Stimulus is Just the Start By Kim Phelan
Article Date: 03-01-2009
Copyright(C) 2009 Associated Equipment Distributors. All Rights Reserved.
It'll take much more to fix the jobless mess and bring lasting recovery. By the way, what are you doing on April 29?
In the 1936 “goofball” comedy My Man Godfrey, William Powell’s “forgotten man” character gazes over the city dump, home to a host of homeless men, and reflects that, “The only difference between a derelict and a man is a job.” With zainy scenes ranging from horseback-riding in the drawing room to a moody gigolo doing chimp impersonations, it’s evident that Hollywood, at least, was able to create some humor – as well as wry social commentary – during a period of national devastation.
I find Godfrey’s remark quite piercing as I survey the rapidly rising mound of jobless claims amassing around us. Can any of us fully wrap our brains around the concept of half a million people losing their jobs per month?
Like you, I’ve heard economists draw parallels between the present economic environment (with its rampant plunge of employment) and the conditions of the Great Depression. Experts are not optimistic, but their conclusions merit our close attention.
Addressing a roomful of trade editors at the World of Concrete on Feb. 3, the chief economist of The Portland Cement Association, Ed Sullivan, asserted that his own estimation of the nation’s economic outlook was considerably bleaker than that of President Obama’s economists. At the time that he was speaking, the $787 billion stimulus package had not yet been signed into law, but even anticipating its arrival Sullivan predicted a high job loss pace sustained through most of H1 ’09, and that between ’09 and ’10 a ghastly six million jobs will be lost.
Sullivan expects several other depressing conditions to plague our fragile economy: (1.) continued acceleration of home foreclosures, adding to home inventories and further depressing home prices; (2.) continued losses in consumer, business, and bank confidence through mid-2009; (3.) tight lending standards through 2009, with slight easing in mid-2010; (4.) slow world economic growth hurting U.S. exports; and, perhaps most discouraging of all, (5.) the lingering fiscal deterioration among state governments, with total deficits reaching more than $100 billion in 2010.
State budget debacles are poison to the job situation – severe cutbacks, including construction projects, will only make matters worse.
Sullivan predicts that actual job creation from the stimulus won’t kick into full throttle till mid-2010 and beyond. But guess what. Sustainable job creation is also going to depend on another critical event on Capitol Hill: the reauthorization of SAFETEA-LU.
The key is to not allow Congress or the public at large to be lulled into the false security that the federal stimulus package is enough. The genuinely brilliant thing about fixing our crumbling roads and bridges is that people are put to work, products and services are bought and sold, and, what d’ya know, we actually get something impressive for our money. But somebody’s going to have to do a lot of work to make adequate federal funding a priority.
Overlooking that cinematic garbage heap, Godfrey also remarked: “There are two kinds of people: Those who fight the idea of being pushed into the river, and the other kind.”
I’d like to encourage you to be one of the fighters; a good place to start would be to join other dealer principals in Washington, D.C., next month for AED’s free Government Affairs Conference April 29 and 30. E-mail me and I’ll send you details – and the reasons you should not miss it.
Meanwhile, stay out of the river, and thanks for reading.
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