How bad is the economy? My wife and I have been shopping for a vehicle this week, out of necessity. I didn’t see another prospective buyer at the dealerships we visited. Not one. It was a hassle trying to test drive vehicles because the batteries were dead, and even the electronic keys didn’t work because they hadn’t been used for so long.
I think it will be years before many new homes are built in this country. Between the price uncertainty that will linger for years, and the ever-increasing regulatory hurdles, it’s no longer rational for a builder to build. My wife and I started building our home before the economy cratered, so stopping the project wasn’t an option. But the process has taken over four years to get approval, and even though we do expect to finish on budget (sort of), the market price of the home will be worth maybe half what it cost to build, assuming home values keep dropping. I can’t recall seeing any other homes under construction anywhere in this area.
Restaurant business is down about 40% nationwide. That puts almost all of them underwater. No independent operator who has a lease will renew it when it comes up in the next three years or so, unless they can fund the operating losses from some other source. I expect about half of all the restaurants in California to close. When that happens, it will free up enough customers for the restaurants that stick it out.
I think we’ll all survive. And we’ll find ways to be happy. But I don’t believe the economy will roar back in 2010 as the experts are fond of predicting. I think this is the new reality until some innovation comes along to drive another bubble.
One could argue that previous economic bubbles were driven by sex, directly or indirectly. Guys bought cars to attract girls. The VCR business thrived because of porn. So did the Internet. If you want to predict the next economic boom, figure out who is inventing technology that 19-year old boys will crave in order to increase their chances for sex.