October 18, 2007 ::
Thoughts From Kenny
Does anyone ever get tired of watching the news and reading in different print medias and hearing nothing but “Doom and Gloom”? The national media for the most part emphasizes just that in reporting on the front page of newspapers and lead stories on national news that the “Housing Bubble” is ruining our economy and that the stock market is poised for crash because the Dow dropped .6% in one day! Did these guys not take Economics 101. The housing market and the economy has seen a healthy rise for at least the last 7 or 8 years with many housing markets in Indiana seeing 8 to 12 % increases in yearly home sales over that term. The sensationalism created by the media over a downturn in the housing market is nothing more than a much needed market correction. If it didn’t happen we would all be living in homes valued at extremely higher prices than the true market value.
The one thing that every economist should know is that whatever market you are in, or what commodity is being sold, the economy is ruled by one single factor. THE LAW OF SUPPLY AND DEMAND. The more supply, the price drops, less supply, more demand, and the price rises. In our economy real estate prices in the housing and commercial market could not keep rising at the pace of the past. The market corrects itself, and if we could magically take away the statistics from California, Florida, Nevada and Arizona the rest of the U.S. is in pretty good shape. The sub prime mortgage fiasco is reminiscent of the savings and loan problem of the 80’s and guess what? The market corrected itself. While sometimes it does correct itself with the help of the federal government or should I say the taxpayers, these times should be lessons learned was well when it comes to our election process and the elected bureaucrats that created and allowed the problem to begin with.
Indiana residents enjoy a standard of living that is at an all time high. Indiana has the second lowest industrial electrical rates in the nation, and boasts one of the lowest workman’s compensation rates in the nation. These things create an atmosphere that makes Indiana the place to do business. We are home to world class sports. Our farms feed the nation. Exports are on the rise and manufacturing is expanding. New automobile plants being built, new bio-fuel plants, new distribution centers and Indiana is leading the way in creating new jobs. Sure we may not sell as many homes as we did last year but eventually every stock drops a point, every economy has a flutter and the free enterprise economy we fight to protect corrects itself.
So to the media, quit your crying, report some positive news and come to Indiana, The Crossroads of America where we make positive things happen.
