EDITOR'S CHOICE -- SCOTT SUTTELL
Manufacturers brace for U.S. economy falling off a 'fiscal cliff'
Blog entry: August 6, 2012, 11:27 am | Author: SCOTT SUTTELL
Who's afraid of a fiscal cliff? Just about everybody.
The New York Times says a “rising number of manufacturers are canceling new investments and putting off new hires” because they fear looming tax increases and budget cuts in January will undermine economic growth. The combination of tax increases and spending cuts — the result of a deal last year when Democrats and Republicans couldn't agree on how to extend Bush-era tax breaks — is creating an economic threat known as “the fiscal cliff.”
As a result, “Executives at companies making everything from electrical components and power systems to automotive parts say the fiscal stalemate is prompting them to pull back now, rather than wait for a possible resolution to the deadlock on Capitol Hill,” The Times reports.This and that
Cleveland-based Eaton Corp. is among the companies that has cited the uncertainty as a threat to earnings in the second half of 2012, according to the newspaper.
“We're in economic purgatory,” Alexander M. Cutler, CEO of Eaton, tells The Times. “In the nondefense, nongovernment sectors, that's where the caution is creeping in. We're seeing it when we talk to dealers, distributors and users.”
As a consequence, the newspaper notes, Mr. Cutler lowered Eaton's projected results for 2012 in late July, adding that he sees particular weakness in the heavy-duty truck market.
“I don't think there's any question the economy is starting to see an impact from the fiscal cliff,” Mr. Cutler says. He adds that as companies retreat, the effect is multiplied by the impact it has on other sectors, like restaurants and hotels.
Vincent Reinhart, chief U.S. economist at Morgan Stanley, estimates that all told, the political gridlock in the United States, along with the European debt crisis, will shave about half a percentage point off growth in the second half of the year.
Everything's bigger in Texas: Forest City Enterprises Inc. has closed a land deal for three buildings in what's known as Uptown Dallas. The Cleveland-based developer plans to build a $100 million high-rise residential and retail project, according to the Dallas Business Journal.
Forest City executive Jim Truitt tells the newspaper that the site will have a 21-story tower, and two, five-story buildings. The three buildings will have residential units on the upper floors, with retail on the ground-level floor. Plans call for 380 apartments and 37,000 square feet of retail space.
Lucky you: This Associated Press analysis of ad spending in the race for the White House notes that Ohio is one of nine states where ad spending is being concentrated.
Those states — in addition to Ohio, they are Colorado, Iowa, Nevada, New Hampshire, North Carolina, Pennsylvania, Virginia and Florida — have “absorbed an eye-popping $350 million in commercials so far,” the AP says.
Ohio is getting the worst of it.
“No state has been flooded with more campaign advertising than Ohio, where an average viewer in the Cleveland television market is seeing about 87 presidential campaign spots a week,” the AP reports.
Florida is second, with viewers in the Orlando media market seeing about 70 campaign ads a week.
Drink up: An Ohio city makes this MarketWatch.com list of the country's 10 best bar towns, but surprisingly, it's not Cleveland.
Toledo, though, is No. 5 on the list, with 7.2 bars for every 10,000 households.
Only New Orleans, Milwaukee, Omaha and Pittsburgh have more bar-going opportunities per household than Toledo.
Competence is the new charisma: Here's a refreshing take, from National Review's Jay Nordlinger, on the “he's-so-boring” narrative about U.S. Sen. Rob Portman, a possible VP pick for Mitt Romney.
Mr. Nordlinger writes that Sen. Portman “is super-capable, famously capable — the kind of person you would appoint as president, if you could appoint a president. … He doesn't excite me,' people say. Well … different people are excited by different things. A superb conservative leader who can help keep this country from swirling down the drain? Not unexciting.”
Work, not words: For refreshment from the other side of the political spectrum, check out this Reuters story about last Friday's "kiss-ins" at Chick-fil-A restaurants nationwide, which features comments from a leader of a gay organization in Cleveland.
The protests were “largely peaceful,” Reuters says.
Phyllis Harris, executive director of the LGBT Center in Cleveland, acknowledged the controversy has an upside for her organization's goals, noting, “It is allowing people to have their say. It keeps the issue in the public view and you can see folks standing up for marriage equality."
As for demonstrating, she told Reuters, "We are not going to participate as a group. We are going to focus on work here. What happens, happens. We are not against Chick-fil-A."
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