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Uncertainty

By Dr. Darlene Brezinski
March 1, 2010
As hard as I try to maintain optimism and really look in all the nooks and crannies for signs of a major turnaround – it is still tough out there. When you have been in the industry as long as I have it is so frustrating and sad to see a lack of growth, R&D budgets severely curtailed and in some cases cut completely, and an industry that you love continue to shrink.

As hard as I try to maintain optimism and really look in all the nooks and crannies for signs of a major turnaround – it is still tough out there. When you have been in the industry as long as I have it is so frustrating and sad to see a lack of growth, R&D budgets severely curtailed and in some cases cut completely, and an industry that you love continue to shrink. It is difficult to talk to young people in the schools and encourage them to pursue the sciences as a career choice. You wonder if they will be able to find a job. How do you jumpstart an economy that has moved offshore? As we continue to offshore jobs, we reduce the blue-collar and middle-class job growth.

Reports indicate consumer spending is up a bit, and 4th quarter reports for many chemical companies and coatings manufacturers were optimistic. But for all the money the government has dumped into the system, consumer demand is still down and the country is immersed in a quagmire of debt and unemployment. GDP for 4th quarter might be up a bit – BUT is it really because we hit a wall and there had to be some production as inventories had dried up? Is this just an adjustment?

The global economy is not offering much in the way of a glimmer of hope. As of today, Greece is in serious trouble and may need a bailout from the EU, Germany or someone else; Greece once was the cradle of Western Civilization and democracy. Spain and Portugal are not far behind – all of these countries, and others as well, are experiencing high unemployment, extraordinary government debt, high taxes and frozen wages. And the United States is mirroring the same problems. It has become rather accepted that we do not run a balanced budget in the country. You simply cannot run forever on this sort of thinking in the country, in your company or in your household.

When you get so far in debt you have to either default a large portion of it away or inflate it away. We are facing a serious debt implosion. In general, people have a false notion about inflation – it is NOT rising prices and wages. These are the effects of inflation and they are damaging. Inflation is an increase in the supply of money – so the government can print more money and increase the supply to finance the deficits resulting from out-of-control spending. But all that means is that all the money in circulation becomes less valuable – the water-downed dollar will have less purchasing power. It is an insidious form of taxation. The result is that companies have to raise their prices and workers then need higher wages to be able to support families, and a downward spiral ensues. Only the government can stop inflation. And only the government can stop the spending.

We need to get people back to work – any increases in taxation, or green taxes will only further take us down in my opinion. Look back in history and just study California – between government regulations and increased business taxes is it any wonder that the jobs have left and the state is in significant debt?

So far the coatings industry has weathered the roller coaster ups and downs as best as we can but for how much longer? I am hoping that we have a great turnout at the AC Show – maybe the enthusiasm that is usually predominant at these shows will spread and generate some excitement.

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Darlene Brezinski, Ph.D., is the Technical Editor of PCI.
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