Sunday, January 5, 1997

FISCAL FITNESS: A matter of attitude

The beginning of each year is a time when our attention is almost automatically focused toward the future. Even more important than any specific plans we have is our attitude about the future.

I guess I'm an optimist by nature. My blood type, in fact, is B-positive. Nevertheless, whether or not optimism and hope are your natural tendencies, optimism is more logical than pessimism.

Consider the profound questions about the future. Should we be hopeful or fearful about the future of mankind? People are concerned about overpopulation, global warming, loss of species and a long list of similar problems. Many seem to believe that one or another of these problems will lead to our demise.

The threat posed by any one of these problems is debatable. How serious they will be in 25, 50 or 100 years is even more debatable. You can't really know what the future has in store, so essentially you have to make an assumption. Now you can assume that we will create ways to deal with these problems, or assume that we will fail.

Here's where the logic of hope and optimism comes in. Suppose you decide to work on the assumption that mankind will fail to solve the mega-problems. That means that you live your life in some degree of despair.

Even if you live to see your pessimistic prediction come true, there is no payoff. Your prediction came true, but you were probably miserable in anticipation of it. Your only consolation is that you can say, "See, I was right!"

If you're wrong, mankind succeeds. You can breathe a sigh of relief, but much of your own life has been wasted in worry. One of the truest quotes in all literature is "A coward dies a thousand deaths, a brave man dies but once." Couldn't it also be said that a pessimist also "dies a thousand deaths"?

Here's another reason why it makes sense to have hope. Consider two "populations": the population of problems and the population of solutions.

It's clear that as our stock of knowledge and information grows, the population of solutions grows. The more we know about the world -- chemistry, biology, medicine, electronics, physics, psychology -- the greater is our problem-solving ability.

We've learned, for example, that many mental problems are the result of imbalances in blood chemistry. Millions of people have achieved dramatic relief through the use of a growing number of pharmacological treatments. That's just one example of how greater knowledge has reduced human suffering.

On the other hand, what has been happening to the population of problems? Some people tend to think that every new solution creates a new problem. They belong to the "there's-no-hope" school.

Solutions do cause change, and with change there are gains and losses. The clearest and most significant achievement of science and economic growth is our increased life expectancy. This advance, however, has caused Alzheimer's disease to be far more common than it used to be.

I would argue that the population of major problems is almost static, that most of the large problems and challenges of the human condition have been with us for thousands of years.

Besides logic there is also historical support for optimism. Pessimists and doomsayers have been with us throughout history. Every kind of catastrophe imaginable has been predicted and practically none have come to pass. Society keeps on muddling through. Of course, present-day pessimists maintain that "this time it's different." Yeah, right.

One popular doomsayer is Paul Erlich. In his 1968 book, "The Population Bomb," he warned, "The battle to feed humanity is over. In the 1970s the world will undergo famines -- hundreds of millions of people are going to starve to death." Repeatedly, Erlich's predictions have failed to materialize. Strangely, people keep buying his books and listening to what he says.

Pessimism's only real advantages are that, in the short run, it's easier to be pessimistic than optimistic, and cynicism is the cheapest way to act sophisticated.

The greatest damage done by pessimism is what it does to our youth. I'm troubled hearing my own children relate what they learn at school regarding insurmountable problems facing mankind in the future. In most cases I'm sure it's unintentional, but destroying a young person's hope is a terrible, terrible thing to do. As a matter of fact, giving children hope should be one of society's highest priorities.


FISCAL FITNESS: A matter of attitude - North Coast Journal January 1997

Ron Ross Ph.D. is a former economics professor and author of The Unbeatable Market. Ron resides in Arcata, California and is a founder of Premier Financial Group, a wealth management firm located in Eureka, California. He is a native of Tulsa, Oklahoma and can be reached at

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