|
Musicmystery -> RE: American Shame (2/23/2011 10:47:22 AM)
|
quote:
In order to truly grow jobs, we need to increase the amount of small and med size businesses. Capital is needed to start those, and that money is at the top. Right now many at the top are being very cautious and conservative in ventures. Some kind of incentive for them to use that money here in the US is needed.
No, the money is in the banks, which are reluctant to lend except at prohibitively silly rates. Likewise, corporations are sitting on cash, waiting to see what happens. Both factors are stifling business investment.
But money at the top isn't sitting around--it's going into higher productivity, which has driven GDP growth for the past two years, and particularly here, replenishing inventories. Additionally, people are moving to other venues while the stock market is relatively flat, speculating in commodities, for example, which is contributing to rising commodity costs as demand for futures climbs.
None of that creates jobs, of course. Banks have to start lending again, allowing small business to move on expansion.
I scaled back orchard plans this year, and financed the expansion from my savings, preciously because although I have excellent credit, banks are offering only ridiculous rates for a time with historically low interest rates. They can afford it, with money so cheap. It may take rising interest rates to get them loaning again, or federal requirements on the cheap cash they're borrowing from the Fed.
The mortgage mess will continue to be a drag, precisely because the mysterious and sloppy way these were bundled/handled makes determining financial health a guessing game.
|
|
|
|
