Thursday, March 5, 2009

Economy weak? Spenders refute it

Arizona Republic, The (Phoenix, AZ) - Wednesday, March 19, 2008
Author: RICHARD KELLEHER , The Republic

It was one of those delicious days, when the temperature hovered in the two-week gap when Phoenix goes from 60 degrees to 100-plus. It was an 85-degree day dripping with sunshine.

Baseball bats were cracking in Scottsdale and in many other ballparks throughout Arizona. There were probably 10,000 people, spending as much as $100 each, at this ballpark. If my math is correct, that's $1 million in circulation for this game. That doesn't include the brew and snacks after the game.

I was almost at the point of listening to voices of doom about our economy. Since gas went over $1 a gallon, I have curtailed my travels and had not been out and about in years. I needed this day to open my eyes to the reality of what a prosperous economy there is in Phoenix.

Old Town Scottsdale has radically changed since I first set foot there in 1965. There is still a blacksmith shop. Tourists were planting green -- dollars, just as Midwest farmers plant this time of year for fall harvest. After seeing this planting, I know Arizona's economy is due for an abundant harvest.

The 101 freeway was a huge parking lot, even at 1:30 on a Friday afternoon. There were at least three lanes of cars. If the average car was worth about $20,000, I was looking at billions and billions of dollars, each containing a tank full of gas with prices above $3 a gallon. Meanwhile, city buses were empty.

Common sense told me that if this were truly a bad economy, buses would be full and the roadways would be vacant. In impoverished countries, citizens take the bus or walk or ride a bike.

Granted, there's inflation. I predicted this years ago when gas prices hit $3 per gallon. Matter of fact, I predicted $4 per gallon gas in a Republic article last year -- and was totally off the mark. Today I feel the prognosticators -- and the media feeding into it -- of a recession are creating what they want. As far as I can see, we have a robust economy in Arizona. We've just come off a Super Bowl, golf tournament, running event and car shows that all have pumped money into the economy.

Desert Ridge mall was full of cars in early March, again about another billion in metal, chrome and petrol. That means people were shopping or going to the movies on one of the nicest days in Phoenix's history. Why?

Sure, the housing market is recessed. When someone offers a home loan where all you pay is interest on the loan, and nothing on the principal for paying on the house, it would take an idiot to think you're buying a home. You're paying someone else's mortgage with the interest.

Why regulators let mortgage companies get away with this is beyond my grasp. Legislators let loan sharks and spurious business people get away with a lot of corruption.

So why have the media shifted their attention to how bad the economy is rather than ferreting out corrupt business practices? You would have thought they would have learned their lesson in the savings and loan collapses last century.

As for me, again, I don't see a bad economy. I see bad sectors, but there will always be bad sectors. Let's dwell on how good the economy is overall, not how bad a few sectors are.