It is early July, well before this article goes online, yet the landscape is pretty clear from where I stand. The U.S. and China both raised tariffs on $34 billion worth of goods Friday, July 6. This did not deter the S&P 500 from continuing its charge up to the January 26 all-time high. To boot, unemployment is historically low and the Fed is set to raise rates twice before the year ends - all this amidst a stealth discretionary spending recession.
So, how about that trade war? Let's recap. Most folks would agree that the free trade of goods would be best for all concerned. Goods would be less expensive and those that could not compete on price would do so on quality, leading to a beneficial improvement of goods. All is well and good until protectionism and nationalism rear their ugly heads. Some nations have goods that find it difficult to compete on the basis of price and/or quality. Globally, world leaders of such nations are unapologetic in pursuing their nation's interests at the expense of others. In trying to avoid the image of the ugly American, we have often placed ourselves at a disadvantage. Nowhere is this more evident than in trade were our trading partners often have a clear advantage.
U.S. Census Data shows that we have a trade deficit with every trading region except for South and Central America and Australia/Oceania. At only $33.14 and $14.38 billion, respectively, the last four years and a combined trade of $310.44 billion this pales in comparison with the deficit for the rest of the world, -$844.66 billion, whose combined trade is $3.578 trillion. Below are 2014-2017 averages for most of the world in billions:
Canada: -$20.01
European Union: -$149.61
Asia: -$547.49
Africa: -$2.60
China is a case in point. Aware of the huge financial benefit that comes with their 1.38 billion consumers, they extract huge concessions from their trading partners, including the U.S. When they have not barred certain U.S. business sectors, they restrict or regulate business, place tariffs on goods, or coerce intellectual property release. Note this goes one way; there is no intellectual property sharing.
These noncompetitive business practices are not fair, but until now, U.S. companies have accepted them without much push back as the cost of doing business there. That is until Trump. What Chinese leaders need to realize is that they are not in a good bargaining position and the longer they hold out the more harm will come to their economy.
Here is why. Leaders of the government-run economy are well aware of their history and realize the huge Chinese population is not going to put up with poor conditions forever. To keep discontent at bay, they have a policy of inflated economic growth. According to Trading Economics, they have averaged 11.7% GDP growth for the past 10 years but chinks in their armor are showing. From the 2010-2011 heyday, where GDP grew 19% and 24%, growth has dropped steadily and sometimes precipitously. It was 5.56% and 1.14% in 2015 and 2016, respectively. Little wonder that worried central government figures have made a big push since then for increasing their global exports, including those to the U.S., resulting in a resumption of GDP growth to 9.35% in 2017. The prospect of increased tariffs, which would make their goods less competitive, runs afoul of those plans. China's economy is struggling and their stock market is testament to that. The smaller Shenzhen composite moved into bear market territory in February and the Shanghai composite closed in bear territory on Tuesday, June 27. The indexes went as low as -26.5% and -25.0 on July 5 but have recently recovered to -22.5 and -21.2%, respectively, as global markets have climbed in tandem with U.S. markets. That is still in bear market territory, which will curtail much need foreign investment. Meanwhile, U.S. GDP is growing steadily, the economy seems to be healthy, and the stock market is nearing new heights. Trump can ratchet up the tariff game longer knowing he has more economic wiggle room. Moreover, he can inflict more pain to the Chinese economy than they can to ours.
To see why, let's look at the trade numbers. The trade deficit with China has averaged -$358.68 billion the last four years in a rising trend. While U.S. exports have vacillated between $110-129 billion since 2012, Chinese imports have steadily increased from $315 to 375 billion. Last year the deficit was -$375.58 billion, of which $129.89 billion were U.S. exports to China and $505.47 billion were U.S. Chinese imports. Not only is trade unbalanced, so are tariffs. Prior to this year, U.S. tariffs on Chinese agricultural and non-agricultural goods were 2.5% and 2.9%, respectively, while Chinese tariffs on U.S. goods were 9.7% and 5% for the same. True, these had been going down from a 14.1% average prior to 2001 when China joined the World Trade Organization but that was part of the price and tariffs are much higher for some industries.
Below are the top 10 U.S. exports to China in 2017 according to the International Trade Centre Trade Map http://www.intracen.org/marketanalysis:
Aircraft, spacecraft - $16.3 billion
Vehicles - $13.2 billion
Oil Seed - $13 billion
Machinery - $12.9 billion
Electronic equipment - $12.1 billion
Medical, technical equipment - $8.8 billion
Mineral fuels including oil - $8.6 billion
Plastics - $5.7 billion
Woodpulp - $3.4 billion
Wood - $3.2 billion
Total - $97.7 billion
Together they account for 74.8% of all exports that year. Note that except for oil seed, mostly soybeans, the rest are non-agricultural products. But their tariffs are not the same and depend on how strategic the product is. For example, Chinese cars cannot compete with American ones so the latter have duties ranging between 21% and 30%. Compare that to a maximum of 2.5% for Chinese car imports to the U.S.
Therein lies the rub. The Chinese can only raise imports so much more on these goods, some of which have few suppliers outside the U.S. As a result, some of the announced tariff hikes are empty rhetoric with few teeth. Just as an example, China announced 25% tariffs on aircraft, but not all aircraft - just those with an "empty weight" of 15,000 to 45,000 kilograms. While it may seem like China is taking aim at Boeing, it turns out the stipulations only target older 737's being phased out of production, while not touching the larger models comprising the bulk of Boeing's trade. China desperately needs to grow their airline industry. It is estimated 7000 new planes will be needed in the next 20 years. With Airbus working at near full capacity, there is no alternative but to turn to Boeing for the remainder.
The same goes for soybeans, the bulk of Chinese agricultural imports. China is the world's top pork market and they need soybeans for feed. It turns out Brazil and the U.S. are the top two global soybean suppliers. Brazil has been cranking up production for years and now constitutes 57% of Chinese soybean imports. This came mostly at the expense of the U.S., but Brazil does not have the capacity to make up for the remaining 31% in U.S. soybean exports to China. As a result, the planned 25% increase in tariffs will hurt Chinese pork farmers directly.
Ultimately, the sheer size of the trade imbalance will play in Trump's favor. With $500 billion dollars of goods at risk for China vs. only $130 billion for the U.S., China's fate is sealed. That is, provided Trump is persistent in raising the bar while keeping disgruntled American businessmen at bay. Historians may recall a similar unrelenting raising of the bar eventually caused Russia to capitulate during Reagan's tenure. It does not help China that it is already running up against its tariff limit.
