Chugging Along

First of all, my apologies for the infrequent updtaes. I'm silly busy.

Today's news: consumers kept chugging along at the end of 2006:

Economy Grows 3.4 Percent in 2006

By Howard Schneider
Washington Post Staff Writer
Wednesday, January 31, 2007; 11:04 AM

U.S. economic growth accelerated in the final months of 2006, as strong consumer spending and an increase in exports helped boost the economy despite a steep downturn in the residential housing market.

Commerce Department figures released this morning show that Gross Domestic Product increased 3.4 percent in 2006, faster than the year before and despite a sharp dip in growth last summer. Gross domestic product is a broad measure of the goods and services produced by U.S. workers and capital.

Growth in the last three months of the year was especially strong -- an annualized pace of 3.5 percent, led by a 4.4 percent jump in personal consumption and a 10 percent increase in exports.

[snip]

The latest Commerce Department figures may quell speculation among analysts that the housing downturn would inevitably slow the economy as a whole and prompt the Fed to consider a rate decrease. With labor markets tight, incomes growing and economic growth on track, the bank will have little incentive to change course.

"The very good news is that the recession in housing continues to have a very limited impact on the rest of the economy," said Nariman Behravesh, chief economist with the Global Insight consulting firm. "The Fed has the economy where it wants it."

Some analysts say the housing downturn is in fact taking its toll -- and will continue to do so. Spending on housing, they note, fell at a nearly 20 percent annual rate in the last three months of the year compared with the year before, and subtracted more than a full percentage point from the estimates of growth for the period.

A run-up in business inventories also dragged down the economy's performance.

Though all of that was offset by strong consumer demand and exports, Ian Shepherdson, chief U.S. economist for the High Frequency Economics consulting firm, said he expects the Commerce Department to revise its growth estimates downward in coming weeks.

And he said that while Federal Reserve bankers will be "happy" that their current interest-rate decisions have kept inflation in check while sustaining growth, the first months of 2007 will be "much softer."

I'm still on the skeptical side that the fundamentals of the US economy can keep away a recession, but so far, consumers have not taken the folding of their real estate assets as hard as I had expected. Bad me! Good thing I'm not an economist or a pundit, though I must confess, I've never seen a business pundit take a career hit for being wildly wrong about anything, ever.

Are You A Teacher?

This is a recurring theme in my executive coaching: are you a "problem solver" or are you a "teacher?"

Executives who see themselves as problem solvers fix things but can't scale their efforts. There are always more problems to solve in the world than what you can get to. Some see that as job security, but that's elusive: your security and productivity go up exponentially when you can teach people how to solve problems, or even better, teach people how to teach others to make decisions and solve problems. Be a builder of systems, not just immediate solutions.

You'd be surprised how many executives with classroom type leadership training or year of experience think they know this when they actually don't. The art of converting moments of interaction with direct reports into teaching opportunities is too little studied and deployed. It takes a real knack for understanding your people, how they learn, how they feel, who they are. Any number of leaders are, truth me told, more interested in themselves than others.

So, what do you do?

Small Business, the Minimum Wage and Health Care

A bill passes the U. S. House:

Rise in minimum wage OK'd by House
Utah representatives are divided along party lines; Senate plans tax breaks for businesses

By Robert Gehrke

The Salt Lake Tribune Article Last Updated: 01/11/2007 12:54:35 AM MST
WASHINGTON - The U.S. House voted Wednesday to raise the minimum wage to $7.25 an hour, although Utah's Republican members voted against the bill.
"It's an issue that makes for some nice political rhetoric, but it actually hurts the people that we're trying to help," said Rep. Rob Bishop, R-Utah. "This bill will increase unemployment among the least skilled and lowest paid workers, including high school and college-age kids, and will increase costs for small businesses and consumers."

But Rep. Jim Matheson, D-Utah, who voted for the measure, said he doubts the doomsday scenarios painted by opponents of the wage increase. The House vote calls for a $2.10 increase in three steps over two years.

"I really don't think it's going to eliminate jobs. My gosh, the $5.15 wage was set years ago. It's long overdue," he said.

The U. S. Chamber of Commerce and other large groups are opposed to this, but this does nothing to hurt my small business clients. If people really wanted to help my small business clients, they'd move to. . .. wait for it. .. a single payer health care system that got private insurers out of basic care.

Health care premiums are really a drag on small business growth and job creation. But right now, all the insurance companies have an incentive to do is to weed out the people most likely to need care, all the while raising rates. Then, we all end up paying more because the uninsured get the most expensive care imaginable: emergency care, which we all pay for anyway, but now they're sicker than they would have been if we had dumped everyone into one big risk pool, creating a kind of Medicare for everyone. We already have a de facto universal health care system, it's just an insanely inefficient one. Insurance rates o down when risk is pooled over ever widening groups, but we've been narrowing our groups by weeding out the sick and pushing the resultant higher expense onto the insured. We get so little bang for our health care buck it's ridiculous, and it hurts our economy, and small businesses get hurt the most.

But the U. S. Chamber will never take this position, because on the national level, it represents big business, not small business, no matter what its rhetoric may be.

Quotes of Note

"Humanitarianism needs no apology. ... Unless we ... feel it toward all men without exception, we shall have lost the chief redeeming force in human history." -- Ralph Barton Perry

"It takes as much energy to wish as it does to plan." -- Eleanor Roosevelt

"Don't forget to love yourself." -- Soren Kierkegaard