No RVs For The Homeless Because There Is No Financing And Very Little Production In Elkhart

It has taken a little time to digest what President Obama said to Hoosiers yesterday in Elkhart, Indiana. My first impression was that the President spoke in eloquent prose and looked great saying the words. Unfortunately, as the image of the well spoken President faded, we were left with words which bear little hope for a quick economic recovery.

President Obama visited Elkhart and witnessed that unemployment in the area has soared to 15.3 percent in January. The Elkhart-Goshen area has the fourth highest unemployment rate of any of the U.S. Metropolitan area according to the Bureau of Labor Statistics. Elkhart's unemployment rate has has increased by more then 10 percentage points over the past 13 months.

Folks after looking around, things are bad. See WSBT-TV: Laid-off workers turn out to hear Obama. Despite Obama's plan to bail out the mismanaged banks, no plan is in effect to bail out small business. In briefly surveying small business owners, the overwhelming response is that the lack of credit is crippling the little man. Elkhart is known for manufacturing RVs. But few people can afford to buy an RV without credit. What with all of the people losing their homes to foreclosure, one would suspect the RV business would increase as their becomes a demand for alternative mobile housing. (No kidding here, folks.) But RVs are not selling because no one can get financing. As a result, the RV manufacturers have to shut down production lines and lay off workers.

Folks in Indiana, a state which voted Democratic for the first time in a long time, simply lack confidence in the government's ability to resolve the crisis. While tax relief may help, unless it includes the upper middle class and middle class, it simply won't be enough. Now is not the time to encourage those with money to be stingy. If you want stimulation of the economy, then encourage everyone to spend. If some one does not have a job, then that person can not make their house payment. Income is necessary for people to increase spending. Create jobs with the incentives. Provide cheap credit to consumers and to small business. To ignore the recipe to rump starts the cycle is to ignore history.

Elkhart Mayor Dick Moore briefly summed up the situation. People need jobs so they have money to spend and support industries such as RVs. Watch Elkhart's mayor. According to Moore, the stimulus package may finance 16 shovel-ready projects that should create jobs.
Will it work? By itself, probably not. If there is a comprehensive plan which incorporates tax cuts and incentives to buy for all, then perhaps. Now is not the time for a band aide solution, President Obama.