I'VE JUST SPENT two days with friends and family in Disneyland, "The happiest place on Earth." Based on what I've seen, it ought to be called "the most crowded place on Earth." It was mobbed. Packed beyond capacity.

There's simply no way this country is in a recession with people spending money like mad amusing themselves at Disneyland. I've been coming here frequently for years, during good times and bad, having grown up in Southern California. I've never seen crowds like this. Not here, not anywhere not even on the Tokyo subways.

There were times when the streets of the Magic Kingdom were so thickly thronged with human bodies that one simply couldn't move. Rides were breaking down. Restaurants and snack vendors were running out of food. There wasn't enough staff to get people properly loaded onto the rides that were working. It was bedlam.

It actually would have been a miserable experience, if we hadn't lucked out and been given a rare and highly coveted "Dream Fastpass," a plastic badge you wear around your neck that lets you bypass the hours-long lines at the most popular rides.

Sure, when I wrote here several weeks ago that I didn't see any evidence of recession during my trip to a high-end Hawaii resort, I opened myself up for criticism that I wasn't really looking at the typical vacation experience of ordinary middle-class people. But this is different.

Disneyland is definitely a middle-class destination. People drive to it, paying high gasoline costs. They travel to it, paying high airfares. And park admission is costly. So is food in the parks. And all those souvenirs. If these were hard times, the park would be empty. I've seen it like that before. It's not like that now.

This isn't just a fluke of the couple days I happen to have been here. It's well reflected in Disney's better-than-expected earnings this quarter.

You hear every day that the American consumer has been clobbered by high food and energy costs, and falling home prices. Some stores are reporting poor sales. The Bennigan's restaurant chain has declared bankruptcy and Starbucks is shutting 600 stores. There must be a recession in this country.

No, I don't think so. There's essentially no macroeconomic evidence for it. And while you can point to Bennigan's as an example of a victim of recession, I can point to Disney as an example of a beneficiary of a healthy economy.

When I talked about this on CNBC this week, one of the usual perma-bears tried to dismiss it by saying that all the people crowding into Disneyland are foreigners, taking advantage of the cheap dollar. I beg to differ. I've just spent two days jammed in with the tens of thousands of people clogging the park, and I can tell you that it was very much an American crowd.

And besides, even if the crowds were artificially swelled by foreigners, so what? That would be just fine, if they want to spend their money here on American goods and services delivered by American employees. Did you see the GDP report released last week? Exports are booming. So that's no proof that we're in a recession it's one of the reasons why we're not.

So for the perma-bears, I have a T-shirt I bought at Disneyland. It has a picture of Grumpy, from Snow White and the Seven Dwarves. It says, "I'm right. You're wrong. Any questions?"

OK here's a question, in case you didn't have one on tap. If we're not in a recession, why are stocks down 20% from their highs last October?

That's easy. Because we've been in a slowdown which is a very different thing than a

and that's played into a prevailing public mood of intense pessimism. Blogger

captured it beautifully last week by posting a list of media quotations about "the worst economy," "the worst credit crisis," and the worst this and the worst that, all "since the Great Depression."

When people are willing to throw the word "Depression" around like that, no wonder it feels like we're in a recession. And no wonder stocks are down about 20%. Though 20% isn't really all that much a fluctuation in the grand scheme of things. In the last recession, stocks fell by more than 50%.

The risks that threatened the economy with potential recession are receding. The credit crisis is now a year old, and at this point is very well understood and contained thanks to smart moves by the Federal Reserve and the Treasury. There are still problems in the banking system, and there may be problems for years. But the risk of outright meltdown is now off the table, so these problems will get solved.

The housing crisis is probably near an end. As I wrote then, it hasn't been reported, but by some important measures the national housing market bottomed in February and has been on the upswing ever since.

And the oil crisis is probably over. At this point it looks like we're not going to put supplies at risk with an ill-advised military adventure in Iran. The Bush administration is now talking about diplomacy, instead. And it looks like we're going to start doing a lot more oil exploration and drilling here in the United States to increase supplies and make supplies more reliable. Even Barack Obama has started talking about drilling to bring the price down, rather than kowtowing to the extremists in the environmental movement.

Things are getting better. The only fly in the ointment is that the Federal Reserve doesn't seem to realize this, so it's looking like they're going to let interest rates sit at a super-low 2% forever. That's a big inflationary mistake, and it's going to cause trouble down the road. But for now, it's a very stimulative policy, and it's going to keep the economy on the road to robust recovery from slowdown.

So stocks are attractive. And they are cheap.

My favorite sector is basic materials, such as metals, mining, fertilizers, packaging and so on. This sector has gotten killed over the last month as oil prices have fallen, and investors have suddenly stopped worrying so much about inflation, but they've kept worrying about recession. Big mistake. No recession, but inflation is still going to be a problem. These beaten down stocks should be the leaders in a significant recovery over the next month or two.

Also See:
Luskin: Merrill Move May Mark Capitulation for Financials
Luskin: Today's Investor Sentiment Makes No Sense
Luskin: Financials Aside, Stocks Aren't in Bad Shape