Fresh bad news hit last week with notice that Herff Jones of Lewiston, producer of high school Memory Books, will consolidate with its plant down in North Carolina, entailing the loss of nearly 250 jobs, about half of them full-time. That is a lot of employment to replace in a small local economy.
On the other hand, businesses go through life (and death) cycles as people do. Herff Jones’ biggest problem was not the current recession, but the fact that the digital revolution in photography has changed its markets and customer base profoundly. That doesn’t make life any easier for those who have lost their jobs, but it is not the tightening of a noose around our necks here in the Winona area, at least not from this current recession.
You could find better news in the help-wanted section of today’s issue of the Winona Post, where ad- vertising space is up almost 100% over last Sunday. That is anecdotal evidence, of course, but illustrates that life hereabouts is not grinding to a halt. In fact, there are sectors of the local economy that are booming and cannot find the employees that they need.
In our dealings with realtors and car dealers, we hear that many people who have needs and the means to satisfy them are staying out of the showrooms and open houses because they have been led to believe that there is no credit available to them to make car or home loans. Nothing could be further from the truth, as I confirmed by talking to the presidents of local banks.
According to Jack Richter of Winona National, the only thing keeping him from making more car loans is exceptionally cheap rates from GMAC and Ford Motor Credit. But Richter’s bank is currently processing a slew of home refinancing applications, as well as for fresh mortgage loans. Standards for those have tightened a bit, but then we are in the current mess because sensible mortgage lending practices had been abandoned in many places, the malign influence of a federal government believing in and mistaking itself for Santa Claus.
Rod Nelson, of Merchants Bank, said that the only reason they have to turn down mortgage or car loans to their friends and customers is if applicants can’t reasonably be expected to pay them back – a standard, sensible lending practice never abandoned here, and the excellent reason why qualified local borrowers can still make car and home loans.
The Winona area and, to some extent, the Midwest in general, is not participating in the worst of this recession for that same sound reason. It will be shallower for us, and end sooner. The Kiplinger Newsletter, a conservative business publication, predicted this week that the national economy would start turning up, hopefully, by midsummer. We should be ahead of that timeline.
Looking beyond the short term, the scariest prospect for Winonans and everyone else should be the tearing rush within the incoming Obama administration to throw nearly another trillion dollars at this recession, justified by absurd end-of-the-world rhetoric.
The federal government has already generated a trillion dollar deficit this year, trying to solve a problem originating from its earlier fiscal irresponsibility. What have we to show for that? And what will another trillion dollars in deficit accomplish on top of it, other than an endless mountain of debt, and runaway inflation caused by the blizzard of paper money introduced into the economy which was not generated by any meaningful or lasting goods and services?