An economic mixed bag

We’ve been hearing some positive economic news lately. New-home sales jumped 11 percent in June. The Dow managed to top 9,000, and Goldman Sachs reported $3.44 billion in second quarter earnings earlier this month. Larry Summers, top economic advisor for President Obama, said the economy is “back from the abyss” in a July 17 Forbes article.

According to a July 20 Bloomberg report, the index of U.S. leading economic indicators rose in June “reinforcing signs the economy may be emerging from the worst recession in five decades.” James O’Sullivan, a senior economist from UBS Securities LLC in Stamford, Conn., predicted in the article that the recession will end in the third quarter. “We’re moving in the right direction,” he said. And the results of a recent National Association for Business Economics shows the economy recovering, albeit slowly, during the last half of this year, according to a July 20 article from MarketWatch.

But just as I start to take a nice long sigh of relief, I start to hear the strong, scary and convincing words of warning from folks who are not so optimistic about the economic recovery.

Paul Krugman, for one, the Nobel Prize-winning economist and columnist for the New York Times, queried in his July 12 column whether America was becoming a “boiled frog,” lingering in increasingly hot water, unaware of the fact that it will soon be boiled alive. “Now that the free fall is over, all sense of urgency seems to have vanished,” he said. Krugman predicts a painful jobless recovery, with unemployment rates staying high through the end of 2010, and with many unemployed losing their savings and homes.

Many in the glass industry also are unsure about the economy’s recovery. In a July 7 e-glass poll, only 20 percent of respondents said the economy had bottomed out.

So, where does that leave us? Will Wall Street recover in the near future, while Main Street continues to trudge through a recession into 2010? Could things on both streets just keep getting worse? Or are we all actually rising from the economic abyss? What’s your take?

--By Katy Devlin, commercial glass & metals editor

'Free' health care

In a CNBC Financial report, I heard an investment guy who summarized it all brilliantly.

He was discussing the fact that emerging market funds will be where the money is made. He said that the Chinese are using their currency to buy up and hoard commodities (oil, metals, etc.) at the current bargain prices in preparation for the turn around that will surely come at some point in time.

He said this: “The U.S. will lag the recovery because we have so much bad spending to digest. The rest of the world is financing growth opportunities, while we’re in the USA financing entitlement programs. Where would you put your money?” That just about says it all.

Here are some of the key points of the bills approved in the House this week: You will pay a 5 percent excise tax if you earn more than $280,000 in order to fund health care. Businesses will be forced to pay a “fine” of $375 for every part-time worker if they don’t offer health care. That one is sure to create jobs for our younger workers and the marginally employed.

Yep, it’s a real incentive to hire people who might not even generate that much in profits during a year. In one scenario: You have employees who only work five-to-10 hours per week because this is a second income for “fun” money in their homes. These are typically people who already have health care through their spouses’ employers, but under Obama-Care you'd be forced to pay a fine if you don’t offer them a program. You'd likely lay them off first if you can’ t make a reasonable profit. That model will be repeated over and over in our country.

Oh, it gets more than just interesting. This proposal could cost you even more.

It could even be worse; one of the Democrat proposals is an 8 percent tax on salary if your annual payroll is more than $400,000 for your company. How much good do you think that will do for small businesses? It doesn’t take much to hit an annual payroll of $400,000. If you take an 8 percent hit of $32,000, you might not have any profit left for many small businesses.

This is mind-boggling. Tell me how you feel about what is being proposed by posting your thoughts.

— By David Walker, Vice President of Association Services, National Glass Association

The opinions expressed here are those of the individual author and do not necessarily reflect those of the National Glass Association, Glass Magazine editors, or other glassblog contributors.

Study habits influence attitudes

There are only three three things we can control:
1) Our work habits
2) Our study habits
3) Our attitude

It is easy to define work habits. At Evans Glass Co., we define our work habits by what we call The Five Main Things; communication, daily quality results, customer service, teamwork and personal growth.

However, our study habits directly influence our attitude. Consider an analogy of the Dead Sea and the Sea of Galilee. Nothing new enters the Dead Sea. Consequently, it is generally lifeless and stagnant. The Jordon River runs through the Sea of Galilee bringing with it fresh growth and new life.

