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Nashua;52.0;http://forecast.weather.gov/images/wtf/small/ovc.png;2014-10-24 14:41:52
Sunday, July 20, 2014

First snow, now rain. Seriously?

Tony Paradiso

A spate of wet weather in the South is being blamed for a 9.3 percent drop in housing starts. That may be true but how does that explain the Commerce Department reporting a drop in housing starts in May as well? That must have been one heck of a storm. Has anyone seen an ark float by?

Weather happens, and it contributed to the 30 percent drop in the South. But during my brief tenure in the construction business, I discovered that you can build stuff in the rain. Snow and freezing cold are a different story, but rain, you can work around. ...

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A spate of wet weather in the South is being blamed for a 9.3 percent drop in housing starts. That may be true but how does that explain the Commerce Department reporting a drop in housing starts in May as well? That must have been one heck of a storm. Has anyone seen an ark float by?

Weather happens, and it contributed to the 30 percent drop in the South. But during my brief tenure in the construction business, I discovered that you can build stuff in the rain. Snow and freezing cold are a different story, but rain, you can work around.

Home builders say that because of the wet winter and spring, they weren’t able to get lots ready for construction, leaving a shortage of buildable lots in June. Some builders also point to lengthier permitting processes due to staff shortages in city building departments. If nothing else, the spinmeisters seem to be working overtime on new excuses.

The good news is that these same builders say demand remains strong. So assuming the lines at city hall subside and a monsoon doesn’t hit, construction should pick up briskly in the coming months. And let’s not lose sight of the fact the Commerce Department reported that for the entire second quarter, construction of single-family homes was up 4 percent from a year ago.

It’s not unusual for housing starts to decline for a couple of months. It’s also not unusual to experience a significant drop. In other words, the data is irrelevant. I just wanted to amuse myself by making fun of the industry’s latest excuses. Expect a significant rebound in housing through the summer.

Besides, none other than Barclays economist Michael Gapen assures us that the economy is on the upswing. The Fed beige book report “is consistent with our expectation of a pickup in growth in the second quarter after a weather-related contraction,” Gapen wrote.

Prescient that Mr. Gapen. Let’s see. The economy contracted 2.9 percent in the first quarter. For it to do anything but pick up, it would have to shrink again, and by more than 2.9 percent. Talk about going out on a limb.

Here’s a standing offer to Barclays: Without knowing Mikie’s compensation package, I’ll do his job for half his salary. That is as long as I’m never required to say anything useful.

Last week, Federal Reserve Chairwoman Janet Yellen testified in front of the Senate Banking Committee and hinted that the strengthening labor market could prompt planned rate hikes to come earlier than expected. That is good news for Main Street, but naturally not so for Wall Street. Stocks dropped sharply on the “hint.”

Besides an improving jobs market, the Fed cited a number of other positive economic indicators including a robust corn and soybean crop in the Chicago area, stronger attendance at Broadway shows, and improved activity at campgrounds in Montana.

Silly me, I haven’t paid any attention to soybeans or campgrounds, and I find the latest fare on Broadway trite and lacking in creativity. So my interpretation of that same data might go something like this: all that wet weather caused a bumper soybean crop; people in Montana don’t have money for a real vacation; and there is a glut of theatergoers with no taste. That must be why Janet Yellen is running the Fed and I’m not.

I wish the government would leave General Motors alone. Clearly no high-ranking official knew about the defects that have plagued GM’s cars. I mean, the problems only spanned a decade. That’s not nearly long enough for the issue to trickle up to senior management.

What the government doesn’t understand is that these types of problems are usually caused – and then covered up – by low-level workers. That’s why they are low level workers.

They ain’t smart like the executives at the top of the corporate pyramid.

But like a junkyard dog, the government won’t let go.

Unlike the taxpayer bailout of the old mismanaged GM, this continued investigation is a waste of taxpayer money. In the latest chapter of the Washington inquisition, members of a Senate panel called for General Motors CEO Mary Barra to explain how she plans to change the company’s culture while refusing to dismiss her top lawyer, whom the panel believes knew about the problems.

But Ms. Barra wasn’t appointed CEO for no reason.

Unlike the uninformed politicians that permeate Washington, Barra understands that general counsel Michael Milikin was kept in the dark by an incompetent staff. And she has an internal report to prove it.

That report outlines how Milikin’s staff were warned repeatedly starting in 2010 that GM could face costly punitive damage awards as a result of the faulty ignition switch. But these idiot underlings just kept settling the cases for short money. Consequently, the problem never rose to a level that required anyone to bother Mr. Milikin with the fact that GM’s cars were subjecting people to potentially life-threatening circumstances.

As Mr. Milikin eloquently stated in his testimony, “We had lawyers at GM who didn’t do their jobs.”

That’s good enough for me.

Author, professor, entrepreneur, radio and TV commentator Tony Paradiso can be reached at
tparadiso@tds.net.