This recovery is killing small business
I happen to be CEO of a small import export business, in the construction supply industry.
My business is down almost 45 % year to year. Several of my largest credit worthy customers have filed Chapter 11. My bad debt is growing, and the phones barely ring during the height of the construction season.
I have been forced to lay off 5 workers, and reduce the hours of my other 10 employees.
The economy has put our survival in jeopardy.
If this is economic stimulation I must be missing something. With state and federal taxes increasing in a dozen direct and indirect ways, I feel squeezed,
People have become mean spirited and very antagonistic.
Every day I speak to customers and suppliers around the country, Almost every one of them tells me that they are laying people off, cutting back hours, and cutting expenses at every turn.
Small business is struggling to survive.
Despite the Stock Markets being 40 % above their March lows, I don't believe this recovery is real. This economy is still dropping, The glimmers of rebound that “they” keep telling us about, represent the optimism born of Spring and warm weather.
The Federal Stimulus spending bill has made a bad situation worse because:
1. The Fed and the politicians have misled us into thinking government spending is making a difference.
The psychology of disbelief has pushed the Markets up over 40%. The public sees this performance, and accepts that things must be getting better. They are tempted to put money back into stocks. They chase the market after the bounce has almost run its course, in a vain attempt to recoup their losses and replenish their retirement savings.
Chasing a running market bouncing off a deep dive is a futile strategy destined to fail.We are not at the beginning of the next boom, and the bottom of our depression has not been seen yet.
2. The stimulus money delays a real recovery by keeping bad businesses afloat. Instead of letting the incompetents die off they are keeping alive dead wood for political agenda.
The expression," when a door closes a new window opens" should have been applied to the Auto and banking industries.
What should have been a 2-3 year shakeout and restructuring in a free market is destined to become a prolonged 10 year, slow recovery,(If it ever recovers from all of the interventions)
3 Basic laws of economics have been ignored. When a business fails due to a faulty business plan, the stock holders, the unions, and the bond holders must share the pain.
In the case of the auto bailouts and subsequent bankruptcy, the labor unions have come out as the big winners, while the bond holders have been left holding a bag of pain. Rewarding the unions as political allies at the expense of the rule of law and free enterprise , sends a very stilted message of distrust and legal disregard.
Politicians should not decide the outcome of free market movements for partisan reasons.
4 The current upward trend in stock prices is ultimately a fools gold fake out. The recession is a depression, and we appear to be doing everything possible to duplicate the errors of our predecessors in the early 1930’s.
Those who do not study history are doomed to repeat it.
The bubble era in economics has ended,. We have lost the drive which made our economy flourish. The banking system has been bailed out and regulated but not fixed.
The final bubble, which the government is attempting to inflate, to pull us out of this disaster is the US Treasury.
When this bubble pops from too much hot air too fast, who will bail out the treasury?
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Tags: economic stimulus, last great bubble, recovery, small business