Sunday, August 16, 2009

Wishful Thinking?

As I was driving home from church today, I saw some signs in storefront windows that I haven't seen in awhile.

They said "Now Hiring" or "Help Wanted."

Honest. That is what they said.

Now, I would like to believe that is an indication that things are starting to turn around. But I'm not sure. As Will Rogers used to say, "All I know is what I read in the papers."

Unfortunately, there are fewer of them than there used to be.

One newspaper that is still in business, the Washington Post, confirms, in today's editorial, that the economy is stabilizing, and that is good news.
"The U.S. economy appears to be stabilizing. It is estimated to have shrunk at an annual rate of just 1 percent in April through June — bad, but much better than the frightening 6.4 percent drop in the previous quarter. Unemployment remains too high at 9.4 percent, but job losses, too, are decelerating. Credit markets have begun to thaw. Home prices, though far from bouncing back, are no longer in free fall. Banks are once again raising private capital; there may be no need to expand the Treasury Department's $700 billion Troubled Assets Relief Program or for a big toxic assets buy–up program. So, exhale: There probably will not be a Great Depression II."

But, at the same time, the Post says some tough choices lie ahead. That's not entirely unexpected, but I'm sure most of us will breathe easier when talk of tough choices subsides.

Most of these choices are out of consumers' hands, really. But the choices consumers make about spending will play a significant role in the decisions that policymakers must make in the weeks and months ahead.

With so much economic uncertainty, consumers have been understandably reluctant to spend money for anything that wasn't absolutely necessary. But, before things really turn around, consumer spending has to provide more juice for the economy.

I'm not suggesting that consumers resume their devil–may–care, freewheeling spending ways. That certainly played a role in the economic meltdown. But, at the same time, consumers have to be more willing to part with their money than they have been.

I have often heard it said that moderation is the key in all things. Too much of anything is not good — and that goes for frugality as well as excessive spending.

I'm glad that most consumers who once spent beyond their means have learned from that experience. But hoarding their resources does nothing to help the economy.

I don't know how good the jobs that I saw advertised in storefront windows today really are. But when consumers loosen their grip on their money, such jobs will start to get better.

And that will be better for everyone.

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