Facebook Twitter

Long expansion is making Americans feel acrophobic

SHARE Long expansion is making Americans feel acrophobic

NEW YORK — Along with the cars and houses and other bounty of this, the longest economic expansion in U.S. history, there's a feeling of acrophobia, the fear of heights.

Americans have established new and higher living standards during the decade of good times and they're not sure they can maintain them. And every day some seer tells them it's all a mirage.

You can feel the nervousness on Wall Street when the Federal Reserve meets. You never know, they say, whether or not the Fed will raise interest rates again. And that would be bad for stocks.

You can sense the jitters of the dot-com crowd, who a couple of years ago were certain everyone would buy into their digital concept, making them millionaires if not billionaires.

And at cocktail parties, where talk grows heavy rather than light as the night wears on. Or across kitchen tables, maybe yours. Or in the buzz of new MBAs hoping they're not too late to cash in.

Will it endure or will it end, that's the question.

For every dozen economists who say it'll continue, there seems to be another who warns it won't. And for every political candidate who promises that, if elected, he or she will see that it does continue, a dozen voters quietly wonder if anyone can fulfill such a promise.

The subject never leaves the news, and when briefly it does, it is countered by other news about the high price of oil, the threat of inflation, the possibility of layoffs, the imbalance of payments, the national debt. . . .

All this has a way of obscuring the huge difference between a slowdown of the expansion, which is quite likely, and an actual decline of economic production, which isn't likely.

For that assessment you have the word of Alan Greenspan, the Fed chairman. In his midyear report to Congress, Greenspan estimated that the expansion this year will remain as strong as a year ago.

Last year, the economy grew at a 4.2 percent annual rate. This year, he said, the gross domestic product, the total of domestically produced goods and services, would be around 4 percent to 4.5 percent.

That's strong growth — extraordinarily strong for an expansion that began close to a decade ago. Expansions that old generally decay; not this one. Greenspan foresees it growing — underline "growing" — by about 3.25 percent to 3.75 percent in 2001.

Seen in the context of that assessment and forecast, a slowdown from an extraordinary rate to a still strong rate of growth is good news, of the sort that should create confidence, not anxiety.

Anxiety, however, is for many people a natural accompaniment of heights, including economic heights, keeping them from overburdening the economy with big (inflationary) ideas and big spending plans.

Interpreting the chairman rather freely, pushing the economy to heights at which the dangers of a crash become very real is akin to a teenager recklessly exceeding the speed limit.

A mature economy needs mature, responsible participants not inclined to test the limits. In that sense, a dose of anxiety is a small price to pay for prolonging the expansion.