Living With Econo-Worry

Roosevelt wouldn't have made it into "Bartlett's Familiar Quotations" if he had intoned "The only thing we have to worry about is worry itself."

But worry, not fear, has dogged the US economy in recent months. Worry about Asian economic contagion. Worry about a stock market bubble. Worry about rising labor costs causing inflation. Worry about Washington scandal causing political entropy.

Mostly this is one of those periodic upsurges in the static of financial prognostication. In economics the old aphorism becomes: Some economists see the glass as three quarters full; others see it as one quarter empty.

What are the facts?

Growth. In the second quarter the US economy grew at a rate of 1.4 percent. Not bad, considering all the Asian firms and individual consumers who passed up the strong-dollar price tags on American goods. Not bad, considering the long GM strike. And actually good since it slows down the torrid pace of growth in the first quarter, thus making a Federal Reserve hike in interest rates less likely for a while longer. National growth for the year now seems likely to check in near a healthy 3 percent.

Inflation. This value underminer remains negligible, at about 1 percent. A big plus. Another reason for the Fed to hold off pushing up interest rates. Even more relevant to millions of families: gradually rising wages aren't undermined by gradually shrinking money. More still: Low interest rates encourage first-home buying and trading-up. They make it easier for reforming credit-holics (including, let's hope, the US government) to pay down debt. Social Security costs don't rise as fast.

Business earnings. This yardstick continues to show steadier growth than gloomy pundits deemed possible. Exporters are, understandably, slowing.

Stock markets. A down-up rollercoaster last fall. Wobbling lower again this spring and summer. A healthy correction - giving overvalued stocks a rest and puncturing some of the gambling instincts that run amok in a market rising too blithely. With more than 40 percent of Americans involved directly or indirectly in the market (mostly through pension plans) more sober valuations are important. But the continuing flow of all that 401(k) pension money should place a floor under market sagging. The long-delayed recovery of European economies helps. So do signs that some Asian economies may be finding a bottom on which to rebuild.

The US glass is still filling. But a period of caution provides a welcome restraint on economic arrogance.