We are already seeing that endgame play out. Just four days after both countries raised taxes equilaterally, Trump announced 10% tariffs on $200 billion in Chinese goods. There was no equilateral retaliation China could muster after the late Tuesday, July 10 announcement. Instead, China announced it would hit back in other ways - probably by selling U.S. Treasuries, which would flood the medium- and long-term bond market causing bond prices to fall and yields to rise.
Regarding the latter, Trump's victory will come at a cost. Bolstered by his success with China, Trump will continue to pursue his trade normalization agenda with other trade partners. Although trade is fairly balanced with the U.K., the European Union had a $173.58 billion trade advantage last year on a $839 billion trade. Not only that, but the E.U. has made it a habit to go after American tech giants it cannot compete with. Think Qualcomm in 2018, Google in 2017, Facebook in 2017, Apple in 2016, and Microsoft in 2013. Japan is on the same boat. Our deficit with Japan averaged -$68.59 billion from 2014-2017 and stood last year at -$68.88 billion on a $204 billion trade. Although government regulations have eased under Prime Minister Abe, Japan has a culture of impeding foreign investment, particularly in the financial sector. Moreover, they have high tariffs on dairy (up to 40%) and meat (38.5% on beef) products, which account for $6.1 billion of U.S. exports to the country. Trump has made it clear they are also in play and they have fired salvos in return.
Given the posturing by all parties involved, tariffs will be higher going forward than they were before. This will raise the price of U.S. goods abroad, making them less competitive. This will, in turn, impact earnings for our larger, international firms. Our stock market may be flirting with highs right now, but I believe this will be the catalyst to the market downturn as Investors, looking ahead, bid down these stocks. Moreover, tariffs on imports will inevitably lead to inflation. We are already at the Fed's 2% comfort level so any visibility on higher inflation will incite the Fed to head it off by hiking fed funds rates beyond their current path. Their incentive to do so will be bolstered if China retaliates with a Treasury selling program, as higher 10-year Treasury rates relieve the Fed of yield curve inversion worries.
A stock market downturn will reverse the wealth effect we have been seeing recently on our economy and combined with export losses, this undoubtedly will lead to job losses and higher unemployment. On top of all that, the stealth discretionary recession we have been experiencing, will make itself clearly evident as U.S. peak spender populations continue to decline all the way until 2023. This is not an incident unique to the U.S. World population growth increased from 1946 to 1968, peaking at 2.09% per year that year, coinciding with the bulk of our Baby Boomer bulge. Since then it has been steadily decreasing until it reached 1.09% at the beginning of this year. Peak spenders are those 46-50 years old and if we take 1968 as the mid-point of their population zenith, they topped out in 2016. That is a main reason populous nations, like China, have been concerned with slowing consumerism the past couple of years. The upshot is we will see a global drop in discretionary spending for at least the next five years. This will result in an accelerated global economic downturn for the next five years and plummeting global stock markets for the next few years.
I am an investor, two decades plus student of the market, professor, and author of "And Then the Tempest - The Imminent Financial Meltdown is Real and What to do About it." I was the founder and chairman of the Idaho State University Budget Committee in 2007. As such, I warned the university of the impending recession and real estate crisis and helped steer finances during those tumultuous years. Today, I warn folks of a coming economic storm, indeed, it's already knocking at the door and could prove more catastrophic than the Financial Crisis. Check out my website, http://www.megabearmarket.com, and posts at http://www.stockopedia.com to find out more.
By Karl De Jesus
Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts
More Jobs Added, But Unemployment Goes Up? Welcome to Our New Reality
The U.S. economy added 213,000 jobs in June, more than the 195,000 expected. Job numbers for May were revised up to 244,000 from 223,00. How is it then that unemployment jumped from 3.8% to 4.0%?
Welcome to the new reality where job gains are undone by an increase in labor force participation. It stood at 62.7% in May and rose to 62.9% in June. That 0.2% increase amounts to 601,000 folks who decided job prospects had improved enough to make it worthwhile.
What is worrisome is that, although we are close to the average labor force participation rate, it has averaged 62.99% since data compilation began in 1950, levels were much higher until recently. Throughout the 90's and up to 2002, the average was closer to 67% and only dipped slightly, to 66%, with the advent of the Great Recession. Since then, however, labor participation steadily dwindled until plateauing below 63% since 2014. If labor participation was ever to normalize, i.e. get back to pre-Financial Crisis levels, it would mean a jump of 9.6 to 12.6 million new entrants into the job market. At the current job creation rate it would take 4.5 to 6.0 years to assimilate those workers with unemployment rates jumping to 7% in the interim.
So, maybe the job picture is not as rosy as it is currently being painted. Certainly, the wages side of the equation is not that alluring to prospective entrants. Hourly wages only rose 0.2% from the prior month and 2.7% over the year. They rose 0.3% and 0.15% in May and April, respectively, over the previous month and 2.7% and 2.4% over the previous year. If labor markets were tight, as many pundits claim, wage pressures should be much higher. Back in March 2000, for example, when labor participation was around 67% and the unemployment rate stood at 4.1%, average hourly earnings rose 3.6% on a year to year basis. Likewise, in 2008, when the labor participation rate was 66% and unemployment was 4.9%, average hourly earnings rose 3.7%.
While not gangbuster wage growth numbers, however, they should allay the Fed's fears that wage pressures will lead to inflation growth above 2% anytime soon. Nevertheless, the "real" unemployment numbers should give Fed members pause. Maybe the job market and the economy are not as healthy as they surmise and perhaps caution is merited as they consider further rate increases. Instead, the June meeting minutes indicate the Fed considers conditions robust enough to remove accommodative language in their policy statement and that they should continue undaunted in raising the fed funds rate above the neutral level by next year.
About the only concern the Fed had was the flattening of the yield curve. Historically this is a harbinger for recessions, which led to a discussion regarding a recession lurking around the corner and global trade tensions as a potential cause.
Personally, I feel there is some stealthy, nefarious force behind those labor participation and wage numbers. My suspicion is that the demographic forces I have previously written about are at work here. And we should thread carefully on the economy's brake pedal until we can be certain of those forces.
I am an investor, two decades plus student of the market, professor, and author of "And Then the Tempest - The Imminent Financial Meltdown is Real and What to do About it." I was the founder and chairman of the Idaho State University Budget Committee in 2007. As such, I warned the university of the impending recession and real estate crisis and helped steer finances during those tumultuous years. Today, I warn folks of a coming economic storm, indeed, it's already knocking at the door and could prove more catastrophic than the Financial Crisis. Check out my website, http://www.megabearmarket.com, and posts at http://www.stockopedia.com to find out more.
