Beware the Green Shoots

I find the current level of optimism in the market a little worrying. Everywhere I turn, I find yet another article making the case that those economic "green shoots" are real, shooting up real fast and ready to blossom into a jungle of prosperity. Not to mention CNBC, which I don't remember having seen this wildly bullish in, like, eons (this might partly be explained by the fact that yesterday was the first time in months I actually watched CNBC). 

All this to say that reading Paul Krugman's not-overly-bearish but soberly pragmatic New York Time's column was such a refreshing experience for me this morning. 

He reminds us that: 

"History shows that one of the great policy dangers, in the face of a severe economic slump, is premature optimism. F.D.R. responded to signs of recovery by cutting the Works Progress Administration in half and raising taxes; the Great Depression promptly returned in full force. Japan slackened its efforts halfway through its lost decade, ensuring another five years of stagnation."

And cautions us against the "real risk that all the talk of green shoots and glimmers will breed a dangerous complacency."