Must Read Article on Portland, Oregon
Posted by JimPeter Goodman wrote a piece today in the business section of The New York Times about the city of Portland. The story could be about any affluent city in America; it is really about our collective economic behavior in these difficult economic times. The article is a cautionary tale how excess thrift and caution can sink a city. Mr. Goodman also provides moral cover for the oft-maligned lending community. I have been a frequent critic of how unreasonable the banks have become. You know the old saw about how banks will be happy to loan you an umbrella if it is not raining. Lenders have gone on the offensive and argue they have plenty of money to loan. They argue that credit-worthy people are not investing, spending or borrowing.
Which brings me back to the umbrella. It does rain, even here in San Diego, and people do need umbrellas when it does. While I can understand their reluctance to take any credit risks in this new environment, assuming risk is in the nature of lending.
It is at this time that all of us need to assume more risk. Only if there is a collective leap forward can we break the recessionary, and even deflationary, psychology that is the raw fuel of the downturn. Banks must lend and people must spend . At least more than we have over the past few months. Read the article and then go to the mall.
