly below the record 2000 sales year. And home sales will set records this year.
All of this sounds pretty good to me. Of course, the Business Roundtable has weighed in on the economy with its recent survey of CEOs. The Roundtable hasn't exactly been a bastion of optimism and leadership, choosing to fight governance and accounting reforms for the past year.
The CEO survey found that 60 percent of them expect to cut payrolls next year, with most of the rest expecting payrolls to remain steady. Most of these CEOs don't expect to improve capital spending, a necessary component of economic growth. Talk about whining.
Interestingly, only 9 percent of those rather pessimistic CEOs expect sales to decline next year. Sounds like a pretty good year to me.
And what about the markets? For the past seven weeks the Dow has gained 6 percent and the Nasdaq gained 12 percent, despite lingering questions about the sustainability and quality of earnings.
But we are making progress. Investors want a rebound in real earnings and real reform and accountability, and I believe both are near.
There are certainly still problems. The Accounting Oversight Board's establishment has been delayed several weeks by the Harvey Pitt-William Webster snafu. But that will be overcome.
The SEC is charging ahead with probes of hundreds of companies. Boards of directors are taking their jobs much more seriously. And we've all learned a lesson as we've lost trillions of dollars in the markets: Even independent research is no substitute for individual responsibility in investing.
The good news is that regulators are committed to restoring oversight of the marketplace and corporate America, no matter how loudly some business leaders whine.
This week Saddam Hussein accepted the terms of the UN resolution on inspections. War, for now, has been avoided.
Republicans have retaken the Senate, restoring their hat trick of controlling the White House, the Senate and the House. The negative campaigning by Democrats and Republicans only added to the pessimism in the country, and we won't see that for another two years. All right, another year.
Republicans won barely 53 percent of the votes cast in the midterm elections. While they dominate government, Republicans aren't claiming a mandate. They recognize that we are a nation balanced politically, expecting governance from the center.
I don't know whether Republicans will succeed in their policies, but there is clear accountability to voters should they fail.
I think the whining is about to wind down.
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