Question by Julia: How does the economy affect business? Does the political climate affect business?
I am writing a paper, and have to answer thses questions. It relates to an online business.
Answer by johnb693
When the economy is doing poorly, and that affects all of us.
The Stock Market goes down, and that lowers our savings and 401Ks.
Housing prices also have plunged, and that makes people nervous, as tthey may owe more on their mortgage, than their house can sell for.
When that happens, people cut back, often heavily on their spending.
That means fewer products are sold, so the Manufactures lay off workers. It affects transportation, as they are delivering less goods.
It affects Department stores, as they too aren’t selling product, so they lay off workers, or don’t hire new ones.
Those small companies, suffer, especially in smaller towns, if one of their biggest employers shuts down, or moves off shore, for cheaper labor. That has a big ripple effect around the town. As there is no place you can find to get a new job.
The only way to break this cycle, is for Government to step in with varies plans, to stimulate the economy, as in lowering taxes and offering stimulation packages. They also need to trust those who they elect, will do the job. They need someone who will instill confidence in restoring the economy/
Historically, the Party that most people trust on that issue, is the Democratic Party. As you can easily see, it todays Presidential Race.
Even when people have jobs, but see others losing theirs, it makes them nervous, and gives them reason to tighten their belts, and save harder.
Only when that fear has been lifted, will people relax their spending habits, enough to get the economy back on it’s feet. Recessions, can be long and deep, or short and shallow.
So it’s going to take time, who ever takes Office next year. so we need
a good steady man, who can lead and is smart enough, to come up with good solutions.
To me that man is Obama. As the polls are showing, that seems to be the way our country is leading just now.
What do you think? Answer below!