The cover of the July 14th issue of The Economist magazine featured a buff, bulked-up Uncle Sam under the heading “Comeback Kid.” Subtitled “America’s economy is once again reinventing itself,” the cover story described several very positive trends. Their story largely overlapped our April 2012 “Thoughts on the Current Outlook” in which we said the following:

On a longer term basis, we are increasingly focused on four factors that we see as likely to help our economy over the next several years. We believe these four trends will help lead us away from some of the nearly four year old legacies of the Great Recession, particularly high unemployment and excessive debt.

They are:

the push for energy independence, supported by major discoveries and new technologies in North America as well as a moderately favorable regulatory environment;
the petering out of the housing debacle – with foreclosures concentrated in a few severely depressed markets and affordability at an all-time high, we believe the stage is set for stabilization of home prices nationally;
a new wave of business productivity enhancements, sparked by the convergence of highly functional, user friendly mobile devices and an explosion in software targeted at these devices;
the overarching theme is the emergence of the echo boom generation as the driver of each of the three themes above. Think energy efficiency, housing needs, mobile productivity – we think those six words succinctly summarize the mindset of current 20- and 30-somethings.

Anticipating the view that America’s economy is not exactly humming along now, The Economist said: “What should the next president do to generate muscle in this new economy? First, do no harm. Not driving the economy over the fiscal cliff would be a start: instead, settle on a credible long-term deficit plan that includes both tax rises and cuts to entitlement programmes.”

We couldn’t have said it better. As our most recent outlook indicates, we are most concerned about the self-inflicted wounds we seem destined for over the next six months as the fiscal cliff arrives. If we can get through this period with a reasoned approach that sets in place a solid long-term course, there is much to be optimistic about. Unfortunately, this is a big IF – it seems that both political parties are more concerned with posturing around problems rather than solving them.

So put us in the short-term cautious, long-term optimistic camp. Regardless of who wins the election in November, the new president would be well-advised to heed the urgings of Lucy to Charlie Brown: “Lead, Charlie Brown, Lead!”