Recession? What Recession?

Since the Inauguration, Barack Obama has been a lagging indicator on the economy, choosing his words carefully to avoid any "Mission Accomplished" triumphalism about premature signs of a recovery. Which is why it is telling that Obama felt emboldened enough at a Democratic fund-raiser in Beverly Hills Wednesday night to declare, "It is safe to say that we have stepped back from the brink. There is some calm that didn't exist before."Okay, a presidential phrase like "back from the brink" does not sound like the embodiment of irrational exuberance. But just remember all the end-of-civilization-as-we-know-it talk that filled the TV screens and newspaper Op-Ed pages only a few months ago. Even Obama himself was declaring back in February that the nation was "in the midst of our greatest economic crisis since the Great Depression."

Something has been happening to the American psyche as economic panic has given way to a rebirth of resilience. Some of it may be triggered by the short attention spans fostered by the 21st century media environment. If you have been terrified by swine flu, unsettled by the North Korean nuclear test and fretful that Guantanamo prisoners will be housed in your neighborhood, it is hard to find the emotional energy to also continue to worry about your job, the value of your house and your fast-vanishing retirement savings.

The media has cooperated by treating the worst economic crisis of the last 70 years like yesterday's news. The Pew Research Center's Project for Excellence in Journalism (PEJ) monitors each week the leading stories in the press, on television and in the blogosphere. And most weeks, beginning in April, the state of the economy has failed to receive top billing. "Even before swine flu," says Mark Jurkowitz, the associate director of the PEJ, "the Somali pirates were enough to distract the media for one week." Jurkowitz estimates that economic coverage is currently running at about half the level of two months ago.

The news about the economy these days is also, for the most part, being portrayed in upbeat terms. Rather than front-page headlines about bank failures and near double-digit unemployment, the media is more likely to be explaining to consumers their new rights under the credit-card reform bill that Obama just signed into law. Even calamity seems to have its bright side. Instead of decking out the impending bankruptcy of General Motors in black crepe as the End of Industrial America, the story line Thursday was that (yippee!) most bondholders had agreed to convert their debt into GM stock.

There is a buoyancy to the public mood that seems at odds with the grim economic realities. Most recent national polls show that roughly half the voters believe that America is on the right track, which -- if pollsters had asked the question -- is probably not a statistic that you would have encountered amid the bread lines and hobo jungles of the 1930s.

This week the Conference Board announced that its monthly survey of consumer confidence reached its highest level since the financial markets collapsed last September. Lynn Franco, who directs the Conference Board's Consumer Research Center, declared in a statement, "While confidence is still weak by historical standards, as far as consumers are concerned, the worst is now behind us." Meanwhile, a survey of business economists found that 74 percent believe that the recession will end by September and 93 percent, in total, see the uptick beginning by the end of the year.

Without minimizing the suffering of those who have lost their jobs or their homes, a significant portion of the drop in consumer spending has been sparked by psychology rather than economic necessity. Take my personal Deli Index. My neighborhood favorite on the Upper West Side of Manhattan – the legendary Barney Greengrass: The Sturgeon King – experienced a predictable drop-off in its Sunday brunch business. The reason was not massive unemployment or an inability to afford sturgeon, eggs and onions accompanied by a toasted bagel. For the most part, it was because its affluent customers had taken a battering in the stock market and decided to economize. This self-restraint is not quite rational, since a couple would have to go without Sunday brunch for about 100 years to get back a $250,000 drop in their stock portfolio.

While I intend to do some in-depth research on the Deli Index this weekend, my strong suspicion is that these are the consumers who are gradually returning to their free-spending habits. A Gallup Poll released Thursday found that optimism about the economy among upper-income Americans has surged by 67 percent since February. This happy-days-are-here-again mood is understandably less pronounced at the bottom of the economic ladder. But this pattern helps explain why the economic recovery appears to be arriving much faster than most prognosticators feared a few months ago.

Even as Obama officials are no longer getting up at 4 in the morning to nervously check the Asian markets, there is an awareness within the administration that, in theory, the current economic plateau could be deceptive – and another abrupt drop is just over the horizon. The history of the Depression is filled with examples of the natural human tendency toward optimism blinding policymakers to the unprecedented nature of the economic catastrophe. And yet – as Obama's words Wednesday illustrate – the odds are high that the nation has endured the worst and has lived to tell about it.