Economic Pessimism

Everyone seems to be waiting it out, but for some the walls
are closing in on them. No one wants to admit they made a mistake. No one wants
to sell their house for less than they bought it for. But that is what is
happening. And the small population of people that can’t afford their adjustable
rate loans are about to have no choice. But Joe Average is waiting for the tide
to turn back.

We are at a stalemate. Those willing to sell their home aren’t
lowering their price. Those willing to buy want to do so at a discount.
Meanwhile, no one is getting significant raises to spur grand purchases. Sure,
employment is up, but no one believes it will hold. Productivity is up, but how
much of that is because of global growth? Debt is high. Gas is high. And oh
yeah, your healthcare bill went up. By the way, global warming will cause
severe fluctuations in the weather, so don’t plan on just taking a sweater anywhere you go. You’ll need your thermal underwear and your board shots.

Here is what we need to happen – one key innovation. It
doesn’t even need to be a big one. Just one to get the ball rolling again. My
belief is that will happen in the green energy efforts. But it could come from
toy makers, insurance companies, or the railroad. It doesn’t really matter.
Actually, I am foolish. The innovation will probably come from the current war
in Iraq. Spending resources on war usually spits out some marvelous
advancements. So if or when we pull out of Iraq, the ideas will come home too.
This will infuse some motivation to the economy. Vultures will then swoop in
and buy large swaths of homes on the cheap and invest in those places. Home
building supplies will increase. Manufacturers and builders will crank up
again. Employment will move beyond the recycle stage. And most importantly, new
concepts will hatch from their incubation and spur the next wave of economic
and productivity growth. My guess is it’s in the healthcare industry.

 Information for this
post came from the NY Times Pessimism is Growing in Executive Suites by Floyd Norris.


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