Hahahah. That was my response to South Park's 3/25/2009 episode entitled "Margaritaville." The show was a hilarious attempt to explain the current economic crisis. I thought Kyle impersonating Jesus was hilarious, along with the scene at the Treasury. They even made a great statement a few times when they referred to the economy as 'people' rather than a 'thing'. That's really all the economy is, people engaging in mutual beneficial transactions. I don't want to give too much away, just watch the episode. This video is part 1 from YouTube, which links to the second two parts at the end of the video. For better quality I'd recommend watching the video legally at www.southparkstudios.com.
Thursday, March 26, 2009
Wednesday, March 25, 2009
Hope for U.S. Economic Policy?
I'll be honest, the last blog of mine (which you should read before this one if you have time) rambled a bit. The economy is such a tough topic to tackle, especially in one sitting. I know I left out a lot of great points and probably included a few lesser ones. Still, it would only seem appropriate that the day after I post it, our economic policy received a big update. Yesterday, Treasury Secretary Geithner unveiled a new plan to have the government auction off 'toxic' banking assets to potential buyers. The stock market soared. Awesome! This would mark the first time off the top of my head that the stock market has reacted favorably to any economic policy announced by Geithner and perhaps even President Obama. If I was writing for a national newspaper instead of a personal blog with only a few readers, I might suggest that Geithner checked out my ramblings yesterday. Odds are likelier that I'll win the lottery tomorrow (I'd prefer the latter anyway). Why did the stock market go up? The plan acknowledges that the private banking sector is necessary to a recovery-the private sector is the answer, not the government!
A 'toxic' asset is basically an asset that is worth nothing. These are assets such as subprime mortgage packages that were purchased when they seemed valuable. When the economic crisis hit, nobody wanted to buy these assets so the 'market' value turned to '0'. In reality, the assets are worth something because they could eventually turn profitable, but if nobody wants to buy them right now the market value is nothing. Banks have had to write down these assets to 'nothing' because of government-instituted (by President Bush I believe) mark-to-market accounting regulations. Those write-offs led to huge artificial losses at banks across the country and translated into shaken investor confidence. The Treasury is hoping that by guaranteeing some portion of the value of these assets and auctioning them off, they can create some demand for the assets and improve bank balance sheets. While there are plenty of reservations with the plan, I think the idea is one of the best policy ideas put forth by this administration. I welcome President Obama's move to boost confidence in the banks in addition to recent comments by his administration expressing confidence in the economy.
Unfortunately, many banking executives will likely be reluctant to take part in this program because of recent government efforts to villify Wall Street. The administration realizes that they now need the help (and backing) of some of the same executives they have criticized. Still, President Obama realizes this and has expressed some disapproval over Congress's attempt to "tax away" bonuses paid to certain executives (i.e. AIG). Maybe he's starting to realize that an approach designed to aid the private sector is better than spending money like a teenage girl left in the Mall of America with a no-limit credit card.
Perhaps the no-limit credit card analogy is a bit overboard considering it's likely that the recent stimulus bill has some positive effect on economic recovery. Consider this though: the non-partisan Congressional Budget Office recently projected that under Obama's budget the federal deficit will reach over 80% of GDP by 2019. It's currently less than half that. Consider also that Europe has long passed spend-happy budgets to finance their welfare states. Europe has fairly unanimously (the European Central Bank agreed with this viewpoint today as well) rebuffed U.S. requests to pass a European stimulus package and insists that the government spending more money is not the answer. The current president of the E.U. today called the U.S. stimulus package "a way to hell." Interesting when you consider the continent this statement comes from.
Anyway, the stimulus package is already passed, and all we can do now is hope that we don't further test that no-limit credit card. I'm not going to hold my breath, but I do think some positive steps are now being taken. I may not be confident enough to put anything new into the market right now, but I'll go ahead and keep in whatever I already had invested (too much).
A 'toxic' asset is basically an asset that is worth nothing. These are assets such as subprime mortgage packages that were purchased when they seemed valuable. When the economic crisis hit, nobody wanted to buy these assets so the 'market' value turned to '0'. In reality, the assets are worth something because they could eventually turn profitable, but if nobody wants to buy them right now the market value is nothing. Banks have had to write down these assets to 'nothing' because of government-instituted (by President Bush I believe) mark-to-market accounting regulations. Those write-offs led to huge artificial losses at banks across the country and translated into shaken investor confidence. The Treasury is hoping that by guaranteeing some portion of the value of these assets and auctioning them off, they can create some demand for the assets and improve bank balance sheets. While there are plenty of reservations with the plan, I think the idea is one of the best policy ideas put forth by this administration. I welcome President Obama's move to boost confidence in the banks in addition to recent comments by his administration expressing confidence in the economy.
