TOP BU.S.INESS STORIES OF '04 LOOK FAMILIAR
by Mark Scheinbaum
American Reporter Correspondent
Boca Raton, Fla.
BOCA RATON, Fla., Dec. 22, 2004 -- In return for getting up before dawn each day for a live, ad-lib radio business commentary, Doug Stephan, host of the syndicated "Good Day" radio show, asks me to pick the top business stories each year. My work is easy this time around, since the list is strikingly similar to last year's offering, except for the 2004 Presidential Election results.
Trained as a political scientist and teacher - and not as an economist -
I've always thought that the business and financial worlds were both
commodity-driven and politically ruled. Obviously this causes a big "crossover"
between straight news stories and so-called business stories.
Just as a reminder, here were the Top 10 (in downward order) from 2003:
Number 10 there was a tie between the Northeast power blackout and "mad cow"
scares; then came new health care and prescription drug legislation; weather
and natural disasters; security alerts and their impact on business; Richard
Grasso and New York Stock Exchange "excesses;" mutual fund scandals; low interest rates/retail sales; and the top story was the rebound of the U.S. stock market.
The latter might have been a better Top 10 candidate this year, since today it
closed at the highest level it has reached since September 11, 2001.
This year, with a U.S. bias I've probably missed a few of your favorites,
and hit some gray areas that cover more than one story, but here's my attempt to
make Doug's year-end "Countdown" show a bit easier:
Top Ten Business Stories of 2004
- . Re-election of George Bush. The President views re-election as a
mandate for improved infrastructure security, reformed Social Security,
streamlined tax codes, and new trade talks, among other fiscal issues.
- . War and Deficits. The earmarked expenditures for the wars in Iraq
and Afghanistan moved from the $210 billion level to $300-billion plus. With
or without Social Security reform the national debt has finally started to
worry people beyond the Beltway.
- . Oil prices (and other commodities). The 30-60 per cent increase
in crude prices depending on the month and your location have impacted
household budgets, and caused retail spending concerns. The soaring price of gold and
other commodities combine political concerns with "hard asset" preferences by
some investors and speculators. I think any "top story" about "continued stock
market recovery" is trumped by this macro story.
- . Social Security. The system is broken, and yet the Administration
has been unable to explain - in layman's terms - the difference between
self-directed accounts long proposed by savvy academics, and "privatization" which is
- . Hurricanes and Insurance. The four Florida hurricanes not only
disrupted lives and trade, but exposed growing loopholes in
consumer protection issues regarding insurance companies and deductibles.
Ironically, there were some long-term tourism, building supply, and infrastructure
upgrade benefits from the storms. On the insurance side, call this a catalyst for
the insurance industry scandals.
- . Housing: Boom or Bust? In most parts of the country low interest
rates kept real estate values growing. Only in late November did some markets
soften slightly. The Chinese construction boom has waned a bit, but still
caused lumber, cement, drywall, plywood, and other shortages resulting in
skyrocketing per-foot increases in new construction costs in the U.S.
- . Drugs and Health. The Vioxx, Celebrex, Alleve and Crestor problems
of the final quarter only punctuated the incestuous relationship between Big Pharma,
government regulators, and health care managers and providers. No clear
workable national reform is in sight.
- . Security/Outsourcing Issues. Behind every boarding pass is the
sneaking suspicion that September 11 can happen again, anywhere, at any time. Briefly,
as a campaign issue, the security of U.S. ports and even rail lines received
attention. Immigration issues with both Mexico and Canada still concern
employers and manufacturers. Outsourcing of jobs has also been the target of union
and homeland wonks, as were tax returns prepared overseas; Wal-Mart was featured in a
CNBC-TV documentary allegedly pushing U.S. jobs overseas, and more undocumented
workers fell into U.S. jobs; all are part of the mix.
- . Weakness of the American Dollar. We'll always have Paris - but
probably not this year. American exporters are smiling as Euro managers worry about
competing in the global arena. The downside are the Eurasia bargain
hunters - even in the Midwest - looking for U.S. companies to pick off, or pick up,
with their newly valuable Yen and Euros.
- . Martha, Martha, Martha. Okay, maybe not a global story, but a
real surrogate for New York Attorney General and gubernatorial hopeful Eliot Spitzer,
and all that's wrong with insider greed and cozy boardrooms. Remember, Martha was a
former stock broker - a registered representative who not only should have
known the rules, but passed a test which proved she did know the rules. Her punishment for five months in the slammer: a fast new tv talk-show deal.
Ahhh, God Bless America!
Former UPI newsman Mark Scheinbaum is chief investment strategist for Kaplan &
Co. Securities in Boca Raton, Fla. He is heard daily on "Doug Stephan's Good Day"
on 300 radio stations (and online at www.dougstephan.com).
Copyright 2006 Joe Shea The American Reporter. All Rights Reserved.