David Stockman’s analysis in The New York Times paints a dismal picture of our financial system that is unlikely to be fixed.  While his facts are largely correct, his conclusion is suspect.  For a reference to his article plus a few retorts see my post Economic Villains and Heroes.

Many critics of this administration’s policies rationally translate their displeasure into a lack of action.  While  I remain as critical as any the world is not yet coming to an end and much of our economy continue to function. There are still bright spots including 3 D printing and the shale oil revolution.  In spite of growth restraining fiscal policies and risky monetary policies most of us still go to work, produce and create.

Just as blind optimism blunts our awareness of risk, excessive pessimism blunts our awareness of opportunity.

And some of the best opportunities in the equity markets occur when pessimism is high.

Not to be mistaken this market is progressing in spite of government policies.  The stock market is not a sole proxy  for a healthy economy.  The market valuation is a matter of both earnings and the available flow of funds into the market.  This is based on monetary policy AND the lack of availability of suitable alternatives.  This is why it is possible for the stock market to continue to do well when the economy is still weak.