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Three More Quarters Remaining

No, I’m not talking about football!

Like so many businesses, in our business, we look closely at quarters of each year. How did we do this first quarter in 2013 as compared to the first quarter in 2012? Half way through the first quarter of 2013, and looking back through the years, it occurs to me we seem to be living in a strange, if not brave, new world in which down is up, left is right and right is simply not cool. Our faith, family, and governance seem to be in full retreat. Even the once self-evident knowledge that hard work and saving brings prosperity seems unattainable to many Americans. As a result of this chaos, we are more divided as a nation than at any time since the Civil War. And, we know how that turned out.

While I personally believe that our social values are directly tied to our economic well-being (married couples prosper, etc.), I don’t have enough ink or paper to fully get into all of that. Instead, I do want to jump off the safe cliff and make some predictions as to what we can expect over the three quarters of 2013 and probably longer.

Sadly, I feel small businesses are going to continue to take a pounding. And, when I say small, I mean businesses with fewer than 50 employees. Because of changes in health care laws, they will probably have more part-time employees and do what they can to reduce expenses. They, along with everyone else, will begin to see that overhead in the form of taxes, electricity, and many other things, will crush profits. Some businesses will be forced to start passing these costs forward. A number of owners will try to sell their businesses or close them. Of course, when hard times arrive, and sooner or later they always do, the stronger businesses will survive and even prosper. But, rest assured, in the new Obama world, many smaller businesses will suffer the most. I am the owner of a small business with less than 50 employees.

Continuing on in 2013, I believe the pace of regulation will increase from a flood to, well, a larger flood. This will affect a number of different areas. However, you can count on regulations beginning to have serious negative impacts on the production of electricity, the workplace environment, etc. In particular, coal and oil will be under even more massive attacks than they are now. However, if oil and gas companies are allowed to fully utilize their amazing new technologies, you will see an energy boom in shale oil and gas that is unprecedented. I suspect this will be a major battle with no clear winners in the short term.

I would make a strong bet with you that also in 2013, the Obama Administration, and others, will continue to throw money down the rat hole known as alternative energy. First of all, there is no such thing as alternative energy. Energy is energy – period. Spending hundreds of billions or trillions of dollars on gathering energy from the sun, wind, or stars, lasts exactly as long as the Government is paying for the difference in cost as opposed to oil, gas, coal and nuclear. Thus, we have Solyndra and many more like it to come. Get back to me on this when oil is $200 a barrel and then we can talk.

The upshot of this is that you can expect unemployment to be between 7 and 8 percent, but unfortunately, most of that will be due to a drop in people seeking work as they have given up or decided that a life on the dole is acceptable. American manufacturing, excepting the giants like GE that pay no taxes at all, will remain flat and unwilling to invest large amounts of capital. On the plus side (there is one), you can absolutely expect good strong manufacturing firms in the European Union to come hard to the U.S. Already, a number of German, French, and Italian companies have started to come and that trend will increase. The reasons are simple if a bit amusing. The guillotine of Government and a repressed economy are worse there than they are here. I guess everything is relative after all.

But, be of good cheer! Life really is a pendulum, or circle, or whatever else suits your fancy. When leftist policies fail (they always do) the era of political and economic boggle will draw to an end and we can get back to work.

Thus my predictions on what we’ll see in the next three quarters of 2013!

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