Not pointing toward a rebounding economy

My blogger friend Bob McCarty alerted me to a heartbreaking story based on its timing, but perhaps a harbinger of things to come as the economy sputters along.

The Arrow Trucking Company lasted 61 years but suspended operations yesterday without warning, leaving bewildered drivers with their loads and instructions to go to the nearest dealership or terminal. Their fuel cards were shut off as well, so many were stranded in farflung locations. Even their paychecks bounced.

Obviously this is a nightmare for drivers who may be several hundred miles from home and away from their families, but the ripple effect of the closing of a company which employed hundreds of drivers and numerous other personnel at its Oklahoma home base can be huge – after all, those drivers still have mortgages to pay and families which depend on their livelihood.

It also shows the true effect of this recession on Main Street. According to the American Trucking Association, year-over-year tonnage has declined every month this year and although the rate of decline is slowing, that simply means we’re scraping a bottom. It’s akin to having “only” 500,000 claims for unemployment instead of 600,000 – the total is still going the wrong way. Even when we get what can be considered good economic news, such as the positive third quarter GDP number of 3.5% growth, subsequent events dampen the impact. The original GDP figure was “adjusted” for the second time this week, bringing it back down to a much more anemic 2.2% annual growth.

But that growth isn’t coming from the bottom up; it’s simply being primed by excessive government spending. Since the ratio of hours worked per employee is still stumbling along near its all-time measured low, there’s little need to hire new workers and small businesses remain cautious, awaiting the fate of health care legislation and worrying about how it will affect the bottom line. It’s not an environment conducive to recovery, and the fact Christmas spending started out flat shows families with strained finances are having to cut back. Needless to say, a smaller demand for goods spells trouble for the trucking industry and continues the vicious circle.

Try as the media might to talk up the economy – after talking it down during the last eight years – the reality hits again this week as a new group of families finds out again how tight things really are on Main Street and how difficult it is for a business that’s not among the favored special interests in Washington to thrive. Even though they employed hundreds of workers it’s apparent that Arrow just wasn’t “too big to fail.”

Author: Michael

It's me from my laptop computer.

One thought on “Not pointing toward a rebounding economy”

  1. Michael,

    I am curious if ATA stats include the increased tonnage that FedEx and UPS are reporting from the growth in online sales. While I am keenly aware that the growth — to just over $1 billion this year — doesn’t offset the decline 100%, it could also be that the “Great Recession” is causing a tectonic shift in the economy as a whole, as both consumers and businesses change how they do things.

    I can tell you that I shop very little “in stores” anymore. If I can buy it on Amazon through my Prime account, I do. And its not because of the sales tax difference.

    It’s because modern retail — in general — sucks. And as companies like Amazon get better at what they do, the value proposition changes.

    So we might be seeing more than just an ongoing slowdown — we might be seeing a complete shift in how we “do business” here in America.

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