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Arkansas business leaders comment on federal shutdown

Much has been said of the potential negative economic impact of the federal government shutdown. Market watchers suggest a 0.2% to 0.4% hit to the fourth quarter GDP, with some hope the economic activity lost would be made up in the first quarter of 2014.

The National Retail Federation issued on Thursday (Oct. 3) its expectations for a solid holiday season with sales expected to top $602.1 billion, up 3.9% from last year. However, the federation also said a prolonged shutdown in government operations, or worse yet, Washington's inability to quickly reach compromise on the debt ceiling could derail those holiday expectations, said NRF chief economist Jack Kleinhenz, during a media conference call on Thursday (Oct. 1).

“Our forecast is a realistic look at where we are right now in this economy – balancing continued uncertainty in Washington and an economy that has been teetering on incremental growth for years,” said NRF President and CEO Matthew Shay. “Overall, retailers are optimistic for the 2013 holiday season, hoping political debates over government spending and the debt ceiling do not erase any economic progress we’ve already made.”

“Our forecast is also somewhat hinging on Congress and the Administration’s actions over the next 45 days; without action, we face the potential of losing the faith Americans have in their leaders, and the pursuant decrease in consumer confidence," Shay said.

He said over the past year the NRF has survey consumers time again dating back to the fiscal cliff issue and found that 70% to 80% of consumers surveyed consistently said that the state of the economy greatly weighs on their spending decisions.

Northwest Arkansas' economy is closely tied to retail, given Wal-Mart's presence there as well as the near 4,000 supplier-related jobs. The holiday season comprises anywhere from 20% to 40% of a retailer's total annual sales. Experts said if the shutdown drags on more than a week or so and the debt ceiling issue stalls, this holiday season might not be as merry.

The City Wire on Thursday surveyed several business leaders around the state. Following are the questions and their responses.

Q: Do you believe the shutdown will have a negative impact on your metro area economy? If so, in what area(s) are you most concerned will be hurt?

“Anytime 800,000 people are suddenly plunged into unemployment, the economy is dramatically affected,” Lane Kidd, executive director of the Arkansas Trucking Association

Sam T. Sicard, president and CEO, Fort Smith-based First Bank Corp.: “What I am most concerned with are the dedicated workers at the Guard and other government funded occupations who are being furloughed and not being compensated. From a direct economic perspective, obviously their delayed or lost compensation will negatively impact local businesses due to less consumer spending in our economy. From a broader perspective, I believe the shutdown will also lower spending of other families in our community out of fear of the future. I also believe this negatively impacts business investment, as businesses become concerned with future uncertainties of what Congress will do next and whether our country can intelligently govern itself.”

Jeff Amerine, technology licensing officer, University of Arkansas: “At this point it is difficult for me to clearly assess the impact as it relates to the startup/venture community in Arkansas. Clearly if the shutdown goes on for long, the impacts will inevitably grow because the economy is driven good or bad by the balance between confidence and uncertainty. Even if the actual impacts of an extended shutdown are low, confidence in the overall economy will erode as this morass continues. Let's hope cooler heads prevail soon.”

“I think we are in a much better position in Northwest Arkansas to avoid any short term issues, however the cost of Obamacare is much more scary to me,” Gary Head, CEO of Signature Bank of Arkansas

“What goes down, goes back up by the same amount after the crisis ends, so net-net, we’ll be in the same place,” Dan Sanker, CEO of CaseStack

Dave Hughes, executive director, Greater Fort Smith Association of Home Builders: “I'm very pro-business, small government, so my responses are skewed toward that bias. Regarding economic impact, the suspension of pay for federal workers could have, if protracted, a significant negative impact on the economy. Of more importance will be how Congress handles the debt ceiling deadline October 17th. If the stalemate continues, it could have a local impact, but it would probably take until mid 2014 for it reach here.”

Q: Who do you most blame for the shutdown?
“Politics caused the shutdown. Chicago style politics, unlike Chicago style pizza, is very unappetizing.” – Dave Hughes

Sam Sicard: “There is plenty of blame to go around for the shutdown. What I have learned in business and organizational leadership is that when blame is not shared, problems don't get solved. I believe, as Americans, the only way we get our government to govern responsibly and quit governing by self-imposed crisis after crisis is we all share in the blame. Perhaps we have been at fault for prioritizing our personal interests over the interests of our country. Perhaps we are to blame because we have done nothing but complain about our federal government, without actually trying to make a difference. The failure of our country to responsibly govern itself through our representative democracy is an opportunity for us to reflect on where we are as a country, how we got here, and what we have to do to change directions. I hope we can learn from this, and if not, maybe our country's children will.”

Jeff Amerine: “I'd say our politicians are a reflection of America. Someone once said ‘we always get the government we deserve.’ If we don't like the current situation, we are all obligated to be informed citizenry and vote whenever the opportunity presents itself.”

Jennifer Parks, Fort Smith-based HealthPointe Insurance Services: “Both parties. However the egos are going to have to go. It seems that most of our elected representatives lose grasp on reality when they get to Washington.”

“Those factions within the House of Representatives that linked approving the federal budget to delaying the start of the health insurance exchanges.” – Lane Kidd

“The system.” – Dan Sanker

Q: The next potential gridlock in Washington could be over the debt ceiling. What would be your advice to Arkansas’ Congressional delegation on how to handle the expected need to raise the federal debt ceiling?

