Our economy is finally beginning to pick up steam. We have been plagued by false starts and set backs aplenty over the past couple of years but the sun is coming out now and things are getting better.
The unprecedented boom of the 1990s got some of us spoiled into thinking it would never end. It seemed that technology had so changed the business environment that business cycles were no longer a fact of life. But that was not true.
Though it didn`t eliminate the business cycle, technology has caused some major changes in our economy. The importance of technology is not all the bells and whistles that thrill and fascinate technocrats. The real importance is its ability to increase productivity. Though increasing productivity is good for society as a whole, it`s a bummer for those who lose their jobs.
Technology-related job losses occur all across the job spectrum. Millions of low skilled jobs have been permanently eliminated through technological innovations. Businesses have also replaced an entire level of middle management through the utilization of new communication technology. The lesson in all of this is twofold: (1) educated workers need to keep their skills updated and build a good social network and, (2) there is no future for uneducated workers in our modern economy.
Time right for new ventures
The beginning of an economic recovery is the best time to start a business venture or expand an existing business. Since business start-ups and expansions are riskier than standing still, they need several years of prosperity to get a foothold before a recession threatens their survival.
Coming out of a recession strongly implies that the next couple of years will be strong so now is the time to get things going.
Brighter days for state government?
The recovery will help state government as well as the business community. Economic prosperity means more consumer and business spending and more taxes. Mississippi`s in a deep, dark financial hole right now and next year is not going to be good under any circumstances. However, with some restraint by the Legislature, we could start to get solid ground underfoot over the next couple of years. Probably won`t happen, but it could.
Lt. Gov. Amy Tuck and the apparent new Speaker of the House Billy McCoy are making decisions of critical importance to the business community. These leaders of the House and Senate appoint committee chairs and these chairs determine which bills are pursued and which ones die in committee. Funding for the Department of Corrections, Medicaid and education are going to be problems this year. The question of further reforming our tort laws also hangs in the balance.
Our new governor, Haley Barbour, will likely get some kind of grace period with the Legislature before he is pushed off center stage by legislators. The early days of the upcoming legislative session could set the tone for all future dealings between the executive and legislative branches of our government. Here`s hoping they get off to a good start.
Education still the priority
Last year, the Legislature made funding education a priority early in the session and dispensed with that problem for the year. Funding education should continue to be the top priority for Mississippi. With the cuts over the past few years and the huge tuition hikes implemented by our colleges and universities, access to education is becoming more and more difficult. And that at a time when educating our people is becoming more and more important.
Fortunately, the days of Supreme Court Justice Chuck McRae are nearly over. Perhaps with his departure some semblance of order and dignity will be returned to our high court.
The stock market is likely to continue to rise over the foreseeable future even though interest rates are likely to start inching up also. Bonds are likely to take a beating as interest rises and bond prices go down to compensate.
Overall, a good financial time is likely to be had by most, if not all.
Thought for the Moment — You cannot dream yourself into a character; you must hammer and forge yourself one. — historian James A. Froude (1818-1894)
Joe D. Jones, CPA, is publisher of the Mississippi Business Journal. Contact him at email@example.com.