Look for moments of maximum pessimism.   To the legendary value investor Sir John Templeton, this was the secret to learning how to buy low and sell high. 

In recent months, I've been feeling the pessimism in a big way.  You probably have too.  Watching the scroll of headlines on cable news channels this summer, I thought I was in an overdone disaster film.   Riots break out across the globe, screamed a Drudge headline.  Markets were crashing.  An earthquake cracked the Washington Monument.   In my hands, Mark Steyn's new book After America -- a rollicking read that makes a strong case that we should prepare for the apocalypse -- arrived perfectly timed with the S&P's downgrade of the United States' credit rating.   The end, surely, seems nigh. 

President Obama blames this -- the credit downgrade, the Carteresque malaise, virtually all the wreckage around us -- on our politics "being broken."  Lots of Americans would agree with this assessment of their supposed representatives in Washington, D.C. 

But I think they've got it all wrong.  Politics today are at the healthiest state of my lifetime.  And from this, I began to build the case for American optimism.   Our future truly is bright.

Now, I won't be so foolhardy as to predict that we've reached a "bottom."  Some Act of God -- or foreign shock -- easily could create new headwinds that complicate our country's recovery.   It's difficult to assess how the unwinding of the Euro-crisis will affect our own financial infrastructure, and satellite photos of scores of empty cities in China buttress my belief that a bubble of unknown proportions may pop there as well. 

Nevertheless, there is a plausible case for long-term optimism about America's future.  I think you should hear it, and I think you should express your gratitude to those who have the laid the groundwork for an amazing national recovery. 

First and foremost, thank Barack Obama.

The first and most important step in any 12-step program is to admit you have a problem.  The American electorate finally seems ready to check in at a special Betty Ford Clinic for big-government abusers.  For years and years, we pretended our addiction to government spending was manageable.  We allowed our politics to be a personality contest, dominated by gotcha questions, sound bites, and cynical wedge issues.   The madness reached its zenith in 2008; Obama's promise of "hope and change" will be remembered as an incredible parody of the vacuous politics to which we'd become accustomed.   The candidate himself -- only four years prior, a state senator with no meaningful accomplishment to his name besides a self-aggrandizing memoir about his unaccomplished life -- was unsuited for the job of President, but perfectly suited to capture the imagination of Democratic Party voters.   An eloquent, elegant black academic, Obama captured the moment and affirmed his well-wishing audience of shallow thinkers when he proclaimed: "We are the ones we've been waiting for."

On the other side, the listless McCain campaign only gained momentum by placing a perfect anti-Obama on the ticket.  Sarah Palin -- an independent-spirited, moose-hunting, Christian woman with an accent and resumé that invited East Coast ridicule -- was almost a cartoonish projection of populist conservative values.   

Obama won the 2008 election by default, but believed he won with a mandate to implement progressive dreams.   In pursuing an aggressively leftist agenda, he has done these United States a profound service; he has clarified the fundamental ideological battle at the heart of all politics -- statism vs. individualism -- and dramatized the results that flow from such statist public policies. 

As a result, the American people are angrier than ever with politicians of both parties.   As I say, this is a very positive development.    More Americans are focused on issues of Constitutional principle than ever before.  They have absorbed a costly lesson about the unintended consequences of runaway government.   As a result, some politicians -- Paul Ryan and Chris Christie among them -- have talked to voters as though they were actual adults who can make hard decisions about the challenges confronting our nation.   What's driven this change from the hollow campaigns of yesterday, which got no deeper than shallow slogans like "building a bridge to the 21^st century" and "putting country first"? 

