Wave of economic good news a vital confidence-builder
By Michael Lewis
All that's missing now is the faith of business and consumers.
They've been so battered by The Great Recession that they've had trouble seeing the forest for the trees.
The forest is the long-term strength built into our national and local economies. The trees represent the economy's changing facets.
Since the condo bubble burst in Miami three years ago, the signs hung on those trees in daily headlines have been pure gloom.
Little wonder that consumers stopped spending and businesses stopped investing in tomorrow. The way those signposts read, there was going to be no tomorrow worth investing in.
And so it became a self-fulfilling prophecy: headlines said things would get worse and worse, and consumers and businesses took them to heart and stopped spending, making things worse and worse.
Not that there wasn't truth in each ugly signpost. The realty bubble, Wall Street meltdown, financial collapse, credit crisis, massive jobs loss and the rest have been as painfully real as can be.
But each spawned negative signposts, all undercutting confidence, and each loss of confidence made it that much harder to turn the economy around.
We got into a hole and just kept digging. Little wonder it seemed too deep to ever escape.
The only plus in business and consumer activity feeding off headlines is that it cuts both ways.
While negative signposts have been burying us for years, recall when news of rising realty prices spawned an unhealthy feeding frenzy, or reports of a rising stock market drove prices higher and higher.
The point is, when headlines have collectively reversed course, consumer and business spending rapidly followed suit.
Given identical underlying factors, a headline's tone, in any medium, can turn outlooks positive or negative, with actions quickly following. And those actions trigger more headlines in chain reaction.
Let us then record April 1, 2010, as official opening day of the new round of confidence-building, most likely to be followed by renewed activity that in turn will multiply that confidence and restore local, state and national economies.
Let's recount the signs, immodestly starting with this paper's headlines of April 1, beginning on Page 1. Each was a single tree, a single signpost, but as a whole they paint a landscape of Miami's economic forest growing again:
n"Brokers up off the mat: commercial jump as deals returning."
n"Proposed mart would lure Asian manufacturers: Mart could add 3,000 jobs in county."
n"As consumer spending still suffers, economists see an upturn beginning."
n"Private-equity groups spotlight Florida banking targets."
n"Decade's turning points offer hope; more improvements on way."
n"Mami officials say they've turned over a new fiscal leaf."
n"New North Miami retail-office center finds leasing strong."
n"Hotel foreclosure wave never hit but few sell as owners await value rise."
n"Big money on the prowl for distressed commercial properties."
n"More realistic pricing, better business outlook aid recovery."
These ten headlines point upward without sugarcoating real problems. They note consumer spending's lag, Miami's fiscal bind, worries about hotel foreclosures, commercial realty distress and our malaise — but portray overall a currency-green Miami that's growing again.
Other headlines illustrate a greening of the national forest.
The Financial Times, April 1: "Consumers Display Stronger Vital Signs."
The Wall Street Journal banner, April 2: "Factories Revive Economy."
The New York Times, April 3: "Job Market Brightens as U.S. Payrolls Surge in March."
Just as day-after-day gloom and doom about real estate or the financial meltdown or jobs has crushed hopes and business activity, a steady drumbeat of good news is likely to do the opposite, buoying confidence. And with confidence comes consumer activity that encourages businesses to once again invest in marketing and manpower, which in turn causes more business and consumer spending at the other end.
Without that confidence, even the healthiest economic trees in a growing green global forest won't reach full height.
And while unbridled economic euphoria did long-term harm, building up to our current fall, we've let more than enough air out of our balloon of confidence.
A pendulum swing is due, and last week's headlines likely to spur it were all justifiable and realistic. While we're not out of the woods by any means and recovery will be measured at best, we're on the right path.
All that's missing now is the faith of business and consumers, and greener news on the headline trees should help rebuild that faith. Justifiably so.