Why is this economy smiling?

American optimism is reportedly rising and credit markets are improving. Maybe there's nowhere to go but up once you've accepted the possibility of complete disaster.


Andrew Leonard
April 7, 2009 5:28PM (UTC)

"Poll Finds New Optimism on Economy Since Inauguration" declares the lead story in the print version of The New York Times, Tuesday morning. The apparent reason? Confidence in President Obama: "fully two-thirds" of the survey participants "said they approved of his overall job performance." The number that jumped out most at me -- 74 percent supported "Mr. Obama's push to increase income taxes on people making over $250,000 a year."

That's not the United States I remember growing up in, and it may explain why "just 31 percent of respondents said they had a favorable view of the Republican Party, the lowest in the 25 years the question has been asked in New York Times/CBS News polls."

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Optimism and confidence, however misplaced, are key emotional building blocks for getting the nation's "animal spirits" revved up. And the Times offers some hard data to bolster the sunny-side-up stance in a lead story in the business section: "Muted Signs of Life in the Credit Markets."

But let's not get carried away. One reason why investors are looking favorably at some corporate bonds:

"The fundamentals are still poor, but a lot of bonds are priced for an extraordinarily high default rate," Ms. Caron said. "We've priced in a pretty disastrous outcome, so anything short of disaster bodes well for these bonds."

Anything short of disaster is win-win! There is an important life lesson to be learned here. Once you've gotten to the point where you wake up every morning expecting apocalypse, armageddon, fire, flood, and ruin to spoil your day, you're pretty much guaranteed to be pleasantly surprised.


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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