Business and Investor Confidence

This past week we heard from Fed Chairman Ben Bernanke that the U.S. recovery would continue to be slow and uneven and that the unemployment rate would remain stubbornly high into 2012. Of course, even as the Federal Reserve continues prudent planning for the ultimate withdrawal of extraordinary monetary policy accommodation, we also recognize that the economic outlook remains unusually uncertain, Bernanke stated. (NY Times 7/21/10) In his second day of testimony before Congress, Bernanke clarified his statements from the day before and assured them that he would take action if necessary and the Fed could extend very low rates of interest out into the future to insure that we do not fall back into recession and a perilous deflationary spiral. The term unusually uncertain had clearly roiled the markets during his first day of testimony.

The Federal Reserve, together with the Obama administration and both houses of Congress, needs to understand the necessity of restoring both business and investor confidence to get the economy growing at an acceptable pace once again. Raising taxes during this low point in the recovery, combined with consistent criticism of business, particularly our financial institutions, is not going to give anyone the reassurance needed to start adding jobs. A focus on tax incentives to create new jobs would go a long way to restoring both business and shareholder confidence and to get the economy growing at more than 3%-4% again.

Both parties need to Cool the Populist Rhetoric. I called for this in January and it remains true now. Restoring our economic engine remains a bipartisan task and voters, particularly those that are unemployed or underemployed, will remember those who focused on job creation and those who did not when they go to their polling places this November.

On a much more positive note, Mary Claire and I spent several vacation days this past week in Healdsburg, California (Sonoma County) with our good friends Elise and George Riggs. We did not have to drive too far from home (less than 2 hours) to be reminded of simpler times and the true beauty of the Golden State.

We spent our first afternoon over a leisurely lunch at Copain with Wells Guthrie, the proprietor. (Copains tasting room sits on Eastside Road in Healdsburg, with gorgeous views.) Guthries focus on quality and the need to pair wines and food is consistently on target. Back in the winter of 09, Eric Asimov, who writes The Pour, wrote in the New York Times (3/11/09): As the rain slanted down onto the vineyard around Copain Wine Cellars, just outside this town in northern Sonoma County, Wells Guthrie, the proprietor, poured a glass of one of his 2006 pinot noirs. The wine was fresh and light with aromas of flowers and red fruit. Even in the gray dimness of his tasting room I could see my fingers on the other side of the glass through the pale ruby wine. It was vibrant and refreshing, nothing like the dark, plush, opulent wines that have made California pinot noir so popular. Mr. Guthrie used to make wines more along those heavier lines, but not anymore. After the vinous equivalent of a conversion experience, with his 2006 vintage he renounced the fruit-bomb style in favor of wines that emphasize freshness and delicacy.

The next night we went for dinner to Cyrus, in downtown Healdsburg, and we paired a 2007 Copain Wentzel Pinot Noir with an extraordinary dining experience. Cyrus lives up to its two-star Michelin billing.

Finally, we took the time to make the trip up Spring Mountain to Pride Mountain Vineyards, in St. Helena, California. This spectacular vineyard straddles the border between Napa and Sonoma counties. This mountain winery makes outstanding Cabernet Sauvignon. We also enjoyed a delightful picnic lunch, paired with their 09 Viognier.

On Sunday evening we welcome back Mad Men and the enigmatic Don Draper!

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