Unfortunately, many banking executives will likely be reluctant to take part in this program because of recent government efforts to villify Wall Street. The administration realizes that they now need the help (and backing) of some of the same executives they have criticized. Still, President Obama realizes this and has expressed some disapproval over Congress's attempt to "tax away" bonuses paid to certain executives (i.e. AIG). Maybe he's starting to realize that an approach designed to aid the private sector is better than spending money like a teenage girl left in the Mall of America with a no-limit credit card.
Perhaps the no-limit credit card analogy is a bit overboard considering it's likely that the recent stimulus bill has some positive effect on economic recovery. Consider this though: the non-partisan Congressional Budget Office recently projected that under Obama's budget the federal deficit will reach over 80% of GDP by 2019. It's currently less than half that. Consider also that Europe has long passed spend-happy budgets to finance their welfare states. Europe has fairly unanimously (the European Central Bank agreed with this viewpoint today as well) rebuffed U.S. requests to pass a European stimulus package and insists that the government spending more money is not the answer. The current president of the E.U. today called the U.S. stimulus package "a way to hell." Interesting when you consider the continent this statement comes from.
Anyway, the stimulus package is already passed, and all we can do now is hope that we don't further test that no-limit credit card. I'm not going to hold my breath, but I do think some positive steps are now being taken. I may not be confident enough to put anything new into the market right now, but I'll go ahead and keep in whatever I already had invested (too much).
Sunday, March 22, 2009
Perception in the Current Economy
Clearly, perception is very important to the economy. I made my case for this in my previous blog, so it would be a good idea to read that one first if you haven't already. So, if we assume that to be true, then it should also be true that perception is incredibly important in any economic recovery. I don't claim to be an expert on the economic crisis, I think that the causes are incredibly complex and it will take time for economists and historians to pinpoint the exact causes and what solutions helped to improve the economy. Obviously, a big cause was a housing bubble, which was encouraged in large part by the Federal government through Fannie Mae and Freddie Mac. Too many people were encouraged to buy more than they could afford on dubious terms. Too much credit was loaned to risky borrowers. I think that perception has also played a role in this. The first major collapse in terms of credit was Bear Stearns. From the pages of information I read on the collapse soon after it happened, I gathered that noone expected the firm to collapse (not even executives) even a couple days beforehand. A few creditors stopped lending money to the firm, which turned into a domino effect. No company wants to be one of the last creditors of a company, so when other investment firms/banks saw creditors withdrawing credit lines from Bear, even though the company may have ended up fine, they followed suit. Bear's credit lines dried up, the firm collapsed. Sure, the issue was much more complex than this, but still, when the firm's perceived reputation tanked, so did the firm. More firms proceeded to fail and the government's response was inconsistent. Some firms were 'rescued', some were not. Investors were nervous; the stock market does not like uncertainty.
The government responded by spending money. Lots of money. Most of it went to banks. Americans were looking for reassurance from the government. Instead, they saw inconsistent behavior. Furthermore, since most Americans did not understand the complexities of the crisis, they did not understand why banks were receiving bailouts while other industries were not. The government was relatively quiet for a few months as economic policy transitioned from President Bush to President Obama. I think that President Bush addressed the crisis fairly poorly, but as his term is now over there's no point in looking at it in detail. What I'm concerned about is President Obama's policies.
I think that a lot of the problems that caused this crisis have eased. Home values have plummeted and any market-based price corrections are probably complete. Bad assets have been identified, the government has injected billions into banks that were on the verge of failing. Now the issue is how to get the economy back on the right track. A significant obstacle that must be overcome is improving investors/consumers' perception of the economy. Obama's first order of business in addressing the economy was to put together a massive "stimulus" package that increases government spending to an unprecedented level in comparison to post-WWII history. The budget deficit over the next 20 months will be greater than the deficit over the previous 8 years. So, we're fixing an economic problem caused in part by too much borrowing by borrowing substantial amounts of money. Even if we assume this is sustainable, and perhaps it is, there's the whole issue of spending to fix the economy.
