Marc Faber is a market analyst and publisher of the “Gloom, Boom and Doom Report” newsletter. As you may have gathered from that title, he’s rather pessimistic about the economy. (He’s also been very accurate concerning economic trends over his career.) But he really dropped jaws this morning when he made the following statement on CNBC:
“I am a great optimist in life; otherwise I would commit suicide in view of the kind of governments we have nowadays.”
Hyperbolic suicide comments aside, it brings up an interesting irony that I have been noticing for a while. That is, most (if not all) of the most bearish economic forecasters describe themselves as optimists in their day to day lives. I consider myself extremely optimistic, but my views on the economy are dire at best. The fact that we optimists are so pessimistic about the economy should cause you to take notice and ask if maybe there is something to all this gloom and doom after all.
That may seem like a paradox. If you listen to the financial news, those of us who have been predicting that the economy is on the verge of collapse are “doom and gloomers” who are just negative people. When we say that the Greek debt crisis can’t be resolved with more bailouts and that default is inevitable, they call us defeatists. When we point out that America’s economy is as bad or worse than the problems in Europe and that the only solutions to get us out of this mess are currently politically impossible, they say we have no faith in America.
In fact, nothing could be further from the truth. We economic gloom and doomers are simply realists who understand the nature of the crisis. We’re also optimists who are trying to minimize the damage and help people avoid calamity. If we weren’t optimists, we wouldn’t spend our time shouting into the wind, hoping against hope that the general population will heed our warnings, or that we can influence the political landscape by inserting reality into the picture.
So who are the optimists and who are the defeatists? Let’s do a thought experiment.
Close your eyes and imagine you are living in New York City. (Now open your eyes so you can read the rest of this.) The local weathermen are all astrologists who have declared that although the sky looks dark, our horoscope says we have a bright future ahead of us. The clouds have always moved on in the past, and this time is no different. Then imagine an astronomer comes along and says, “I’ve done some scientific experiments and looked at the data; that dark spot in the sky is actually a comet and it’s heading straight for New York.”
Is the astronomer a pessimist because his thinks New York will be hit by a comet? I would suggest that he’s an impartial analyst who’s tools provide a more accurate way of looking at the universe than astrology does.
Is it pessimistic for someone to want to look at the scientist’s negative data, even when all off the forecasters on the news agree he’s a lone quack? I would say that’s just being inquisitive, an optimistic trait.
Is it then pessimistic to observe that his experiments are based in science, and to question the majority who say astrology holds the answers? I would suggest that is simply making a judgement based on evidence as opposed to popular opinion.
Is it pessimistic or anti-New York for that person to say to his fellow New Yorkers, “Hey, I’ve seen the data and there’s a good chance that the growing black spot in the sky is a comet that will hit right here. We should all move some of our assets out of the city now and be prepared to flee entirely if it gets darker.”? I’d say that’s just being prudent.
Is it optimistic to sit tight and say, “It’s probably not a comet, but even if it is, someone will save us. Perhaps the government will reverse gravity just in time to turn the comet around.” No, that’s just foolish. The pessimists are the ones who bury their heads in the sand when things get tough, or even know there is something seriously wrong, but give up because they think there’s nothing they can do.
The optimists are the ones who search for the truth and have the conviction to believe in themselves. They are not scared of a changing future that will be difficult for many, but instead look the future straight in the eye and adapt and prepare. They are the ones saying, “Hey, I’ve got a bus with a full tank of gas and a roadmap. Let’s get out of the city before panic sets in and the bridges jam up. Besides, even if I’m wrong, there are some great places to explore.”
Perhaps our optimism is the reason we want to educate as many people as we can about the problems that face us, and how we can avoid these problems in the future. We are optimistic that people will learn the right lessons from a catastrophe, and turn to freedom, instead of government, for solutions. We are the ones who see a glorious future when the dust settles and we can start from scratch with the astronomers, and not the Keynesians (I mean astrologists) running the show.