Diana West

As for any comparisons to recent recessions, one need go back to the spring of 1980 when Jimmy Carter's economy was heading south and the unemployment rate had risen to 7.5 percent and inflation was 14.4 percent. The national jobless rate today is 5.5 percent (between 4 percent and 5 percent in many states) and inflation is at 4.2 percent, with the core rate (minus volatile energy and food prices) at less than 2 percent.

The decline in housing values is perhaps the biggest culprit making Americans increasingly pessimistic about the economy. That has fed fear that as relative net worth has declined, so will overall consumer spending, which accounts for two-thirds of the economy. But it doesn't affect it at all, as Irwin aptly notes, citing a study by Wellesley College economist Karl E. Case, who compared spending habits with changes in housing values. Homeowners, feeling wealthier, will spend more as those values rise, but they don't spend less when they fall.

Wall Street economists David Malpass, is a realist with an optimistic outlook who sees economic problems ahead of us as well as, more importantly, opportunities for growth. He worries about inflation through 2009, even if the dollar rises. The impact of tax increases on labor, dividends, capital gains, inheritance and the alternative minimum tax that are due to expire in 2010 is a huge concern, too. Still, Malpass foresees "a reasonably solid global expansion in 2009," noting that the U.S. economy "has an underlying sturdiness" because it is "driven by small businesses and a flexible labor force.

He thinks "the current rebound will have legs and the heavy investments made globally in recent years will pay off." How much of a rebound? Expect 1 percent to 2 percent growth in the second quarter and 3 percent in the second half of the year.

But right now, Neil Irwin's excellent article notwithstanding, Americans remain as gloomy as ever. That mood is unlikely to change anytime soon as long as oil and gas prices keep rising and the Democrats continue to block GOP proposals to produce our way out of this mess. Obama-smitten Democrats still think that Americans are opposed to drilling for more oil in offshore fields and in wilderness areas and that they blame U.S. oil companies for higher gas prices.

But Americans know better. The latest Gallup poll finds that they support such drilling by 57 percent to 41 percent and those who blame big oil has plunged from 34 percent to 20 percent.

Diana West

Diana West is the author of American Betrayal: The Secret Assault on Our Nation's Character (St. Martin's Press, 2013), and The Death of the Grown-Up: How America's Arrested Development Is Bringing Down Western Civilization (St. Martin's Press, 2007).