While the bulls stampede Wall Street, pushing the Dow-Jones index to its first-ever close above the 3000 mark, America remains bearish -- and for good reason. The country is mired in debt, joblessness, trade deficits and falling production.
So why is the Dow at its highest point in history? One reason is a lot of loose cash, especially from big pensions funds, that needs a place to park. With interest rates down, equity shares beckon. Another is the function of the stock market as a leading indicator. Historically, the market anticipates recoveries.
If the Dow at 3000 means the country will emerge from the current recession reasonably soon, it is an occasion to uncork the champagne. But this should not obscure fundamental flaws in the economy that must be overcome if American society is to achieve its full potential.