We are in a Greecy spin

Clo rHene wE wERE all feeling good about ourselves for a change as business started to L)pick up. I myself attended a number of industry events and watched the economists' pointersgoinginanupwardsmovement,andlfeltgoodthat20ll lookstobetheyear.

In late April, we at The Merchant could hear the sighs of relief and sense broad grins on the phone as we called round. From your feedback, business in March and April was pretty good (well, at least comparatively). Then May came along to spoil it. I think that sums up the state of our economy. While technically the recession has been decreed over, it just doesn't feel like a recovery, and a consumer-driven economy such as ours will continue to be gloomy for some time.

It is such an uneven rebound that none of us can predict with any certainty where it will go. Many of us are frustrated that we seem to be in a U-shaped trough with no clear way how to get out. In all my business life in the U.S., I have never seen or felt the misery index to be so high. There are so many concerning open-ended issues around the world that I think will still greatly impact continued recovery here at home.

While writing this column in early June, the new jobs report came out and the markets tumbled immediately. The private sector is still in a non-hiring mode, and the picture for the immediate future may not be as rosy as spin doctors are saying. What the report also confirms is that, with about 15 million unemployed (more than double the number when the recession hit late 2007), government spending has done linle to improve the situation. When government spends $3 for every $2 that comes in, no budget can survive for long unless in the short term it creates the results that spending was intended for. From my vantage point, I cannot see a return.

I'm fed up with hearing about all the new energy jobs that are being created. Great (although I think that is even debatable), but what about the rest of industry? Like many, I am concerned about how much national debt has been created for so little return. You can spin it any which way you like, but current policies are just not cutting it and aren't going to get us back on the right track. And, when we have already wasted billions of dollars, we do not have the means to boost the economy with real tax cuts. For me as a business owner, what encouragement is there to invest, with credit impossible to get and the risk/reward ratio offering no incentive to do so. In fact, I have never seen a time less compelling to invest one's life savings in starting a business with so much uncertainty amid an anti-business climate.

So what has happened recently to hinder the recovery? Two things: the news of Greece's financial woes and on May 6 an already edgy stock market plunging 1,000 points in a matter of minutes followed by wild swings almost every day since-more down than up. So why is such a small country and market (sorry, to my Greek readers) playing havoc on the world economy? Many will say, so what if it goes bankrupt? Our economy has been doing okay and recovering slowly, but one tiny blip on the radar suddenly sends the whole worlds stock markets tn atizzy. The Euro drops at record pace and may continue to fall. Except for us tourists, a high dollar is not a good sign, as it will greatly impact exports and certainly encourage more imports. Of course, the real issue becomes who is next on the list? Spain? Portugal? Why not closer to home? Perhaps a U.S. state, such as my own, California? And what if the Chinese economy slows? We now more than ever are interminably linked globally. Since many European governments have done even less than we did to prop up the economy, the price they'll have to pay will impact their economies for years-perhaps decades-to come. Their citizens are in for a great shock because, as many of you saw on TV, Europeans are not prepared to give up the great social benefits that are unsustainable with an aging population. Cutting benefits will drive up unemployment and the spin down in the rest of the European economies will multiply. All these things will not help our business overseas and will have an imoact here at home.

These two issues have again turned the psyche of us consumers. While I sincerely hope I'm wrong, the mood of the country just does not feel right! With such uncertainty, you cannot but question yourself on every expenditure your family makes, and it is that uneasiness that drives up the level of the misery index, maybe fueling even more unemployment and certainly not encouraging people to move and buy new homes. And, yes, that is what imoacts us!

Alan Oakes, Publisher ajoakes@aol.com

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