My problem with the current response to the economic crisis is that the government seems to be aiming to improve the perception that the government can help us out of the crisis rather than the perception of the actual economy. It's true that there's something to be said for this. Consumer confidence is extremely important and knowing that the government is spending massive amounts of money to prop up the economy undoubtedly is reassuring for some people. However, consumer confidence is also significantly affected by the stock market, which theoretically is a fairly accurate representation of the value of all publicly traded companies. I don't think that the economy can recover to a large extent until the stock market begins to recover (true, they kind of go hand in hand, so that statement could be argued). Government spending CANNOT replace private spending in the economy. The economy IS private spending, and the more the government spends the less capital is available to the private sector. A short-term stimulus to the areas of the economy hurting the most could be used to potentially boost private spending in those areas as well. Instead, we have a stimulus bill that increases spending for years and funnels money to areas of the economy that aren't suffering, i.e. education and healthcare. These areas may be deserving of more funding, but a lack of funding there is not ailing the U.S. economy. Investors agreed, as the stock market tumbled when the stimulus package was announced. If our goal is to improve the economy, i.e. the private sector, than how is legislation that causes the stock market to tumble good for the economy?
My impression of the stimulus package is that it's a massive spending bill filled with pet projects for which the Democrats have been wanting funding for years. Analyses I've seen suggest that at most 12 cents of every dollar spent are going to something that could remotely be considered 'stimulating' for the economy. Obama further convinced me of this by his change in attitude before and after signing the bill. Before the bill, Obama stated that the economy is the worst it's been since the Great Depression. He attacked McCain for saying the economy was fundamentally sound. After getting his stimulus bill passed, he claimed the economy is fundamentally sound (in different words, I don't feel like looking up the quote right now). Also, he signs a bill filled with some 9,000 earmarks and then starts talking about the need to cut down on earmarks. I congratulate President Obama on realizing that it's about time to start building Americans' faith in the economy itself by saying it's fundamentally sound, it was a good sign of his intentions. However, the timing suggests that the 'stimulus' bill was political and nothing that needed to urgently pass to save the economy. Granted, I think that if McCain had been elected, he would have also created a stimulus bill, but it would have gone to Republican pet projects rather than Democratic pet projects. My point: I'm not trying to demonize President Obama or the Democratic party, but as they are in charge they get to answer for the policies.
I'm sure that the stimulus bill will create jobs, but they are jobs that depend on government funding. If government was the answer, then fixing the economy would be a cinch. We must not create dependencies on the Federal government, but create incentives for the private sector to grow and for the stock market to increase in value (when investors see added value in the economy). Tax cuts, incentives, and healthy regulation would be far more beneficial than adding trillions of dollars to the national debt. If we lowered the capital gains tax, then investors would pour money into the stock market as it would be cheaper to own stocks. This would ease the difficulty many companies are having in borrowing money. If President Obama is convinced that we need to spend our way out of the recession, than perhaps limits should have been put on the bill to significantly scale back or halt spending when key economic benchmarks were met i.e. Dow Jones reaching 9,000 and unemployment less than 5.5%. Just a suggestion, but it would clarify his intentions for people like me. Many of the other policies being proposed right now (i.e. cap and trade, ending secret ballots for unions) are anti-business and will not increase confidence in the economy. These policies should not be debated until the economy is back on its feet.
On a side note, it's important to notice that the stock market DID jump when Citibank unexpectedly announced they expected to make a profit. That announcement was apparently more beneficial to the economy than the announcement of the stimulus package. Let's not advertise the government as the answer to our problems, but use the government to clear the way for the companies that are the bread and butter of our economy to be successful on their own.
The government responded by spending money. Lots of money. Most of it went to banks. Americans were looking for reassurance from the government. Instead, they saw inconsistent behavior. Furthermore, since most Americans did not understand the complexities of the crisis, they did not understand why banks were receiving bailouts while other industries were not. The government was relatively quiet for a few months as economic policy transitioned from President Bush to President Obama. I think that President Bush addressed the crisis fairly poorly, but as his term is now over there's no point in looking at it in detail. What I'm concerned about is President Obama's policies.
