(HOST) Commentator Timothy McQuiston is editor of Vermont Business Magazine, and, like most people, he’s been trying to make sense of current economic conditions. And, also like most people, he’s not having much success.
(MCQUISTON) Has the other shoe dropped yet? Or is the auto industry next in line for an enormous federal bailout? And at what point can we no longer just print money? If government is too important to be run by politicians, is business too important to be run by capitalists? Do you really trust anyone who says he has the answers to any of these questions?
One thing I can say is that there is a pause in the economic downturn. The stock market has stabilized somewhat. The Dow Jones Average has been hanging around 9,000 for days, albeit less than two-thirds of its value from a year ago.
There are plenty of ominous signs for the economy. But let’s look at a couple of relatively good signs.
One is that the Vermont banks are well capitalized and seem willing and able to lend money. That fact is a significant upgrade over the last financial-led recession in the early 1990s. Back then, banks struggled with their finances. While Vermont’s banks were in relatively sound condition, there were a couple of failures. Even worse, three bankers went to jail for malfeasance. Not good. Even here the banks were petrified for a couple of years. Not so now.
Another hopeful sign is impossible to quantify. There is a sense out there of "business as usual." At least we seem to be trying to convince ourselves of that, even as the list of layoffs mounts.
Some of this attitude is sheer force of will. Everyone knows what will happen if we give up: economic disaster. And, despite those layoffs, to a large extent the worst of the news is still at arm’s length.
The Wall Street meltdown was caused by something, but even the experts can’t agree on exactly what. The reasons are as unknowable as the financial jargon obfuscates. The wild ride the markets have been on indicates that investors don’t understand what’s happening or what will happen.
Meanwhile, the bulk of the housing foreclosures are in just four states: Florida, Arizona, Nevada and California. These are places far from here. Vermont’s foreclosures have increased 41 percent over last year but are still second lowest in the nation. In August, one in every 17,198 Vermont households received a foreclosure filing. The national rate was one in every 416 households. Nevada, the worst, was one in every 91.
Our unemployment rate just topped 5 percent for the first time in 15 years, and businesses have closed. But it’s still almost a point lower than the national average.
It seems that for many people this problem hasn’t hit home yet. Just put your head down and keep going. But stay alert, like an old man coaxing himself down an icy sidewalk. You can’t just stand there or you’ll freeze.
Perhaps that should be our mantra. Just keep going.