Can you think of anyone other than CNBC’s talking heads who’s bullish on the economy, bullish on the banking system, and bullish on real estate? Nor could we after brainstorming the question with radio host Al Korelin yesterday. We had just taped a update on gold for the Korelin Economics Report when our host asked whether we knew any full-throated optimists who could hold their own in a radio interview. The weekend show was becoming too gloomy, Korelin said, because it’s so difficult these days to find guests who think the economy is really and truly on the upswing. Korelin’s hugely popular radio show reaches 260 stations, and as you can imagine, his Rolodex is filled with many hundreds of names of especially opinionated people. But genuine, hard-core bulls willing to embrace the sunny side? Searching the Rolodex, he had come up empty. And the only guy we could think to recommend was Mr. Happy-Talk himself, Larry Kudlow.
Surely there must be someone else? Unfortunately, in the newsletter world where we dwell professionally, we couldn’t think of a single, unmitigated bull among the scores of gurus with whom we swap newsletters. In fact, although we’re pretty sure ourselves that the U.S. economy is slipping into a Second Great Depression, that kind of thinking places us only around the statistical middle of the pack among professional gloom-and-doomers. And compared to, say, a Nostradamian in the group who foresees two World Wars and an unimaginably powerful series of earthquakes that will turn Flagstaff, Arizona into a coastal town and split the Dome of the Rock, our own view of the world seems positively buoyant.
Are We Too Pessimistic?
So, no, we told Korelin, we can’t think of anyone besides Kudlow to take the other side. But having said this, we wondered aloud whether the future could really be so hopeless. Have we perhaps sold ourselves a bill of goods, ignoring upbeat signs that the banks are slowly returning to health? Have we underestimated the resilience of the American consumer? Is the housing market poised for the kind of strong resurgence that would cause consumers to step up their borrowing once again? Have state and local governments gotten their respective houses in order, putting revenues and outlays in balance for a smooth recovery? Nahhhhhhh! Not a chance.
Meanwhile, we can’t fathom why anyone would believe such things, nor why the spinmeisters would be so brazen as to suggest that an economic environment characterized by falling incomes, growing structural unemployment, mushrooming federal debt, plummeting asset values and a collapse in bank lending somehow portends recovery. In reality it’s 1931 again, except that the dollar is worthless and the work force has unlearned just about everything it ever knew about surviving hard times. Even those who have been socking away gold and silver are uncertain how much of a cushion they will actually need. For our part, we are prepared for hard times, though not for rioting in the streets. It is a comfort to be living in a small, semi-rural area of Colorado rather than in, say, Los Angeles. But there’s still no way of knowing what level of preparedness will see us through troubles that we’d care not to imagine.
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In all seriousness to the radio host, he might call Brian Wesbury who I hear every Friday on Hugh Hewitt’s show. He just wrote a new book to plug too ‘Its Not as Bad as You Think” Saw him recently on Fox one morning too.
As an aside, I often take strong issue each Friday with his points – so as to whether he could ‘hold his own’ I give no opinion. Hewitt just lets him talk. But he is a big boy and works for First Trust Advisors as chief economist.