The Economic Roundtable – Recovery At A Snail’s Pace!
In recent days economic data suggests the economic recovery is gaining momentum. Trade deficit numbers are encouraging, corporate profits have soared, consumer debt has been drastically reduced and personal savings are improving. Hopefully consumer spending will show a marked increase and this engine which traditionally has been the driving force of improving the economy will begin picking up some steam. When will this translate into business for our industry? Backlogs continue to shrink and are not being replaced at levels that inspire confidence for the near term. The Building code requirements requiring fire sprinklers for new construction from homes to high rise are in place. I’m hopeful we will begin seeing some improvement in business activity by the second quarter of 2011. We ask our readers to “blog” their view of business activity and how they see things for the balance of this year into 2011.
Unfortunately, I do not share your optimism on the economic turnaround. Productive jobs need to be created before the economy improves and consumer spending resumes. The “other” element plaguing us, is the commercial real estate debt crisis. A significant percentage of real estate will need to hit bottom before investment begins to encourage improvements and more building construction.
The economic stimulus package(s) have not helped the building construction markets and I’m not sure our country can afford another one. My prediction for “our” industry: bottom in 2012 upturn starts in 2013……I hope I’m wrong and your right!
The fact that corporate profits are high is a good indicator that all of the recovery money is staying at the top and not getting into the hands of the working class people in America. This is just the same as Regeans “Trickle down economics”. The greed factor keeps the money in the hands of the wealty corporations. I would call the era we are in as “Corporationism”. Like Socialism and Communism it is doomed to fail. We are well into a economic and social take over of America by mulit congolmorate corporations that have moved all the good paying jobs over seas. Until these jobs are returned to America consumers the trend can only be downward.
I share tricks concern that the economy is rebounding.
John, you refer to the trade deficit which has only narrowed slightly because American consumers are spending less, it has nothing to do with domestic output. (maybe on a micro level , but certainly not macro).
D Dunbar, You are correct that the healthier corporations are holding on to cash reserves. However, we can not fairly characterize all corporations as being cash horders in this economy.
Many of the largest corporations and banks have failed and survive only on government welfare.
I share your legitimate concern about “good paying jobs being moved overseas.” Ironically, many of these jobs are being outsourced to communist countries like Vietnam and China. This has been done under the watchful, approving eyes of both Republican and Democratic administrations.
Nearly 17 years ago, I led a rally of concerned citizens at a protest outside of the offices of Rep. Bob Smith, prior to the vote on NAFTA. Speaking with Smith on the phone, he told me that he was convinced that NAFTA would benefit his agricultural constituents and he later voted in favor of it, and a few months later in favor of the GATT treaty.
Shortly after retiring from Congress, Smith went to work as a lobbyist, with leading domestic and foreign corporations as clients.
Today, there is little debate that NAFTA has hurt this country. Corporations have no choice but to outsource labor to the lowest bidder (usually a communist, state-operated company) if they are going to compete in today’s economy, under these unfair trade laws.
The dollar continues to decline in value and the Euro currency system is on the verge of collapse. Instead of taking proactive steps to help American businesses, like reviewing trade agreements with communist countries, cutting taxes and excessive regulations, our current President has choosen to take us down the path of European style socialism. Government welfare, to corporate or private interests, will always stifle growth.
Until these policies are changed, our economy will remain stagnant.