|Ignoring Lag-time Distorts Our Perception Of Reality|
The element of lag-time should not be discounted. This is particularly true when it comes to economic policy. It is easy to underestimate how complex the interaction playing out across global markets add to and skew even the best intentions of policy makers. This means many variables are often out of their control. A factor that further muddies the water is the fact that hidden agendas lurk everywhere and that those making the decisions are not as honorable, smart, or as well intentioned as we would like. Many times people are given credit for the fruits of seeds they did not plant or the misdeeds of those before them. In short this is akin to the idea of who is left holding the bag when it breaks.
As of late the media has been opining on the legacy of President Obama, the idea of a so called "legacy" I consider much overdone and often misleading. History has a way of being rewritten to suit the views of the person in charge of the narrative which means truth has a way of being discounted. In our overly simplistic way of trying to understand events the lag-time effect should not be forgotten, today America is reaping the bad fortune of years of poor trade policy concocted years ago. Another example yet to play out is the ACA also known as Obamacare, this is only beginning to play out and it will be sometime before we feel the full negative effects of this program and the impact it has on society as a whole.
|Rivers Do Not Peak When The Rain Falls|
I deal with small business on a day to day basis and I will tell you they have little reason to be optimistic. This is why "Small business failures should receive a lot more attention then they do." If current policies continue we will see a lot more small businesses fail in the near future as people that have ventured down the path of starting a small business hit the wall. Small business is hard, going into business is risky, and many people are not up to the task. As a property owner that leases space to many start-ups I have a keen interest and knowledge of the microeconomics that occur. Just as important is the effect, long and short term on the economy. With most business start-ups having a very short lifespan of just months or around a year, the short term burst of spending is quickly followed by the longer term negatives.
|Smokers find Bad Impact Years Later|
We are often reminded of the following words of wisdom attributed to the economist, John Maynard Keynes: The market can remain irrational longer than you can remain solvent. In some respect this is a reflection of the fact markets do not always lead a market, this plays out in both up and down markets where it is not uncommon for prices to overextend to an extreme until those who have misjudged a trend finally capitulate. The point of this article is to highlight or shine a spotlight on the issue that what we see and are told today concerning the economy and markets do not reflect the lag-time effect, it is not all about today! Many issues that have been improperly handled over time will haunt us in future years as events unfold.