The Long Range View

There are now officially three plus generations of Americans who have grown up on Sesame Street, a show its producers originally decided to piece together in short, entertaining snippets on the belief that kids didn’t have the attention span to follow a full half-hour storyline – which, when you think about it, is exactly how MTV would be conceived a few years later.

Well I guess years later all that short attention span television is finally catching up to us.

The Federal Reserve reported this week that in June factory output in the U.S. increased by .7% in this country, while industrial output increased .4%.  And this, of course, comes on the heel of comparable decreases in those two areas the month prior. 

The difference is how the media and investors are reacting to the news.  In May, many were predicting the onset of a period of economic slowdown for the country with the prospect of future doom and gloom.   Now, however, many of the same people are calling the numbers a positive sign and themselves bullish on our prospects for the balance of 2012.

Seriously?  In a month’s time they go from pessimistic to optimistic?  It makes no sense.  Manufacturing in this country has had an amazing, extended three year run of growth and one measly down month causes us to panic?  And then a follow-up good month has us once again dancing for joy? 

Folks, we all need to just relax.  We need to chill.  This economy is growing.  Manufacturing is gaining momentum.  And the global market is once again starting to beat a path to our doors.  It’s just that where we’re headed, and what we’re going to become as an economy in this new global marketplace is not going to happen in a month’s time.  And analyzing our progress in relatively tiny snippets might be good for our increasingly short attention span, but it’s bad for anyone looking for an accurate reading of how we’re doing or a deeper understanding of where we are.

Look, I’d be willing to bet Babe Ruth had many games in the prime of his career during which he failed to get even a single hit.  But I’d also be willing to bet that no one ever believed he was done or called him washed up after any one of those contests.

Likewise, the stock market might have some down weeks, or even months over the course of so many decades.  But no one ever made money betting against the market in the long run.

Part of it is because today’s voracious media is always looking for the latest trend and is often willing to find more meaning in the ebb and flow of everyday market dynamics than is actually there. 

Part of it is because so many politicians in this country aren’t leaders as much as they are perennial candidates, and the majority of them appear more concerned with winning elections than doing what’s best for the long-term growth and stability of our economy.

And part of it is because as Americans we simply don’t react to the very same news that we saw, read or heard yesterday, and because we eventually become numb to month after month of the same thing.  It is only when month after month of, say, growth gets followed by a month of decline that we stop what we’re doing, stand up and take notice.  It is only then that we consider what is being reported “news,” and only then that we give it weight – and not because it’s relevant or even accurate, but simply because it’s different.

As someone who owns a small, private company, and who lives and occasionally dies with the relative strength of this country’s economy, I can assure you; things are good.  We’re headed in the right direction.  And we’re getting stronger by the month. 

It’s just that we have to understand that sometimes things don’t always go according to plan.  We just have to stop worrying so much when they don’t, or getting too far ahead of ourselves when they do.  We have to just stay with the plan and keep believing in our economy’s remarkable ability to adapt to the marketplace. 

After all, for as many times as Babe Ruth was likely to hit one into the bleachers, he was just as likely to go hitless or make an error.  And you know how that turned out. 

The guy made the Hall of Fame.

Leave a Reply