The Light at the End of the Tunnel

You never know about that light at the end of the tunnel.

Irwin Stelzer writes, in The Weekly Standard, that "several odd things" are happening "beneath the surface of the economic news."

Let’s be clear about one thing right off the bat. Stelzer acknowledges that "all, or almost all, of the economic news is grim."

He also points out that Americans appreciate a macabre sense of humor — which, these days, manifests itself in the "Depression parties" being thrown by young New Yorkers. One is encouraged to wear "’30s vintage" clothing to these soirees and dance to "Big Band numbers and Dust Bowl ballads."

But Stelzer tries to inject a note of optimism into today’s economic discussion. He says "economists who have been worth listening to in the past" tell him that they sense "unreasoned panic" among the masses who are making appropriate adjustments to their lifestyles.

"That is not to say that there is no real suffering out there," he writes. "There is, especially among the unemployed. But this isn't the 1930s, or even the early 1980s."

Here’s what Stelzer says he’s hearing from these economists:

"They note … that highly regarded money manager John Paulson (no relation to Hank) has begun purchasing mortgage-backed debt securities — after making billions last year by betting against subprime mortgages," he writes. "They are predicting that the slide will abate by mid-2009, and a slow recovery begin later that year, or by early in 2010."

Stelzer also says he senses "the beginning of a fight-back against the idea that there is no limit to what governments can and must spend to turn things around."

The automakers will get the help they need, he writes, "but there will be no blank check."

Congress, he says, will approve a stimulus package to help the states, and unemployment insurance eligibility periods will be extended. He also anticipates assistance for homeowners who are lagging on their mortgage payments.

After that, though, it’s "wait and see" — wait and hope, rather, that " the optimists have it right, and a recovery peeps through the clouds sometime next year."

As I say, you never know about that light at the end of the tunnel.

Sometimes it really is a light that will guide you to the place you where you can emerge from the darkness.

And sometimes it’s an oncoming train.