After thanking Obama for unwittingly catalyzing a backlash against liberal arrogance, we must thank Tea Party activists.  The citizens who turned out for town hall meetings over ObamaCare, and then for Tea Party protests, deserve our eternal gratitude for concentrating on issues that matter:  the country's precarious budget situation, the dangers of nationalizing broad sectors of the economy, and the corruption that accompanies crony capitalism.    News commentators with leftist sympathies have found it easy to ridicule this authentic populist movement and their most visible new media allies.  But the truth is that Mark Levin's Liberty and Tyranny is a serious book; Glenn Beck was right to pick battles over insane czar appointments like Van Jones; the Tea Party has shown zero tendency to violence; no allegations of racism within the movement have survived scrutiny; and the Tea Party's citizen leaders have graduated from simple mass protests to strategic engagement in the political process.   What an amazing example of American decency and citizenship.  (And now, what an amazing contrast to the forces of "Occupy Wall Street.")

Making the Tea Party's job easier, world events have unfolded like a prosecutor's case against the Left.  

• Exhibit A: An $819 billion stimulus package failed miserably against the White House's own projections for job creation.
• Exhibit B: ObamaCare has become less popular, and shows no signs of being able to deliver on the promise of cutting costs and improving care, and actually will push our health care system in the opposite direction, toward higher costs and industry consolidation. Moreover, the bill's passage -- with legislative maneuvers, bribes, and not a single Republican vote -- demonstrated that this generation of Democrats simply cannot govern.
• Exhibit C: The failure of the Democratic Senate to produce a budget for two and a half years reiterates this lesson.

Obama's attempt to push America toward European social democracy has coincided with the detonation of the European model.   The countries that have survived the best have been those that pursued austerity  after the financial collapse  -- that is to say, the opposite of  Obama's course.   Here at home, the blue-state model is also in retreat; California and Illinois accelerate their downward spiral.  

The gleam that accompanied Obama's arrival at the White House quickly dulled.   Pledges of transparency were broken.  Special interests, quickly given comfy seats at the table.   Obama's old ACORN allies were exposed as without moral compass.   His new appointments brought their own embarrassments.  And now just a year before the 2012 election, other bubbling scandals -- over wasting taxpayer money on crony-capitalist schemes like Solyndra to benefit campaign contributors, and the mind-bogglingly shameful Operation Fast and Furious mess at ATF -- look poised to endure until Election Day. 

Moreover, on a more personal level, Obama quickly proved susceptible to "Bushisms" like referring to Navy "corpse-men" and the "Austrian language."    The rhetorical skills that sent shivers up Chris Matthew's leg in the fall of 2008 have proven unable to sell Obama's policy priorities to the public.  Let me clear:  this President's reputation has fallen from that of an heir to Lincoln to that of a shadow of Jimmy Carter.   

There's more.

For a generation, the Democratic Party has depended upon the environmentalist movement for inspiration and for affirming their members' sensibilities as sophisticated thinkers who defer to science.   The moral high ground on this issue is rapidly melting away under the feet of the Left, unlike all those Himalayan glaciers that the IPCC erroneously predicted would vanish by 2035.   The "Climategate" scandal showed that global warming alarmists were willing to corrupt the peer review process and falsify data to protect their political agenda.   And Al Gore hasn't had much to say about CERN's new research that makes the connections  among cosmic rays, cloud formations, and temperature changes. These deep thoughts cast new doubt on the idea that human behavior is a prime mover in climate change.

If the Left no longer can trust that science leads inexorably toward progressive policy preferences, it also is seeing contemporary legal theory moving away from the kind of "living Constitution" judicial activism that has propelled progressive victories over recent decades.   Jeffrey Toobin's recent New Yorker profile of Clarence Thomas sent shockwaves as it acknowledged:  "Thomas has emerged as an intellectual leader of the Supreme Court... the majority has followed where Thomas has been leading for a decade or more. Rarely has a Supreme Court Justice enjoyed such broad or significant vindication." 

Don't look now, but union power -- so essential to filling the coffers and providing the manpower to elect Democrats -- is also on the wane.  Private-sector unionism has returned to where it was a century ago -- down sharply from its mid-20th Century peak.  Too often, unions have beaten the golden goose to death with picket signs: they have extracted demands from employers that rendered them unable to compete globally.  

