Small Business Letter From America – a shattered economy

It’s something of a secret about the US economy; it’s shattered. Not in the sense that it’s broken, but in the sense that it is fragmented, with lots of little pieces.
When …

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23rd October 2008 at 9:42 am

uspostageIt’s something of a secret about the US economy; it’s shattered. Not in the sense that it’s broken, but in the sense that it is fragmented, with lots of little pieces.

When you hear news reports that the US stock market is dramatically up or down, they are referring to the Dow Jones Industrial Average. That’s made up of 30 stocks of very large publicly traded companies. There are something over 25 million small businesses in the US. So a simple headline just cannot convey the depth of the real story.

What is the real story?

Each region has its own economic indicators. For example, my part of rural Oklahoma looks at petroleum production and wheat crops. We have small banks that stayed careful in their lending, so they remain stable. Our state and local governments do typically seek loans from larger banks and do have investments in the stock market for retirement funds, so they are having some troubles.

Farm commodity prices are dropping, though we expect that to be temporary. If you want to know more about the small town effects, I brought together some research from local newspapers on the financial crisis in small towns.

Some regions are much harder hit. Some had huge increases in house prices, and now they are hurt by their housing prices dropping back down. Some depended on the financial industry. A wave of layoffs in various industries is hurting people all across the country. It certainly looks like we are in for tight credit markets all over, higher unemployment, and other effects I haven’t even considered, I’m sure.

However, I certainly don’t think this economy is going to come close to equaling the Great Depression. I’m taking a cue from my grandmother who survived the Depression and the Dust Bowl; I’m thinking about how today will look after 70 years have passed. I expect we’ll get by.

Becky McCray

Becky is a small town entrepreneur in America. She writes about small business and rural issues, based on her own success and failures, at her blog Small Biz Survival. She is the co-owner of a small town retail liquor store and cattle ranch. She also helps tourism related businesses from Oklahoma to Africa to maintain their web presence and rural nonprofits and governments with grant writing and project administration. http://www.smallbizsurvival.com/

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