“We are waiting for the election before we expand. It depends on which candidate gets elected. If one does, then the economy will improve and we will be able to give cash for books and expand the store. If the other is elected, then the economy won’t get better and we will only be able to give trade credit. We won’t get as many books that way. I won’t tell you which candidates I’m talking about though.” -Steve
I love it!
That’s an awful lot of faith in one person with a relatively small amount of power …
I wish people could look beyond the current administration or the previous administration when they speak of the economy. Sure, things that one president may be involved in can change the perception of the economy, which is undeniably a factor … but economic problems don’t just crop up within a four-year period any more than a person wakes up with clogged arteries and heart trouble. It takes years and years of eating Big Macs every day to get to that point. The current economic situation is likewise the sum total of thousands of decisions, good and bad, that the government has made over the last 150+ years. Every attempt at propping up one industry here or there has an equal and opposite effect somewhere else. Propping up the banking industry with bailouts leads to a deflation of the stock market as money moves to invest in the industry the government has just acted to keep from failing. Etc, etc, etc … and so it goes.
Rats, I forgot my conclusion which was … it took us a long time to get here, and no candidate for president is likely to undo the mess in four years, period.
I agree. The full effects of this problem won’t disappear for probably 4-5 years. But the economy hopefully will begin gaining strength earlier than that. Steve Forbes also blamed the increase in money on the market as a hidden factor to the crisis. That is something Bernacke can help right now, or whoever is in charge of the treasury. Cut back on the money in the pipeline.
Exactly … and that’s why we need to decrease the amount of credit rather than increase it, because an increase in credit represents an indirect increase in the amount of money in the system. Of course, the Fed can help too, as you say, by suspending the direct injection of money …
In any case, you’re right … I think we’ll start to see an improvement within a few years, unless the government continues to “help” with crap like the bailout.
Once again I hit “submit” before I’m done. D’oh!
Anyway, my implication was that it would take many years to solve the economic problems that got us here. I’d say that the economy could possibly rebound within eight years, and be back at the point it was, say, in 1995 or so. But … unless the underlying issues that got us here are addressed, we’re going to continue to have problems. Back to the heart patient … if the guy has a triple bypass, within a few months he’s gonna be feeling good again. But … even though his immediate problem is fixed, if he keeps eating at McDonald’s three times a day, he’s gonna find himself back in the hospital within a few years, more than likely.
Suddenly I’ve got a hankering for a McRib. Time to lay off the Benadryl and the economic talk …