I think that a lot of the problems that caused this crisis have eased. Home values have plummeted and any market-based price corrections are probably complete. Bad assets have been identified, the government has injected billions into banks that were on the verge of failing. Now the issue is how to get the economy back on the right track. A significant obstacle that must be overcome is improving investors/consumers' perception of the economy. Obama's first order of business in addressing the economy was to put together a massive "stimulus" package that increases government spending to an unprecedented level in comparison to post-WWII history. The budget deficit over the next 20 months will be greater than the deficit over the previous 8 years. So, we're fixing an economic problem caused in part by too much borrowing by borrowing substantial amounts of money. Even if we assume this is sustainable, and perhaps it is, there's the whole issue of spending to fix the economy.
My problem with the current response to the economic crisis is that the government seems to be aiming to improve the perception that the government can help us out of the crisis rather than the perception of the actual economy. It's true that there's something to be said for this. Consumer confidence is extremely important and knowing that the government is spending massive amounts of money to prop up the economy undoubtedly is reassuring for some people. However, consumer confidence is also significantly affected by the stock market, which theoretically is a fairly accurate representation of the value of all publicly traded companies. I don't think that the economy can recover to a large extent until the stock market begins to recover (true, they kind of go hand in hand, so that statement could be argued). Government spending CANNOT replace private spending in the economy. The economy IS private spending, and the more the government spends the less capital is available to the private sector. A short-term stimulus to the areas of the economy hurting the most could be used to potentially boost private spending in those areas as well. Instead, we have a stimulus bill that increases spending for years and funnels money to areas of the economy that aren't suffering, i.e. education and healthcare. These areas may be deserving of more funding, but a lack of funding there is not ailing the U.S. economy. Investors agreed, as the stock market tumbled when the stimulus package was announced. If our goal is to improve the economy, i.e. the private sector, than how is legislation that causes the stock market to tumble good for the economy?
My impression of the stimulus package is that it's a massive spending bill filled with pet projects for which the Democrats have been wanting funding for years. Analyses I've seen suggest that at most 12 cents of every dollar spent are going to something that could remotely be considered 'stimulating' for the economy. Obama further convinced me of this by his change in attitude before and after signing the bill. Before the bill, Obama stated that the economy is the worst it's been since the Great Depression. He attacked McCain for saying the economy was fundamentally sound. After getting his stimulus bill passed, he claimed the economy is fundamentally sound (in different words, I don't feel like looking up the quote right now). Also, he signs a bill filled with some 9,000 earmarks and then starts talking about the need to cut down on earmarks. I congratulate President Obama on realizing that it's about time to start building Americans' faith in the economy itself by saying it's fundamentally sound, it was a good sign of his intentions. However, the timing suggests that the 'stimulus' bill was political and nothing that needed to urgently pass to save the economy. Granted, I think that if McCain had been elected, he would have also created a stimulus bill, but it would have gone to Republican pet projects rather than Democratic pet projects. My point: I'm not trying to demonize President Obama or the Democratic party, but as they are in charge they get to answer for the policies.
I'm sure that the stimulus bill will create jobs, but they are jobs that depend on government funding. If government was the answer, then fixing the economy would be a cinch. We must not create dependencies on the Federal government, but create incentives for the private sector to grow and for the stock market to increase in value (when investors see added value in the economy). Tax cuts, incentives, and healthy regulation would be far more beneficial than adding trillions of dollars to the national debt. If we lowered the capital gains tax, then investors would pour money into the stock market as it would be cheaper to own stocks. This would ease the difficulty many companies are having in borrowing money. If President Obama is convinced that we need to spend our way out of the recession, than perhaps limits should have been put on the bill to significantly scale back or halt spending when key economic benchmarks were met i.e. Dow Jones reaching 9,000 and unemployment less than 5.5%. Just a suggestion, but it would clarify his intentions for people like me. Many of the other policies being proposed right now (i.e. cap and trade, ending secret ballots for unions) are anti-business and will not increase confidence in the economy. These policies should not be debated until the economy is back on its feet.
On a side note, it's important to notice that the stock market DID jump when Citibank unexpectedly announced they expected to make a profit. That announcement was apparently more beneficial to the economy than the announcement of the stimulus package. Let's not advertise the government as the answer to our problems, but use the government to clear the way for the companies that are the bread and butter of our economy to be successful on their own.
