Economist: What recession?

Current concerns about the economy are more a matter of negative perception than actual market factors, one of the nation's top economists told a Hilton Head Island crowd Tuesday night.

Brian Wesbury, who in 2001 was ranked by the Wall Street Journal as the country's No. 1 economic forecaster, told clients of the Hilton Head-based Tabby Road Wealth Management Group that the news media are too focused on negative turns in consumer confidence. The real driver of the economy is business investment and corporate profits, which are still doing well, he said.

He compared the economy to a sail boat: the consumers are the sailors, but the business investments and financial policy are the winds that really push the boat along.

"Does it really matter how the sailors feel about this?" Wesbury asked. "The boat's still not going to move. So why are we measuring consumer confidence?"

Wesbury is the chief economist at First Trust Advisors L.P., a Lisle,Ill.-based financial services firm and has more than 27 years experience. His opinion is frequently sought for news stories about the state of the national economy. He regularly contributes his opinion through the Wall Street Journal's editorial page, appearances on CNBC and Bloomberg television and as economics editor for the American Spectator magazine.

Even as the housing crunch, falling dollar and rising gas prices continue to make headlines, he's often more optimistic on the economy than other analysts. Tuesday's appearance on Hilton Head was no exception.

"If you listen to the news, what you're told is, 'The consumer drives the economy and people are fickle.' What you really need to do is follow the policy makers," he said. "My view is that the economy is highly unlikely to have problems."

Jobs are decreasing as technologies and innovations make industries more efficient, but, Wesbury said, that's been the same story since the Industrial Revolution.

For instance, in the faltering newspaper industry, the number of jobs at the New York Times is dropping while the number of jobs at Google is rocketing upward.

"It's this change that's causing people consternation," he said. But the upside of the trend is the "explosion in technology is creating wealth we can't imagine."

Americans had been spoiled by years of low interest rates and an undervalued stock market, he said. Gas prices are high and foreclosures are up, but the real winds of the economy are still blowing strong, he said.

"My opinion is we're going to have a pretty nice year this year and next year in the stock market," he said.

Wesbury spoke at a dinner event with Jim Bowen, president of First Trust Portfolios, in the clubhouse in Spanish Wells Plantation.