We think it began with banks and other institutions relaxing the terms by which they approve home loans. As soon as the financial climate changed, people became financially stressed, which meant less buying of any kind, and the market contracted. Getting the process back up to speed will take an environment that helps small business start ups regain a footing in the market.
One of the favorite concepts that some of our political leaders like to tout is the notion that if wealthy people have money, they will inevitably spend that money on enterprise, and in doing so they will generate new jobs. With the newly created jobs, more individuals will have income and the engine of progress will have been primed.
In reality, when wealthy individuals are allowed to retain their money during down economic times, they either move it to safer havens or invest in those things which people will always need, like energy, food and medicine. Since they already have wealth, they are best positioned to ride out the crisis without taking additional risks. The same thing happens with large companies.
The larger the company, the greater the possibility of hanging in there through consolidations downsizing and focusing on only the core products or services. Unfortunately this does nothing to help the gross national product or the business environment as a whole. Even stimulus spending on major projects can only go so far in convincing consumers to spend again.
It is with no small amount of irony that we identify a major problem to be the same capital managers that loosened credit too much exacerbating the problem by overreacting and tightening credit too much. What has to happen is an opening of the credit markets so that enterprise can function normally. For retail outlets to function, they have to be able to invest in product or service and hire people to position and sell product.
Slowly but surely we are beginning t identify signs that things are getting better. Heavy industry is beginning to move, consumers are finally beginning to purchase items they have been postponing for the last few years, and the overall climate is improving. This is the time when the financial managers need to make sure they are there to help as retailers and niche stores begin to come alive again.
It is at the smaller end of the commercial scale that the greatest capacity for growth exists. As long as there is room and impetus for small business start ups, a community will flourish. The big companies are critical to the overall gross national product, and for infrastructure and heavy industry. But he smaller companies are the ones that hire the most people, as the reason the big companies hold out so well is due to economies of scale and efficiencies of technology, not through labor, which is most of us.
One of the favorite concepts that some of our political leaders like to tout is the notion that if wealthy people have money, they will inevitably spend that money on enterprise, and in doing so they will generate new jobs. With the newly created jobs, more individuals will have income and the engine of progress will have been primed.
In reality, when wealthy individuals are allowed to retain their money during down economic times, they either move it to safer havens or invest in those things which people will always need, like energy, food and medicine. Since they already have wealth, they are best positioned to ride out the crisis without taking additional risks. The same thing happens with large companies.
The larger the company, the greater the possibility of hanging in there through consolidations downsizing and focusing on only the core products or services. Unfortunately this does nothing to help the gross national product or the business environment as a whole. Even stimulus spending on major projects can only go so far in convincing consumers to spend again.
It is with no small amount of irony that we identify a major problem to be the same capital managers that loosened credit too much exacerbating the problem by overreacting and tightening credit too much. What has to happen is an opening of the credit markets so that enterprise can function normally. For retail outlets to function, they have to be able to invest in product or service and hire people to position and sell product.
Slowly but surely we are beginning t identify signs that things are getting better. Heavy industry is beginning to move, consumers are finally beginning to purchase items they have been postponing for the last few years, and the overall climate is improving. This is the time when the financial managers need to make sure they are there to help as retailers and niche stores begin to come alive again.
It is at the smaller end of the commercial scale that the greatest capacity for growth exists. As long as there is room and impetus for small business start ups, a community will flourish. The big companies are critical to the overall gross national product, and for infrastructure and heavy industry. But he smaller companies are the ones that hire the most people, as the reason the big companies hold out so well is due to economies of scale and efficiencies of technology, not through labor, which is most of us.
About the Author:
Discover why the key to global economic recovery lies in small business start ups now in our review on all you need to know about business finance and car finance
No comments:
Post a Comment