Are We There Yet?

By: Jim Moody, President

Academic types call economics “the dismal science.” Over the past couple of years, the rest of us have gained insight into why this is the case. There have been many, many writings by learned folks discussing how the current economic crisis is the end of our prosperity, our financial system, our country as we know it, capitalism, the world – you fill in the blank. Yet here we are, in the 17th month of this Great Recession, and the world has not ended.

There have been severe effects, and I don’t want to discount the pain that so many people have felt. But even with relatively high unemployment, reduced consumer spending, tight credit, endless foreclosures, overbuilt retail, and a stock market that is worth half what it used to be, there is still a lot of good out there. The vast majority of us still have jobs. We don’t see soup lines around the block. Bargains abound for consumers. We still live in exorbitant prosperity compared with much of the world and compared to our previous generations.

We’ve been so overwhelmed with negative economic reports that we seem to have forgotten these things. We also seem to have overlooked some pretty strong indicators that the days of doom and gloom are numbered.

Maybe we have hit bottom, and it just hasn’t been widely acknowledged yet. We are seeing some very positive signs on the housing front. Prices continue to fall while interest rates hold low, so inventory is drawing down. Homebuilders see glimmers of hope. Stocks, which tend to be a precursor of the economy as a whole, rebounded nicely in March and April. Inventories are down below unsustainable levels, indicating that manufacturing and purchasing must go up soon.
You may be wondering why economics is the dismal science. It stems back to the Victorian era when a leading mind of the day forecast the end of the human race because food production couldn’t keep up with population growth. Fortunately, he was wrong. Just like those with “the end is near” signs around their necks today.

Sure, we’ve all taken financial hits in the recession. But the best days for capitalism, for our country, and for lumber dealers lie ahead.

We all know that good times hide a lot of business sins. You’ve had nearly two years for those sins to be exposed in your business. I hope you’ve made the effort to clean things up while you’ve had the opportunity. If you have, you’ll be poised to take advantage of the better days that really are just around the corner.