If a conservative can't be optimistic, that would explain why I'm a neo-conservative.
(Some would say pseudo-conservative, no doubt).

I've never met a more ardent group of optimists than the "conservatives" on this blog, who consistently ignore every warning sign of economic toubles to come. Judgement will come soon enough.

Robert:

That's realism, not optimism. When the Brits are forced to pay their Napoleonic War debt we'll agree with you.

What about all that "It's morning in America again" stuff? I thought Reagan won in '80 because he was the optimist and Carter was the pessimist. In fact, I thought that's why you were prodicting 50-0 for Bush this time around.

Reagan thought the Apocalypse imminent, though that can be argued is the optimist's position.

This is the paradox at the heart of American conservatism. Americans are optimists. Conservatives are pessimists. We all must make our own peace with this paradox. For myself, I see America as a brief period of sunlit sanity amidst the violent storms of human history.

OJ, you are making many optimistic assumptions by comparing our current situation to Britian in the 19th century. For one, you assume that, since Britain had a huge debt after the war and "did okay" for itself, that we will do likewise. There are many factors that are different between the US today and Britain then. One is that Britain, Europe and the Anglosphere were just embarking on the Industrial Revolution. Another assumption that you are making is that Britain "did okay", since they held onto, and extended their empire in the subsequent decades. There is a lot of economic and social misery you are glossing over. Ever read Dickens?

But it is the hallmark of an optimist that he glosses over facts. Optimists lack curiosity, they skim over the appearances of things without trying to delve into the details. One match between the current situation and some past situation that did not lead to disaster, and he is happy, and can ignore any semplance of the current situation to other historical analogies that ended worse.

Okay, when we repay the debt from WWII.

David:

...that peaked in 1621.

Hmm. Wasn't Dicken's point that being rich and miserly was what makes man sorrowful and pessimistic? Happiness and optimism, at least according to Dickens, comes from appreciating what you have, little as it may be, not complaining you don't have enough and might not get more soon. (Now who is skimming over the appearance of things)

Well, I would still say 1776, but Reagan would say that the best is yet to come.

Shana tovah to all :-)

Robert Duquette:

North America, China, Japan, and Israel are embarking on the Neo-Industrial Revolution.
Nanotechnology, biotechnology and quantum computing will (eventually) make early 21st century America look like Sierra Leone, or North Korea.

It's raining soup.
Only the anomaly of the Boomer generation being much bigger than GenX is even causing us to break a sweat, and that's temporary, in historical terms.

The only way that it can be derailed, that I can see, is global thermonuclear war. Perhaps you have insights that I don't.

Michael,
You don't think that any of these technology marvels can ever have unintended, negative consequences? If you can imagine that nuclear weapons, those offshoots from yesteryear's wonder technology, can derail our progress toward utopia, then certainly you can dream up a few dark scenarios for these newcomers, can't you? Don't you ever read science fiction?

But I'm not looking that far ahead, I'm looking more to the next 20 years. Our problems aren't technological, they are economic. We're living beyond our means, and it can't last forever. Our economy is so leveraged that an unexpected shock to the system can put us into a deep recession or depression. Where will such a shock come from? Use your imagination, but if you are skeptical, I would refer you to the very conservative saying "stuff happens". Who on this board expected oil could hit $50 this year? (Just me, but I didn't think it would happen until next year). Who expected the Southeast to be hit by 3 monster hurricanes in rapid succession? I understand that some insurers are close to bankruptcy. Do you think that such an unexpected financial event could possibly spark a derivatives chain reaction meltdown? Remember LTCM?

Our current economic optimism relies on an almost irrational faith in the best case scenario. Noone is thinking of the unexpected, noone imagines that things could get really ugly. But such a person is not a student of history.

Robert:

Yes, of course future technologies will have unintended, negative consequences.

A relatively benign example would be that, at some point in the future, the "virtual reality" or "holo-deck" of science fiction will become possible.
Given modern people's appetite for TV and internet usage, and the future's reduced need for individual productivity due to robotics, I would expect that fully a third of the modern world's population will essentially withdraw from society, preferring to spend all of their copious free time in a Universe of their own making, interacting with others only in fictional settings.
It'll be modern Europe writ large, Asimov's 'The Naked Sun' come to life.
The fertility rate will plummet. Effectively, it'll rival the Black Death of the 13th and 14th centuries.
And that's just the good stuff !

