Economic Factor #6: Biorhythms
I am often surprised when I watch a very successful sports team suddenly go on a losing streak even though the players have remained healthy and the team’s strategies are unchanged. Coach Joe Paterno once observed, “You’re gonna get better or you’re gonna get worse, but you’re not gonna stay the same.” Is there an explanation?
Biorhythms is an obscure term that refers to the perceived tendency of humans to perform in otherwise unexplainable patterns. Can economies experience effects analogous to the perceived biorhythms that cause unexplainable declines and surges?
President Jimmy Carter delivered his famous “Malaise speech” in 1979 in which he blamed the decade-old relative decline of the U.S. economy as emanating from a crisis of confidence. He believed that people were failing to thrive primarily because “we are losing our confidence in the future.” Indeed we had lost confidence.
I believe that President Ronald Reagan restored the confidence of many Americans in their future, and that Reagan’s leadership and policies laid a foundation for a spurt of economic growth that persisted for almost two decades and was largely supported during President Clinton’s last six years.
The predictability of this factor is especially uncertain. I have observed what I perceive as a tremendous decline in the past decade or so regarding the future prospects for our economic future – not because of the financial crisis, but because of a widespread belief that the U.S. economic system did not reward people for doing the right things. Billboards and television commercials promote lotteries, lawsuits and government giveaways as keys to financial success. Wealth creation through hard work is increasingly being hamstring by regulation, litigation, taxation and even ridicule. These pressures tear down our work ethic and confidence.
What will the future bring for the American economy after the surprising election of 2016? Just as I believe that good coaching can elicit incredible athletic performance, good leadership can stimulate a national economy. Our economy’s future will be driven to some extent by whether the Congress and the President are able to inspire Americans as they were inspired when Reagan and Clinton were presidents.
Importance of factor in general: B-
Prospective influence of this factor on the U.S. economy: C+