What Does The Financial Crisis Mean To Metal Construction?
By Shawn Zuver, editorial/content director
Last Friday, October 3, 2008, U.S. President George W. Bush signed into law a plan that authorizes $700 billion in funding to bail out the struggling financial markets. Is it a good idea? Will its effects be good in the long-term, or even in the short-term?
I obviously don’t have any definitive answers, nor does anyone else. We’ll all just have to wait and see.
Closer to home, what will the bailout plan mean to each of us on a personal level and to the metal construction industry? During last week’s METALCON International 2008 conference and exposition in Baltimore, I had dozens of discussions about the bailout—which had been voted down by the House of Representatives last Monday, September 29th, before being resurrected later in the week. The feedback that I received from metal product suppliers, contractors and building designers was mixed. And by “mixed”, I mean that almost every person was conflicted in their opinion.
Virtually every person I talked with was disgusted by even the idea of a bailout of this magnitude because it’s seen as helping out brokerage houses, banks, insurance companies and others in the financial industry. The level of outrage against the perceived greed and abuse of other people’s money was overwhelming and unanimous.
At the same time, while everyone was appalled by the greed and abuse, nearly all of my industry expert friends regrettably agreed that some sort of government intervention was probably needed to make sure that the credit markets—in the U.S. and worldwide—wouldn’t come to a crashing halt. Let’s face it, I was talking with business people who are aware that credit and a free flow of money are essential to nearly all transactions.
While I’m no expert on financial matters of this global magnitude, I have spent a great deal of time studying personal and business financial matters over the past couple decades. Like everyone else, I’m also conflicted in my opinions and have been searching for information to help me understand the mechanics of what’s happening with Freddie Mac, Fannie Mae, faltering insurance and financial corporations—and where all of this could lead. I recently came across a very enlightening book that analyzes the current financial situation with startling clarity.
The Trillion Dollar Meltdown, subtitled “Easy Money, High Rollers and the Great Credit Crash”, was written by Charles R. Morris in 2007, yet reads as though he’s reporting the news today. Morris, a lawyer and former banker, does an excellent job of explaining the history that led credit markets to be in the abysmal state where we now find them. And he lays out his thoughts on where all of this may be heading, with some of his predictions having recently become reality. If you’re interested in background on some of the factors that have contributed to the current financial situation—including failed governmental policies, corporate greed, and individuals who have signed on for mortgages, credit cards, auto loans and personal obligations that they have little hope of honoring—then I’d strongly recommend this book. Published by Perseus Books, it can be purchased at www.publicaffairsbooks.com or through other online and storefront booksellers.
It was interesting to note that foreign markets didn’t show immediate favorable response to the news of the $700 billion bailout. Likewise, as I’m writing this, the U.S. stock market was down sharply on Monday, October 6, 2008. For the many detractors of the bailout, this is additional fodder to support their claims that the U.S. government should have let the markets regulate themselves, and that Wall Street avarice should be punished.
While it’s easy to say—and undoubtedly true—that the marketplaces would have worked themselves out eventually without government intervention, there would surely have been countless businesses and an untold amount of families who would have suffered severe consequences. Unfortunately, even with the bailout, these same results could still materialize. It’s truly a case where only time will show us what will happen.
My one prediction is that, whether the bailout proves to be a long-term solution or not, many of us as individuals and business people will change in at least small ways, like acquiring a better appreciation of the things that bring true enjoyment and value to our lives. If this is true, I think it could be a very good thing for all of us involved with the many quality products and services that are offered by the metal construction industry.
Shawn Zuver is editorial/content director for DesignandBuildwithMetal.com. He has been covering the metal construction industry, including residential and non-residential construction, since 1985. To contact Shawn, call (419) 581-2051 or email shawnz@designandbuildwithmetal.com.
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