Every time good news about the economy is announced, the inevitable spinning it into bad news starts immediately. The unemployment rate dropped to under 10% and news organizations like Fox News say that it is just because unemployment benefits have run out or people have just stopped looking for work. It seems that anytime there is good news it never goes unpunished. Here is a list of good news turned bad.
Obama’s 30 billion small business funding plan
This plan that was announced during the State of the Union speech diverts TARP funds to community banks for the purpose of financing small business. One of the challenges for local business is that the larger banks do not want to loan smaller amount. The community banks would, in theory, be more receptive to small loans to local businesses.
The bad news spin: The lending standards are too stringent and small businesses will not qualify for loans even if the community banks have the capital to lend. This is not untrue, however one thing is for sure, no business will be able to get financing if the banks have no money to lend. It is one of the fundamentals of business, supply and demand. If the banks have money to lend, they will find ways to get that capital into the marketplace.
Obama’s small business tax credit
Obama proposes that any small business that hires a new employee will receive a tax credit of $5,000. This plan would also give a tax break for pay raises. Even if a small business had planned to hire anyway, this would also be included. Although there are some restriction, if a small business has a net gain in new employees they will receive the credit.
The bad news spin: Small business will not hire just to receive a tax credit. True, however if a small business needs to add employees to the payroll, this is another incentive to justify the new hire. If a small business owner is debating on a new hire, this could help make the decision to bring them on.
Unemployment drops under 10%
Unemployment numbers have dropped to under 10% and can be looked at as a positive sign of things to come. Most of America is employed by small business. Owners will be more willing to hire if they feel that the economy is turning around. This is just one indicator of the economy and is believed by many as a lagging indicator.
The bad news spin: People have fallen off the unemployment rolls because their benefits have ran out. This is also true that every week a certain percentage of people will exhaust their unemployment benefits. However if more people file new claims than loose benefits, unemployment numbers go up or stay the same. Only when more people find jobs will unemployment drop. The number does not conceder people who didn’t look for work last month.
What good news turned bad have I missed. Use the comments below to add to the list.
{ 4 comments }
its really great article, and the word you have express are really powerful.
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Excellent article. That some up the difficult financial situation that exists today. There will always be negative spin, but some of it is certainly justified.
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I think there will always be a hyped bad spin on something partially because of the nature of politics (always trying to make the other side look bad) but also because most things designed to solve a certain problem A create problems B C and D. So its a matter of which the most people think is the lesser of the evils.
Interesting article! well this something unevitable that all good news are followed by some bad ones:)
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