However, as you are a student of history, consider this:

The world population in 1000 AD was around 350 million, ± 50 million.
Then:
The Black Death, claiming a third of all humans. Famine. War. The technological advances of the Industrial Revolution, allowing humans to field armies of millions, allowing those armies to grind each other to hamburger, in the 19th century, in the 20th century. Atomic weapons unleashed, with a brilliance to rival the very sun's, Prometheus truly Unbound. Brutal dictators killing handfuls of millions of their own people.
And yet:
The global population in 2004 is 6 billion higher than it was a mere thousand years ago.
For many of those 6+ billion, livin' is easy. Work takes up barely a quarter of their productive lives, and their working years are only half of their lifespan.
So many people are fat that instead of being seen as a status symbol, that one is rich and powerful enough to get fat, it's viewed as a huge problem.
People in advanced countries live, on average, for twice as long as the people in 1000 AD, and even people in undeveloped countries live for half again as long.

What this tells me is, humans will survive and prosper, regardless.
Even global thermonuclear war only throws us back to the Bronze Age, and not for long. It won't end humans.

The only way to extinction is via science fiction, some advanced species sterilizing the Earth for their own purposes.

America is living well within our means, even if not with maximum wisdom.
The projected deficit due to Boomer retirement is only $ 3 trillion or so, which means that, added to current debt, the US will be on the hook for ONE YEAR'S GNP. One !!
That's hardly a sure road to the poorhouse.

$ 100 a barrel oil, although not pleasant, would be bearable: In '80 - '81, we had (in current dollars) $ 70 - $ 80 oil, and were paying $ 4/gal for gasoline.
In any case, it wouldn't stay that high for long.
There are easily four alternatives that become commercially viable at that level, and oil production would explode.

Dr. Carl Steidtmann, an economist with Deloitte Research, estimates that due to productivity increases in the use of energy, oil would have to go above $ 160 a barrel to have an impact on the US economy similar to the situation in the early 80s.

It's very simple really, when your guy is in office you become an optimist, when the other guys in you're a pessimist regardless of the signs. Look at the 1980s, the era known for personal excess was the same era of insanely high interest rates and the deficit, yet here we are, still kicking. And IF (notice I say if) the budget was balanced by cutting back on defense, then wasn't the current spending inevitable anyway. Defense of Offense, which would you prefer?

Michael,
If optimism means that you think that mankind will ultimately survive any disaster that befalls it, then call me an optimist. But that is setting the bar about as low as it can go.

Yes, we are much better of materially and socially than we were in the distant and even recent past. But our present condition is the baseline from which to measure the success of our actions, not the past. If we were to experience a full blown depression today, people would be better off than people were in the Great Depression. We could ensure that everyone at least were fed, sheltered and had minimal medical care. But the social impacts would still be huge. Crime, vice and family stress would go up exponentially.

The problem with excessive optimism is that, by causing people to downplay or ignore the warning signs of future troubles, it tends to make those troubles greater when they arrive than they would have been had people taken corrective action earlier. I believe the unexpected spike in oil prices this year is a sign of problems ahead. When something unexpected occurs, you have two options:
1. Re-examine your assumptions, look for new data that may cause you to revise them (such as the unanticipated increase in World oil consumption driven by higher than anticipated World economic growth, particularly in China).

2. Find a conveient rationale for explaining the anomaly away and holding to your original assumptions.

If we reach a condition of peak oil output, the price can go a lot higher than $160 pretty quickly.

It seems unlikely.
For instance, at $ 160 a barrel, Chinese, Indian, and other emerging economies' demand dampens pretty quickly.
Developed economies' demand would also decrease; remember, the sky-high oil prices of the 80s were followed by an oil glut, and, in today's dollars, $ 15 a barrel oil.

Finally, oil is only being produced at, perhaps, 80% of global potential. With $ 160/barrel oil, infrastructure would be thrown up within months, and ever more oil flowing.

Unthinking optimism is blinding, but reflexive pessimism is not only just as debilitating, it also leads to a lower quality of life, and a shorter life span. (Really).

Michael,
I agree about reflexive pessimism, but I think that our political and economic leadership is skewed too much toward the optimism side right now. Where do you get the figure of 80% capacity? I haven't seen any source that claims that, if you could supply a reference, that would be great. Also, do you have a link to the research by Steidtmann?

If the Chinese let their currency rise against the dollar, than $160 dollar oil will be cheaper for them than it will be for us. It is not just about oil, it is about the fact that our current fiscal mess gives us no room for economic shocks. Borrowing to the hilt assumes the best case scenario going forward. Optimists tend to back themselves into corners where the unexpected is always negative and they are not in a position to adapt to it.

Robert:

oj posted the Steidtmann article under the headline "Letting the air out of the bubble mentality", on 16 Sept.

Michael, thanks, I'll check it out.