The Economy: The Fat Lady Ain't Sung Yet

After a busy day we decided to go out for a bite to eat. We chose a once busy center anchored by a Walmart and a Sam’s Club. A couple of years ago it had a Ruby Tuesdays, an Old Country Buffet, a Fazzoli’s and an Applebee’s.
Target has moved out of the center; Circuit City has died. Ruby Tuesdays has closed, as has Old Country Buffet. Fazzoli’s has cut their portions and their quality to the point that I don’t think there were more than five or six patron’s cars parked there all evening. We don’t go anymore.
That left Applebee’s. Two dinners for twenty bucks wasn’t bad. (There’s a rainbow to every market crash.) It was Saturday night—once a busy night in west Michigan. As we sat, we started to count the empty tables. Three this way, four that way and so on.
Applebee’s was making money. (Exactly how much on two dinners for twenty dollars—which most tables seemed to be ordering—I cannot say. I’m sure it’s not a profit margin that pleases headquarters terribly.) But, I kept asking myself, what if the other two restaurants were still open? Would any of them be making a dime?
This is not an isolated incident. I could name other restaurants that have closed up in this part of the state. (Even a “Little Caesar’s Pizza” outlet that’s been open for decades near my house shut down in the past month or so.) Empty store fronts are blooming everywhere.
National Christmas shopping forecasts suggest a retail season that promises to be even worse than last year’s. An article I saw the other week warned shoppers not to wait to the last minute hoping that prices will be cut some more—this year, retailers simply aren’t ordering all that much.
I know of three houses in my neighborhood that have sold this summer/fall. One was a short sale (the bank forgave part of the mortgage); in the second, the seller underwrote the down payment out his own pocket; in the third—a house that was purchased nearly twenty years ago—the seller got out of it the bare minimum he needed to pay off the mortgage.
To me this is in no way a clear sign of recovery. Right now the Federal money being pumped in to the economy is acting as life support. What happens when that plug is pulled? Remember 1937? FDR’s infusion of “bailout money” had brought things back by 1936.
Being an innately conservative man, Roosevelt cut back on Federal spending that year. Pop—right back to full scale Depression levels. It finally took Hitler and the Japanese to bail us out permanently. So what will happened in 2011 or '12? (Maybe the Aztec calendar was written for the American stock exchanges?)
Speaking of the stock market. It’s having a mini-boom. Just like it did in the spring after the Crash of 1929. We’ve gone from over 14,000 to under 7,000 and now back to nearly 10,000—all in the space of two or three years.
More and more pundits, business writers and economists are looking at the DOW, the NASDAQ, and STANDARD & POORS, and wondering what on earth is holding them up. It sure isn’t the business at Walmart corners here in western Michigan, I’ll tell you.
Nor is it the real estate market. Or the employment rate. Or family earnings (down in absolute dollars since the 1970s—even for those who are working). As I drove past the shuttered Circuit City and Target store fronts—as I sat looking at the empty tables in Applebee’s, eating my two for twenty dollars dinner—I had to say it certainly isn’t anything happening here.
Do we stand by for the next exciting episode? Or do we just wait and hope Applebee’s will get so busy they have to reopen the restaurant across the street? Yogi Berra maybe didn’t actually say it, but he could’ve—“It ain’t over ‘til the fat lady sings”.
I don’t even see her on stage yet.