Macroeconomics –Polischuk
This business outlook was included in MeadWestvaco’s (MWV) second quarter earnings report issued in late July: “The company remains cautious around ongoing macroeconomic challenges in developed markets and the impact on consumer demand, higher costs for certain raw materials and freight, as well as the potential impact of policies in key emerging markets to control inflation. The company is also continuing to monitor fiscal developments, particularly in the U.S. and Europe, which could also impact consumer confidence.”
Researching information for industry trend reports is always interesting, but seems to be even more so in these trying times. The news recently has been filled with economic news on a macro scale—$14 trillion debts with possible defaults; serious concerns about the solvency of some European governments; downgrading of the U.S. credit rating.
These developments strike home when you see comments like those above from companies in our industry. Granted, MWV is a global player, but these same issues are hanging over the heads of the small, regional package-printing companies that still form the heart and soul of our industry. When more than nine percent of American workers can’t find jobs, there’s an impact on consumer confidence that is felt by companies of all sizes and shapes.
What is really disheartening for me is the shrinking middle ground in our nation’s capital. I have long felt that our politicians (and respective political parties) spend way too much time trying to make each other look bad, and this seems to be ramping up even more quickly than our problems are.
My thinking was reinforced by a recent Schumpeter business column in the August 13th issue of The Economist. The gist of the column was that American businesses are being damaged because of the “civil war in Washington, DC...American politicians are intent, not on improving their country’s competitiveness, but on gouging each other’s eyes out.”
Schumpeter observed that American businesses still enjoy a big advantage over others throughout the world,“yet America’s politicians are intent on squandering this painfully accumulated capital.” One of the reasons given for S&P’s downgrading of the U.S. credit rating was because of the lack of confidence in our political leaders’ ability to bridge their differences.
Left wing ideologists won’t cut social programs, right wing ideologists won’t raise taxes. Well, something’s going to have to give at some point in time and I am confident it will. It’s just a matter of how big a hole we dig before we meet in the middle to climb our way out. Until that time occurs, more and more business reports will be mentioning “macroeconomic challenges” and “fiscal developments.”
Tom Polischuk, Editor-in-Chief
We welcome your comments regarding any part of packagePRINTING. They can be addressed to Editor, packagePRINTING, 1500 Spring Garden St., 12th Floor, Philadelphia, PA 19130, or tpolischuk@napco.com.
