Economic rant and theory

I’m going to do something rare for a conservative and portray myself as a victim. As many of you know, one casualty of the economic downturn in the construction and building industry was my previous job. It was one of the hundreds of thousands of jobs lost that particular week back in December, toward the beginning of an job-creation tailspin that roughly coincided with the election of Barack Obama as President.

While I don’t hold Obama’s predecessor completely blameless in all of this, the fact remains that things have gotten markedly worse in the last four months or so. It’s a point brought home to me when I found out today a prospective client of mine wouldn’t be able to complete a planned enrollment because his bottom line was making him lay off over half of his staff.

Needless to say, economic woes were the key issue of the 2008 election. Several times a week we received word of some major institution, in particular banks, laying off thousands of workers because they needed to fix their bottom line quickly. This also occurred in a number of Fortune 500 companies as well.

I’ve noticed lately that we don’t hear as much about these mass layoffs anymore. For example, while the news concentrated on the number of Chrysler dealerships being shut down (to be quickly followed by a similar General Motors casualty list), no one seemed to point out the mass layoff of perhaps 45,000 employees nationwide once these dealers close. Granted, many of these dealerships handle multiple auto lines and may not necessarily close completely (as an example, the Frostrom Chrysler-Jeep dealership in Pocomoke City also handles Subarus) but the hardship of needing to furiously unload cars in an effort to stave off creditors before the Chrysler franchises are pulled will likely spell their doom and take those other brands off the local markets as well.

As it turns out, my prospective client has a used car dealership. His business trouble stems in large part from a lack of trade-ins for new cars because few are buying new, instead deciding to keep their old (but paid-for) clunkers around. Plus credit is a little tight and those who have jobs are saving their money waiting for the other shoe to drop.

So it’s bad enough that Delmarva is losing a sizable number of jobs from these dealerships closing. Here’s where I wonder about another industry many on Delmarva depend on – tourism. Sure, most locals grumble about the traffic heading to the beach on summer weekends, but after enduring a summer of $3-4 per gallon gasoline last year, will the mounting job losses in the economy at large mean another drop in tourism spending this year as those who are laid off cut back on fun things like the family vacation?

As a season ticket holder for the Shorebirds, I’ve been pleasantly surprised that attendance is up but caution that a large part of the increase is from scheduling several early-season “Hit the Books” nights. (It’s a good sign though that there are six HtB nights scheduled as opposed to four last season – more schools are participating.) Certainly the Shorebirds can benefit from an economic downturn as cheap entertainment for a night but as more lose jobs will they feel the pinch as well? The bills have to come first for most of us.

Even local and state government feels the pinch as they need to furlough employees or slash their pay. It seems like everyone is suffering except Uncle Sam.

And speaking of Uncle Sam (or Uncle Barack if you prefer), today he announced new emission and fuel economy standards for the auto industry that’s 2/3 beholden to him for their very survival – that’s two of the Big Three with the exception of Ford Motor Company. While the administration is quoted in this AP story by Tom Krisher that the needed changes will run consumers about $1300 per car, what’s not being said is that the changes will hit automakers in the segments where they make the most money – sport-utility vehicles and trucks. They don’t make nearly as much on economy cars, but that’s what the new standards will encourage, along with people keeping their older SUV’s for a longer period of time when they find the newer, smaller ones won’t handle both people and cargo as effectively.

In short, new vehicle sales are likely to decrease unless and until Fedzilla dreams up new regulations aimed at getting older, non-compliant cars and trucks off the road. If they can regulate what type of gun you can buy and what sorts of food you can eat, chances are we’re not all that far from being told that if you have a car that’s pre-1990 you need to scrap it or maintain it simply as a historic vehicle not intended for everyday usage.

I’m not looking at this as the owner of a large car or SUV; as a matter of fact I drive a small coupe which gets reasonably decent gas mileage. Instead, I see this as choice by fiat (not the Italian car maker, though) where the free market is choked and restrained by the desire of some to control what everyone else can do with their lives. Far from letting a crisis go to waste, the Democrat Socialists are moving quickly to cement a position of power over American society in the mode of Peron or Mussolini.

In the meantime, the pain of losing a job is going to be felt by untold millions more as government dithers on finding a solution where it can be most involved instead of jumping aside and letting the correction take its course. We did this in the 1980’s and there’s no reason to think it wouldn’t work again if tried.

The next job which needs to be lost is a government job. How about starting with Congress in 2010?

Author: Michael

It's me from my laptop computer.