Ignore the Scaremongers - Watch out for the Truly Scary

[marmar]

from HuffPost:



Ann Pettifor
New Economist, Author, Debtonation - The Coming First World Debt Crisis
Posted: June 5, 2009

Ignore the Scaremongers - Watch out for the Truly Scary



As a banker noted recently, there is no constituency for pessimism. Americans, he suggested, believe in optimism as a human right. This bright buoyancy is one of this nation's greatest strengths, lapped up by jaded Europeans.

But it was optimism that also enabled Americans to max out on credit cards and other forms of borrowing -- in the mistaken belief that debts are always payable -- sometime in the future.

Such optimism did not help millions of Americans prepare for the shock of losing their job, or for the move into part-time work last year.

Optimism did not prepare investors for the reality check that finally forced Bernard Madoff to admit deluding and defrauding investors. And it probably did not help the shareholders and directors of General Motors prepare for the collapse of auto sales last year -- or for the shock of the biggest industrial bankruptcy in American history.

So while optimism is great; reality checks are vital for a balanced outlook. What is the real world economic outlook now? Although we are clearly still in the midst of the 'Banker's Recession,' the stock market is soaring upwards; there is much talk of 'green shoots' and of consumer confidence rising. Should we start shopping again? Invest in the stock market? Take the plunge and buy a new house?

These are critical decisions, and the economics profession does little to provide Josephine Public with the kind of straightforward analysis that would assist her in making wise decisions. ...............(more)

The complete piece is at: http://www.huffingtonpost.com/ann-pettifor/ignore-the-scaremongers_b_211842.html