In the last several weeks, the unwinding financial crisis has been competing with the upcoming birth of my daughter for my full attention. Since the first mention of the $700billion bailout package, we’ve all become a somewhat numb to the magnitude of the problem. Despite my admittedly distracted attention to these issues, several thoughts have clarified themselves in my mind.

The first is that anyone in the building products industry that isn’t in favor of a bailout plan might as well be firing cannons at their business. I’m routinely in touch with companies that are telling me that customers, even those with strong credit, are finding it difficult if not impossible to obtain credit to finance door and window purchases. This situation can’t be allowed to persist if this industry is going to recover.The bailout plan that has been passed will help absorb a lot of the financial toxins that are robbing banks of their confidence to lend to one another.

The second thing that has become clear to me is the parallels between today and the period after Sept. 11, 2001. It was widely predicted then that we were staring down the barrel of a protracted recession. Just as I didn’t believe that then, I don’t believe it now. Are we in for some rocky times? Yes. Is there a good bit of pain left ahead of us? Sure. Do I know how much? No. What I do know is that the largest economy in the world moves more like a freighter than a speedboat. It will take a while longer to regain momentum than we previously thought, but the companies that manage to navigate this trying period will come out stronger than ever on the other side.

As for my daughter, she made a very dramatic entrance last Friday night. After a harrowing dash to make it to the hospital, my wife gave birth in the back seat of our car 60 seconds after I screeched to a halt in front of the front lobby of the hospital, which I thought was the emergency room. My wife had drafted an elegant birth plan that didn’t include a total lack of pain management and the delivery of our baby by her investment banker husband (no, I’m not kidding.) Baby and mother are doing wonderfully, though, which is just another example of a rough situation turning out well in the end.

4 Comments

  1. Congratulations on your daughters birth. Not the first child I suspect.
    It does take time to turn a large ship around!!!

  2. Wow, congratulations Mike! Quite an entrance by your new little one!

  3. So Mike, Obama or McCain, speaking solely for the industry? I think it is clear, but let us know what you think from your professional stand point. Thanks and Congrats Dr.

  4. Well, that’s a tough one and I normally try to keep my comments non-political. I’m a firm believer that the bailout and the shoring up of banks’ capital positions was badly needed and will get us a good portion of the way toward the recovery. Whatever the results on Tuesday, you can be sure the victor will take credit for the recovery. As for the rhetoric from both sides, they both claim they will cut taxes on the middle class, which would be great for the recovery in this industry. When I look at the amount of new spending proposed by Obama, though, I have a hard time believing he can pay for all of it by raising taxes only on the wealthy. Wealthy people have access to tax advisors, investment planners and even offshore accounts. They’re very capable of diminishing the effect of a tax increase, so I think Obama will need to raise taxes at lower levels of income than indicated in his speeches. In my mind, that and other factors push the needle in favor of John McCain.

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