Minding Your Business Blog Index
September 08, 2008
Sputtering economy primed again

My lawnmower is getting a little long in the tooth, and it often takes a lot of yanking on the chord to get it started these days. It makes me wonder, often, whether it'll ever catch.

Policy makers must be feeling the same way, as they struggle to get the sputtering economy going.

Unemployment is at its highest level in five years nationally.

The U.S. rate climbed to 6.1 percent last week, when the August job statistics were released. Maine's rate of 5.4 percent in July represented an increase from the previous month too, though August numbers are not yet available.

In Maine, we've been losing jobs to plant closures, with managers blaming the soft economy for most of their problems.

And investors have not been signaling that they think things will turn around quickly. Bears have been dancing all over Wall Street, with a decline in the Dow Jones Industrial Average of more than 20 percent since last fall.

That's kind of discouraging, since the federal stimulus checks were designed to get the economy going. It's not surprising, then, that voters in Maine and other states tell pollsters that the economy is their top concern.

With all this in mind, it's easy to see why the federal government gave a heck of a yank on the chord Sunday, when officials announced the takeover of Fannie Mae and Freddie Mac, the big loan-guarantee corporations. It's going to cost taxpayers billions of dollars, but also is sure to calm credit markets and drive interest rates down.

The Maine Mortgage Brokers Association, in a news release Monday, summed up everyone's hope for the action: "Returning confidence to an uncertain housing and monetary market is the first step to a full recovery."

Let's hope they're right and that the economic engine catches this time.

Like my trusty old lawnmower, the U.S. economy always has turned over, eventually, in the past. It's just a question of when.

Posted by Eric W Blom at 01:31 PM

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Eric Blom has been a journalist in Maine for 20 years, much of it as a business reporter and editor. He's been inside factories, office buildings and retail shops throughout the state, meeting with workers, shoppers, investors and executives about their hopes and fears. These days, as local and business news editor, he has a bird's eye view of what's happening in Maine commerce.

Eric, who was born in Rhode Island, has been heading north for some years now. He graduated from Boston University, edited a weekly newspaper in Belmont, Mass., and worked at the now-defunct Peabody Times in Massachusetts before coming to Maine. He lives in Portland with his wife and two children.

Knowing Maine's Business is a gathering spot for the respectful exchange of information and ideas about the marketplace.



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