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If investors were termed overly exuberant when they pushed the stock market to unsustainable heights, what term is to be used in describing the newfound confidence of the American consumer? 

The recent burst of consumer enthusiasm for the future, as measured by The Conference Board this week, suggests a confidence and expectancy that awes even those cocky Wall Streeters who told you to buy stocks a year ago. 

Wall Streeters are busy lowering their forecasts for the year to come, cutting earnings estimates and downgrading their old favorites. Corporate profits are down and liable to stay down for a while. Layoffs are rising. 

Through these clouds the consumer seems somehow to have spotted a glowing Eden on the horizon, with business conditions improving and the job market becoming less dangerous than it had been a few months ago. 

The attitude represents a stunning, confounding dichotomy between producers, whose actions indicate they remain fearful, and consumers, who after five straight months of gloom have come alive like springtime. 

Have they read last year’s results from their 401(k) provider? Don’t they know that the new quarterly report they’ll be receiving in the next few weeks is likely to be worse? Haven’t they been reading the newspapers? 

You could go on asking questions like this, but what’s the point? Except that all we have are questions without answers. Something like $5 trillion of wealth has disappeared in the stock market debacle and the reaction as measured in surveys is “Oh, well.” 

The impossibility of treating such losses so casually is clear when you realize that perhaps a third of American families live hand to mouth after taxes, car payments, energy bills, credit-card debt and mortgages. 

Could recently lower interest rates, including on home mortgages, have produced the spurt in confidence? Could slightly lower fuel bills have contributed? Maybe, but enough to reverse five months of growing fear? 

Could it be that after a long period of economic stability and growth Americans have forgotten what it’s like to have a recession? Does the newest generation believe it is immune to economic catastrophes? 

One elemental change that might be examined is the pervasive sense of security you can hear expressed everywhere – that Alan Greenspan (through interest rates) and George W. Bush (through a tax cut) will see to it that the worst doesn’t happen. 

Whatever the factors involved, the crazy, mixed-up situation provides a rare opportunity for consumer specialists at the nation’s universities to seek some explanations where only speculation now exists. 

Has the American consumer been gifted with foresight that defies the reasoning of those who claim to be experts? That is, could the consumer’s expectations be right on the mark? 

Is the new confidence just another aspect of the irrationality that earlier in the expansion drove stock prices to mathematically unsustainable levels? 

Should the methodology of consumer forecasts, whose prominence in economic affairs has risen greatly during the expansion, be re-examined for possible flaws? 

John Cunniff is a business analyst for The Associated Press