Can animal spirits revive the economy?
That’s what many claim. They note before that consumers start to spend again, they’ll need to have confidence in their personal finances. By this reckoning, what’s needed is a massive infusion of cash into consumer’s pockets. Extra cash will encourage extra spending, which will get the economy back on track.
But that’s putting the cart before the horse. Confidence isn’t bolstered by a handout or some temporary make-work job. It’s encouraged by permanent, productive employment-where your skills are put to work and you can see that you make a difference. Real confidence doesn’t come from putting humpty-dumpty back together again. It comes from serving or healing or making things faster, better, and cheaper than ever before.
The result is a stable wage and assurance that your income can grow. This kind of “animal spirit” will revive the economy. But it doesn’t come from free money or happy talk. It comes from rolling up our sleeves and getting to work.
Douglas R. Tengdin, CFA
Chief Investment Officer
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