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Musicmystery -> RE: Where is the economy? (10/4/2009 8:07:46 AM)
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Look, stick your head wherever you want it.
You made the sweeping claim that no one is investing. That's never true. Yup, some businesses are closing. That's always true too, even in bull markets.
The Administration is largely irrelevant--this one and past ones. They just don't have that kind of economic power. Two-thirds of GDP is consumers.
If you ever tire of your "anecdote as news" approach, look at economic indicators. Production is up. Messes remain, sure--they were messes that were going to blow up sooner or later, built on sandy foundations. Employment will follow...but slowly, as it often does after a recession. Mortgage problems will persist for a bit, because the structural problems don't vanish with a market upturn. These are transactions that never should have happened.
New business comes from people who can identify and capitalize on wants and needs. We still have wants and needs--and we still have people who understand that starting and running a business doesn't mean following the trends. And businesses that make poor decisions--like the U.S. automakers did--will face hard times. Saturn is an excellent example--great concept, great product, but G.M. just sat around and looked at it while their competitors whizzed on by.
Of course, every schmoe who's been hired as a manager mistakenly thinks he's a skilled entrepreneur, when reality is he's a hired hand carrying out someone else's vision--but that's another story. Ego will always trump reality in those cases.
So make your proclamations. While you're doing that, others are making money--the old fashioned way, by producing goods and services better and more effectively than their competitors, by introducing new products that better serve. Turning profits in good times and bad, using slow times to build for better times.
Now, if you want to make the claim that tight credit is dampening investment, fine. I'm not so sure that's bad in the long run (now that we're past banks just not lending at all), as a lot of the past credit went to questionable ventures. You use Vegas as an example--gaming is very recession prone, as it doesn't "produce" in a meaningful sense, and people stay home when money's tight. The entertainment isn't enough to sustain the loss from gaming revenue, and the market is already overstaturated--some long established casinos were struggling before the economy slowed. So if a bunch of pads are sitting around undeveloped, frankly, it's just that lenders are making smarter decisions, and/or developers are realizing Vegas doesn't need several new casinos.
We also have an abysmal savings rate in the U.S. If tougher times help change that, sure, consumption will drop in the short run, but investment will be there for the long term--and people won't be in dire straits next time unemployment benefits end.
We have the same assets and value we had before the economy tanked. Smart people will figure out how to add value and access, helping their customers and earning profit for themselves. The rest will whine that no one gives them a break.
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