Cautious optimism sneaks up on Wall Street

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Trying to find a silver lining in the current economic mess requires a hefty helping of iron-clad Pollyanna optimism, coupled with a lot of imagination. Even so, there's something to be said for shared outrage; in the last few months, glancing at strangers on the subway or in a restaurant, it's been pretty easy to read minds. Even on Wall Street, where suddenly shy money men and bagged lunches have forced many restaurants to close, one could almost feel the undertone of outrage and disbelief.

This week, however, the mood has seemed a little more restrained, perhaps even a touch hopeful. As our newly-minted President repeatedly insists, getting out of the current financial hole will take a lot of time and work, but there have recently been a few hints about the path that the recovery might ultimately take. One key element, of course, will be a return to responsibility on the part of America's banks, and the oft-criticized decision to place a $500,000 cap on executive salaries might be a good start. As some experts have noted, this provides a strong incentive for firms to quickly pay back bailout funds. Goldman-Sachs' CFO announced that the company plans to pay back $10 billion in 2009 in order to avoid the restrictions. Similarly, Bank of America has plans to pay back its TARP funds within three years.

At the same time, Congress' passage of President Obama's stimulus package has offered considerable cause for optimism. Even the Senate's push to cut pork barrel projects seemed to have a silver lining; with the economy in a shambles, unnecessary bridges and mafia museums are a tough sell. With the recent passage of the bill, the 37 Senators who voted against it are flirting with irrelevance; although only an early step, this is progress, and even the most apocalyptic forecasts are starting to seem less like insurmountable problems.

For cynics who have grown accustomed to the government turning a blind eye to the excesses of big business, the last week offered another tantalizing hint of how the next few years might be a major improvement. In a largely unnoticed development, the Department of Transportation proposed new rules that would allow airline passengers to sue neglectful carriers for breach of contract. After the much-lauded "Tarmac Task Force" took the better part of a year to develop non-binding suggestions for the airline industry, the idea that the federal government might actually be able to exert some level of control over industry seems a little outlandish. Still, hope springs eternal.

As the saying goes, this isn't the end, or even the beginning of the end. With any luck, though, we might just be approaching the end of the beginning.
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