Thursday, March 12, 2009
The Importance of Perception in the Economy
It's amazing how important perceptions are. I would argue that in many ways perception is more important than reality. In some circumstances, perception is reality. If enough people perceive something as true than it becomes true. There's really a lot of areas this could be applied to, including individual personalities. Perhaps I'll cover some of those other areas in a later blog. For now, let's think about the economy.
The economy today, more so than at any point in history, is dependent on perception. The purpose of the economy, in essence, is to allocate resources in the most efficient way possible. Before the adoption of currency, barter systems ensured that items involved in all transactions were useful to the individuals who were on the receiving end of the trade. When currencies were later adopted, currency had a set exchange rate to something of value, usually gold because of its relative global scarcity and perceived value. When the world left the "gold standard," a fairly unpopular decision led by the United States, the world's currencies became valued only by their exchange rates to other currencies. No longer could a U.S. dollar be exchanged for a set value of gold, its value now rested solely on faith in the United States government. Perception. People perceived the dollar to have continued value because everyone else did too. In other words, if suddenly everyone in your community lost faith in the U.S. economy and perceived little to no value in carrying U.S. dollars, your cash would be worthless.
The banking industry is another aspect of the economy heavily dependent on perception. Many banks collapsed during the Great Depression because depositors lost faith in them. Hence the creation of the FDIC to help prevent 'runs' on the banks by individuals unnerved by the hint of bad news. One of my favorite stories illustrating this is one I learned in economics class in college. I don't have my notes readily available from freshman year and so I don't remember the details but the big picture is still fresh in my mind. Back around the Great Depression there was a bank that was rumored to be running out of cash. With no such thing as the FDIC to calm people down, a massive crowd began to form in front of the bank after the rumors had circulated. Everyone was fighting to be first in line to get their money out before the bank crashed. The problem: the bank WAS low on cash! They weren't low enough to be in danger of failing, most of the bank's assets were loaned out... but they did not have enough to give depositors back all their savings [no bank does, banks use their deposits to make loans, so banks only have a small fraction of deposits available at any given time]. The bank manager called the local Federal Reserve office. In an attempt to save the bank, the Fed rushed over a truck full of government cash. When the bank opened, the manager showed off the vault full of cash to the nervous crowd. Assured by the sight of cash, most depositors left their money in the bank. The extra cash was returned to the Fed, and the bank was saved because the bank was no longer perceived to be in danger of failing. If enough people believe a bank will fail, it WILL fail.
Another crucial aspect of the economy dependent on perception is the stock market. The stock market is where investors buy and trade shares of public companies. A company's stock price represents the market's (i.e. investors) collective valuation of that company. A stock price is theoretically equal to the present value of all future profits of a company combined with a few other things, such as assets-liabilities. Since the present value of a company is by no means perfectly scientific (unless you can read the future) then in essence a stock price represents investors' perceived value of a company. This is why when companies don't meet their expected earnings, EVEN IF those earnings were higher than last year's earnings, the stock price will go down. The company didn't do as well as expected. Stock prices are continuously fluctuating as "the market" (investors) digests a never-ending stream of information. Hence, the total value of the stock market is the perceived value of all companies publicly traded on a particular stock exchange! Since exchanges such as the NYSE and NASDAQ list such a large number of companies, the value of the stocks on those exchanges is an excellent barometer of the perceived value of the United States economy. When the stock market goes down, this usually means the perceived value of the U.S. economy has gone down. When the stock market soars, new information has given investors the perception that the expected future performance of the U.S. economy has improved. If enough investors believe a company (or all companies, i.e. the stock market) will fail, then the chances of that company failing significantly increase. When a company's stock price plummets, the ability of that company to raise cash by selling ownership rights to the company (equity/stock) is severely diminished.
Few people have a thorough understanding of the stock market, or the economy for that matter. This is a very dangerous fact that I may address in another blog. However, even people who do not understand how the stock market works understand that the stock market is important. They see green arrows or red arrows every day on CNN and in the newspaper. Regardless of someone's understanding of the stock market, people know that poor stock market performance is bad. Therefore, stock market performance, which is rooted in the perception of the economy by investors, then affects overall perception of the economy. A crashing stock market tells people the economy is bad. Those people get nervous. They invest less, they spend less, they save more. Companies make less money, investors see this nervousness and diminishing profits and they sell. The stock market continues to go down, creating a vicious downward spiral. Sound familiar?
