There is just too much good economic news around to suit the economic pessimists, and it has got to stop soon or they'll have to re-evaluate their scenarios.
The good news is coming from every direction, from the Commerce Department and consumers and retailers and purchasing agents and even from the Federal Reserve Board, which deferred an expected increase in the discount rate.The latest retail sales showed a 1.1 percent improvement in November. Car sales were good. Housing construction was at the highest rate in seven months. The purchasing agents foresee strong, non-inflationary growth in 1989.
The November report on producer prices shows they rose only three-tenths of 1 percent for the third month in a row. Even though they probed deeply into the guts of the report, inflation-fearers found little grist for their mill.
The latest and broadest measurement of the U.S. trade deficit showed a sharp improvement in the third quarter of the year, reducing the gap to its narrowest in three years.
It might seem hard to argue with items such as these, but that is not so. There is a peculiar attitude toward good news today, the commonest one being that good news is bad because it will bring on inflation and recession.
Never mind that neither is in sight. Just remember, if you will, that in the view of some economists inflation and recession are ever-present threats even in the best of times. Like sin, they attack the weak and unprepared.
That being so, you must forever flagellate the economy during good times in order to ward off the threat. The economy should not be indulged, because it is inherently weak and subject to excesses that can destroy it. Beware.
In this environment, improved retail sales are viewed as an indication of an economy overheating and heading toward inflation.
News of the improved trade deficit had been broadcast only minutes when the oil analysts warned that higher prices for that product would slow and even reverse the improvement.
The continued lowering of the jobless rate, and the continued expansion of the work force, the pessimists said, was very, very dangerous. When you reach jobless levels of 5 percent to 5.5 percent, they say, wages soon will rise.
Sharply rising wages would mean inflation, of course, and so would a continued high level for plant usage. When you use up your most efficient plant space you can't make more goods except at a higher price. Beware.
The latest report by the National Association of Purchasing Management, in which members overwhelmingly say the economy will improve next year, was said to be naive.
Higher car sales just can't continue without rebates, said some of the auto analysts. The news of heightened activity in housing was immediately followed by economists warning that high interest rates would put that to an end.
There are enormous problems facing the U.S. economy - budget deficits, trade deficits, low savings rates, excessive and probably very poor credit, banking problems, tax and revenue issues, the dollar, competitiveness . . .
So why is the news about people working, companies producing, deficits shrinking, prices remaining constant and houses abuilding accompanied by warnings?
Sooner or later the inflation and recession watchers will have their way, because economies are cyclical. Expansions follow and precede contractions. The lines on the graph waver; seldom are they straight, as in straight up.
The inflation-recession watchers know this, and they know, too, that you do not worry enough about it. They feel they must atone for your inattention to worry. Their motto is, "If you only knew, you'd worry more."
Seven years of uninterrupted economic expansion has left them dismayed, disturbed and disgruntled, and habitually inclined to growl, "Bah, humbug."
And so at Christmas, say the good people of America, "The same to you."