Photo: Max Westby
After having read the first instalment of the 2011 Barron’s Roundtable and having listened to various other pundits over the past several months, we wanted to highlight one key thing:The “we’re good short term, but screwed long term” thesis is the most wildly over-believed thing in the world right now.
There are two things going on here.
First, it’s just a matter of hedging. If you believe we’re screwed long term, then the moment the next crash comes, you can fall back on that (“As I’ve always said…”).
But it also shows a lack of imagination. It is hard to figure out why the market would tank right now. Everything seems steady, and Bernanke’s hand is on the tiller. On the other hand, everyone can rattle off the structural problems facing the US (a bad education system, underfunded pensions, ageing demographics, lack of competitiveness, massive debts, huge deficit, etc.)
Anyway, it’s not to say that the US isn’t screwed long-term, but remember, over the long term, things have tended to work out pretty well (for the US, and for much of humanity), with doomsayers predicting catastrophe the whole time.