In this issue

Jonathan Tobin: Defending the Right to a Jewish State

Heather Hale: Compliment your kids without giving them big heads

Megan Shauri: 10 ways you are ruining your own happiness

Carolyn Bigda: 8 Best Dividend Stocks for 2015

Kiplinger's Personal Finance editors: 7 Things You Didn't Know About Paying Off Student Loans

Samantha Olson: The Crucial Mistake 55% Of Parents Are Making At Their Baby's Bedtime

Densie Well, Ph.D., R.D. Open your eyes to yellow vegetables

The Kosher Gourmet by Megan Gordon With its colorful cache of purples and oranges and reds, COLLARD GREEN SLAW is a marvelous mood booster --- not to mention just downright delish
April 18, 2014

Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology

Caroline B. Glick: The disappearance of US will

Megan Wallgren: 10 things I've learned from my teenagers

Lizette Borreli: Green Tea Boosts Brain Power, May Help Treat Dementia

John Ericson: Trying hard to be 'positive' but never succeeding? Blame Your Brain

The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious

April 14, 2014

Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time

Greg Crosby: Passing Over Religion

Eric Schulzke: First degree: How America really recovered from a murder epidemic

Georgia Lee: When love is not enough: Teaching your kids about the realities of adult relationships

Cameron Huddleston: Freebies for Your Lawn and Garden

Gordon Pape: How you can tell if your financial adviser is setting you up for potential ruin

Dana Dovey: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate

Justin Caba: Eating Watermelon Can Help Control High Blood Pressure

The Kosher Gourmet by Joshua E. London and Lou Marmon Don't dare pass over these Pesach picks for Manischewitz!

April 11, 2014

Rabbi Hillel Goldberg: Silence is much more than golden

Caroline B. Glick: Forgetting freedom at Passover

Susan Swann: How to value a child for who he is, not just what he does

Cameron Huddleston: 7 Financial Tasks You Should Tackle Right Now

Sandra Block and Lisa Gerstner: How to Profit From Your Passion

Susan Scutti: A Simple Blood Test Might Soon Diagnose Cancer

Chris Weller: Have A Slow Metabolism? Let Science Speed It Up For You

The Kosher Gourmet by Diane Rossen Worthington Whitefish Terrine: A French take on gefilte fish

April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review April 18, 2006 / 20 Nissan, 5766

Should Americans be less optimistic?

By Niall Ferguson

Printer Friendly Version
Email this article

http://www.JewishWorldReview.com | I am by nature and upbringing a pessimist. As a boy in Glasgow, I was encouraged to expect the worst, on the principle that by doing so you'll never be disappointed and sometimes you may even be pleasantly surprised.

This is not the American way. Optimism is in the DNA of the U.S.A. Louis Armstrong epitomized the upbeat national mood in that wonderful song "On the Sunny Side of the Street":

If I never had a cent

I'd be rich as Rockefeller

Gold dust at my feet

On the sunny side of the street

Nowhere is that sunny side sunnier than in Miami. I went there last week and was dazzled. The place is more than booming. Red Ferraris and black Hummers line the boulevards of Coral Gables. The good times have returned to the Biltmore Hotel, that glorious masterpiece of Roaring '20s architecture.

Tourism, which is Miami's biggest business, has more than recovered from the shock of 9/11. Thanks to surging trade volume, both the port and the airport are thriving. Financial services are growing apace. Unemployment is low.

Pick up the Miami Herald and you find full-page advertisements with messages such as "Create Generational Wealth Through Real Estate" and "No money? It matters not. Bad credit? No problem. No education? So what. Over 65? There's still time to change your financial future." The sunny side of the street indeed.

Note too that Miami's prosperity is a triumph for free migration as well as free trade and the free market. The population of Miami-Dade County is 57% Latino, largely though by no means exclusively Cubans. Yet the contrast with shabby, down-at-heel Havana could scarcely be more stark.

