In case you wondered why this recession is taking so long to dig out of, its because the hole we have been in (collectively) is so much deeper and broader than anyone imagined.
Today, I was the guest at the Ohio Bankers League's 1st ever economic summit -- a one-day gathering of bank execs from around the state of Ohio who got together to hear news from the state department of development, and from a representative of the Federal Reserve of Cleveland.
The news? Consumer confidence is up. But then I got back to the office and read a news report that consumer confidence is at a 10 month low. Hmmm..... I think a lot of that has to do with the mixed signals coming out of Washington DC, attempts to hijack healthcare and institute what most thought was a dead cap and trade plan. People are holding onto their money, buying less, and less willing to commit to spend in the near future.
Also, we learned that unemployment was far higher this time around in Ohio and elsewhere than in previous recessions. The good news is that exports of U.S. good seems to be trending up, and banks have excess money in reserves. Bottom line they have money to lend. But the requirements for getting that loan are much tougher.
Actually, the requirements are like they used to be. Banks have gone back to what worked in the past, though some consumers and investors are frustrated.
Also on hand was the director of the Ohio department of development, who talked of monies available from the state for new business development.
A number of us at the table, guests of First Citizens National Bank, had the ear of two members of the Ohio House of Representatives. When asked what ideas we had for stimulating the economy, helping create jobs, etc., the conversation at the table became quite interesting and animated. We discussed everything from burdensome taxation (Ohio is one of the highest taxed states for business), to solor energy and the reluctance of big Ohio power companies to play ball on solar unless they have ownership of it, and how this author is torn because he feels that the market -- not politics -- should dictate how the economy recovers. And yet, using the solar and energy company example, huge numbers of private initiatives that truly WOULD create jobs are stifled because there is no incentive for the power companies to partner.
All in all a very good day. There may be some media coverage of this meeting and presentation. If so, I will link to it. If not, I will provide a more detailed write up with specifics given by the various speakers.
I couldn't help but smile when I heard the opening remarks of Ohio Bankers League President and CEO Mike Van Buskirk. He noted how it is not policy, but people who make the difference and make an economy grow. He pulled out some history notes to mention how one young Mr. Rockefeller was selling fruit, and doing okay, but in danger of losing his job, when he learned about oil from a friend. Van Buskirk also told the audience of how one young Thomas Edison, like Rockefeller a hard-working Ohioan, worked on the railroad, and had converted a car into a rolling laboratory for some of the things he was "curious" about. All well and good until the car one day exploded. After that he moved east and really got going with his research labs. And finally, the story was told of one Harvey Firestone, who worked for a Columbus company. But misfortune befell him, and he wandered up to Akron, Ohio to see if he could get work there. The rest is history.
All it takes is people who want to work, sweat, and make a difference. The key, in my mind, is making sure that government stays out of the way and lets market forces rebuild, or re-set the switch, if you will, on the economy. Recently two disastrous pieces of legislation (no I'm not talking about healthcare, or cap and trade, though those two definitely qualify) are being kicked around. One at the federal level and one right here in Columbus.
First, a bill in Congress would prohibit seller financing on a property unless the seller actually lives there, or is licensed as a mortgage provider/lender. Congress may as well kill most commercial real estate transactions if this ridiculous proposal passes. In this economic climate, the only way to move commerce -- and move property -- is to get creative. There are many lenders who are willing to "be the bank" on second mortgages for a buyer. These days, sellers have to be able to do something to help the buyer to buy! But not if Congress has its way.
And second, a proposal being tossed around by Columbus City Council would require the registration of "vacant" properties and a payment of a $100 filing fee. Is it about raising capital for the city. Well, yes. But moreover, the city is mistakenly confusing vacant properties (in investment real estate all properties go vacant at one time or another as one tenant moves out while another prepares to move in) with "abandoned and neglected" properties. There is a HUGE difference. Whether the city gets it, I don't know. There has been at least one public hearing on the matter, and Council heard about the hardships they are creating loud and clear. I am hoping they will revamp the proposal, which is mostly designed to deal with abandoned housing, and who is responsible for upkeep, as well as taxes.
We all have a long way to go. That was evident from the presentation today. But its do-able!