Public-sector unions, on the other hand, flourished, since there's no market check on their power. The bill -- it seemed -- always could be passed on to taxpayers.   But public-sector unions also have jumped the shark.  Witness the  parade of union losses in Wisconsin (mirrored by cutbacks imposed  even by Democratic governors,  including Andrew Cuomo in New York and Deval Patrick in Massachusetts).

The Left's other principal outposts of influence are also under attack. 

When Clinton faced down Republicans over the budget impasse of 1995, Americans still got their news from Dan Rather and Peter Jennings.  There was no FoxNews, no blogosphere or Drudge Report -- just Rush Limbaugh, National Review, and little else.  Oh, how the times have changed.  Not only has the news media monopoly been busted, but a little outfit called CraigsList undermined the classified-ad-driven revenue model that had sustained so many U.S. newspapers  -- newspapers that largely followed the lead of the leftist New York Times.   An industry that once effectively propagandized against limited-government conservatives has been laid waste. 

Tenured professors in the cocoon of academia may be the next victims of creative destruction.  Already, there's much talk of a bubble in higher education.   Just like the underwater home-owners who continue to suffer from 2008's real-estate collapse, today's college graduates sit in their parents' basements wondering why they incurred so much student-loan debt for an education so irrelevant to the realities of the job market.  

When price discipline comes to higher education -- and ideas like Governor Rick Perry's proposed "$10K college degree" may bring it swiftly -- it will be terrible news for the Left's factories of political correctness (e.g., those endless "cultural studies" programs that offer Marxist shibboleths with little value to potential employers beyond academia and the permanent protest movement). 

The kinds of innovations that seem likeliest to disrupt higher ed -- blended learning programs that  capitalize on increasingly sophisticated online education offerings --  also could revolutionize K-12 Education.   Teachers unions have been a reactionary obstacle to reform for decades, and have kept most Democrats  toeing the line,  in spite of parents' sincere desire for change.   The times, they are a changing.  Documentaries critical of the unions have gone mainstream, and public opinion has turned against teachers unions.

At least the Left still has Hollywood right?  Well, sort of.  It's true that few of us on the limited- government team get invited to the cool kids' parties.  A reflexive hatred of capitalism and conservatism may be in our pop culture for some time to come.   But even here, things are improving.    Before South Park -- you know, back in the 20^th Century -- no one dared lampoon limousine liberal blowhards.  Today, aging Baby Boomers' nostalgia for their '60s activism is either funny or sad; it's not taken seriously anymore.   And while there's plenty of ugliness on your TV at prime time, let's salute the fact that most of it now feels very played-out.  Jane's Addiction was a little ahead of it's time when it put naked women with their heads on fire on the cover of an album titled Nothing's Shocking, but yeah, two decades later, peep-show nihilism is a bit of a yawner.

As "anti-values culture" loses its rebellious chic, young adults may stop using lefty-affiliations as a fashion statement and actually reconsider their politics.  Jobless in mom's basement, it's not like they have much else to do!  If they ever learn the facts about how their generation is being screwed by Social Security and Medicare, they'll wonder why they've been voting in lock-step with the AARP.  

Younger voters also will be more immune to the race card -- the greatest weapon in the Left's arsenal.  The emergence of "that's racist!" as a punchline surely signals that actual racism is mostly extinct in most (though not all) American communities.    Republican politicians were uniformly gracious about the outcome of the 2008 election.  This was smart -- and right.  The election of a black President was a significant milestone in this country's long struggle to atone for the sins of slavery and segregation.   The historic moment also means that racism in America is no longer a large concern, and it certainly isn't a partisan concern.   There will be voters in 2012 unable to recall a time when the U.S. did not have a black American as either their President or their Secretary of State (that is unless, during their kindergarten years, they had a habit of clicking away from Teletubbies in favor of Madeline Albright's speeches on C-SPAN).   How long will the GOP's "old white guy" stereotype survive amid Cain, Jindal, Palin, and Rubio? 

