The U.S. economy and equities are worth more than current prices indicate. This is a good time to buy companies with strong brands and decent cash positions  those are ones that weather tough times better and grow nicely when conditions improve.

The Standard & Poors downgrade did not cause the selloff the first trading day after its announcement  the market slide began on July 22, some 18 days earlier. That was the day negotiations between Speaker Boehner and President Obama to accomplish a grand deficit reduction bargain collapsed.

Those talks failed because the President incorrectly insisted on more taxes  over the last four years, the deficit is up ten-fold, annual spending in excess of inflation is up $900 billion, but eliminating the Bush tax cuts for all tax brackets would yield less than $300 billion in new revenue.

The Presidents insistence on taxes to permanently increase the size of government, and his absolute refusal to act on business and investor complaints about rising costs imposed by health care reforms and incomprehensible new industrial regulations, have instigated doubt about the Presidents ability to grasp the challenges facing the economy, and come up with reasonable policies to jump start growth and avert a second recession.

Over the last two months, the economic data has been generally bad: weak retail sales and industrial production, jobs creation, GDP growth and other distressing news.

Business leaders  unlike Ivy League economists and Noble Laureates the Administration consults  dont believe big deficits, followed by more taxes and permanently bigger government, spur growth.

Most recent Presidential missteps have aggravated business and investor mistrust. These include an announced bus tour through the Midwest to address the jobs situation, when the crisis is not one of communications but a lack of U.S. and global demand for what Americans can make, and his failure to personally address the S&P downgrade for three days after his knowledge of the fact.

When the President finally spoke, he rehashed old ideas that will do little to improve the situation  extending unemployment benefits and the payroll tax cuts only sustain the status quo  and strengthening universities and free trade agreements offer uncertain positive outcomes only years into the future.

The President offered no recognition that the lack of demand, which business economists believe is paramount, is caused by a huge trade deficit and in turn by reliance on oil imports and distorted trade with Asia. He said nothing about regulatory burdens that are causing American businesses to take purchases and investment abroad.

The good news is a President and Congress can only do so much damage; they are too rigid in their positions to agree on much further to distress the economy.

In the second half, economic growth should pick up, and the odds are better than even that a recession will be avoided.

Asia, laughing at Follies Americana, will continue to grow like gang busters and the S&P 500 companies, who comprise 80% of U.S. publicly traded companies by assets, earn more than half their profits abroad and many are well situated across the Pacific.

Moderate growth at home and robust growth in Asia spell continued good earnings reports. Those will ultimately drive a recovery in stock prices.

At 62, I maintain a healthy cash position as a hedge against an unplanned retirement, but as I always do when things go sour, I am putting money into the market.

The investors will be feeling much better on New Years Eve than it does in the August dog days of displeasure. Dont miss the party.

Peter Morici is a professor at the Smith School of Business, University of Maryland School, and former Chief Economist at the U.S. International Trade Commission.

Peter Morici is an economist and professor at the Smith School of Business, University of Maryland, and widely published columnist. He is the five time winner of the MarketWatch best forecaster award. Follow him on Twitter @PMorici1.