The Real State of The Economy
On January 28, 2008 President George Bush graced us with his grand oratory, The State of The Union Address. This was his last. Although he gave us a bleak economic forecast Bush's speechwriters buttered up the rhetoric to sound more like a call to arms than the bitter truth. We are on a slippery slope and the only thing holding us out of the abyss is a strand of fiscal floss. The Cliff's Notes version of the address includes a focus on our dire economic straights. Are we going into recession? Well, if it feels hot, looks bright, and smells of smoke, chances are it is a fire.
Bush has decided to use the carrot approach to jumpstart the floundering economy versus giving us the cold hard tax stick. As a matter of fact our President swore not to raise taxes and furthermore if a bill is passed to his desk that even hints at a tax increase he will veto it. His tactic in restarting the economy is his much-hyped tax refund increases. This refund increase will allow people to go shop. It is a very kind gesture to China. Do you really think all the refundees will loyally go out with their bankrolls and blow their wad on strictly American made products? However, we do want to stay on China's good side.
To his home crowd, of republicans, the speech seemed to go over as well as Oprah's Favorite Things episodes. Bush got many standing ovations and even a strange whoopee sound which seemed to downright delight Dick Cheney. The camera kept panning the room to focus on Hillary and Obama. They both looked as if they had V.I.P. seating to the Armageddon.
With the national economy out of order, there is a slightly better prognosis for local economies. There are many variants in each regional economy that will determine if markets will sink or swim in this quasi-recession. At an Economic Trends Seminar in San Diego January 2008 the local versus national economy was brought into focus. A panel of experts from different industries included San Diego's own Mayor Jerry Sanders. A wrap-up of this event included some comforting trends, in San Diego, apart from the rest of the country's decay.
The current factors determining the economy are the government's fiscal, monetary, trade, and regulatory policies. Small businesses will fare far better than large corporations during this down period. One reason is because small businesses are inherently more nimble. Secondly, smaller companies are not as often tied up in borrowing money and accruing monumental debt. More specifically in San Diego all transactions are trending toward all that is urban. San Diego is not spreading out like Los Angeles, but instead going vertical. Real Estate expert Gary London, of The London Group Real Estate, appropriately calls this the "Manhattanization of San Diego".
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