The struggles of The Current Economy – Economics (200 Level Course)
The article on the 09/08 WSJ summarizes the struggles the current economy is going through. There is too much supply of goods and services and not enough demand for them. Thus creating an oversupply. The massive layoff’s the economy has experienced has also contributed to the fall in demand as people trim their expenses in times of uncertainty. While most US companies are trimming
manufacturing and closing plants foreign car makers are expanding their markets in the USA since they have lower manufacturing costs. And at the same time creating a price war with the local manufacturers. Consumers now have a wider choice than before.
A slump in the business real estate market has caused a lot of business lots and office spaces to be vacant. A good indicator of oversupply is the telecom industry which had built itself up during the internet boom in the 90’s. The build up of extra transmission medium ended up causing an overcapacity.
Overall the economic slowdown has benefited bargain hunters who are acting quickly to acquire companies that want to avoid liquidation or are in bankruptcy proceedings.