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Doubt is depressing. Doubt that the “fiscal cliff” will be averted come January 1, 2013. Doubt that Europe’s leaders will exhibit the intestinal fortitude needed to get their countries out of trouble and growing again. Doubt that our selfish, polarized politics will ever soften into reasonable, practical government with an economic growth agenda. All this doubt is weighing heavily on everybody. Doubtful business people are holding off on investments and hiring. Doubtful consumers are holding back on certain purchases. Doubtful state and local governments have hit the brakes on many infrastructure repairs and upgrades. Doubt’s bottom line, according to the International Monetary Fund, is that the global economic growth will be depressed to just 3.5% this year, the slowest in a decade except for 2009, after the financial crisis crested. The IMF has forecast the U.S. economy will expand 2% this year, The Wall Street Journal reported, but other prognostications are lower. Some people are clueless about the doubt factor, while others underestimate it. Anyone who follows securities markets knows there is such a thing as investor psychology that can affect prices. Irrational exuberance can send markets soaring and irrational despondence can hammer them — in both cases far beyond what objective data would suggest. The same is true of entire economies, although the driving forces are optimism and doubt rather than greed and fear. Doubt darkens the public psyche because it is the expectation that while things could work out they probably won’t. Optimism is the feeling that things probably will be just fine even though problems might occur. Optimism is the foundation needed to achieve and sustain 4% economic growth. People can’t be kidded or cajoled into optimism, nor can they be scared into it, as the presidential-election attack ads seem to be attempting. We need someone to break the shackles of doubt and give us reason to dare to be optimistic. Will anyone take up that challenge?
2012 Economic Growth Fellow
John Prestbo is retired as editor and executive director of Dow Jones Indexes. Previously he was markets editor at The Wall Street Journal. He has co-authored or edited several books over the past 30 years. The most recent is “The Market’s Measure: An Illustrated History of America Told Through the Dow Jones Industrial Average,” published in 1999 by Dow Jones Indexes. His column, Indexed Investor, appears on the highly regarded “MarketWatch” business and finance website. He received his bachelor's and master's degrees from Northwestern University.Full Bio
TARIFFIED: Trade Talk with Matthew Rooney
This week, trade relations between the U.S. and India are continuing to escalate. Earlier this month, the U.S. stopped granting India special trade privileges by taking away the Generalized System of Preferences (GSP) program, and India has responded by enforcing more tariffs of its own. The George W. Bush-SMU Economic Growth Initiative Director Matthew Rooney breaks down the trade conflict: For more information on trade groups and the global economy, visit www.bushcenter.org/scorecard.
How Trade Spreads Holiday Cheer
It is projected that the average American household will spend more than $1,000 during the holidays this year.
Deporting Salvadorans May Lead to Economic Decline
We should think carefully about a policy whose major impacts are likely to be reductions in employment and economic activity here at home, and increased instability and lawlessness along our borders.
Bush Institute's Laura Collins Talks Immigration on Good Morning Texas
Last week, Deputy Director of Economic Growth at the George. W. Bush Institute Laura Collins spoke with Good Morning Texas about immigration myths. During the interview, Collins had the opportunity to set the record straight and address common misconceptions about legal immigrants living in America today. The segment was inspired from facts released earlier this fall by the Bush Institute in the third edition of America's Advantage: A Handbook on Immigration and Economic Growth. Watch the full Good Morning Texas interview here.