THE FORESEEABLE RESULTS OF OPTIMISM

As we look forward to the beginning of 2017, the recent past is grounds for pessimism. Median household income in the United States is about the same level as it was in 1989. This leads to the mindset that, for the first time since the Industrial Revolution, a whole generation will enjoy a less bountiful life than their parents.

Research by Manju Puri and David Robinson at Duke University finds that optimistic people work harder, get paid more, and even live longer. Optimistic CEOs invested more in growth and innovation. The older citizens among us will remember emerging from the pessimistic aura of the 1970s to an era of good feeling. Whatever one’s political leanings, it cannot be argued that the past eight years has been a pessimistic time.

Optimism is one of those attitudes which grows in itself. If it grows unchecked, of course, it can lead to a bubble. And, perhaps, bubbles are inevitable. But optimism leads each one of us to get up in the morning, doesn’t it?

In optimism is what drives entrepreneurs to take their idea, raise money from brothers and laws and uncles and aunts an old high school and college friends, and start a business. That business grows until needs more capital than can be obtained from friends and family. With a little bit of luck, the new business is significant enough to go public and obtain the capital it needs. Even though it may not be ready for a full-fledged IPO, reverse mergers and other going public transactions can enable entrepreneurs to reach their dreams.