The U.S. economy is slowly reviving, leaving behind with each passing month the worst downturn since the Great Depression. It goes without saying that an expanding economy is better than a contracting one, but the consensus outlook is far from cheery. Instead, it calls for years of muted growth and high unemployment.
It isn’t hard to find pessimism that runs much deeper. The European sovereign-debt crisis is stoking fears that the heavily indebted American Empire is slouching toward a Greece-like fiscal calamity. The nation’s opinion pages are full of warning that the U.S. may be increasingly caught in what Harvard University historian Niall Ferguson calls the “fatal arithmetic of imperial decline” with a federal deficit at a post-World War II record 9 percent of gross domestic product and a national debt at $13 trillion and climbing.
Taken altogether, from fears of toxic sovereign debts to a euro contagion to a growing federal Leviathan, all the risks appear to be on the downside.
‘Black Swan’ Revival?
Yet the gloom may be way overdone, as the seeds of economic revival may be sown in some unexpected places. By now you’ve probably heard of the “Black Swan.” The provocative catchphrase comes from a best-selling book by author and investor Nassim Nicholas Taleb. A black swan is essentially an unpredictable outlier event that has a dramatic impact on the economy and society. It gives lie to the elegant quantitative and mathematical models most experts use to predict the future course of the financial markets and economy. It’s almost comforting to know that the surprising twists of history can fool even the most highly regarded financial and academic eminences.
Black swans are popularly considered negative events, largely because the fearsome global credit crunch — missed by most mainstream forecasters — made many investors appreciate the phenomenon.
Yet there’s nothing intrinsically bad…