Hey there folks!
lady red kindly invited me to post here. I'll try not to be excessively tedious with my financial d00m pr0n... ... ah, I'm lyin'...
So. I ran across this article: 13 Must-See Charts That Explain Why Americans Have No Jobs - I thought the charts were interesting. And I actually am not so terribly pessimistic having read the charts - I think there might be less d00m here than meets the eye.
Right now there is a big gap between expectations/plans and actual stats - less revenue than expected, etc... but if you look carefully at the charts, you'll notice that periods of big gaps between expectations and actual stats have persisted for years in the past, right through periods of relative prosperity, growth, and improving employment climates.
So the gaps don't appear to mean much - except maybe that small business has always been poor at planning, or good at seat-of-the-pants management, or subject to crappy statistics, or all three.
On the other hand, while things look more or less stable, they are stable at very low levels. I'm concluding that the picture will improve slowly at best.
And that presumes no more shocks to the system.
It would have helped greatly if they'd done the charts in color.
ReplyDeleteBut it seems as though expectations and actualities met only rarely in the course of the last 15 years.
So, despite the low optimism numbers, it may be that small business owners really want to believe that things are going to be much better than past experience tells them.
What I do not understand is how, in many ways, the government seems to penalize businesses for hiring people.
ReplyDeleteI guess the concept that rewarding poor behavior and punishing good behavior gets you lots of poor behavior and reduces good behavior is difficult to understand.
Good grief. Those charts are depressing.
ReplyDeleteOne thing though: since inventories are at rock-bottom, when the economy begins to recover, we may see unemployment numbers plummet as people go back to work to restock those depleted inventories.
However, unless the gov't gets out of the way of private enterprise, this recovery will be slow as molasses. If the banks won't loan, business will stagnate and die.
I go with all three, Lewy. Though at present I believe it is perception of a general malaise that is creating havoc among small businesses, and purchasers of their products. My industry has slowed tremendously over the last year and shows little opportunity for improvement in the coming year. A lack of credit is part of it but mainly everyone is just holding back from spending. A significant portion of which is caused by fear of the immediate future.
ReplyDeleteI always appreciate your economic posts Lewy, even if I have a hard time understanding them sometimes :)
ReplyDeleteMatt,
ReplyDeleteWhy is small business hiring penalized?
Regulation -> "capture" of regulators by big corporations -> playing field tilted towards big corps.
The more hassle it is for anyone to hire, the more of a relative advantage for big corporations that have HR departments, legal departments, sensitivity training in house, etc.
Legal hurdles to hire and fire aren't a bug for big corporations, they are a feature.
We'll see more of this.
Lady red, yeah, I saw the same thing about the inventory... good news is it has nowhere to go but up. At some point...
Luther, as you have observed, while things can go up, they ain't going up yet...
shit I gotta run but I just heard from a business contact in Massachusetts that "she can't talk till Wednesday because she's getting ready for Scott Brown's victory party"... Wow.
What's significant here is that I don't really know the woman and she doesn't know me; for a Mass person to have the courage to admit to a total stranger that they are voting for a Republican is a huge sea change...
That's a lot of information, none of it very good. Sales are the hardest hit, I was a little surprised at the reason for lower earnings chart.
ReplyDeleteNot an optimistic forecast, is it?
I think it all gets back to the opening paragraph, we need some big boosts in small businesses.
Er, what Fay said.
ReplyDelete