By Karl De Jesus
Welcome to the new reality where job gains are undone by an increase in labor force participation. It stood at 62.7% in May and rose to 62.9% in June. That 0.2% increase amounts to 601,000 folks who decided job prospects had improved enough to make it worthwhile.
What is worrisome is that, although we are close to the average labor force participation rate, it has averaged 62.99% since data compilation began in 1950, levels were much higher until recently. Throughout the 90's and up to 2002, the average was closer to 67% and only dipped slightly, to 66%, with the advent of the Great Recession. Since then, however, labor participation steadily dwindled until plateauing below 63% since 2014. If labor participation was ever to normalize, i.e. get back to pre-Financial Crisis levels, it would mean a jump of 9.6 to 12.6 million new entrants into the job market. At the current job creation rate it would take 4.5 to 6.0 years to assimilate those workers with unemployment rates jumping to 7% in the interim.
So, maybe the job picture is not as rosy as it is currently being painted. Certainly, the wages side of the equation is not that alluring to prospective entrants. Hourly wages only rose 0.2% from the prior month and 2.7% over the year. They rose 0.3% and 0.15% in May and April, respectively, over the previous month and 2.7% and 2.4% over the previous year. If labor markets were tight, as many pundits claim, wage pressures should be much higher. Back in March 2000, for example, when labor participation was around 67% and the unemployment rate stood at 4.1%, average hourly earnings rose 3.6% on a year to year basis. Likewise, in 2008, when the labor participation rate was 66% and unemployment was 4.9%, average hourly earnings rose 3.7%.
While not gangbuster wage growth numbers, however, they should allay the Fed's fears that wage pressures will lead to inflation growth above 2% anytime soon. Nevertheless, the "real" unemployment numbers should give Fed members pause. Maybe the job market and the economy are not as healthy as they surmise and perhaps caution is merited as they consider further rate increases. Instead, the June meeting minutes indicate the Fed considers conditions robust enough to remove accommodative language in their policy statement and that they should continue undaunted in raising the fed funds rate above the neutral level by next year.
About the only concern the Fed had was the flattening of the yield curve. Historically this is a harbinger for recessions, which led to a discussion regarding a recession lurking around the corner and global trade tensions as a potential cause.
Personally, I feel there is some stealthy, nefarious force behind those labor participation and wage numbers. My suspicion is that the demographic forces I have previously written about are at work here. And we should thread carefully on the economy's brake pedal until we can be certain of those forces.
I am an investor, two decades plus student of the market, professor, and author of "And Then the Tempest - The Imminent Financial Meltdown is Real and What to do About it." I was the founder and chairman of the Idaho State University Budget Committee in 2007. As such, I warned the university of the impending recession and real estate crisis and helped steer finances during those tumultuous years. Today, I warn folks of a coming economic storm, indeed, it's already knocking at the door and could prove more catastrophic than the Financial Crisis. Check out my website, http://www.megabearmarket.com, and posts at http://www.stockopedia.com to find out more.
By Karl De Jesus
Has The Internet Killed Our High Streets?
In 1993 I visited County Hall in Durham with my family to take part in a science exhibition. I have always been interested in computing and remember being fascinated by an enthusiastic postgraduate student who demonstrated that he could connect his computer to a machine in Moscow and download data. How right he was. In the future, I was told, thousands if not millions of computers would be connected on a worldwide network and would exchange data freely across the world. We were informed that everyday tasks like banking, shopping and communication could and would be transacted through your home computer. It all seemed a bit far-fetched as only wealthy families even owned a computer at the time.
Fast forward to just after the millennium and these predictions proved to be a conservative estimate of how computing technology developed. The world had been permanently changed with infinite opportunities being made possible by the Internet. Royal Mail panicked over the use of email and Napster revolutionised music forever. Microsoft had seized the moment and tapped into the insatiable demand for home computers and families were quickly buying computers to get hooked up to the internet. Everyone wanted a piece of the action and it was only a short time until the multi-computer family became the norm rather than the exception. The revolution continued.
Moving to the present and the pace of change on the Internet shows no sign of abating. Facebook, YouTube and Twitter are now such a fundamental part of online culture that we can scarcely imagine a world without them. All television adverts now come with details of the Facebook page, complete with blue 'F' logo and website details. Not to do so would look silly. Internet users want more interactive ways of communicating and interacting online and we are at the precipice of the next major development online with the development of 24/7 mobile computing. Either through a tablet computer, mobile phone or even the new product Google Glass the internet can be with us wherever we go.
The world of ecommerce drove development online and it is this globalisation of business that is a contributing factor to what I believe is a permanent change in the composition of our high streets. Customers can now shop from home for everything they need, accessing the full market to find the best deal. Those who do venture into the high street can download a free app for their iPhone which scans the bar code of a product and immediately offers price comparisons to the deals available for the same product online. As the use of such technology widens businesses must face the reality that there competitors are potentially every seller of their product in the world, rather than just their town or region. Margins that were already tight, particularly in these tough economic times customers want the best value for money.
One of the many benefits of the Internet is that it empowers the customer to find the best deal. The mass supply has seen prices move towards a wholesale prices than retail prices we find in shops. The cartel of the high street has been broken as we have access to almost infinite choices. A business in a small rural town now has to ensure they are competitive compared to their entire industry niche. Some would say that this ensures ethical pricing, others would say it places small to medium sized businesses (SME's) in a very difficult position to survive in today's business environment. When I was a child I remember my mother was keen on knitting clothes. In our small rural village of Lanchester in County Durham, there was a wool shop which was well-used and valued by the local residents. This business closed many years ago through retirement of the owner, however, I doubt that such a business would be viable on our high street today.
Bricks and mortar businesses must still pay wages, insurance, utilities and the biggest drain of all for an offline business, commercial unit rent and business rates whilst the online enterprise exists with no overheads which allow their pricing to reflect their reduced costs. Shop frontage does remain desirable and gives you footfall to turn into customers on the high street but it comes at a price. There is a strong argument that investing in a branded website, integrated ecommerce facilities and a search engine optimisation program is more useful in today's business world, but spare a thought for the empty shop units that are becoming a relic to a bygone era where people browsed the high street rather than Amazon or Google to shop.
