In listening to the President speak yesterday – after he got the audio fixed- I couldn’t help but wonder if:
1. A jobs bill will really have a significant impact
2. Small business owners are even really aware of this bill and are indeed waiting to hire based on its passing? In other words, will “holding the bill hostage” deter these business owners from extending job offers?
Here is the transcript.
The businesses of investing and trading both have their complicated moments, as does the analysis of economic trends. But I do believe there are some major problems that actually have a more simple solution. Sometimes (in this business especially) many of us tend to think that a solution, method, or path to success must involve layers of complex analysis and in turn very complex solutions. I like to try and reduce things down to the simplest terms any time I can and relate a seemingly large situation or problem to something I can wrap my head around.
I first set out to quiz a couple of friends who are business owners in Dallas, Philadelphia, and southern New Jersey. Did they even know a jobs bill was in the works? The answer was a resounding NO. (Although my realtor was familiar with it, she didn’t think it would help her business much).
Now of course my little study was obviously a bit anecdotal. I do believe, however, that many small business owners who are not politically savvy might just be looking at their front doors and the dollars that are rolling into it, rather than sifting through the “pending legislation” pages on www.wh.gov for specific details on how a pending bill may help them out.
My uncle Steve, who owns a large fabric and sewing center outside Philadelphia, just wants to see confidence restored in the local community and in the economy as a whole. Once that happens, he believes, people will begin spending and then he can maybe hire another couple of people to help with the increase in business. I know he doesn’t currently believe that one bill is going to change that sentiment.
I’m not here to argue politics or point fingers here at what is wrong or right with the current administration. I would, though, like to introduce a new chicken/egg theory:
Does it first take a stronger consumer to take the leap of faith and begin to purchase goods and services, which in turn drives profits for small and large businesses, which in turn hire and drive down unemployment? Or do small (and large) business owners make the jump first and hire folks on anticipation of a strengthening economy, therefore putting dollars in the hands of Americans.
I have to believe it’s the former, not the latter. But right now – though I’m sure both theories may have some truth – based on data and my local observations, there is little faith coming from the consumer. I don’t think the small business owner is waiting on a bill, they are waiting for customers!
It is certainly hard enough for a government to put real money directly into the hands of a consumer. Bush #2 tried it in early-mid 2008, which gave consumers a little boost, but we all know what happened after that. “Helicopter Ben [Bernanke]” got that moniker following a 2002 speech in which he made reference to dropping money via helicopter on America (I told him to start in my zip code). To an extent, Bernanke has been doing just that, just not literally and not directly into our hands.
But all jokes aside, our situation needs more than just a $600 or $1200 check. Frankly, I don’t think a $5,000 check for every American would guarantee spending or continued stimulus with genuine confidence. Because once the check is spent, you’re still left with no job, no credit, a depreciated, leveraged house and a sense of “what happens now?” I sense many Americans are feeling this these days. I think it’s safe to say that for most Americans, the bulk of a $5,000 check is going right into our bank accounts, just in case….
Even with high unemployment and prices of goods steady, Americans are socking away their cash:
*chart courtesy of the U.S. Bureau of Economic Analysis
It’s not just about a jobs bill, which very well may help; it’s about our entire system, which is still largely stuffed up and going through an evolutionary period. Heck, mortgage-lending guidelines are getting tighter each week; how’s that for stimulating the biggest purchase of most Americans’ lives?
Americans need real confidence, which is not going to come from a bill in my opinion, but rather from multiple sources, the most important of which is out their front window. Until our future view out that window is a little less murky, I have a feeling the rest of 2010 and early 2011 may continue to be tough, both for Main Street as well as Wall Street. I also believe that one needs the other and vice-versa; both should share in the recovery as well as the burden.
Photo Credit: csc4u
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Tags: Consumers, Jobs Bill, President Obama, U.S. Economy, Unemployment
