At year’s end, the United States faces interesting questions. What if our economy really is improving? What if the naysayers are wrong about the President’s position on taxes and spending cuts? And what if Washington responds accordingly? I’m not wearing rose-colored glasses, but a level of optimism may be justified. Here’s why…
First-time unemployment claims dropped to 350,000 for the week ending Dec. 20. The current four-week moving average stands at 356,750—the lowest since March 2008. Some economists tagged 400,000 as the milestone for stopping job loss and 350,000 as the target for meaningful job growth. We’re getting close. Oh, and in October (the most recent date for figures), single-family home prices rose for the ninth month in a row. Meanwhile in November, contracts for home resales hit a 2-1/2 year high.
Good news about the Treasury, too. It recently sold the last of its shares in the insurance giant, AIG. The $182 billion bailout rankled some people—particularly Tea Partiers—but America’s financial system was on the brink. And while the matter should never be considered a business opportunity for Washington, the Treasury cleared a $22.7 billion profit.
The government also is getting out of General Motors. Steven Rattner (The New York Times, Dec. 19) wrote that Washington should recover all but $14 billion of the $82 billion in TARP funds invested in Detroit (Chrysler also needed assistance; Ford made it through on its own). Auto sales have increased from 10.4 million in 2009 to a projected 15 million-plus for 2012. Moreover, Rattner reports, as many as 250,000 workers have been added.
Just as encouraging, American manufacturing may be coming back. In the Dec. 2012 Atlantic, Charles Fishman writes about General Electric bringing appliance manufacturing onshore from China. Why? Product designers, production specialists and marketers can all work face to face. GE is lowering manufacturing costs while eliminating shipping costs from Asia. In the same edition, James Fallows writes about small start-up companies designing and manufacturing products here (San Francisco is on the cutting edge) to respond faster to market demand. We won’t re-capture all our lost jobs, and new jobs will require more education. But the future offers exciting new opportunities.
Add to that, the U.S. may be heading towards energy self-sufficiency and more. Roger Cohen pointed out in the Times (Dec. 14) that the U.S. National Intelligence Council (NIC) sees the nation being a major energy exporter as soon as 2020. This will result from new technologies enabling dramatic increases in the production of shale oil and natural gas. There are risks, yes. But risks can be overcome. Improved mileage standards will help, too. Cohen cites the NIC study: “The prospect of significantly lower energy prices will have significant positive ripple effects for the U.S. economy, encouraging companies to take advantage of lower energy prices to locate or relocate to the U.S.”
I’ve always believed in American ingenuity and flexibility. What if Congress—particularly Speaker John Boehner—demonstrates enough ingenuity and flexibility to believe in our nation’s strengths and turn away from the Fiscal Cliff lying in wait? What if they got out of the way and actually put America first?
May the New Year be a good one for you!
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