Signs of economic recovery in a US town

Signs of economic recovery in a US town

Ears pricked, nose quivering, she held her ground as we strode past with Pinot, a large black dog who craned his neck to observe the doe.

There were other walkers out and about, with and without dogs. We strode past a house advertising bed and breakfast, its sign proclaiming vacancies. A tourist in a car with California license plates stopped to ask directions to a restaurant serving breakfast.

Tens of thousands of outsiders visit this pretty town every year, attracted by the Oregon Shakespeare Festival, which lasts from February to October. They dine in good restaurants, stay at the historic Ashland Springs hotel, hike in the surrounding Cascade mountains and attend performances at local theatres which produce plays other than those penned by Shakespeare.

Founded in 1855, Ashland is a small Oregon town with some 24,000 inhabitants. It is located 25 km north of the California border. The financial melt-down — dubbed the ‘Great Recession’ — hit Ashland hard but the economy has started to turn-round. People say, hopefully, “As Ashland goes, so goes the nation.”

Here in West Coast Oregon the rate of unemployment is the third highest in the country.

Michigan, home of the US automotive industry, has the largest number of unemployed.

But there are positive developments. President Barack Obama’s stimulus packages have worked here on three key fronts, banking, real estate and car sales. Fortified by an injection of billions of dollars, banks are once again providing money for mortgages and loans, jump starting a stalled economy.

First time home buyers have been given an incentive to purchase at this time by a federal tax credit of $8,000. The combination of the credit with lower prices and low interest rates is encouraging couples to buy, estate agent Rob Skinner told Deccan Herald. He said buyers were also attracted to bank-owned properties which are priced at about 10 per cent below market value.

At present, “lower priced houses are going, but there is a domino effect. Once people living in these houses sell, they want to go up” by buying a house in a higher price range. “Couples who had been waiting three or four years to buy feel the economy is turning around. Interest rates are historically low.” He said that the improvement in the housing sector, where toxic mortgages plunged the economy into a tail-spin, has “rebounded psychologically and helps people to make (positive) buying decisions.”

Chuck Butler of Butler Ford, a firm with four car dealerships, said that his company has been doing “very, very well” since the Obama administration launched its “cash for clunkers” programme.

This provided $3 billion in cash payments for old cars if their owners are buying new vehicles. Butler, whose firm represents Ford and several Korean brands, said, “Since July 25, we have doubled our sales”. These did not involve only cars covered by the government programme but all vehicles on his lots. He said that sales had slumped to 60-80 vehicles a month but had risen this month to 150 and were expected to conclude the month at 200.

The rebate for ‘clunkers’ is $3,500-$4,500. Since prices have also fallen dramatically, he said people now have a “once in a lifetime chance” to buy a car at half price. “The economy is starting to turn around.”

While consumer confidence is returning in some sectors, many Ashlanders who formerly shopped at the more expensive shops and supermarkets are now going to the cheaper mass outlets like Walmart and Target located in malls along the highway to industrial Medford, the nearest city. Ashland is a ‘green’, town which seeks to keep its quaint character.

In spite of improvements in the economy, people across the US are still holding onto their money, postponing less urgent expenditures. They are waiting to see what will happen when the country gets back to business in September after the summer holidays.