Don’t believe the bad news

By Geert De Lombaerde Posted on October 29, 2009 at 9:30 am

Mark Perry says reports of discouraged and disenchanted consumers need to be discounted a good bit. The world looked just as bleak coming out of the last few recessions.

Consumer confidence remained low for two years following the end of the 1990-1991 recession and it took about three years for consumer confidence to rise to the pre-recession level. The circled pattern following the 2001 recession was similar.

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Tags: consumer spending, economic indicators, economy, recession, recovery  

Banks are hurting small biz’s growth potential

By Geert De Lombaerde Posted on October 12, 2009 at 9:38 am

Two related bits of info and analysis on the scope and repercussions of banks’ continued tightening of credit. The latest Fed numbers show outstanding commercial and industrial loans have dropped by some $250 billion in the past year. That has been most painful for small businesses, which can’t hit up the bond market to raise capital and create the jobs they have traditionally created coming out of a recession. Or in econospeak:

It’s not clear whether small businesses will continue to play their traditional role in hiring staff and helping to fuel an employment recovery. However, if [...] financial constraints are a major contributor to the disproportionately large employment contractions for very small firms, then the post-recession employment boost these firms typically provide may be less robust than in previous recoveries.

SEE ALSO: Via Milt Capps, a potential solution that would vacuum up leftover TARP cash.

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Tags: banking, employment, entrepreneurship, hiring, lending, recession, recovery, small business, small-business lending  

Where the jobs will have to come from

By Geert De Lombaerde Posted on October 5, 2009 at 9:52 am

Belmont professor Jeff Cornwall says entrepreneurs will — as they have before — be the driving force behind a true recovery, one that really makes a dent in our painfully high unemployment rate.

So all we need is government to do more, and we will be OK? Sorry, neither big government nor big corporations feeding at the government trough have ever brought us out of a recession and into a sustainable recovery.

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Tags: Belmont University, employment, entrepreneurship, government spending, government stimulus, Jeff Cornwall, recession, recovery, unemployment  

Four years till the good ol’ days

By Geert De Lombaerde Posted on September 25, 2009 at 12:22 am

MTSU’s David Penn says it will take the Middle Tennessee job market until 2014 to recreate all the jobs that have been lost during this recession. On the flip side, that creation should begin by the end of the year, Penn told Thursday’s Economic Outlook Conference.

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Tags: Business & Economic Research Center, David Penn, economic indicators, economy, employment, Middle Tennessee State University, MTSU, recession, recovery, unemployment  

The recovery needs small biz, but small biz needs help

By Geert De Lombaerde Posted on September 22, 2009 at 8:01 am

Forbes publisher Rich Karlgaard reminds us that small companies are the backbone of a normal economic recovery. But he adds that the Obama administration must pretty much throw overboard its economic platform for that to happen this time.

We now have reached the inflection point — e.g., the recession is ending, but the recovery is embryonic — where small businesses historically jump to the lead and pull the American economy along. It is precisely now when small businesses ought to be coming out of hibernation, leasing or buying cheap commercial property, and gearing up for growth.
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When the bi-coastal Obama administration thinks of small business, it undoubtedly dreams of promising start-ups churning out solar panels or turbine blades for windmills. Well, that’s fine, but America will never get back to 5% unemployment and defuse the commercial property bomb with windmills.

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Tags: Barack Obama, economic policy, entrepreneurship, recession, recovery, Rich Karlgaard, small business