It's not over yet!!

Good morning everyone. (all one of you that's following this blog *snicker*)
Normally I get on here just to hear/see myself think and there's something that I just have to put down...if, for no other reason than to help me think through it...Namely where I believe that economy is going. I hear so many pundits speak of "happy days" being here again, but I'm just not seeing it. (I know that this doesn't necessarily have to do with advertising, but it does affect our clients) I'm seeing some tentative job growth but as most of my life was spent in the financial services sector I'm not seeing the real rebound that's been expected. Certainly not a rebound that would be indicative of a stimulus package of just under a $ trillion dollars. Here's what I believe is happening. I believe that companies have gotten "lean and mean" out of necessity (I know we have) and I believe that those with necessary services and/or products have been making quite a bit of money in recent quarters. Now, do I believe that that will translate to job? Yes, but not immediately. I believe that those companies will spend that money on greater efficiencies brought about by software and equipment upgrades, which, in some cases, will eliminate the need to bring back certain types of employees. Sorry, but it's the truth. I believe that only after that spending cycle has come to a slow will companies then be able to determine what (if any) spaces they have to fill. Look for the always needed sales person, IT person, and customer service folks. Don't look too hard for anything middle management, or even lower "C" level management for that matter unless you're terribly specialized. Even then you might be better off hanging out your own shingle. Oh, and if you're going to do that, become a sole proprietor and contract out help as you don't want to get caught (as so many small businesses will) paying for increased employee health care costs. Not a terribly rosy scenario, but I was never good at the whole "up with people" thing. And this doesn't even include the debacle that is "COMMERCIAL REAL ESTATE." That's another story for another day, but just consider that most small business' fixed capital expenses come from salaries, raw materials and what? OVERHEAD...one of the efficiencies they'll be looking hardest at is unloading that expensive office space. And who is in a position to come in and pick up the leases...even with modest job growth. There's just not the appetite (even among contrarians) to pick up such assets, no matter how cheap. Not when they can create better and more efficient means of production, sales, distribution, marketing, etc., which leads directly to a better bottom line. If this turns quickly, look for just as quick a reversal...and this time the government won't be able to offer a bail out...Why? Because the American people just don't have the money (because as we all learned in our early civics classes, the government has no money except for what is given to it by the people) AND WE'RE BROKE!
I hate to sign off as usual with such a dour entry, but I do sincerely wish anyone reading this...

Best Always,
Dave J.

TURTH ABOUT TAXATION - middle class...

If you ever wanted the truth about increased taxation in a nutshell here it is. And the only reason I mention this on our blog is that some of you who read my random thoughts are small business owners and middle/upper-middle class Americans. Some of you may have venture capital, some may have a wealthy Angel investor...whatever the case, if I can provide you with some common sense information that helps you position your business for the upcoming year I'm more than happy to do so:

Something to think about ... higher rates inevitably pressure wealthy taxpayers to withdraw captial from taxable, productive business and instead invest in tax exempt securities (such as municipal bonds or overseas) - the end result is that the wealthiest segment of the tax base begins to dry up as their money is diverted into tax-free channels that neither benefit the overall business landscape (creation of jobs) or the government (taxes). This ultimately leads to the squeeze on the only target left for the government to pursue...the middle class.

Now, I'm sure that you'll realize that the relevance of this message is as sound today as it has been in the past. It's just common sense... Higher taxes will lead to less money to go around for small business. I don't say this to scare anyone, but just to make you aware of the very simple, yet effective mechanism that is being put into play.

Best Always,
Dave J.