The weekly newsletter for everyone interested in barter--the world's most versatile business tool!
February 5, 2002
Excess Capacity Highest Since 1982 Recession
According to Rudi Dornbusch, economics professor at MIT, additional time will be needed to get the economy back to the levels of the past decade. He says today's excess capacity is the highest since the '82 recession...a recession that resulted from massive cutback in inventories by companies trying to rebuild profitability in the face of strong price competition and the high costs of accumulated debt.
Dornbusch says the rest of the world offers bleak prospects for a turnaround...Japan is in a permanent recession. Europe is in a slump from an accumulation of supply-side strangulation and policy stubbornness.
And emerging markets are mostly on the ropes from over-borrowing and reform fatigue. That leaves the U.S. consumers, who have done their best to borrow and spend, due to deflation in retail prices (prices slashed 50% to 75% this past Christmas shopping season). And while the consumers aren't about to cave in, they're also not about to drive a vigorous upswing in the face of rising job losses.
If an upswing doesn't come, the borrowing that has kept the U.S. going will go sour, and tying our upswing to a monetary policy alone is risky. The answer is for the Congress to come forth with a bipartisan strategy for a fiscal stimulus...to move the economy forward.
an industry standpoint, barter is enjoying a renewed interest in the
marketplace, with additional members and renewed trading taking place.
The only downside, exchange owners report, is on the collectable side
of the ledger.
Small Business Survival Committee Says Bush Is Right On
"Small businesses across the country will welcome the fact that President Bush understands how tough things are and that he has good, sound ideas for speeding economic recovery," affirms Darrell McKigney, President of the Small Business Survival Committee, a Washington-based advocacy organization.
McKigney says that "small businesses create 75% of all new jobs, so the best economic proposals are those that will energize the small business economy."
note: The current recession, according to some noted economists,
is a result of policy choices made by the Fed when interest-rate increases
in 1999 and 2000 pushed the real federal funds rate to its highest level
in ten years, coinciding with a peacetime record level of federal taxes
as a share of GDP.
White House Scored In Barter Deal For Super Bowl Ad
News Corp's Fox provided $3 million in "matching spots" to the taxpayer-funded White House Office of National Drug Control Policy, in exchange for their $3 million purchase of commercial time during the "Big Game." Reportedly the intent of the pro bono match program was to preserve the model traditionally used with public-service advertising.
many advertisers being hesitant to purchase ads on the Super Bowl,
Fox smartly used barter, i.e. offering enhancements, to get advertisers
aboard. The enhancements took the form of ads prior to the kickoff
and after the gun at the game's end, as well as extra billboards,
and special positioning.
Here And There. . .
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