The Biz of Pacelinebiz

Turning things on end to achieve results!

Four Years Later, What Is Holding Us Back?

leave a comment »

Where are we headed?

I started this blog in September 2009 and back then the economy was on everyone’s mind and still is today.     In September 2009 we were about 1 year removed from the financial crisis and had recovered significantly in the stock market from the lows on the DOW of about 6,600 to about 9,600.  As I begin year 4 of this blog, I want to briefly reflect on how things are going now compared to 2009 and offer two reasons we are still stuck going nowhere.

We were in fragile times back in September 2009 and the stock markets were skittish worrying about the next big event to happen.  Since 2009, we have muddled through and have made strides in stabilizing the economy but have not made strides in turning the economic engine back on.  The recovery has been anemic considering how hard and fast we fell.  The typical post-recession “snap back” we were expecting has not come and there are two factors I believe that have contributed to this. 

They are:

1)  This recession was not a normal one but one involving the banking sector. 

We were close to having a collapse of our banking system.  How close?  I can’t say and probably no one really can for certain but that is not important.   The banking system was as close as it has ever been to collapse since 1929.  When the credit markets seized up; individuals, businesses and governments worldwide had to reduce their massive debt loads.  This is still going on today.  National governments in Europe are continuing to deal with it now and state, county and local governments in the US have been dealing with it and some are still dealing with it.  Foreclosures are still an issue in many areas but it appears we may be finally getting close to seeing an uptick in real estate values that will become a long term trend.  Fairly new existing homes selling at significantly less than replacement cost can’t continue forever.

2)  Stifling government regulation is choking business expansion.

The EPA, the Department of Labor, The Dodd-Frank Banking regulation and the Affordable Care Act (Obama care) have all contributed to putting the brakes on expansion.  One thing that could be a stimulus without affecting tax rates, printing money, going further into debt and risking inflation is cutting back on regulations that do nothing but make busy work for business owners and achieve no results.  This knee jerk reaction of the government to fix things has done little to help.  What the government can do is get out of the way.  I am not saying all regulation is bad by any means but laws that are written that have over 2000 pages in them are ridiculous.  The Sarbanes-Oxley act that was passed in 2002 in reaction to the Enron and WorldCom accounting scandals was considered bad law and ineffective.  10 years later it has had mixed reviews.  That bill was 66 pages long.  The Dodd-Frank bill is 2,319 pages long!  That is staggering to think about.  It is over 200 pages longer than the Affordable Care Act (Obama care).  We need to enforce laws that we have before writing more.  If you want to read about what the National Federation of Independent Business (NFIB) thinks about regulatory conditions click here to read more.

Have a great week guiding your business to recovery.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: