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2 minutes reading time (407 words)

It’s the Economy, Stupid. Or Is It?

A few months ago I attended a CEO forum in Colorado where a big topic on the minds of the 1000 CEOs in attendance was the state and direction of the US and global economy. The keynote speaker Brian Beaulieu began his presentation with this assessment of the economy from TIME magazine:

The U.S. economy remains almost comatose. The current slump already ranks as the longest period of sustained weakness since the Great Depression. Once-in-a-lifetime dislocations will take years to work out.

 Among them: the job drought, the debt hangover, the defense-industry contraction, the banking collapse, the real estate depression, the health-care cost explosion and the runaway federal deficit.


What was interesting was what was revealed next – the date when the above was written. It was from September, 1992!

The media – especially in the USA – is in the business of making every situation sound extremely ominous. If you are interested here is a link to Brian Beaulieu’s presentation.

An informal survey at the CEO forum (we were asked to show hands) indicated the vast majority had job openings. I have heard this over and over in recent months. Companies are hiring.

Are there people displaced by the current economic challenges? Yes, of course. The economy is a very dynamic thing. But the story is not so much about jobs destroyed but of jobs created. Jobs are always being destroyed. In the USA it is 15-17 million jobs destroyed every year – even in a healthy economy. When job growth occurs it is because more jobs are created than destroyed so there is net growth. Right now jobs are being created – just not enough to significantly offset those being destroyed.

A recent article by Exxon Mobil “Where the jobs are” discusses the huge potential in the USA to create new jobs in the energy sector. A recent article in BusinessWeek “Hope for American Manufacturing—and Maybe Jobs” discusses the rising wage scale in offshore manufacturing and how manufacturing jobs are returning to the USA. Things are not as bleak as the media continues to portray.

Many new companies are started during times of economic challenge. Applied Flow Technology was started during a recessionary time in 1993. We may not see the impact of some of these new startups for many years.

All of this is just a reminder – if we needed a reminder – to view the media’s presentation of the news with great skepticism.

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Tuesday, 04 August 2020

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