Business seems to be turning around, but why?

My business, and the business of most of my friends and colleagues, seems to be turning around. Everyone in my circle has become more optimistic and encouraged as business picks up in websites, marketing, publishing, advertising and similar fields. But why?

The economy is stagnant, the stimulus by all accounts but Joe Biden’s has not done anything but waste a lot of our money, unemployment is still rising, the stock market appears to be in a wait and see mode, and yet, companies are spending again.

As we all probably know, recessions are in large measure psychological. Yes, there are other economic factors, but when the media says there is a recession coming, businesses stop employing and slow manufacturing – and that in turn leads to the recession. It’s a self-fulfilling prophecy.

And this recession is largely no different. Business has been sitting on the sidelines waiting for things to turn around, but there is no turnaround coming. But when a business, one that needs to grow to survive, sits idle, management gets antsy to get things moving again. And that, in my opinion is what is happening right now.

Businesses cannot wait any longer for a government program to work, and most now know it won’t. So all across America businesses are starting to tick up their spending in order to get their businesses growing again. You see dollars being spent in marketing and related fields, Internet services like SEO and optimistic entrepreneurs plowing ahead with the better mousetrap, spending on services and products. And that in turn starts the money flowing through the economy again.

And as the money starts flowing, more people become optimistic and start to spend as well, and the upward spiral of economic grow begins.

This is a true capitalistic movement, one not borne from government bailouts, one-time spends like cash for clunkers or multi-million dollar government stimulus grants for the migration habits of wilderness ants. Nope, this is a capitalist resurgence. Businesses need to grow to survive and can no longer sit on the sidelines waiting for things to happen. So they are making things happen themselves.

That that resurgence is a self-fulfilling prophecy as well. Only this time the media is no where to be found. Until the election draws near…

As we approach the 2010 elections and businesses have pulled themselves up by their bootstraps and the economy beings to bloom again, the party in power will take all the credit. “See, we told you the stimulus worked.” Or “See, we told you the tax cuts would work.” But the reality is, it’s capitalism that works. The drive and desire to make money, lots of money is what pulls us out of recessions.

Now, as the economy turns, it is incumbent on the government to get out of the way and let capitalism do its thing. And when it does, it’s a beautiful thing, and we again become the envy of the world.

Posted on October 3rd, 2009 by admin
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