The American economy is in a rough patch. But the long-term trends are good - and there is a price to economic pessimism. So write W Michael Cox and Richard Aim of the Federal Reserve Bank of Dallas.

When a presidential election year collides with iffy economic times, the authors point out, the public's view of the US economy turns gloomy Perspective shrinks in favor of short-term assessments that focus on such unpleasant realities as falling job counts, sluggish GDP growth, uncertain incomes, rising oil and food prices, subprime mortgage woes, and wobbly financial markets. Taken together, it's enough to shake our faith in American progress.

But it is a mistaken view. The best path to reviving that faith lies in gaining some perspective - getting out of the short-term rut, casting off the blinders that focus us on what will turn out to be mere footnotes in a longer-term march of progress.

Once we do that, we see the US economy, a $14 trillion behemoth, is doing quite well, thank you very much. The authors cite the following evidence to bolster their view:

The American economy has been remarkably stable and productive. Since 1982, the United States has been in recession for a mere 16 months, the present slowdown notwithstanding. Over that period, the country more than doubled its inflationadjusted output of goods and services and created jobs for an additional 50 million workers.

The spread of products into American households has been phenomenal. Products that begin as luxuries only the rich can afford in time come within the means of just about all US households. In previous generations, telephones, cars, electricity, household appliances, and televisions made life better for the average American. In our times it has been computers, cell phones, Internet access, VCR/DVD players, digital cameras, and more.

All segments of society have shared in the material progress. Over the past two decades, ownership of cars, color televisions, and household appliances has risen among poor households. A quarter of poor households have computers. Two in five own their homes. For many goods, ownership rates are higher for today's poor households than for the general population of the early 1970s.

Less work buys more stuff. When it comes to how hard we have to work for food and fuel, we still face far lower burdens than our grandparents did. Living standards rise on the ability to use productive resources to churn out more goods and services - that is, to advance productivity. As the economy has become more productive decade by decade, Americans have reaped the gains, first and foremost by consuming more.

We've also gained more leisure time, improved our working conditions, enhanced safety and security, and added variety to our choice set. All of these benefits become increasingly important as we climb up the income ladder.

* An average workweek has fallen from 39.8 hours in 1950 to 36.9 hours in 1973 to 33.8 hours today.

* Not all those hours are spent on actual work. Human resources experts estimate that 1.6 hours a day go to non- work activities; employees themselves say it's more than two hours. What are workers doing? Most of them are using the Internet for personal business or socializing with coworkers.

* Since 1950, the annual hours devoted to work at home has fallen from 1,544 to 1,278. Working less means we have more time for ourselves. All told, only about a quarter of our waking hours are consumed with work, down from 45% in 1950 and 35% in 1973.

* Workplaces are getting safer. In the early 1990s, the on-the-job death rate fell below home mortality for the first time. Since then, the home has become riskier, while safety gains have continued at work

* Deaths per billion miles driven and flown are both at all-time lows.

* Medical advances have brought down death rates for many diseases. Gains have been made against heart disease and cancer in recent decades. Since 1960, life expectancy has risen by seven years for men and six years for women.

The American economy is still highly competitive internationally. The world economy is moving toward producing and consuming more services - and that's where the United States shines. Our foreign sales of services totaled $488.5 billion in 2007, topping the combined total of Britain and Germany, the second and third most successful services exporters. US exports exceed imports in 15 of the Commerce Department's 20 broad categories of services trade, often by large margins.

This trade supports well-paying jobs in industrial engineering, medicine, construction, information technology, and law.

CONCLUSION: THE PRICE OF PESSIMISM

So many data points add up to steady, continuing progress for average Americans - and there's no reason not to expect the future will bring further progress. Bad news will pop up from time to time, just as it has in every decade of American history. Some people will take the negatives - the hiccups on the long road to progress - for harbingers of worse times to come.

But there's a price for pessimism. In the early 1980s, the US economy had big problems, including slow growth and high inflation. A rational response for pessimists might have been to put their money into the safe havens of gold or Treasury bills. A $10,000 initial investment in gold would now be worth $22,525; the same amount in T-Bills would be worth $37,778. But the same $10,000 invested in Dow stocks would now be worth $228,163, even after the financial market troubles of recent months.

The lesson seems clear enough: don't sell the American economy short.

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