I believe the media thrives on bad news and it is never ending. Every year there is the same refrain of “this time it’s different – we’ve never experienced anything like this before.” Have you heard or read lately that there will be a double dip recession? The following is a sample of headlines from the last two years concerning this same topic:
8-3-2009 Nouriel Roubini Sees Double Dip Recession Risk (blogs.wsj.com)
8-18-2009 Double Dip Recession Fears are Growing (money.cnn.com)
3-11-2010 Beware of a Double Dip Recession (www.Forbes.com)
8-16-2010 Economists See Increased Chance of Double Dip Recession
The Dow Jones Industrial Average (DJIA) was at 9217.94 on 8-19-2009 and it is at 12,425.16 today. The media is still full of double dip recession fears.
There was a great article by Morgan Housel published by The Motley Fool last week called “50 Things You should Feel Great About.” The following are a few interesting points:
• Bad news: 68% of Americans think the country is on the wrong track. Positive spin: The exact same percentage felt that way in 1991. Pessimism is nothing new.
• 115 stocks in the S&P 500 are within 10% of their all-time highs.
• As a percentage of GDP, the federal government was in substantially more debt after WWII than it is today.
• “Five years have seldom passed away in which some book or pamphlet has not been published pretending to demonstrate that the wealth of the nation was fast declining … manufactures decaying, and trade undone.” Adam Smith wrote that in 1775. Again, pessimism is nothing new.
Since 1960 we have had a President assassinated, the Vietnam War, Watergate, a Presidential resignation, Three Mile Island accident, Lockerbie Airliner crash, The Gulf War, Oklahoma City bombed, World Trade Center terrorist attack, Katrina, the Iraq War, the Gulf Oil Spill and the Japanese Earthquake.
With every catastrophe it is always different, yet always the same. Despite bumps along the way, the economy has still managed to grow, we all are living longer and let’s face it, the news might be terrible, but life is good.
Barbara Gray, CFP®