In your own town you will notice there are increasing numbers of empty shop units which show the battered remains of a once proud business. Empty shop units constantly appear and at present they can sit empty for years. I always take note of the empty unit, complete with broken shop sign and the "Come to the Circus" poster that seems almost obligatory and I am reminded of a once ambitious business that the owner invested many hours, months and emotion into growing. Unfortunately many businesses fail and I do not envy the ambitious and proud business owner having to tell a loyal worker who earns a small wage in the hope of a better tomorrow that unfortunately the realities of the balance sheet means the business has failed. Small to medium sized enterprises could be the biggest casualty of the Internet. Now look at your large buying history on Amazon or eBay, do you feel guilty yet?
Business owners do not expect any sympathy and I would get short shrift if I attempted to lament their plight with colleagues of mine who are self-employed. Lord Sugar would be the first to say that business owners must adapt to the world around them rather than lament that in different conditions they would succeed. However, I would argue that having a healthy number of SME's remaining viable businesses on our high street is vital to resisting the financial redistribution to the wealthiest in society. If SME's leave the high street we get more empty units and only the largest companies offer the goods we can buy. We never see that money again. For business owners there is the incentive of social mobility for the upwardly mobile wealth creators. Unfortunately a by-product of the Internet and the tough economic times we are enduring is that small businesses like shoe shops, sandwich shops, family butchers, wool shops, electrical shops find it almost impossible to exist in today's market, even if they utilise online sales to help their revenue.
Taking advantage of the void are large companies who have began to set up business on our high streets, offering loss leaders to compete for customers. This retail behaviour prices out smaller businesses that cannot compete. In tough economic times, customers are forced to buy food and important life items as cheaply as they can. Years ago smaller retailers like Spar, Presto, and Co-op were the high street food outlets but now large companies like Tesco are a common sight with their Extra stores which can be no larger than your corner shop or newsagents. This increases the amount of revenue generated by the huge retailers like Tesco, hitting the black hole of their bank accounts and only paid in dividends to already very successful and wealthy directors.
The ongoing evolution of our high street presents different and equally worrying problems for society, namely the increase in the number of bookmakers and cash converter businesses that have popped up everywhere in recent years. Unfortunately whether we like it or not these industries are massive growth industries, but they offer society an easy route to very bad decisions. Within a two minute walk from my place of work, there are two cash converter businesses, four bookmakers and a product rental outlet that offers goods on a rental basis targeted at capturing benefit claimants who cannot buy the goods outright. Reinforcing a previous point I made, even the bookies in the town used to be owned locally, but they were bought by a national brand who knows that it is money in the bank.
Whatever our feelings towards these companies if they were not there then we would have empty shop units. I'd rather have the shops filled by someone, just not by businesses that either give people a bad deal or sell opportunities that are not really opportunities. It is tough enough for the consumer as it is. Larger retailers are doing very well from the changing face of our high street and our government must address the farce that is corporation tax and ensure that these companies pay the correct amount of tax. Labour can make great strides to economic credibility by demonstrating and following through on a tough line to combat tax evasion. Voters will remain disillusioned as they are continue to pay lots of money for petrol, food and even bedrooms whilst the wealthiest companies manage to evade paying anything with the political system apparently complicit in this evasion, whilst talking a tough game. The current system is not fit for purpose and needs urgent attention and the HMRC, albeit overseen by government, must share the blame for this debacle.
This article should not be read as a technophobe rant on the Internet. I would happily join whatever petition or campaign you liked if there was an attempt to save the high street by taking my Internet away. But I will pledge to try and spend at least a little of my money in local businesses rather than falling for the seductive comfort of online shopping and home delivery. I hope you will do the same. Business people don't need your sympathy, you should only buy from good companies that offer a good service and competitive prices. However, keep in mind that great companies exist that might not necessary have the modern flash websites and one-click purchasing options, they might have a till and, god forbid, shelves and items. The development of mobile technologies may break the shackles of the consumer to the home computer allowing even the most hardened Internet addict to leave their home and explore the many businesses that are worthy of your consumer support and at least a cursory glance into their shop.
They will be pleased to see you.
Malcolm Clarke
Fast forward to just after the millennium and these predictions proved to be a conservative estimate of how computing technology developed. The world had been permanently changed with infinite opportunities being made possible by the Internet. Royal Mail panicked over the use of email and Napster revolutionised music forever. Microsoft had seized the moment and tapped into the insatiable demand for home computers and families were quickly buying computers to get hooked up to the internet. Everyone wanted a piece of the action and it was only a short time until the multi-computer family became the norm rather than the exception. The revolution continued.
Moving to the present and the pace of change on the Internet shows no sign of abating. Facebook, YouTube and Twitter are now such a fundamental part of online culture that we can scarcely imagine a world without them. All television adverts now come with details of the Facebook page, complete with blue 'F' logo and website details. Not to do so would look silly. Internet users want more interactive ways of communicating and interacting online and we are at the precipice of the next major development online with the development of 24/7 mobile computing. Either through a tablet computer, mobile phone or even the new product Google Glass the internet can be with us wherever we go.
The world of ecommerce drove development online and it is this globalisation of business that is a contributing factor to what I believe is a permanent change in the composition of our high streets. Customers can now shop from home for everything they need, accessing the full market to find the best deal. Those who do venture into the high street can download a free app for their iPhone which scans the bar code of a product and immediately offers price comparisons to the deals available for the same product online. As the use of such technology widens businesses must face the reality that there competitors are potentially every seller of their product in the world, rather than just their town or region. Margins that were already tight, particularly in these tough economic times customers want the best value for money.
One of the many benefits of the Internet is that it empowers the customer to find the best deal. The mass supply has seen prices move towards a wholesale prices than retail prices we find in shops. The cartel of the high street has been broken as we have access to almost infinite choices. A business in a small rural town now has to ensure they are competitive compared to their entire industry niche. Some would say that this ensures ethical pricing, others would say it places small to medium sized businesses (SME's) in a very difficult position to survive in today's business environment. When I was a child I remember my mother was keen on knitting clothes. In our small rural village of Lanchester in County Durham, there was a wool shop which was well-used and valued by the local residents. This business closed many years ago through retirement of the owner, however, I doubt that such a business would be viable on our high street today.
Bricks and mortar businesses must still pay wages, insurance, utilities and the biggest drain of all for an offline business, commercial unit rent and business rates whilst the online enterprise exists with no overheads which allow their pricing to reflect their reduced costs. Shop frontage does remain desirable and gives you footfall to turn into customers on the high street but it comes at a price. There is a strong argument that investing in a branded website, integrated ecommerce facilities and a search engine optimisation program is more useful in today's business world, but spare a thought for the empty shop units that are becoming a relic to a bygone era where people browsed the high street rather than Amazon or Google to shop.
