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posted by King Minos in Money / Career

Athens, GA Economy to See Resurgence?

May 6, 2012

If so, it'll come as a subset of improvements to the larger GA economy and the even larger national economy. But yes, indeed, there are some hints on the horizon that a resurgence in U.S. manufacturing might become reality.

Locally, Athens' "got" Caterpillar! Those are real jobs paying real wages. Of course, the King has similarly argued that those jobs might end-up in peril should the global economy tilt further into depression. (Because manufacturers of durable goods suffer disproportionately during depressions; while producers of consumer goods weather the storm much better.)

On the OTHER HAND, let's think about some of the other "macroeconomic effects" we've already witnessed courtesy of the great global financial crisis. The single greatest seemingly counter intuitive development was that when our own Fed drove rates to zero, capital actually flooded into the U.S. market! This was because even though the US had committed itself to an EZ money policy, foreign investors still saw better prospects, here, than they did in many other countries!

Similarly, even though depressions do hurt manufacturers, might that hurt, itself, force these companies BACK to the U.S. to heal their open wounds? (The Cat plant left Japan; and came to GA?) In other words, if the same forces drawing capital to the U.S. also bring back manufacturing, then the U.S. economy, and even the Athens economy, might be better positioned than, yes, even the King thought. (But what I really regret is saying this: A resurgent U.S. and GA economy might restore fiscal confidence in the CCSD and ACC; it might also see the higher ed. system and U.GA. back on a sustainable and positive fiscal course! They may see a payout on their risk-taking, yet!)

Of course, losing the Selig development is a real, real slap in the face to all the unemployed and working folks suffering through what the King sees as a depression in the Athens and larger U.S. economy. Along those lines, the King supports organizing an economic boycott of Flagpole advertisers; let's see how the Flagpole liberals handle their own little economic depression!

Of course, if Flagpole were shut-down, caring folks might leave; and then Athens might become Snellville as always feared.

(And, BTW, why "Snellville"? Why might not Athens become "just like Detroit, " or as "rotten as the Big Apple," or "just like Paris, France!"? We need more imagination than just "Snellville," for Christ's sake!)

But, the point is ... that if Athens IS poised for rapid growth, it might need the Flagpole liberals along for the ride to keep it unique. D'OH, it's a bad bad day for The King! (But not as bad as the day the bond market will have in Europe and across the globe TOMORROW!)

But, I digress. And, as usual, my rotten expository style has saved a little possible hidden treasure or timebomb for the end:

Tomorrow in world markets, the bond markets will react to the news that the French leader, Sarkozy, was driven from political office by a socialist; they will also react to developments in Greece where far left and right coalitions "punished" the leaders who negotiated the debt restructuring and budget deals. Such movements are called "popular" democracy and can quickly create economic chaos; on the other hand, when the economic fundamentals of, say, a monetary union become unstable and cause political instability ... well, it becomes a chicken-egg question. The people blame the leaders; the leaders will blame the people. But the people vote!

So .... the bond market elephant might rage, soon. That'll frighten lots of people and make many believe the end is near. Of course, in history, this has happened many times. The odd thing really is that the world economy enjoyed so many years-in-a-row of relative peace and prosperity.

Long-story-short: Athens ought to get its limited access spur to a major interstate up and running. That'd make Athens a good place for manufacturers to land. They ought to also make the water source readily expandable so that drought does not scare-off potential investors.

(And, begrudgingly, I must credit the apparent deft handing of yawning fiscal issues by the mayor and commission; WE need to project competence and sound fiscal policy in order to ATTRACT those manufacturers and individuals tempted to FLEE governments, countries and localities that are poorly managed and hopelessly indebted! If the CCSD can quickly get their budget crisis on a positive track, then that'd also help to attract business and private investments.)

I say those basic things because if macroeconomic developments promote major flows of capital and manufacturing BACK to the U.S. aka "safe haven," then Athens needs to be ready to get those jobs!

(No, I'd not finance infrastructure improvements with a TSPLOST. Let the Governor and elected folks go on record and vote to raise some taxes and fees; heads they win and the economy takes off; tails they are voted out of office! It's the way the system is supposed to work. That's democracy, and if elected leaders don't want the heat then stay out of the kitchen. Now is the time for them to take personal risks instead of always trying to get the citizens and taxpayers to take risks for them!)

PS

So, wow, the King is now saying there is reason for optimism! But I thought he said before, in "Profits, Success Drive Optimism," that optimism, by itself, has no effect on the economy?

Indeed, the King did say that and he'll not change that view: Whether or not the global macroeconomic situation tends to restore the U.S. manufacturing base remains questionable; but if the economic fundamentals do improve, then that would coincide with lower unemployment and higher optimism.

Finally, the King has not said go out and take a lot of risk. He did say, political leaders need to step-up and take the risk of financing needed infrastructure projects; locally, that's only transportation and water. Not a big deal, really, and no cause to go out and vote for TSPLOST, either. Let's not forget the lesson: Capital and business are attracted to areas with rock solid fiscal management in government; they are attracted to localities that eschew public indebtedness.

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