1. Archive

Americans: riding an eternal wave of optimism

What will it take to shake America's confidence?

Certainly not the impeachment of the president, the chaos in the House leadership, an air raid on Iraq that was of questionable effectiveness or a fraying global economy.

In the capital in recent days, pundits and politicians have been wondering whether it is indifference or ignorance that is keeping Americans from sharing in their gloom. But across the economic and cultural terrain of the most optimistic nation on Earth, the answer heard again and again is "perspective." Life goes on.

The stock market pressed on to new highs. Consumers continued to shop, not wildly but not cautiously. And people were mindful of, but not riveted to, the serious yet manageable events playing out in Washington.

All of this is a reminder of the ebullient national personality of the United States, an immeasurable quirk that without question adds to the gross domestic product and to social harmony.

"When I'm optimistic, I'm more likely to make commitments of capital, to spend and to take risks," said Donald P. Jacobs, the dean of the J.L. Kellogg Graduate School of Management at Northwestern University. "And that's what every economy needs."

Jacobs won't find the nation's sunny disposition quantified among the black-and-white numbers his professors pump out. He doesn't need to. A baker's son from the West Side of Chicago, 23 years ago he improbably became dean of an also-ran business school and turned it into a national powerhouse. Even when temperatures plunge to 6 degrees in the Chicago area, he wakes up feeling just great for a 71-year-old.

And why would Americans think the wheels are about to come off? So many have faced so much in recent years and survived. Millions of good factory jobs have been lost, but working families have pulled together and are making ends meet. Crime and unwed births and adultery and illness and death have touched so many families, yet children are still raised, meals still served, and, collectively at least, the economy and the social fabric seem a little stronger, not weaker. Floods and fires and hurricanes and tornadoes revisit the same regions, yet people don't move away, they rebuild.

Humans by their very nature are optimists, says Lionel Tiger, the Darwin professor of anthropology at Rutgers University in New Brunswick, N.J., and author of Optimism: The Biology of Hope.

Americans, better than any other 20th century culture, have applied those natural tendencies, he says. "What we have done is used the economy as a way of reflecting a generic, almost metabolic, human optimism."

In the United States, nobody likes a sourpuss, as the public opinion polls continually remind the dour Republican leadership in Congress, and as Jimmy Carter learned during his one-term presidency. Regardless of political point of view, leaders who project optimism _ Bill Clinton, the man from Hope, Ronald Reagan, the man from Hollywood _ confound their critics with high approval ratings. Even after impeachment, Clinton's ratings remain high.

Larry J. Kimbell, director of the Business Forecasting Project at UCLA's Anderson School, is accustomed to making precise, fact-based projections using a computer model. But he doesn't hesitate to hazard a guess at the value of optimism and America's appetite for risk-taking: It adds half a percentage point to growth in gross domestic product.

That conservatively puts the good-feelings premium at about $38-billion.

"In special times, such as the turn of the last century, and now, when communications revolutions are occurring, it may be worth more," Kimbell said. "We're in one of those exceptional eras." To see just how "exceptional" this communications era is, just look at hot Internet stocks such as Yahoo! and, which sometimes jump more than 10 percent in a single day's trading. The resulting sky-high price-earnings ratios reveal just how optimistic American investors are that, someday, these will be huge companies.

U.S. capital markets are unique, and a uniquely powerful engine for economic growth. Just about any good idea _ and plenty of bad ones _ can attract capital, as the hot and volatile market for initial public offerings of stock shows; the feverish matching up of dreamers and investors through an IPO beats the dilatory loan committee of a Japanese bank any day.

The optimism and appetite for risk has spread beyond those who might grow personally wealthy. College endowment and public pension funds, managed by salaried officials, account for 90 percent of the $2-billion just raised by Madison Dearborn Partners Inc., a Chicago buyout fund specializing in midsize transactions. But even during the stock market plunge this past summer, and throughout the unpleasantness in Washington, his clients "were totally unfazed," said John A. Canning, the firm's general partner. "They take an extremely calm, long-term view."

Sir John Templeton, who founded the Templeton mutual fund group, made his fortune and his investment reputation stepping in to buy stocks when others were most pessimistic. He says optimists have been the stock market winners over the past century and most likely will be in the future.

"With the fall of communism and the sharply reduced threat of nuclear war, it may be that free-market economies have entered the most glorious period in their history," he said in the new book Spiritual Investments _ Wall Street Wisdom from the Career of Sir John Templeton by Sarasota author Gary Moore.

Strict U.S. regulation of capital markets helps, controlling the cheating and insider dealing that taint markets and discourage investment in so many developing countries. Immigration, though not popular with some Americans, is encouraged, and that brings to these shores dynamic and, by definition, risk-taking newcomers.