Our minds are similar. Without studying something beneficial, our minds are like the Dead Sea. Nothing new enters and our attitude begins to deteriorate. We become mired in the same muck as last week, last month, last year, last decade.

Read a book. If we read a positive self-improvement book only 15 minutes per day, we will read about 300 pages per month. That is more than one book per month. Attend a seminar. One hour or one day at a seminar will stimulate our minds and get us focused on positive change or growth.

Attend GlassBuild America. A few hours or days with our peers will rejuvenate us. The flow of new information, or old information from a new source, will change our attitude. The improvement of our study habits leads directly to a positive attitude. Remember we can't eat anything we want and lose weight simultaneously. Improving our diet--study habits--leads to better health--improved attitude.

—Bill Evans, president, Evans Glass Co., Nashville

Ditch water, summer readings, and creating your own economy

Anybody who knows me knows I am easily enthused. Let's face it, sometimes the little things, even the most trivial, matter. And I am excited as I pen this note on this beautiful July 4 weekend.

True, my mood was just brightened as I listened to the Brewers walking in the Cubs’ winning run in the bottom of the ninth. Sorry, fellow Domer/Brewer Craig Counsel. Them’s the breaks.

But my excitement today goes beyond another Cubbie win.

As Dutch might have said, “Well … we made it.” The worst is behind us. The economy has bottomed out. And not a moment too soon. So the economists tell us.

Monday's headline news affirms this: "U.S. service industries--from retailers to homebuilders--contracted last month at the slowest pace since September, a sign the worst recession in half a century is easing," said economists at the Institute for Supply Management.

Indeed, while many businesses and individuals are still struggling mightily, many manufacturers, suppliers and glass shops have gotten through the worst in decent shape. A few are even flourishing. All is not well--by a long shot--but the proverbial light appears to be flickering at the end of this very dark and dreary tunnel …

The first half of this year was akin to drinking ditch water on a hot summer day. It’s all we had, so we had to drink it; but it sure tasted awful. Hopefully, we've buried that ditch once and for all and that gorgeous, sparkling oasis we see in the distance isn’t a mirage.

As we soldier on, several interesting threats--aka, opportunities--remain.

GE CEO Jeff Immelt was quoted this week as saying that our country needs more manufacturing. We know how true that is; especially in the glass industry.

But China remains a major player in the manufacturing arena. A few months back, I was impressed when Ford Motor Co. announced that it now has the same labor cost structure as Toyota, at some $50 per hour. I was equally shocked to learn that Chinese firms can produce cars at $13 per hour of labor. So the competition is there.

But so is the opportunity.

Indeed, if Immelt’s challenge is to be met, we as a nation must make some important, tough decisions. We need policies that support job creation, without being protectionist. Now more than ever, our unified involvement is needed.

The Obama administration is already talking about a second stimulus package, based on last week's abysmal job creation numbers. What shape it takes, who knows? But we all know that government can only do so much. At some point, the private sector must step up and make the real difference.

In speaking with NGA board member Kevin McMahon last week, he indicated the local association meetings he attends are brimming with business people doing just that. These tough times are clearly prompting people to reach out and connect, network, and yes, create their own economy! It seems we’re all tired of drinking the ditch water.

We’re seeing this play out with GlassBuild America too. If early registrations are any indication, we could be on pace for a wonderful year! In fact--all things being equal--we’ve seen equivalent, if not higher, registrations for this fall’s show than we’ve seen over the previous two years.

You know what I’m going to say here …

It’s time to network, build your business and create your own economy! And there’s no better place to do that than at this fall's GlassBuild America expo. Register today to attend. I promise: We won’t be serving ditch water. After all, ditch water is for dogs; it’s time to drink from a better source.

And if you're looking for a book to add to your summer reading list, try "Create Your Own Economy: The Path to Prosperity in a Disordered World," by Tyler Cowen. Just released, this quick and timely read focuses on how you win by innovating, sharper thinking and working harder.

— By David Walker, Vice President of Association Services, National Glass Association