Overview

IRAQ

This is good news. There is a world of difference between our attacking unilaterally, as first proposed, and gaining, as we now have, the unanimous support of the 15-member UN Security Council (including Syria) to send inspectors in for one last attempt at disarming Iraq before resorting to force.

Kudos to cooler heads on both sides of the aisle and around the world who moved the administration to this vastly more prudent, defensible course.

PRODUCTIVITY

One thing is certain: Productivity is the key. Even Lenin said so. You can’t have prosperity without productivity, no matter what your economic system. Inefficiency impoverishes us all.

Less certain is how to measure productivity gains accurately from quarter to quarter (and how to distribute its fruits sensibly and equitably), but for what it’s worth – and these things have a way of being revised long after the fact – Thursday brought word that productivity for the third quarter was up 4% from the quarter before.

This, too, is good news.

TERRORISM

Here, of course, we have very little idea of how we’re doing. Are the threats as great as we are led to believe? Less great? Even greater? Have we foiled numerous deadly plots? I don’t know.

One of the reasons we missed September 11 and worry about missing future nightmares is the simple lack of translators to analyze the intelligence we gather. Something as basic and mundane as that. ‘Which makes it all the more shocking,’ writes Professor Nathaniel Frank in the November 18 New Republic (sorry, not linkable) ‘that, in a two-month period this fall, the Defense Language Institute (DLI)-an elite training school for military linguists in Monterey, California-discharged seven fully competent Arabic linguists. The reason? They were discovered to be gay.’

This is good news if you subscribe to Jerry Falwell’s view that September 11 was God’s way of punishing America for its pagans and homosexuals; maybe this will persuade Him to punish Saudi Arabia for a change. It’s bad news if you think we’re short of talent in the intelligence agencies.

THE ELECTION

It was another razor-thin margin. If Paul Wellstone’s plane hadn’t crashed and 24,000 votes (out of 79 million cast nationwide) had gone for Jean Carnahan in Missouri (or even fewer for Jeanne Shaheen in New Hampshire), the Democrats would still control the Senate.

Instead, the nation remains pretty evenly divided, but that is not reflected in the government. It is now more or less controlled in all three branches by the right wing of the Republican Party.

This may be good news for stocks, at least in the short run. It holds out the hope for continued lax regulation of business and the possibility of lower capital gains rates (and/or a higher annual allowance for deducting losses), which would make the real after-tax return from owning stocks higher – which, in turn, in theory, would make them more valuable today.

Balancing this or perhaps even outweighing it is the prospect of increasing deficits, which could lead to a weak dollar, inflation and higher interest rates, and an ever increasing gap between the rich and everybody else.

I know some of you will immediately fire up your e-mails to explain that the lower the tax rates, the more tax is collected (never mind the $3 trillion we added to the national debt under Reagan/Bush) . . . and all the rest.

But go see Real Women Have Curves and let me know whether, at the end of the day, you find yourself sympathizing more with the plight of Mrs. Glass, who runs Glitz Industries, or with the seamstresses who make her clothes. We had a pretty good balance (or perhaps I should say imbalance) between the two of them in the last administration. But this administration surveyed the landscape and decided that the plight of the Mrs. Glass’s of the world cried out for trillions of dollars in relief, even if it meant a rougher road for the low- and middle-income crowd. (In Florida, Jeb had to cut 51 of the 55 prison drug treatment programs to help pay for his halving of the intangible property tax – a tax to which only the best-off Floridians are subject.)

The point is: There are now more reasons to think that perhaps 7100 on the Dow a few weeks ago was the bottom. My guess is that it was not, and I would not rush to buy stocks today, 20% higher than they were six weeks ago – especially the big stocks that all the institutions follow. But I fully allow for the possibility that I am wrong. And, more than that, for the wisdom of not trying to ‘time’ the market. If you are young, or youngish, and putting $100 or $1,000 a month into stocks, month in and month out, don’t stop! Over long periods of time, whatever happens short term, you’ll do fine. Should stocks go lower – good! That just means you’ll get them on sale.