Scott Adams of Dilbert fame has a question and some troubling observations:
How bad is the economy? My wife and I have been shopping for a vehicle this week, out of necessity. I didn't see another prospective buyer at the dealerships we visited. Not one. It was a hassle trying to test drive vehicles because the batteries were dead, and even the electronic keys didn't work because they hadn't been used for so long.
I think it will be years before many new homes are built in this country. Between the price uncertainty that will linger for years, and the ever-increasing regulatory hurdles, it's no longer rational for a builder to build. My wife and I started building our home before the economy cratered, so stopping the project wasn't an option. But the process has taken over four years to get approval, and even though we do expect to finish on budget (sort of), the market price of the home will be worth maybe half what it cost to build, assuming home values keep dropping. I can't recall seeing any other homes under construction anywhere in this area.
Restaurant business is down about 40% nationwide. That puts almost all of them underwater. No independent operator who has a lease will renew it when it comes up in the next three years or so, unless they can fund the operating losses from some other source. I expect about half of all the restaurants in California to close.
Adams owns a California restaurant, so he has credibility on the prospects for the industry.
Anyone who understands economics knows the bone-crushing and motivation-destroying effects of heavy government regulation and taxation. For that reason, it's hard to be optimistic about the next two years under Obama and Democrats in Congress. Liberals in power are currently going all-out in the direction of big government and central control. The resulting market distortions will be phenomenal. Fortunes will be made on the scraps and surpluses created by government miscalculation and waste. Larger fortunes will be lost under the leaden weight of taxation, regulation and spending.
The workers and producers of America will somehow have to continue to make a living in this difficult regulatory climate. But where and how? How bad is the economy, and what sectors will survive? If you have personal observations, leave a comment.
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