www.iwallerstein.com
Most politicians and pundits have a vested interest in promising
better times ahead, provided their policy advice is followed. The
current worldwide economic difficulties have provided no exception to
this behavior. Whether the discussion focuses on
unemployment in the United States or the escalating costs of state
borrowing in Europe or the suddenly declining rates of growth in China,
India, and Brazil, expressions of middle-run optimism remain the order
of the day.
But what if it isn’t justified? Every once in a while, a bit of
honesty breaks through. On Aug. 7, Andrew Ross Sorkin wrote an article
in The New York Times in which he offered “a more
straightforward explanation of why investors have left the stock market:
it has been a losing proposition. An entire generation of investors
hasn’t made a buck.” On Aug. 10, James Mackintosh similarly wrote in the
Financial Times: “Economists are starting to accept the Great
Recession has permanently damaged growth. …Investors are more
pessimistic.” And to top it off, the New York Times ran a story
on Aug. 14 on the rising cost of faster trades in which, deep down in
the article, one could read: “[Investors] have also been put off by a
market that has delivered almost no returns over the last decade because
of asset bubbles and instability in the global economy.”
