The Bottom of a Recession

I saw a Yahoo article today that stated that there are new signs that the recession may be near its bottom.

First, I don’t think that’s true. The key to a recovery lies with the housing market and the unemployment situation. The article cited an increase in factory orders. Upon closer inspection though, the increase was due to a spike in defense-related orders. Taking that out, there was actually a decline in factory orders. Defense procurement goes in fits and starts, so it’s not a cause for jubilee. They also identified a jump in home sales. That may be due to the recent tumble in the form of lower interest rates. But that too may just be a blip.

Second, even if the recession is near its bottom, this doesn’t imply a roaring comeback anytime soon. The fact is that until employment numbers change and people start hiring, there is no way we can see an upturn. a straight-line plateau is more likely than a rebound. It’s actually very simple. If people don’t have a job or good prospects for a job, they’re not going to spend or invest money.

Finally, the activities and incentives that motivate individuals and businesses to invest in things that will employ people are not present with our current president and congress. This is a terrible time to invest in a business, all things considered. They say that necessity is the mother of invention. It will have to be in this environment. People without jobs may have no other option but to try and start their own business. However, they will likely run up against the roadblock of a lack of savings to do so. Those who have savings and have the options of either keeping their current salaried job or starting a new business may find it more appealing to simply keep being a salaried employee. With a salary you have leisure and with this president’s tax policies you have a disincentive to make over $250K. Anyway, why work so hard and venture into an uncertain future when you’re country is becoming socialist?

Personally, I am at this time content with rounding up the wagons and enjoying what I have. So, I won’t be investing or employing anybody anytime soon... though it would be nice to take a risk and turn a vision into a successful enterprise. Maybe in the distant future, times will change and I’ll do so. There is a season for everything and this is just not one of those seasons.