The perception of a level playing field, too, encourages Americans to dream about vaulting out of their particular economic class, and many do. Unlike several European school systems, which early on separate those destined for professional jobs from candidates for trade jobs, U.S. schools are a chaotic and continual meritocracy. Late bloomers aren't doomed.

Optimism inspires creativity. American students score below those in many other countries in math and science. But America's engineers, particularly its young ones, continue to keep this nation ahead in the pursuit of better technology. That is because the same kids who show limited interest in learning existing science demonstrate great skill and confidence in creating new formulas. In the New World, creating the new always makes a bigger impression than mastering the old.

Indeed, today's computer nerds figuratively are pushing back the same frontier European settlers encountered more than three centuries ago. In describing that first wave of arrivals, F. Scott Fitzgerald wrote: "For a transitory moment man must have held his breath in the presence of this continent . . . face to face for the last time in history with something commensurate to his capacity for wonder."

But the last frontier would turn out to be a lasting source of wonder. A priest and an explorer, Jacques Marquette and Louis Joliet, canoed in 1673 from the top of Lake Michigan to its southernmost point, on their way to finding the Mississippi River. They stumbled ashore at what would become the continent's crossroads, Chicago, a city built on the crazy belief that man could complete a waterway -- joining the Chicago River to the Illinois and Mississippi Rivers -- that nature had left unfinished.

There was more fertile land than men could farm, and Cyrus McCormick moved his reaper factory lock, stock and barrel from Virginia to Chicago in 1847 and offered prairie farmers easy credit terms on the $120 machines. McCormick could have gone bankrupt, recounts Donald L. Miller in his history of 1800s Chicago, City of the Century. But farmer productivity boomed, McCormick made 4,000 reapers a year, and settlement accelerated west.

Optimism, of course, is most justified among those who already have wealth and education. For many poorer Americans, optimism equals delusion. Relatively few have a legitimate chance to strike it rich, and optimism plays out like a pipe dream: lottery tickets, a fixation on sports and entertainment celebrity, even darker talk of landing on easy street via the trip-and-fall lawsuit.

"You wouldn't believe the number of calls we get," said Chris Barker, a Tampa personal-injury lawyer. "It's like the lottery. People at the Waffle House making $4 an hour want a million-dollar settlement. It's completely out of proportion."

As a group, the poor might be better off collectively embracing wealth redistribution, and voting in greater numbers. But the fact that they don't, a cynic might note, helps keep the economy humming; and on a less concrete basis, isn't life more exciting when fueled by a dream, however unrealistic? Labor unrest is low here, where many workers at least believe they have economic mobility, compared with countries with a more rigid class structure.

In Paris, for instance, jobless protesters recently stormed the agency that oversees the French stock market, demanding a Christmas bonus and sweeter unemployment aid from the government. In recent weeks, French train conductors, feeling overworked, went on strike. Paris bus drivers went on strike, too, to protest having to drive through bad neighborhoods. And French journalists went on strike to protest a plan to strip them of a special tax deduction. The French solution to unemployment: shorten the work week, and give the leftover hours to the jobless.

In American films, the working-class hero triumphs by joining the rich: Melanie Griffith, secretary in Working Girl, becomes a high-powered executive, and Jennifer Beals, steelworker in Flashdance, takes up with her rich boss. In Britain, the working-class hero remains happily working-class: Robert Carlyle, jobless and dancing naked for cash in The Full Monty.

President Clinton, of course, rose from a working-class childhood. And though there is now the possibility that he could be driven from office, the public and media in recent weeks have paid this optimistic man the ultimate compliment: They have speculated on what interesting thing he might do after he is out of office.

No one wrote more eloquently about American optimism than Fitzgerald. In The Great Gatsby, a "heightened sensitivity to the promises of life" propels a working-class Midwestern boy named James Gatz to amass a fortune and reinvent himself as a mysterious New Yorker named Jay Gatsby. Intoxicated by the American Dream, "Gatsby saw that the blocks of the sidewalk really formed a ladder and mounted to a secret place above the trees -- he could climb to it . . . and once there he could suck the pap of life, gulp down the incomparable milk of wonder."

But Fitzgerald, mistaking his own alcoholism for some sort of national condition, had the wrongheaded idea that American optimism was doomed. After Gatsby failed to win the love of a shallow society woman named Daisy, Fitzgerald killed him off, intending this to be a metaphor for the death of the American Dream.

What Fitzgerald -- who coined the inaccurate line: "There are no second acts in American life" -- failed to see is that a real-life Gatsby would quickly get over being spurned and fix his ambition on something grander -- like the White House.