Yet, if history is any guide, our present golden age of globalization is unlikely to endure. It could be ended by a geopolitical crisis. Or it could be ended by a gradual domestic backlash.

Should Americans — and especially Miamians — be less optimistic? Conventional wisdom has it that they should. Economists want them to save more. Environmentalists want them to consume less.

Well, be careful what you wish for.

For roughly a decade, the global economy has been propelled forward by the insatiable consumption of U.S. households. Consumption accounts for about 70% of the U.S. gross domestic product, and U.S. growth has recently accounted for more than half of global growth. The appetite of Americans for imported clothing and gadgets has been one of the engines of China's economic miracle.

American consumption depends critically on American optimism. Why? Because it is only by saving literally zero percent of their incomes and borrowing to the hilt that U.S. households have been able to keep on consuming, as they say, to the max.

To take a look at the finances of the typical American family is to see optimism in action. According to the 2006 Retirement Confidence Survey, six out of 10 American workers claim they are saving for their retirement. In reality, more than half have less than $50,000 set aside (excluding the value of their homes), and more than a third have less than $10,000 in savings.

Similarly, most Americans say they expect to work until age 65. But in reality, the average retirement age is 62. This is what it means to walk on the sunny side of life's street. You simply don't contemplate the possibility that you might get made redundant, or fall sick, or get old. You hang on to that American dream that you'll be one of the lucky few who scales the socioeconomic ladder to become "rich as Rockefeller."

The decline of the U.S. personal savings rate from about 8% in the 1980s to below zero percent today is in itself a remarkable phenomenon. Almost as impressive has been the sustained rise in American indebtedness.

Again, this borrowing bonanza has been based on optimism. As they pile up debt, Americans reassure themselves that the other side of the balance sheet is going to justify the risk involved. Most households have one big asset — their home. Its value has risen steeply over the last decade. The assumption is that this inflation in the real estate market will continue.

The world, as I've said, has reason to be thankful for American optimism. By the same token, however, the world has reason to dread an American mood swing. After all, interest rates have been rising steadily since the summer of 2004, driving up the cost of servicing credit card debt and adjustable-rate mortgages. And it's generally assumed that the Federal Reserve will raise rates again next month. At the same time, Americans are coming to realize that energy prices are not going to go down anytime soon.

A quadrupling of interest rates and a trebling of oil prices is quite a combination.

"The only thing we have to fear," declared Franklin Roosevelt during the Depression, "is fear itself." That fear has been long absent from American life. But we should never forget what a devastating thing it can be on those rare occasions when the United States crosses over to the shady side of the street.

Every weekday JewishWorldReview.com publishes what many in in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.


Click HERE to purchase it at a discount. (Sales help fund JWR.).

Click HERE to purchase it at a discount. (Sales help fund JWR.).

Niall Ferguson is a professor of history at Harvard University. He is the author of "Empire" (Basic Books, 2003) and "Colossus" (Penguin, 2004). Comment by clicking here.

04/11/06: Globalization's second death?
04/04/06: So many ‘special’ friends
03/28/06: Let's get it right about what has gone wrong
03/21/06: Congress is trying to give the world a globotomy
03/14/06: Lame ducks can still bite back
03/07/06: A 19th Century critique of a 21st Century president
02/28/06: The crash of civilizations
02/21/06: Not the president, but close
02/14/06: Want historic trouble? Look south
02/07/06: Greenspan advising Britain? It's housing bubbles, deficits and potential meltdowns all over again
01/31/06: Missing the Cold War
01/24/06: It's a sick, Thick World
01/17/06: Tomorrow's world war today
01/03/06: Scotland, it's over, but keep the accents
12/20/05: History, democracy and Iraq
12/20/05: History, democracy and Iraq
11/22/05: Ghost of Napoleon haunts Tony Blair
11/22/05: Can it happen in Britain too?
11/15/05: Red plus blue equals purple
11/10/05: The fires of disintegration
11/01/05: Triumph of an über-wonk

© 2006, Los Angeles Times Distributed by Los Angeles Times Syndicate