In your own town you will notice there are increasing numbers of empty shop units which show the battered remains of a once proud business. Empty shop units constantly appear and at present they can sit empty for years. I always take note of the empty unit, complete with broken shop sign and the "Come to the Circus" poster that seems almost obligatory and I am reminded of a once ambitious business that the owner invested many hours, months and emotion into growing. Unfortunately many businesses fail and I do not envy the ambitious and proud business owner having to tell a loyal worker who earns a small wage in the hope of a better tomorrow that unfortunately the realities of the balance sheet means the business has failed. Small to medium sized enterprises could be the biggest casualty of the Internet. Now look at your large buying history on Amazon or eBay, do you feel guilty yet?
Business owners do not expect any sympathy and I would get short shrift if I attempted to lament their plight with colleagues of mine who are self-employed. Lord Sugar would be the first to say that business owners must adapt to the world around them rather than lament that in different conditions they would succeed. However, I would argue that having a healthy number of SME's remaining viable businesses on our high street is vital to resisting the financial redistribution to the wealthiest in society. If SME's leave the high street we get more empty units and only the largest companies offer the goods we can buy. We never see that money again. For business owners there is the incentive of social mobility for the upwardly mobile wealth creators. Unfortunately a by-product of the Internet and the tough economic times we are enduring is that small businesses like shoe shops, sandwich shops, family butchers, wool shops, electrical shops find it almost impossible to exist in today's market, even if they utilise online sales to help their revenue.
Taking advantage of the void are large companies who have began to set up business on our high streets, offering loss leaders to compete for customers. This retail behaviour prices out smaller businesses that cannot compete. In tough economic times, customers are forced to buy food and important life items as cheaply as they can. Years ago smaller retailers like Spar, Presto, and Co-op were the high street food outlets but now large companies like Tesco are a common sight with their Extra stores which can be no larger than your corner shop or newsagents. This increases the amount of revenue generated by the huge retailers like Tesco, hitting the black hole of their bank accounts and only paid in dividends to already very successful and wealthy directors.
The ongoing evolution of our high street presents different and equally worrying problems for society, namely the increase in the number of bookmakers and cash converter businesses that have popped up everywhere in recent years. Unfortunately whether we like it or not these industries are massive growth industries, but they offer society an easy route to very bad decisions. Within a two minute walk from my place of work, there are two cash converter businesses, four bookmakers and a product rental outlet that offers goods on a rental basis targeted at capturing benefit claimants who cannot buy the goods outright. Reinforcing a previous point I made, even the bookies in the town used to be owned locally, but they were bought by a national brand who knows that it is money in the bank.
Whatever our feelings towards these companies if they were not there then we would have empty shop units. I'd rather have the shops filled by someone, just not by businesses that either give people a bad deal or sell opportunities that are not really opportunities. It is tough enough for the consumer as it is. Larger retailers are doing very well from the changing face of our high street and our government must address the farce that is corporation tax and ensure that these companies pay the correct amount of tax. Labour can make great strides to economic credibility by demonstrating and following through on a tough line to combat tax evasion. Voters will remain disillusioned as they are continue to pay lots of money for petrol, food and even bedrooms whilst the wealthiest companies manage to evade paying anything with the political system apparently complicit in this evasion, whilst talking a tough game. The current system is not fit for purpose and needs urgent attention and the HMRC, albeit overseen by government, must share the blame for this debacle.
This article should not be read as a technophobe rant on the Internet. I would happily join whatever petition or campaign you liked if there was an attempt to save the high street by taking my Internet away. But I will pledge to try and spend at least a little of my money in local businesses rather than falling for the seductive comfort of online shopping and home delivery. I hope you will do the same. Business people don't need your sympathy, you should only buy from good companies that offer a good service and competitive prices. However, keep in mind that great companies exist that might not necessary have the modern flash websites and one-click purchasing options, they might have a till and, god forbid, shelves and items. The development of mobile technologies may break the shackles of the consumer to the home computer allowing even the most hardened Internet addict to leave their home and explore the many businesses that are worthy of your consumer support and at least a cursory glance into their shop.
They will be pleased to see you.
Malcolm Clarke
Slow Economy, Slow Job Gains
Job growth will probably rebound from April's meager gain, but not by much. Employment will track the economy's tepid growth rate.
April's ho-hum job figures reflect an economy in low gear as well as attempts by companies to preserve profit margins by limiting new hiring. But the less-than-expected gain of 88,000 jobs -- the lowest monthly tally in about two and a half years -- doesn't mean the economy is heading into a tailspin. In fact, more than half a million jobs were added in the first four months of this year -- not as strong a pace as last year, but by no means indicative of a slump.
Some of the slowdown in Friday's Labor Department report is a bit deceptive. It arises from complex seasonal adjustment estimates each spring relating to the construction sector, which officially shed 11,000 jobs in April. In effect, these adjustments probably made the decline in construction seem worse than it actually was. The employment report also featured a surprising loss of 26,000 jobs in the retail sector, which is likely to pick up again this month as stores start to sell summer merchandise.
There is also good reason to believe that manufacturing, which lost 19,000 jobs last month, could soon post a better performance. March factory orders -- a harbinger of the future pace of business -- posted a solid gain, while a recent survey of purchasing managers in manufacturing showed them to be upbeat about the orders outlook and about future hiring.
That said, don't expect a significant upswing in job creation. Although the economy is likely to steer clear of a recession, the pace of economic growth will remain tepid -- in the 2% to 2.5% range this year. For all of 2007, we expect a total of 1.3 million jobs to be added on a net basis, or an average of about 110,000 a month.
The job report includes some good news on the inflation front: Growth in average hourly earnings slowed a bit, rising a relatively modest 0.2% in April and 3.7% for the past 12 months. At the same time, the unemployment rate rose to 4.5% from 4.4% a month ago.
The Federal Reserve is counting on slower economic growth to loosen up the labor market a bit and hence reduce inflation pressures. This would allow the Fed to avoid raising interest rates and exacerbating the economic slowdown.