There are so many other areas of the economy where perception is important, but I think I've covered what I believe to be the most important. In my next blog I'll tie my ideas on economic perception to the current economic situation that we've seen during the past year or so.
The economy today, more so than at any point in history, is dependent on perception. The purpose of the economy, in essence, is to allocate resources in the most efficient way possible. Before the adoption of currency, barter systems ensured that items involved in all transactions were useful to the individuals who were on the receiving end of the trade. When currencies were later adopted, currency had a set exchange rate to something of value, usually gold because of its relative global scarcity and perceived value. When the world left the "gold standard," a fairly unpopular decision led by the United States, the world's currencies became valued only by their exchange rates to other currencies. No longer could a U.S. dollar be exchanged for a set value of gold, its value now rested solely on faith in the United States government. Perception. People perceived the dollar to have continued value because everyone else did too. In other words, if suddenly everyone in your community lost faith in the U.S. economy and perceived little to no value in carrying U.S. dollars, your cash would be worthless.
The banking industry is another aspect of the economy heavily dependent on perception. Many banks collapsed during the Great Depression because depositors lost faith in them. Hence the creation of the FDIC to help prevent 'runs' on the banks by individuals unnerved by the hint of bad news. One of my favorite stories illustrating this is one I learned in economics class in college. I don't have my notes readily available from freshman year and so I don't remember the details but the big picture is still fresh in my mind. Back around the Great Depression there was a bank that was rumored to be running out of cash. With no such thing as the FDIC to calm people down, a massive crowd began to form in front of the bank after the rumors had circulated. Everyone was fighting to be first in line to get their money out before the bank crashed. The problem: the bank WAS low on cash! They weren't low enough to be in danger of failing, most of the bank's assets were loaned out... but they did not have enough to give depositors back all their savings [no bank does, banks use their deposits to make loans, so banks only have a small fraction of deposits available at any given time]. The bank manager called the local Federal Reserve office. In an attempt to save the bank, the Fed rushed over a truck full of government cash. When the bank opened, the manager showed off the vault full of cash to the nervous crowd. Assured by the sight of cash, most depositors left their money in the bank. The extra cash was returned to the Fed, and the bank was saved because the bank was no longer perceived to be in danger of failing. If enough people believe a bank will fail, it WILL fail.
Another crucial aspect of the economy dependent on perception is the stock market. The stock market is where investors buy and trade shares of public companies. A company's stock price represents the market's (i.e. investors) collective valuation of that company. A stock price is theoretically equal to the present value of all future profits of a company combined with a few other things, such as assets-liabilities. Since the present value of a company is by no means perfectly scientific (unless you can read the future) then in essence a stock price represents investors' perceived value of a company. This is why when companies don't meet their expected earnings, EVEN IF those earnings were higher than last year's earnings, the stock price will go down. The company didn't do as well as expected. Stock prices are continuously fluctuating as "the market" (investors) digests a never-ending stream of information. Hence, the total value of the stock market is the perceived value of all companies publicly traded on a particular stock exchange! Since exchanges such as the NYSE and NASDAQ list such a large number of companies, the value of the stocks on those exchanges is an excellent barometer of the perceived value of the United States economy. When the stock market goes down, this usually means the perceived value of the U.S. economy has gone down. When the stock market soars, new information has given investors the perception that the expected future performance of the U.S. economy has improved. If enough investors believe a company (or all companies, i.e. the stock market) will fail, then the chances of that company failing significantly increase. When a company's stock price plummets, the ability of that company to raise cash by selling ownership rights to the company (equity/stock) is severely diminished.
Few people have a thorough understanding of the stock market, or the economy for that matter. This is a very dangerous fact that I may address in another blog. However, even people who do not understand how the stock market works understand that the stock market is important. They see green arrows or red arrows every day on CNN and in the newspaper. Regardless of someone's understanding of the stock market, people know that poor stock market performance is bad. Therefore, stock market performance, which is rooted in the perception of the economy by investors, then affects overall perception of the economy. A crashing stock market tells people the economy is bad. Those people get nervous. They invest less, they spend less, they save more. Companies make less money, investors see this nervousness and diminishing profits and they sell. The stock market continues to go down, creating a vicious downward spiral. Sound familiar?
There are so many other areas of the economy where perception is important, but I think I've covered what I believe to be the most important. In my next blog I'll tie my ideas on economic perception to the current economic situation that we've seen during the past year or so.
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