Mid-Year 2010: Not What We Expected

Editor, Jason Schaff Taking stock at mid-year again. I guess we all hoped that by July 2010, the local economy would show definite signs of looking up. Jobs would start coming back at a decent amount to really make a difference. Jobs would cause more retail spending and this would improve the economy fairly quickly. Well, it hasn’t happened. At mid-year 2010, locally, regionally and nationally the word best describing things is “blech.” Stalled is probably a more professional word to use. Stalled in action and stalled in thought. I’m seeing those tired faces again in the business community. Business owners keep saying things are a “little” better. They say that things are certainly no worse. Some small business owners are saying that they’re just tired of hanging on. Many business owners also say they’re tired of things being erratic. Good sales one day. Bad sales another. No steady trend at all. Unemployment is still way high. In L.A. County, the unemployment rate in May was 12.3 percent, actually up from 12.2 percent in April. California Lutheran University in Thousand Oaks released a dismal forecast for the state for the rest of the year. They said that retail sales will blip up a little but there would be little private sector job creation and weak wage growth. International trade in the state would show some improvement. So what do we make of all this? And are there bright spots? Erratic environment I guess we should expect this erratic environment and attribute it to a slow but painful healing of the economy. At least I hope it’s a healing of the economy. People far more expert than I am say that these stalled conditions probably should be expected. Credit is still tight and a lot of people are experiencing credit problems due to what’s happened to the economy the past few years. So of course they’re not going to buy much at the mall. But just when I want to paint broad strokes and characterize everything as gloomy, there are signs of optimism. Retail sales could be better but amidst all this, Macy’s took over the Gottschalks space in Palmdale and plans to open in the next few months. Macy’s must see a market or potential market for their brand in the Antelope Valley in coming months. People are still starting businesses. Two stories in this issue of the Business Journal highlight how there is activity amidst the overall stalled climate. A story on page 1 shows that there is activity in the venture capital arena and several local companies are taking advantage of that. Reporter Andrea Alegria’s story on what’s hot and what’s not on the VC front shows that there is some positive direction in starting businesses, funding businesses and keeping creativity alive in the region. Another story written by Andrea on page 4 tells the tale of Mariana Rossano who received a million bucks from essentially strangers who are helping fund her food delivery business of nutritious foods. She literally knocked on doors looking for money. It’s a tale of sheer persistence and good old American guts but it also shows that if you have a sound business plan you can still get investors to support you in this climate. But the magic bullet of course remains jobs. They are not coming back in any significant numbers. And until they come back, nothing significant is going to happen. The stimulus stuff is still trickling through the economy. That’s creating a few jobs here and there. But it’s a few jobs in the overall scheme of things. Economic recovery isn’t going to happen until there is significant job creation. Lending still needs to open up. So how do we do that? Business only First of all, we exclude the politicians from the process. Most of them don’t seem like they care about creating jobs. I have never seen such self-serving stuff than what is going on in the current gubernatorial and senatorial campaigns in this state. Zero, I mean zero, ideas. It’s just all political maneuvering. A coming together of all business organizations and businesses (whether you belong to an organization or not) to craft some ideas for jump-starting our economy is needed more than ever right now. It can be at a giant conference or it can be in little groups that get together and kick around some ideas. If this happens, you can count on the Business Journal to report all this stuff. Let’s do it. Contact me or some of the trade groups that you belong to. Contact the Valley Economic Alliance or the Valley Industry and Commerce Association or the dozen chambers of commerce in our area. Businesspeople are stronger and smarter than the politicians. If thousands of members of the business community come together they can figure out things better than hundreds of politicians that have proven they can’t do anything. If there is enough support and concrete ideas from the business community, politicians can’t help but take notice. Business Journal Editor Jason Schaff can be reached at (818) 316-3125 or at [email protected].