We think job trends are on the Fed's preferred path. The unemployment rate is likely to continue to creep higher, reaching about 5% by year end. However, the Fed probably won't feel comfortable about cutting rates until the central bank sees solid evidence that inflation is on a sustainable downward path. So we stick with our outlook for steady rates through this year.
source
April's ho-hum job figures reflect an economy in low gear as well as attempts by companies to preserve profit margins by limiting new hiring. But the less-than-expected gain of 88,000 jobs -- the lowest monthly tally in about two and a half years -- doesn't mean the economy is heading into a tailspin. In fact, more than half a million jobs were added in the first four months of this year -- not as strong a pace as last year, but by no means indicative of a slump.
Some of the slowdown in Friday's Labor Department report is a bit deceptive. It arises from complex seasonal adjustment estimates each spring relating to the construction sector, which officially shed 11,000 jobs in April. In effect, these adjustments probably made the decline in construction seem worse than it actually was. The employment report also featured a surprising loss of 26,000 jobs in the retail sector, which is likely to pick up again this month as stores start to sell summer merchandise.
There is also good reason to believe that manufacturing, which lost 19,000 jobs last month, could soon post a better performance. March factory orders -- a harbinger of the future pace of business -- posted a solid gain, while a recent survey of purchasing managers in manufacturing showed them to be upbeat about the orders outlook and about future hiring.
That said, don't expect a significant upswing in job creation. Although the economy is likely to steer clear of a recession, the pace of economic growth will remain tepid -- in the 2% to 2.5% range this year. For all of 2007, we expect a total of 1.3 million jobs to be added on a net basis, or an average of about 110,000 a month.
The job report includes some good news on the inflation front: Growth in average hourly earnings slowed a bit, rising a relatively modest 0.2% in April and 3.7% for the past 12 months. At the same time, the unemployment rate rose to 4.5% from 4.4% a month ago.
The Federal Reserve is counting on slower economic growth to loosen up the labor market a bit and hence reduce inflation pressures. This would allow the Fed to avoid raising interest rates and exacerbating the economic slowdown.
We think job trends are on the Fed's preferred path. The unemployment rate is likely to continue to creep higher, reaching about 5% by year end. However, the Fed probably won't feel comfortable about cutting rates until the central bank sees solid evidence that inflation is on a sustainable downward path. So we stick with our outlook for steady rates through this year.
source
Low Inflation in the UK
Since the Bank of England was given independence in 1997 UK inflation has been close to the government’s target of 2% +/-1. This is a remarkable improvement for the UK economy. Previously the UK economy suffered from consistently high inflation. Eg in 1979 inflation reached 25%. In 1992 inflation reached 11%. Reasons for low inflation are a matter of debate. The chancellor Gordon Brown likes to take credit for giving the Bank of England independence in 1992. However although this partly explains low inflation, it is only a small % of the reason.
Reasons for Low Inflation in the UK
1. Economic growth has been more stable and predictable. The MPC have avoided a boom and Bust economic cycle. At the first sign of inflationary pressures increasing they have increased interest rates to reduce inflation before it occurs (policy is known as preemptive monetary policy.) This has avoided a repeat of the late 80s inflationary boom.
2. Inflation expectations are lower. Partly as a result of the MPC’s greater credibility. People expect inflation to be low, therefore wage demands have been correspondingly lower. This has made it easier to keep inflation low.
3. The process of globalisation has helped to reduce costs and increase competitiveness in global markets. The UK has benefited from falling prices of manufactured goods that have been made in countries like China and Korea.
4. Improvements in technology. The internet and micro chip computers have helped to increase efficiency and lower costs.
5. Increase in the labour supply. Increased immigration has created a new supply of cheap labour which has helped keep wage pressures low.
6. Appreciation of £. This has helped reduce inflation, because imports are cheaper and quantity of exports lower
However inflation may increase in the future. The Governor of the Bank of England recently said there is no reason why the past period of stability and low real interest rates will continue. Several reasons may cause inflation to rise in the future including:
Why Inflation May Rise
1. Economic growth in China and India is causing high demand for commodities and therefore prices are rising. This will feed through into cost push inflation.
2. The UK has a large current account deficit. To reduce this deficit it will be necessary to have a devaluation in the value of £, at some point.
3. The supply of labour is unlikely to increase by too much in the future. Therefore wage inflation may become a problem as the labour market nears full employment.
4. UK House prices continue to rise. This creates additional consumer wealth and therefore increases consumer spending.
The effect of this is that in the future interest rates may have to rise in order to keep inflation low. This will have the effect of keeping mortgage payments high.
Is Turkey Economically Ready to Join EU?
Turkey’s candidature for the European Union is maybe the most controversial and consequently well-analyzed of any in the history of the organization. The topics of the debate are familiar: human rights abuses, overly uppermost military, and the impact of Islam on the one hand, contrary to strategic partner, valid candidate, and the advantages of including a Muslim democracy on the other. The interaction among these factors will define Turkey’s progress toward membership over the next several years.
Notwithstanding, in theory the EU defines membership eligibility rested on a set of impartial criteria that do not take diplomatic issues into account. As Turkey has already been accepted as a part of Europe, it should be practicable to evaluate its performance as compared with these criteria and to the status of other EU candidates, past and actual, at major points in the accession process.
The economic aspects of the entry of Turkey to the European Union are of great significance and need special attention. The given paper aims to provide a short overview of Turkey’s economy and to highlight the major problems concerning GDP, agriculture, manufacturing, inflation and currency issues.
Turkey is regarded to have a less middle-income economy. Its per capita is correspondingly small contrasted to the EU. The GDP per capita in conditions of Purchasing Power (PPS) was in 2003 at 28.5% of the EU-25 medium, corresponding to the level of Bulgaria and Romania. Valued in current prices in 2003, the GDP of Turkey was comparable to about 2% of the GDP of EU-25 or just half of the ten Member States.
Turkey is distinguished by large provincial disparities which widely follow a West-East pattern. The richest areas are concentrated in the western part of the country while the poorest ones are at the eastern frontier. The richest province Kocaeli, an essential manufacturing location, has a GDP per capita of more than 90% above the national average (46% of the EU-25 average). At the other edge of the gradation, the poorest regions Agri and Van have only around one third of the national GDP per capita (8% of the EU-25 average).
These profits disparities are displayed in the sectoral structure of the areas. The richer areas have significant shares of production and occupation in manufacturing and assistance whereas in most of the other territories agriculture is the most essential derivation of income and employment.
In the late decades some macroeconomic and commercial crises took place in the country, more recently in 1994, end-1999 and early-2001. They have caused to high volatility in aggregate financial activity and interfered with the overall step of growth. Since 2001, more advances have been made in stabilizing the economy and addressing the main reasons of these crises in the last decades. This is especially visible in the resumed enlargement path and the sharply lessened inflation. Nevertheless, this stabilization process is not yet full and some imbalances, such as the broadening external shortage remain to be amended. Further accomplishment of structural reforms would not only help to escaping stabilization crisis, but also let Turkey to attain or even lift its growth potential.
