MECHANICAL CONTRACTING | PVF | CONTINUED FROM PAGE 64
no longer act as a stimulant. This has also positively impinged on America’s positive savings rate and the lessening of consumer loan demand on U.S. banks. With a 313 million population mass, expected to reach
450 million by the end of the 21st century, rentals, whether metropolitan high rises or free standing, are becoming the housing of choice. Shortages in this subsector are rapidly increasing, shifting raw materials such as copper, contractors and labor for this flourishing subsector area of potential construction, into the rental arena. In the meantime, the red hot manufacturing sector
seems to have taken a breather in May, but it is still on the way to a banner year, spurred by an unexpected surge in export shipments of construction machinery, automotive components, armaments and a record total of agricultural products, including controversial shipments of U.S. subsidized ethanol.
Big government, big business confound independent enterprises Despite all the recent media hype regarding an
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improving employment scenario, plus improvement in home sales and residential new construction bouncing off the floor, the "wealth redistribution mentality" emanating from the current administration will continue to follow its ineradicable government ownership and control objectives, tempered only by the need to achieve re-election on November 6, 2012. The bitter irony is that the American nation’s mega-
sized businesses are more in sync with the Washington, D.C. beltway than the tens of thousands of privately owned companies that potentially employ 2/3 of the U.S. jobs pool.
The bitter irony is that the American nation’s mega-sized businesses are more in sync with the Washington, D.C. beltway than the tens of thousands of privately owned companies that potentially employ 2/3 of the U.S. jobs pool.
This conclusion, which I derived at through ongoing
observations as well as through several hundred interviews with independent manufacturers, distributors and retailers were confirmed by 3M CEO George Buckley and several top corporate executives of my acquaintance who preferred to remain anonymous. Big business leader Buckley courageously described the
Obama administration’s policies as “the most anti- business" of any president in "long-term memory." He also alluded to the fact that multi-national companies have added more than twice as many jobs in their overseas subsidiaries and divisions than those brought into the workforce in the U.S. in recent months. The additional business derived from this foreign employment expansion is way out of kilter with the additional business generated overseas. It’s strictly a
matter of cheap labor costs. 3M’s CEO reiterated that publicly-held corporations
are responsible to their stockholders, first and foremost, and are constantly sensitive to their published quarter- annual earnings, which tend to be reflected in the value that investors place on their market price. He added that the advent of Obamacare has "all the
makings of a major business catastrophe" and that the additional strangulation of the Dodds/Frank financial regulations would tend to drive even more jobs away from America’s shores. With the reaching of the debt ceiling, growing deficits,
an out-of-control debt and a possible credit downgrade of the U.S. treasury bond holdings converging into a potential fiscal catastrophe, a new panel has been reestablished by the president to forge a solution. Good Luck! It’s questionable whether panels can replace decisive leadership.
Current consumer savings rate is healthy phenomenon As latest consumer income and expenditure statistics
indicate a long-term commitment to an ongoing 5 to 6% savings rate of annual take-home revenues, it’s becoming increasingly apparent that the American wage earner has reached a reasonable balance between savings and purchasing power. This solid shift to such a conservative stance has not
been seen for the past 20 years and is obviously occasioned by concern over future government entitlements and the expected decreasing dependence on Social Security, Medicare and lower taxes. Despite an upward-creeping economic improvement, the bulk of American families expect tougher times ahead, a reversal of the long term optimism endemic to America’s successive generations since the end of World War II. Despite a stubborn residue of high unemployment,
America’s working majority is still spending reasonably well, but not relying on credit cards, short-term bank loans or stretched-out payment plans. In fact, debt repayment has been on a fast track, another reason why both solid savings rates and consumer activity have exceeded previous expectations. With an expected gross domestic product of
approximately $14.5 trillion for 2011, the consumer sector will still approach two-thirds of total gross domestic product this year. As the trade deficit is shrinking somewhat, despite the
soaring prices of energy imports, greater domestic manufacturing activity and a surprising bulge in export revenues, the per capita income level should be on the uptick as the year wears on. As previously indicated in these columns, this shift
back to domestic manufacturing and booming exports is affected by a plunging dollar, renewed faith in the quality of "made in America" and the accelerated growth of technology, as well as the expansion of private enterprises, despite the continued attrition of hobbling federal regulations. But the overall commitment to individual savings
appears to be primarily motivated by a deep mistrust that the U.S. Government’s long-term support in health and retirement assistance won’t be there in future years when it’s needed. l
phc july 2011
www.phcnews.com
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