By Jim Tighe on Friday, July 20th, 2012
Probably not unlike most people (nice double negative), I was significantly influenced by my parents. I became an accountant like my Dad, I’m frugal (er… cheap) like my Mom, and I love baseball like my parents both do. If you read my earlier post “Another Day at the Office…”, you’ll know my oldest son will likely not be an accountant, my kids don’t exactly strike me as being cheap, but thankfully they do all have a love for baseball (I highly recommend reading The Bullpen Gospels).
Another thing I inherited from my folks was my political views. Not unlike religion (another double negative), I pretty much accepted that my parents would affiliate with the “correct” party so that’s the party I signed up with. Being out from under the roof for the past 25 years or so, I haven’t exactly switched political parties as much as I’ve become politically agnostic.
I feel our country is at yet another critical point in our fiscal future that will require (but likely not get) action from our elected officials.
During the fiscal crisis in October, 2008 there was political action taken. Whether you agree with the actions or the amounts (or any) stimulus, it was in fact action. At some level, the act of taking action defined the rules going forward and began the process of putting things in the rearview mirror.
Last year, there was a political stalemate around raising the debt ceiling. At the outset I was actually hopeful that all the talk about the deficit might lead to action. But instead of making a decision, the proverbial can was kicked down the road a year to just after the election (boy that’s odd) which will allow approximately 60 days to resolve something (or not). It’s sad that we’re going to endure a political rather than a fiscal debate for the next five months before we reach the “fiscal cliff” on December 31, 2012.
This is the time I wish our politicians were politically agnostic and fiscally responsible. The US needs to get on the path to a much more manageable debt service amount. I’m not lobbying how this should be done but rather pushing for real discussion and some freaking decisions. I know there is .001% chance of this happening, but in my opinion this is what is making this an incredibly anemic recovery. And what is sluggish now will turn even worse in November and December. To be clear, long term deficit reduction, regardless of how you get there, is critical to keeping the US (and US manufacturing) relevant and we need to start now.
In the period of deficit purgatory, businesses will be hesitant to act not knowing what is going to happen at the end of the year (sequestration or not). Government agencies will delay supporting necessary projects, but continue to have to act as if something will be resolved soon (more solicitations, delayed decisions, no funding, etc.). This governmental indecision and delay will not only impact defense contractors (what you’ll hear the most about), but will have a huge ripple effect on all US manufacturers who are directly or indirectly part of that supply chain. My sense is it will be similar to the housing bubble burst… People didn’t realize how interconnected global banks were until it all unraveled. The same realization and similar impact will occur for US manufacturers in this delay and no-decision scenario.
Two quotes that I think are relevant at a time like this are “In a moment of decision, the best thing you can do is the right thing to do; the worst thing you can do is nothing” and “Indecision is often worse than wrong action.” The first is from a politician (Theodore Roosevelt) the second from a manufacturing innovator (Henry Ford).
It certainly would be nice if our politicians would discuss and decide so today’s manufacturers (and manufacturing innovators like EWI) can do the same.
Please post a comment or send me (Jim Tighe) an email (email@example.com) if you agree, disagree, or have other thoughts.