If you believe in miracles, as I do, this looks like a miracle. If you have faith in free-market capitalism, as I do, then somehow this faith is being rewarded by a more durable and resilient free-enterprise capitalism than many of us thought possible only one year ago.
But the fact remains that businesses large and small, along with family households, have performed the necessary belt-tightening and deleveraging corrections made necessary by the Great Recession and its bubbled-up speculations. These free-enterprise actions have led to great productivity in our mostly free economy. Again, the results will show in next year’s mini boom.
A political belt-tightening also has been taking place. The Tea Party movement came on the scene in 2009 to revolt against big-government spending, taxing, and controlling. This movement is so reminiscent of California’s Prop 13 tax revolt of 30 years ago, which led to the Reagan revolution. It may well be the backbone of an anti-Washington revolution in 2010, ushering in a much more conservative Congress and a chastened Obama White House.
It remains to be seen whether this political revolt can stop the big-government assault on free enterprise. But I have as much faith in the political markets turning the ship of state around as I have in rising year-end Treasury bond-market rates forcing the Bernanke Fed to shape up and ship out of its wild money-printing ways.
In other words, free people and free markets have always been the best guarantors of American economic growth. Because I believe this, I am an optimist going into the new year.
Amen to that.