Save U.S.

Here's the understatement of the year for you: The United States is in some pretty deep trouble.

As our presidential nominees debate whether or not to have a debate tomorrow, our current head honcho, George Bush, broadcast himself into our living rooms to tell us "our entire economy is in danger." Thanks, W, for that update from the Department of the Obvious. He must still be trying to determine how many zeros to write on that $700 billion bailout check.

Meanwhile, the $27 billion in damages caused by Hurricane Ike this month has left large swatches of Texas and the Gulf coast in disarray. The storm also caused gasoline prices to surge throughout the nation, which already is in an energy crisis. Offshore drilling is a contemptuous issue enough, but it does not help our unstable situation that one of our primary oil suppliers, Venezuela, is controlled by Hugo Chavez, an ardent American antagonist who unceremoniously sent home the U.S. ambassador nearly two weeks ago on September 11--coincidence? I think not. Last week, our embassy in Yemen was blown up and, just yesterday, Iranian figurehead Mahmoud Ahmadinejad declared to the UN assembly that "the American empire...is reaching the end of the road." This statement comes from the man who infamously told Columbia University that there are no homosexuals in Iran. Brilliant.

Did I forget to mention that our troops (and dollars) are still...in...Iraq? Here's a simple idea: Let's bring our women and men home and use some of the millions of bucks we are spending in the Persian Gulf to give them jobs in Ohio, Michigan, Louisiana..we have 50 places to choose from! We can call this plan Economics 101.

Sarcasm aside, it sure has been a rough several weeks, months, years for the United States. When things get this dire, it can be difficult to find that clichŽd light at the end of the tunnel. But as I flip through my calendar, I do see something to look forward to. It's called Election Day, and it's November 4. If you aren't registered, don't know where to vote, or need an absentee ballot, check out www.stopandvote.org. This may be the most important election of our lifetime.

The Mom and Pop Shop's Gritty View of Government

Small business owners in the United States are overwhelmingly disillusioned and dissatisfied with the federal government, according to a recent press release from American Management Systems, a 21-year-old organization that provides turnaround services and profitability guidance to more than 6,000 small- to medium-sized business across 400 industries.

The clear-cut results of the survey, conducted this year from June 23 to July 3, certainly aren't sunny or optimistic. In fact, the opinions of small business owners are rather bleak in regards to the US economy and government.

• 86% say the federal government is doing "little to nothing" to help small businesses
• 81% believe the United States is in an economic recession
• 50% believe the US economy will get worse before it rebounds
  
• 78% say the economic stimulus checks did nothing to help their businesses
• 72% believe that the government is bailing out big businesses on Wall Street

"Our country's 23 million small business owners are disappointed with the lack of actions on their behalf. While Wall Street and big businesses get bailed out, small businesses receive no assistance in these difficult times," says George Cloutier, founder and CEO of American Management Systems. "Tens of thousands of small businesses will fail this year due to government inaction. They create 60% of the nation's jobs; the small business industry is clearly an economic engine and it's stalling. It's time to get it re-started."

When the survey tiptoed into our volatile political landscape, 80% of respondents admitted to having no idea what Senators Barack Obama's and John McCain's platforms are pertaining to small business. Yet, 38% of small business owners favor McCain over Obama, who attracted 21% while 32% remained undecided. Perhaps coinciding with the preference to McCain, 77% of respondents believe the government should tap into restricted oil reserves in Alaska and off the coasts of California and Florida.

Of the 400 people who took part in the poll, 37% identified themselves as Independents, 33% as Republicans, and 22% of Democrats.

Retail: Open for Business!

Back in May, Business Facilities ran a special advertising article on the retail industry, which highlighted a couple of U.S. retail hot spots. It also discussed the resilience of the industry, as it struggles to cope with and rebound from a shaky economy. Fortunately, the retail realm got a long-awaited boost thanks to the first round of federal economic stimulus checks reaching millions of Americans eager to hit the shops they've been too wallet-shy to visit.

An article from today's edition of the Chicago Tribune claims great gains for both our economy and the retail industry. The industry saw a 1% increase from last month, which is the largest jump since November. This windfall is double what most economists had predicted the stimulus checks' effect would have. As more checks reach consumers throughout the summer, it seems hopeful that the industry's mini-boom will continue, and that the U.S. economy will recover slightly from its "recessive tendencies," if not its full-blown recession.

Let's just hope that once the economic stimulus payments run dry, that our beloved retail industry can avoid another drastic dip in consumer activity. The Christmas shopping season never comes soon enough...

Recession What?

These days it's hard to stay up on the news without being subjected to talk of recession this and recession that. Now, there's no arguing that the U.S. economy has fallen on trying times, but it's nice to temper the bad with the good for some perspective. So in the spirit of optimism, I thought it would be a refreshing change of pace to veer away from talk of our "doomed" economy and highlight two recent major investment projects that promise to bring thousands of jobs to those in need.

Well-known for its troubled economy, Michigan has been working hard over the past few years to breathe life into a fresh new economy, one that is much less dependent on its automotive roots and more focused on high-tech and life sciences companies. Progressive incentive programs such as the 21st Century Jobs Fund have been helping with the transition.