Even though Turkey’s population is appropriately large, its GDP represents just over 2% of the EU-25 GDP. As a result, the favourable economic impacts of Turkey’s membership in the EU are likely to be disproportional, for instance small for the EU-25 as a whole and much bigger for Turkey. The results on the EU will very much depend on the manner the Turkish economy will be able to manage its arrangement for membership.
The admittance of Turkey would display economic defiance, and implicitly chances to all parties included. Overall, EU Member States’ economies would advance from the admittance of Turkey, albeit only minorly. An advance of growth in Turkey should present a positive influence to EU-25 exports
Turkey would advance considerably from its admittance to the EU. Admittance should boost Turkey’s development basically via enlarged trade, higher contribution due to higher FDI, inflows, and higher productivity development due to a change in the sectoral arrangement of output and the accomplishment of structural renovations in line with the more competitive EU internal market setting.
Agriculture is the basic significance to Turkey, both in social and economic conditions. About half of Turkey’s territory of some 79 million hectares is occupied with agriculture, which is hardly ever in line with the EU 27 average (48%). Turkish admittance would be therefore add about 39 million hectares to the EU’s agricultural territory. This would show 23% of the EU-25 agricultural area. In 2003 roughly one third of the labour force was occupied in agriculture, and in the same year the sector showed 12.2% of GDP.
The climatic and geographical conditions across the country allow a broad sphere of various farming activities, and Turkey is a main world producer of (in no especial order) cereals, cotton, tobacco, fruit and vegetables, nuts, sugar beet and sheep and goat meat. Roughly 50% of Turkey’s agricultural territory is given to arable crops (of which about 20% is fallow land and 20% irrigated), 25% to constant grasslands and pastures and 2.5% to constant crops (Cakmak E.H., 1998). There are important regional contrasts in production patterns.
The farm structure in Turkey demonstrates similarities with several of the new member countries and with Bulgaria and Romania. In relation to the 2001 census there are about 3 million agricultural investments in Turkey (contrasted to almost 13 million in the EU-25), most of which are family farms engaging family labour. This is down from about 4 million investments in 1991. Numbers for the average size of investments propose that investments are small by EU levels (6 hectares on midpoint contrasted to an EU-25 midpoint of 13 hectares). These figures are numbers of investments and medium size is however not in line with the whole territory. The reasons for this discrepancy are not comprehensible, but they may stem from the exclusion of collective or unused land or defects in the statistical terms.
Maintenance and semi-maintenance farming is an essential characteristic of Turkish agriculture, as is the case in certain areas of the current EU and in Bulgaria and Romania. These farms are typically marked by productivity being low and only a small part of production being marketed. They are hard to reach with usual market and price course, but are decisive for the income defense and life of the most of the country population in Turkey. Turkish admittance would add over 80 million supplemental consumers to the EU-25 total of 452 million, nevertheless with a per capita buying potency substantially power than the EU-25 average.
A compared to earlier acceding state Turkey is bigger, more inhabited and poorer. It is also more argued in market terms than most. The competition of its agriculture and agri-food forms is, in general, less on average than in the EU.
A correct assessment as to what degree the existent CAP system could manage with an accession by Turkey and its connection for financial reserves would need a deeper examination, at least as thorough as the one that made in the case of the new Member Countries.
source
Notwithstanding, in theory the EU defines membership eligibility rested on a set of impartial criteria that do not take diplomatic issues into account. As Turkey has already been accepted as a part of Europe, it should be practicable to evaluate its performance as compared with these criteria and to the status of other EU candidates, past and actual, at major points in the accession process.
The economic aspects of the entry of Turkey to the European Union are of great significance and need special attention. The given paper aims to provide a short overview of Turkey’s economy and to highlight the major problems concerning GDP, agriculture, manufacturing, inflation and currency issues.
Turkey is regarded to have a less middle-income economy. Its per capita is correspondingly small contrasted to the EU. The GDP per capita in conditions of Purchasing Power (PPS) was in 2003 at 28.5% of the EU-25 medium, corresponding to the level of Bulgaria and Romania. Valued in current prices in 2003, the GDP of Turkey was comparable to about 2% of the GDP of EU-25 or just half of the ten Member States.
Turkey is distinguished by large provincial disparities which widely follow a West-East pattern. The richest areas are concentrated in the western part of the country while the poorest ones are at the eastern frontier. The richest province Kocaeli, an essential manufacturing location, has a GDP per capita of more than 90% above the national average (46% of the EU-25 average). At the other edge of the gradation, the poorest regions Agri and Van have only around one third of the national GDP per capita (8% of the EU-25 average).
These profits disparities are displayed in the sectoral structure of the areas. The richer areas have significant shares of production and occupation in manufacturing and assistance whereas in most of the other territories agriculture is the most essential derivation of income and employment.
In the late decades some macroeconomic and commercial crises took place in the country, more recently in 1994, end-1999 and early-2001. They have caused to high volatility in aggregate financial activity and interfered with the overall step of growth. Since 2001, more advances have been made in stabilizing the economy and addressing the main reasons of these crises in the last decades. This is especially visible in the resumed enlargement path and the sharply lessened inflation. Nevertheless, this stabilization process is not yet full and some imbalances, such as the broadening external shortage remain to be amended. Further accomplishment of structural reforms would not only help to escaping stabilization crisis, but also let Turkey to attain or even lift its growth potential.
Even though Turkey’s population is appropriately large, its GDP represents just over 2% of the EU-25 GDP. As a result, the favourable economic impacts of Turkey’s membership in the EU are likely to be disproportional, for instance small for the EU-25 as a whole and much bigger for Turkey. The results on the EU will very much depend on the manner the Turkish economy will be able to manage its arrangement for membership.
The admittance of Turkey would display economic defiance, and implicitly chances to all parties included. Overall, EU Member States’ economies would advance from the admittance of Turkey, albeit only minorly. An advance of growth in Turkey should present a positive influence to EU-25 exports
Turkey would advance considerably from its admittance to the EU. Admittance should boost Turkey’s development basically via enlarged trade, higher contribution due to higher FDI, inflows, and higher productivity development due to a change in the sectoral arrangement of output and the accomplishment of structural renovations in line with the more competitive EU internal market setting.
