Has the economy recovered? Everyone is talking about the Dow hitting 10,000.

10,000 points on the Dow Jones Industrial Average has been considered an important sign of economic recovery for the United States. We hear on the news that the days of seemingly unending market fall are over: this recent benchmark indicating that the recession is waning. However, the economy that matters to many is the one closest to home, and this week Onondaga County had to cut over 100 jobs in order to get the budget passed. If businesses are also still cutting large numbers of jobs to get their numbers improved, to pull stock values up, are we really doing better? Businesses drive communities, because without jobs, there is no money to build and sustain.

Imagine two different fishing villages, both with equal amounts of available fish. Village No.1 has some really eager fishermen come in with huge nets, fish finders, traps, etc. Village No. 2 has equally eager folks, but among them is resource manager with some pretty strong community support. You can imagine what happens as No. 1 goes all out to catch and sell every available fish. Businesses are built to support the fishery, boating supply centers, fueling stations, repair shops, bars and restaurants, churches, banks, a police station and fire station, etc. Village No. 2 has all these, but maybe not as many, because they brought in a biologist to study how many fish they could catch sustainably. They then imposed an annual catch limit. With this slower build of the village, they also tried to attract some other industry to the area. They included a number of schools, art centers, and recreation/entertainment facilities.

Ten years later village No. 1 has peaked, their highest annual catch was in year four, and they haven’t been able to get close to those numbers for the last couple of years. Within five more years some of the old-timers know it won’t be economically feasible to have the boats leave the dock, and they are already looking for somewhere else to go. Their crime rates are beginning to escalate and the few civic groups they had are crumbling, as there is little extra cash, loans being made at the peak of the market. Village No. 2 is still thriving, and constantly adding facilities that improve the overall quality of life. It is a classic case of the turtle and the hare, No 1. underwent the “boom-and-bust” that the G-20 leaders hoped to reduce in world markets, while No. 2 was managed with the intention of long-term inhabitation and development.

Perhaps cutting jobs to cost costs in order to meet numbers on quarterly return statements in hopes of increasing stock valuation is a sort of sustainability technique. However, who pays for all these people that are now on unemployment, and for how long? If they don’t have money to spend to support the businesses, will they be continuing to cut jobs quarterly? Has the fishery collapsed, or is this just a period of flux? It is clear that there is a need for the sustainability factor to be considered when evaluating balance sheets. Unemployment numbers will be interesting to follow over the next few months in order to make a better assessment of the state of the recovery.