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Few Make Case for Optimism

Economic optimism has been a bad bet for more than two years now, but it has not suffered from any shortage of takers.

Starting in early 2001, Federal Reserve officials and most Wall Street economists began predicting a quick return to healthy growth, only to repeat the forecast a few months later after they were proved wrong. The Bush administration, which took office offering a presciently sober view, quickly turned to cheerleading reminiscent of the Clinton administration's final months.

So anybody with a good memory deserved sympathy last week when trying to understand Alan Greenspan's hopeful testimony to Congress. Sure, Mr. Greenspan, the Fed chairman, said the end of the main fighting in Iraq would probably allow the economy to finally escape its slump. But we heard the same theory about Sept. 11, the stock market bubble and corporate scandals. What makes the present the true watershed?

A handful of economists have an answer to the question...

"We do not see a healthy recovery," said Lakshman R. Achuthan, the managing director of the Economic Cycle Research Institute in Manhattan, which also foresaw the 2001 recession. "We just don't see business investment returning anytime soon."

Skeptics like Mr. Achuthan certainly look better right now, two days after the Labor Department announced that the economy lost 525,000 jobs in the last three months...