In April, Michigan residents had much reason to rejoice when the state scored one of the largest non-automotive deals in MichiganÕs history--at a time when the stateÕs unemployment rate is the highest in the nation at 7.2%. Thanks to a $330 million investment by life sciences company MPI Research Inc., Michigan stands to gain 3,300 new direct jobs and an additional 3,300 indirect jobs over the next 15 years. The company, which provides comprehensive pre-clinical research and development services, plans to more than double its current one-million-square-foot facility in Mattawan, MI, as well as launch new operations in Kalamazoo, MI at two closed Pfizer facilities in downtown Kalamazoo that Pfizer is donating to the city. Assistance provided by the Michigan Economic Development Corporation (MEDC) helped convince the company to choose Michigan over competing sites in the U.S. and China.

Based on the MEDCÕs recommendation, the Michigan Economic Growth Authority board approved a state tax credit valued at $86 million over 15 years for MPI. The MEDC is also recommending the downtown Kalamazoo site receive designation as a tax-free Renaissance Zone and that a $2 million grant previously awarded to Western Michigan University be used instead for redevelopment activities at the Kalamazoo site. Through the transportation economic development fund, the Michigan Department of Transportation will chip in and provide funding for improvements at or near the I-94 interchange that are necessary to accommodate the traffic generated by MPIÕs expansion. In addition, local match requirements will be provided by the village of Mattawan. The city of Kalamazoo is also lending a helping hand by way of $150,000 toward environmental due diligence and infrastructure analysis.

The MPI Research expansion is one of five economic development projects the governor announced in April. In all, they are expected to create and retain a total of 9,013 Michigan jobs.

Meanwhile, down south, the Tar Heel State will soon see 900 new, high-paying jobs as a result of GE-Hitachi Nuclear Energy's recent investment promise. The company, which could receive more than $25 million in state incentives for new job creation, plans to invest $704 million to add manufacturing, training, simulation, and testing facilities at its 1,300-acre campus in New Hanover County, NC, near Wilmington. Part of the expansion could also include a commercial uranium enrichment facility. A joint venture of General Electric and Hitachi, GE-Hitachi Nuclear Energy already employs more than 2,000 people in the county.

While wages for all the new jobs will vary, the overall average wage will be about $85,000 a year not including benefits--more than double the New Hanover County average of $33,226.

Unfortunately, these new jobs won't fix skyrocketing gas and food costs, but it is success stories such as these that will hopefully pave the way to brighter economic times for the United States. These stories also reinforce the need for states, and the nation as a whole, to focus economic development energies (and monies) on transitioning to a primarily knowledge-based economy to help our great nation become great again.

American Jobs on a Death March?!

The word recession has been emblazoned in the psyche of most Americans over the past few months. The term has become ubiquitous (although most people probably don't know the true definition), and you can't escape it these days.

It seems that all this talk of recession has forced employers to cut 80,000 jobs in March, the highest job loss in five years, according to an AP article. An array of industries, including construction, manufacturing, retailing, and financial services, were all hit, outpacing gains in a few industries, such as government and education. This stands as the third straight month of losses this year, pushing the unemployment rate to 5.1% from 4.8%--the highest since September 2005, when Hurricanes Katrina and Rita dealt a deadly blow to the U.S. economy.

According to the article:

The economy is suffering the effects of a housing collapse, a credit crunch and a financial system in turmoil. That's causing people and businesses to hunker down, crimping spending, capital investment and hiring. Those things in turn further weaken the economy in what has become a vicious cycle.

For the first time, Federal Reserve Chairman Ben Bernanke acknowledged Wednesday that the country could be heading toward a recession, saying federal policymakers are "fighting against the wind" in combating it. Many other economists and the public believe the recession already has arrived.

Bernanke wouldn't tip his hand about the Fed's next move. However, many economists believe the central bank will lower interest rates again when they meet later this month.

So, it seems that there is still some time to avert a true recession, which is generally defined as a decline in real gross domestic product for two consecutive quarters (6 months). It is hoped that the government's latest $168 billion stimulus package of tax rebates for individuals and businesses will help revive consumer confidence and the economy, although some analysts feel the gesture is a little too late to stave off the impending recession.

I, for one, plan to do my part to help ward off a recession by using the funds to purchase a brand new Macbook!


On a side note:
The National Bureau of Economic Research's framework for judging recessions:

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough. Between trough and peak, the economy is in an expansion. Expansion is the normal state of the economy; most recessions are brief and they have been rare in recent decades.

America's Great Green Hope

Recently, "green" has become the ubiquitous buzzword used to describe all things environmentally-friendly. But prior to such days of mainstream climate-consciousness, the word "green" often summoned images of the US dollar which, of course, has taken a dramatic dip in value over the last several years, most notably against the British pound, the euro, and, now, the Canadian dollar. Fortunately, yesterday's edition of The New York Times included an article predicting that the worst is over and that 2008 will see the dollar get its groove back. This is hopeful news for investors, and the article offers some expert advice as to what stocks and markets we should put our resurgent greenbacks into.

It's also great news for globetrotters who felt the sting of foreign price tags last year. I had a busy personal travel calendar in 2007 and, after a pricey jaunt to New Zealand and French Polynesia in February, and a two-month summer stay in Wales and England, where the dollar was crippled, I finally learned my lesson when choosing a New Year's Eve destination: Guatemala. The dollar still has buying power in some places! Let's hope this list expands in 2008.