Tuesday, February 26, 2013

The economic "perfect storm" that we better keep an eye on

Let me ask you some questions:

1) Are you paying more for gasoline this week than you did last month?

2) Did you get your health insurance renewal letter?

3) Have you checked your net income lately?

4) Are you a small businessman who can't figure out how Obama-Care will impact your hiring?

The first sign of this "storm" was the quarterly earnings report for Wal-Mart:
"Retailers are preparing for a triple whammy as the restoration of the payroll tax, surging gas prices, and stagnant employment and wages take a bite out of consumers’ disposable income, leaving them with less cash to spend on clothing, groceries, and eating out." (CSM)

The second sign is that   " .....Burger King Worldwide Inc., Kraft Foods Group Inc. and others are lowering forecasts and adjusting sales and marketing strategies, expecting consumers with smaller paychecks to dine out less and trade down to less expensive purchases."

I won't blame gasoline prices on President Obama.  I won't do to him what the other side did to President Bush.   Nevertheless, I spent $35 to fill my Ford Focus last week and $40 last night.   That $ 5 that I won't be able to spend on something else.

I do blame President Obama for the health care premiums.  He gave us exactly the wrong medicine for our health care crisis.  We needed to fine tune the engine rather than replace it with one that no one can afford.

Last, but not least, the employment situation is still uncertain, specially for smaller companies who can't make any sense of all of this uncertainty about Obama-Care.

Yes, Obama-Care is the law of the land but the rules are still unwritten.  This is like changing the speed limit but not posting the new number.

Yes, 2013 will be the year of the "3-part perfect economic storm" and there is nothing pretty about it.

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