WASHINGTON -- With the bankruptcy announcement of Lehman Brothers—a leading name in investment banking—just making headlines, speakers at CSP's 2008 Outlook Leadership conference opened the annual gathering on dual notes of caution and optimism. Economist Barry Asmus told the estimated 300 retailers and suppliers gathered at the opening generalsession that decisions by federal officials to hold off on bailing out the famed New York investment firm were necessary and healthy for the economy.
He talked of "good capitalism" and "bad capitalism," where intervention in a free market [image-nocss] can lead to negative consequences.
Taking another example, Asmus, a senior economist with the National Center for Policy Analysis, Washington, said the Federal Reserve had allowed interest rates to remain too low for too long, fueling the many so-called "bubbles" currently affecting housing, commodities and credit. The mere announcement that rates would not go any lower helped the value of the dollar rise in recent months, he said.
"Strong economies are not built on weak currency," Asmus said.
Asmus (pictured) noted several other important influences on the economy including the following:
Population. America 's population has been growing at a healthier rate than other counties, a fact that bodes well for the domestic economy. Prices and inflation. Asmus said stable price levels and a low rate of inflation are important goals. Taxes. Higher taxes stifle economic growth. Productivity. Prioritizing job count over developing technology to increase productivity is a mistake, he said. Globalization. Free trade can lead to win-win scenarios. Entrepreneurship. This is the country 's "ace in the hole."Echoing many of the messages of the afternoon, Sonja Hubbard, CEO of EZ Mart Stores Inc., Texarkana, Texas, and incoming chairman of the National Association of Convenience Stores (NACS), stressed the importance of balance in today 's economic climate, noting how issues of credit-card monopolies, price-gouging accusations (see related stories in this issue of CSP Daily News) and the ramifications of alternative fuel mandates were all extremes in need of "correction."
A third general assembly speaker, Dennis Ruben, managing director for NRC Realty Advisors LLC, Chicago, noted that near term, the troubles for the nation 's financial institutions are probably not over, predicting additional bankruptcies.
The end result for c-store retailers is a shrinking pool of capital. "Retailers will see credit standards get tighter and interest rates go higher," he said. "In general, financing will become more difficult."Alsocatch Hubbard and Asmusontoday's CSPTV in this issue of CSP Daily News.
As part of the "What's Right With America" theme at the 2008 Outlook Leadership, at the new Gaylord National Resort & Convention Center, National Harbor, Md., CSP Information Group's CARRE Foundation is collecting donations to benefit the USO.Click here to donate now.
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