All of the above suggests that the policy environment and the political stage are becoming less friendly to big government and its Democrat allies.   

None of the above is to say that Republicans won't screw up the big opportunities in front of them, as is their wont. 

But let's imagine, for a moment, that a Republican presidential candidate is elected with a mandate to undo the statism of Obama (and of Bush before him).  America very likely could  boom.   Businesses are sitting on as much as $2 trillion, in cash.  Once we lift the current fog of economic uncertainty (over taxes, housing, health care, and other regulatory burdens), investment could jolt the U.S. economy back to life. 

The icing on the cake will be a boom in energy production.  It's startling to read of the oil and natural gas reserves now retrievable within the U.S., in North Dakota for example, thanks to new technology.  The only thing lacking is the political will to authorize increased exploration.   Obama can't do it without alienating the environmentalists who are crucial to his reelection.  A new Republican President would have no such disincentive.   America, your best days are ahead.

How do we get from here to there?   This will require bold ideas and savvy strategy.    Here are a few that I think would make a difference:

• Tax and entitlement reform: Throughout his Presidency, Obama has made it impossible for business owners to predict their future tax liabilities. Within weeks of renewing the Bush tax cuts, he began campaigning to let them expire in two years. Businesses will hire again when tax rates are set for the long-term (preferably, reducing marginal rates while also eliminating wasteful exemptions in the US Tax Code). Similarly, responsible budget-cutting and entitlement reform will earn a sigh of relief from credit markets.
• Monetary reform that removes the punch bowl from the Fed: Our government has misused its authority over the dollar. It's supposed to protect that value of the dollar, not debase it to accommodate government over-spending. There are creative proposals, like offering a gold-backed U.S. bond, to restore discipline to the Federal Reserve, which is essential for long-term economic growth.
• Spending caps and setting priorities: Cutting back the federal leviathan will take time and discipline, but we need to begin by setting spending caps, creating sunset dates for all federal programs, and setting priorities within the budget process so programs compete among themselves for this capped amount of taxpayers' dollars.

Laying the groundwork for true prosperity also will involve letting the real estate market finds its bottom, repealing ObamaCare and replacing it with patient-centered medicine, killing the "too big to fail" concept, and vastly scaling back Washington's regulations and mandates.  

All these are topics for another day -- or at least an even-longer essay.

But these are the types of topics that need to stay in the front and center of public policy debate in the coming years, and certainly during the 2012 campaign.    The core question must be: Should the federal government be entrusted with more power, or less?  

Conservatives' renewed emphasis on the 10^th Amendment and federalism is most welcome in that it moves less-salient policy issues to the state level, where they can be addressed better, and off the national stage, where they muddle a conversation over the big picture of where this country is headed.

Sticking to this message, and governing courageously and consistently by these principles, are not easy tasks.  We can lament the lack of a perfect political leader to match the moment.   But maybe this, too, is a blessing.  

Slaying the Big Government Goliath will require growing and strengthening the freedom movement's "army of Davids" -- ordinary citizens who are connected to limited government think tanks and advocacy groups -- all using the new media to inform the public and mobilize effective political engagement.    It's folly to put faith in a political leader; real change will be driven by changing the incentive structure for politicians across the spectrum.  We do that by increasing public pressure for limited-government reforms.    

Our early progress towards this end is the single most important reason for optimism.  

A majority of Americans are awakening to the notion that there is a battle of ideas to be won, which transcends any particular electoral battle.   As we've seen, there is reason to believe the defenders of big government are seeing their power structures melt away.   If we stay committed at the grassroots and keep developing the sector of civil society, that's dedicated to limited government principles, the political victories -- and a return to the American success story -- certainly will follow.

Don't let this moment of maximum pessimism cloud your vision of the path ahead.  Cheer up, America! It's time to go long on the U.S. of A.  

Brad Lips is the CEO of the Atlas Economic Research Foundation, which has built a network of more than 400 free-market think tanks in the United States and 81 other countries.