By DAVID MOON, Moon Capital
November 25, 2001
Mark Twain was right when he said, 'few of us can stand prosperity.
Another man's, that is.' Look around; you see people reveling in the
failures and poor fortunes of others. For years, I suspected this trait
was common across cultures and communities, but I am becoming convinced we have
more than our share of negativism in Knoxville.
Recessions happen. Always have; always will. There are different
types of recessions caused by different excesses. Each type requires its
own purging process to prune the economy back to a state where it can once again
be healthy and grow. It is a natural process.
Just as natural as the rhythmic oscillation of the economy is the Darwinian
nature of business. There are successes and failures. This should
surprise no one. Individuals have always been the visible, tangible focal
point of these successes and failures. At the margin, it is easy to
misinterpret the health of an economy or geographic region by focusing on the
individuals involved with businesses at the margin. But this technique is
no more valid than walking into a sports bar, seeing one play of a football
game, then deciding who is winning on the basis of that one play.
In the last several months, economic growth has slowed in the US and in
Knoxville. But consider this: our current unemployment levels are still
lower than is typically seen at peaks of economic expansions. Just a few
years ago, many economists argued it was structurally impossible to have as low
of unemployment as we now do, without creating wage inflation.
When I drive down Kingston Pike, I have a choice: I can focus on the growing
or the failing. In Bearden, three restaurants recently closed. Less
than a mile down the road, Cha Cha's works with a 2 hour wait for weekend
dinner. Less than 100 yards from one of the closed restaurants, Belleza
Spa now operates in a converted and newly renovated facility. A couple of
clothing stores closed in the area. Who is to blame: the economy or M.S.
McClellan? Within 500 yards of that location, there are multiple class A
office buildings under construction or recently completed. In fact, there
are several large class A office developments currently underway in several
parts of Knoxville.
Some of these developments and successful businesses will one day fail.
It is an economic fact of life. But like a forest fire, the burning of
undergrowth provides the fuel and freedom for something else to grow in its
place. The original developer of Sequoyah Hills failed. The
neighborhood turned out all right.
It all depends on your view of life. When circumstances are tough, it
can be a challenge to focus on the silver lining. But in the aggregate,
circumstances are not tough. We have more people employed in this country
that at any time, up until a few months ago. We are wealthier and more
literate than ever. Our nation's poor are the envy of much of the world's
middle class. And the rich in our country are more wealthy than anyone
could have imagined only a generation ago.
In times like these, it is easy to get into the 'glass is half empty or full'
discussions. Don't get into that debate. Our glass in the US and
Knoxville is so full that we spilled some of our water.
Enjoy the rest of your Thanksgiving weekend. We all have much to be
David Moon is president of Moon Capital Management, a
Knoxville-based investment management firm. This article
originally appeared in the News Sentinel (Knoxville, TN).