Confidence hinges on sound leadership standards

September 6, 2010
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The monthly index from the Institute for Supply Management offers balm for the worried brow. Brian Long, director for the office at the Grand Valley State University Seidman College of Business, admits he was surprised at the sustained strength of the Grand Rapids and Southwestern Michigan surveys, and the national survey also showed another month of improvements.

Long’s work shows production up another 15 points to an index increase of 42, and purchases are up to a positive 46 from plus 23. Employment, too, shot up — a 16-year high — of plus 46, up from plus 33, with 54 percent of all firms surveyed reporting additional staffing.

Purchasing managers variously told Long, “Business is steady, with lots of quoting activity,” and “sales and production are picking up as usual for third and fourth quarters.” Yet another said, “We are starting to get very busy. We hope this continues.”

Those are the real barometers of economic health, and while there is anticipation of slowing as a result of recently declining auto sales, it should provide more confidence to business owners.

That said, even Long notes the political poison of perception proffered not only by the politicians but by broadcast ratings-oriented overkill of the “possibility of a double-dip recession.” The odds show it unlikely, leaving Long to comment, “It is also worth repeating that the biggest cause of a DDR (double-dip recession) will be that we talked ourselves into it.”

The real impediment to progress, however, is a stubborn and ineffectual federal government appropriately creating voter retribution. As the financial services industry continues to dam up resources, the issue of federal taxes becomes a very big part of business budgeting, which is no guessing game (as has become sport among politicians in regard to which way the tax wind blows). Another purchasing manager in Long’s report so noted, “I think the general economy is a question mark. It would be nice to know what is going to happen with expiring tax cuts which affects every American worker, and, unfortunately, will probably be manipulated for votes.”

The even larger problem is that government believes it creates jobs. And sadly, it appears true: The 2010 Inc. 5000 shows the fastest-growing industry sector to be government services, albeit as measured from 2006 through 2009, spanning both a sitting Republican and Democrat president. Worse, however, is that sector continues to grow. The idiocy of such policy would suggest it finds no harm in what would surely be a business pox of tax increases should the Bush administration cuts not be restored.

The Grand Rapids Area Chamber of Commerce Policy Forum is but a week away and offers some opportunity for the collective voice of West Michigan businesses to be heard — above the stinking sound bites and mindless prattle that depress business far more than any anticipated slowing of the jumps made in the past few months.

The economic barometers do not lie; it’s time to hold would-be leaders to new standards of excellence in the new economy.

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