Hopium: How Far Can Irrational Optimism Take The U.S. Economy?By Michael Snyder When we deny reality and engage in irrational wishful thinking, we are engaging in something called hopium. This is a difficult term to define, but the favorite definition of hopium that I have come across so far goes like this: The irrational belief that, despite all evidence to the contrary, things will turn out for the best. In hundreds of articles, I have documented how the U.S. economy is mired in a long-term decline which is about to get a lot worse. But most Americans see things very differently. In fact, according to a brand new CNN/ORC poll, 52 percent of Americans describe the U.S. economy as very or somewhat good, and more than two-thirds of all Americans believe that the U.S. economy will be in good shape a year from right now. But if you asked most of those people why they are so optimistic, they would probably mumble something about Obama or about how were Americans and we always bounce back or some other such gibberish. Well, its wonderful that so many people are feeling good and looking forward to the future, but are those beliefs rational? We witnessed a perfect example of this hopium on Wednesday. Sales at McDonalds restaurants have been in decline for quite a while, and the numbers for the first quarter of 2015were just abysmal The ubiquitous burger-and-fries chain said US sales, the largest share of global income, fell 2.6 percent from a year ago for comparable outlets. Sales in the Asia-Pacific and Middle East region dropped 8.3 percent, helping bring overall global sales down 2.3 percent, reflecting negative guest traffic in all segments, the company said. Total revenue sank 11 percent to $5.96 billion in the quarter to March 31, and net income plunged 32.6 percent to $812 million, or 84 cents a share (-31 percent). So you would think that the stock price would have tanked on Wednesday, right? Wrong. Thanks to news that a turnaround plan would be announced on May 4th, McDonalds stock actually skyrocketed McDonalds closed up 3.13 percent after spiking more than 4.5 percent in early trade as investors cheered a turnaround plan expected on May 4. However, the fast food chains earnings missed on both the top and bottom lines. This is pure hopium. Why dont McDonalds executives just tell us what the plan is now? But instead, the mystery of a secret turnaround plan gives people just enough hope to keep the stock from tumbling at least for the moment. And of course there are all sorts of other stocks that are being massively inflated by hopium right now. Many years ago, when I was an undergraduate, I was taught that a price to earnings ratio of more than 20 was really, really high. But these days that is the norm on Wall Street, and at the moment there are quite a few stocks that actually have price to earnings ratiosthat are greater than 100 There are 10 stocks in the Standard Poors 500, including industrial giant General Electric, video-streamer Netflix and oil and gas explorer Cabot Oil Gas that are trading for 100 times their diluted earnings the past 12 months excluding extraordinary items, according to a USA TODAY analysis of data from SP Capital IQ. And if you can believe it, General Electric has a PE on its training earningsof more than 200 Take General Electric, the industrial giant thats swiftly selling off banking assets so it can return to its manufacturing roots. GE sports a PE on its trailing earnings of 227, says SP Capital IQ. This is completely and totally irrational. General Electric is a giant mess and is being very badly mismanaged. But investors continue to pay a massive premium for GE stock because they hope that things will turn around eventually. Look, hope will get you a lot of things in life, but it wont put money in your pockets or dinner on the table. Our politicians and the mainstream media continue to sell us hard on the idea that things are getting better in America, but meanwhile our economic infrastructure continues to decay. Just check out what is happeningin the steel industry United States Steel Corporation issued layoff notices to 1,404 workers in the latest sign of struggle for the American steel industry. The missives went out in recent days to workers producing pipe and tube products that are used in the oil and gas sector. Job cuts could come as early as June for 17 to 579 employees at a plant in Lone Star, Texas, 166 at a factory in Houston, 255 at a mill in Pine Bluff, Arkansas, and 404 managers across the companys tubular operations nationwide. Since last June, the company has informed 7,800 employees of potential job cuts, a tally from Pittsburgh Business Times indicated. U.S. Steel spokeswoman Sarah Cassella said the ongoing layoffs are the result of challenging market conditions and global influences in the market including a high level of imports, reduced prices for oil and natural gas and reduced steel prices. A little over a month ago, I published an article entitled 10 Charts Which Show We Are Much Worse Off Than Just Before The Last Economic Crisis in which I demonstrated that we are in far worse economic shape than we were just prior to the last recession, and now another great economic crisis is at our door. Unfortunately, most Americans have no idea what is going on out there. Most of them get their news from the giant propaganda matrix that very tightly controls the flow of ideas and information in this country. This is something that I explain on my new DVD. Six colossal corporations control over 90 percent of the news, information and entertainment that Americans consume, and that gives them an awesome amount of power. And right now that propaganda matrix is assuring the American people that everything is going to be just fine. Well, they better be right. Because if not, they are going to have millions of people extremely angry with them when things really start falling to pieces. This article first appeared here at the Economic Collapse Blog. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here. 