Agriculture is the basic significance to Turkey, both in social and economic conditions. About half of Turkey’s territory of some 79 million hectares is occupied with agriculture, which is hardly ever in line with the EU 27 average (48%). Turkish admittance would be therefore add about 39 million hectares to the EU’s agricultural territory. This would show 23% of the EU-25 agricultural area. In 2003 roughly one third of the labour force was occupied in agriculture, and in the same year the sector showed 12.2% of GDP.
The climatic and geographical conditions across the country allow a broad sphere of various farming activities, and Turkey is a main world producer of (in no especial order) cereals, cotton, tobacco, fruit and vegetables, nuts, sugar beet and sheep and goat meat. Roughly 50% of Turkey’s agricultural territory is given to arable crops (of which about 20% is fallow land and 20% irrigated), 25% to constant grasslands and pastures and 2.5% to constant crops (Cakmak E.H., 1998). There are important regional contrasts in production patterns.
The farm structure in Turkey demonstrates similarities with several of the new member countries and with Bulgaria and Romania. In relation to the 2001 census there are about 3 million agricultural investments in Turkey (contrasted to almost 13 million in the EU-25), most of which are family farms engaging family labour. This is down from about 4 million investments in 1991. Numbers for the average size of investments propose that investments are small by EU levels (6 hectares on midpoint contrasted to an EU-25 midpoint of 13 hectares). These figures are numbers of investments and medium size is however not in line with the whole territory. The reasons for this discrepancy are not comprehensible, but they may stem from the exclusion of collective or unused land or defects in the statistical terms.
Maintenance and semi-maintenance farming is an essential characteristic of Turkish agriculture, as is the case in certain areas of the current EU and in Bulgaria and Romania. These farms are typically marked by productivity being low and only a small part of production being marketed. They are hard to reach with usual market and price course, but are decisive for the income defense and life of the most of the country population in Turkey. Turkish admittance would add over 80 million supplemental consumers to the EU-25 total of 452 million, nevertheless with a per capita buying potency substantially power than the EU-25 average.
A compared to earlier acceding state Turkey is bigger, more inhabited and poorer. It is also more argued in market terms than most. The competition of its agriculture and agri-food forms is, in general, less on average than in the EU.
A correct assessment as to what degree the existent CAP system could manage with an accession by Turkey and its connection for financial reserves would need a deeper examination, at least as thorough as the one that made in the case of the new Member Countries.
source
The Real Economy
How many times have you seen negative headlines? They are the mantra we hear from the media virtually everyday. "High gas prices are expected to spark inflation and could drive this economy to a halt." "Consumers are doubting economic future." "The sky is falling." That last one was actually from Chicken Little, or Al Gore on the environment, or something like that. Any way, the news isn't good, but the economy keeps on chugging along at excellent levels.
The media may have an incentive for the economy to decline. According to most scholars who monitor journalists, the vast majority of those in media (approximately 80%) describe themselves as "liberal" or "very liberal." That percentage may be higher than the entire delegation to the Democratic National Convention from Massachusetts. If they keep saying it is bad long enough, and we believe it, people might vote their liberal friends to office. Stranger things have happened.
Also, when is the last time people bought a newspaper because of good news? "The Economy is Great" or "Everything is Fine" rarely catches a person's attention. Imagine the little kid with suspenders and cap running through the streets in an old black & white film with a newspaper, yelling "Extra, Extra, prosperity breaks out everywhere!" It should happen, but it rarely actually does, although we seem to celebrate the economy every day in the real world.
Speaking of the real world, the place most journalists don't appear to live in, but where I make a living, I find a very different economy.
I find more optimism about the future than any time in the last twenty years.
I find more employers hiring more employees than I have seen in years.
I am finding a record number of businesses expanding rather than laying people off.
In other words, I find a pretty solid economy. I prefer my economy and it seems more realistic than the one promoted by the media and I hope Americans don't drink the poisoned Kool-Aid the media is handing out. Let the media remain scared in an effort to sell newspapers or even change government. Let's you and I stay in the real world.
The inability of the media to stay in the real world has led to its massive decline. The heavily hierarchical media structure that drove information for decades (from the media down to the consumer) was overtaken by the surprising popularity of talk radio in the 80's and 90s (a forum where real people could express their views) and is being obliterated by the Internet which is now overwhelmingly being driven by the audience rather than the "media elite."
The next time you hear so-called "bad news" about the economy, take a positive step. Consider investing in something new, maybe contemplate the hiring of an employee, or see what you can do to add to this impressive economy noted for record growth. Let the journalists continue to live in their private little world, with its personal agendas, no matter how depressing it may be. But by all means, don't join them. Be real, like the economy.
The media may have an incentive for the economy to decline. According to most scholars who monitor journalists, the vast majority of those in media (approximately 80%) describe themselves as "liberal" or "very liberal." That percentage may be higher than the entire delegation to the Democratic National Convention from Massachusetts. If they keep saying it is bad long enough, and we believe it, people might vote their liberal friends to office. Stranger things have happened.
Also, when is the last time people bought a newspaper because of good news? "The Economy is Great" or "Everything is Fine" rarely catches a person's attention. Imagine the little kid with suspenders and cap running through the streets in an old black & white film with a newspaper, yelling "Extra, Extra, prosperity breaks out everywhere!" It should happen, but it rarely actually does, although we seem to celebrate the economy every day in the real world.
Speaking of the real world, the place most journalists don't appear to live in, but where I make a living, I find a very different economy.
I find more optimism about the future than any time in the last twenty years.
I find more employers hiring more employees than I have seen in years.
I am finding a record number of businesses expanding rather than laying people off.
In other words, I find a pretty solid economy. I prefer my economy and it seems more realistic than the one promoted by the media and I hope Americans don't drink the poisoned Kool-Aid the media is handing out. Let the media remain scared in an effort to sell newspapers or even change government. Let's you and I stay in the real world.
The inability of the media to stay in the real world has led to its massive decline. The heavily hierarchical media structure that drove information for decades (from the media down to the consumer) was overtaken by the surprising popularity of talk radio in the 80's and 90s (a forum where real people could express their views) and is being obliterated by the Internet which is now overwhelmingly being driven by the audience rather than the "media elite."
The next time you hear so-called "bad news" about the economy, take a positive step. Consider investing in something new, maybe contemplate the hiring of an employee, or see what you can do to add to this impressive economy noted for record growth. Let the journalists continue to live in their private little world, with its personal agendas, no matter how depressing it may be. But by all means, don't join them. Be real, like the economy.
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