A couple hours ago, the House of Representatives joined Congress in passing the financial “Bail Out Bill”. President Bush quickly signed the measure so taxpayers like you and me can throw $700 billion at the problem.
Politicians and pundits are lined up to give their spin on what will come next. Most agree our economy will not see a true rebound. The $700 billion will simply avoid catastrophe and reduce further meltdowns from Wall Street to Main Street.
Do we dare hope for a quick turnaround for those whose livelihood depends on the construction trades?
I suspect not. Skepticism is running extremely high. I just checked a poll posted on MSNBC’s website (www.msnbc.com). Although labeled as “non-scientific”, it’s hard to argue with 85,000+ responses.
Here’s what the poll asked: “How confident are you that the financial bailout package approved by Congress will ease the economic crisis?”
Here were the results as of 4:30 p.m. Friday, Oct. 3, 2008.
Very confident: 4.4%
Fairly confident: 11.0%
Somewhat confident: 27%
Not at all confident: 57%
Wall Street also responded poorly. The Dow Jones Industrials Average was down 157 points today.
I’m no research wiz, but those responses don’t sound the least bit encouraging.
How is this historic financial rescue plan supposed to help builders, tradesmen, developers, architects, engineers, wholesalers and other construction pros?
Theoretically, it will provide confidence and reassurance for banks to loan money. Those who run companies will have increased odds at getting funds to meet payroll, buy equipment and materials, pay subcontractors, suppliers and other vendors.
Realistically, it will help keep solvent some firms on the edge of bankruptcy. They will live to fight another day. But the bailout won’t open any floodgates. Banks will remain paranoid, creditors will continue to hound debtors, and new buyers will remain skittish.
My guess is that projects already started can be saved. And those projects funded by the government or large institutions will keep moving forward. Just don’t look for a wave of new business, especially in the residential market.
Will the bailout help your business? I’d love to know. Post your response to this blog or email me firstname.lastname@example.org.