“Listen to your constituents and shrink our government.” – Gary Head

“Let’s be realistic. They have commitments. Their decisions are made.” – Dan Sanker

Jennifer Parks: “Quit spending money! This cannot continue. Sacrifices are going to have to be made. They MUST keep a balanced budget for the country much the same as they would for their own family. Not many of us could keep our nice, comfy lives if we did not pay our creditors. I am very concerned for our children and what the future will hold. We are losing producers (taxpayers) and putting more and more people on government assistance.”

Jeff Amerine: “It is hard to argue with the desire to control spending and to manage to a budget versus a continuously rolling bow wave of CRs. The current approach is indefensible. I'd like to see a rational plan that reduces the debt and the deficit. We simply cannot continue to spend beyond our means. I hope that both parties can figure out how to work together to develop a consensus approach that gets the country on that path.”

Sam Sicard: “My advice to my Congressman is to raise the debt ceiling. I have no objection to trying to get additional spending cuts for increasing the debt ceiling, particularly if spending cuts come from our completely out-of-control entitlement programs, but not raising the debt ceiling could be an absolute economic and fiscal disaster for our country. If we don't raise the debt ceiling, this puts us at risk of defaulting on our debts and putting us back in a deep recession with millions of lost jobs. From a fiscal standpoint, this puts us at risk of drastically raising the interest rates on the existing $16.7 trillion in federal debt we owe. We can't afford to do this with how much we already owe. The negative economic impact from the government shutdown will pale in comparison to a failure to raise the debt ceiling.”

“Voting to increase the debt ceiling will not increase future government spending but rather authorize payments of debts already incurred, so the delegation should vote to support raising the debt ceiling.” – Lane Kidd

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Q: Please feel free to offer any other thoughts on the relationship between federal government actions and the regional economy.

“‘We the people’ get what we vote for.” – Dan Sanker

“Again, it's about the debt. The federal government hurts everyone in the country with the way they have mismanaged our money.” – Jennifer Parks

“The best thing we can do locally is to monitor the situation but not be paralyzed by it. We need to keep doing what we do best by running great businesses and creating new enterprises that can and will change the world.” – Jeff Amerine

Sam Sicard: “I just want to add that I support my Congressman, Steve Womack. While I may not agree with his position on absolutely every issue, I know that he is smart, hard working, loves his country and is trying to do what is best for our State and our community. It is easy to just blame everyone in Congress for our political dysfunction and assume they all don't really care. Maybe some don't, but I know he does care, and I know he did not want our government to shutdown and thousands of Arkansans to be furloughed. He is facing some difficult decisions on how to vote to get us out of the shutdown and avoid defaulting on our debt, avoid raising the interest on our debt, and avoiding putting our economy back in a recession from yet another self-inflicted wound. I know that however he votes, he will vote based on what he believes is best for our country.”

Five Star Votes: 
Average: 2.7 (7 votes)

Comments

I can't wait for the 'Whatchamacallit Care Act'

I haven't been able to afford medical care for so long. Now, thanks to President Obama and the Democrats, for just a mere extra house payment, my family will be half covered. It's high time somebody stood up for the middle class! The Republicans are doing everything they can to make sure the American people have at least a chance to figure out who did this to them. They know the nation is already over the edge and clinging to a bush on the deal. The debt will get covered maybe on the last day. I bet this will hit discount retailers hard if people find the equivalent of a house payment has disappeared. Just how wrong was Bloomberg?

my bet

if you conducted a poll to find out what American want most and gave them a choice of two, Obamacare or low cost fuel for their automobiles, what would they select as more important? choices are great for the American people and it seems that our leader is against the national pipeline that would reduce fuel costs, he is against extra drilling to increase supply and reduce fuel cost, but then offers no choice in personal decisions regarding health care. just how free are we?

You're Not Happy

Happy, maybe you should visit with the folks in Mayflower to see how they feel about a pipeline. And while you are at it, visit with the masses of people who, until the passage of the Affordable Care Act (Obamacare to you), could not get ANY kind of medical insurance and sometimes no treatment because of a chronic medical condition. I see them every day. I doubt you should opine about anything until you look at both sides of the issue.

Anon Anomalous

Well Anonymous person, the mayflower incident was a one in a million accident and there is more damage done to the environment by fuel and oil shipment vehicle accidents and that includes barges and other vessels. does that mean we should stop shipping and using oil products? good luck with that theory because you would shut down half the industry in the world including your own! the ACA or Obamacare has some good points but needs a whole lot of extra work done on the structure of the offering before it is forcibly shoved down the throats of the American people. its simply not ready for prime time so maybe you should check all your facts before you "opine" your slanted views. the national polls show that over 60% of the American people don't want the ACA in its present state. Now carry on and take care of all those folks needing medical assistance and study both sides of the issues while checking out those national polls. We still operate by majority rule in this country, don't we?
Well Anonymous person, the mayflower incident was a one in a million accident and there is more damage done to the environment by fuel and oil shipment vehicle accidents and that includes barges and other vessels. does that mean we should stop shipping and using oil products? good luck with that theory because you would shut down half the industry in the world including your own! the ACA or Obamacare has some good points but needs a whole lot of extra work done on the structure of the offering before it is forcibly shoved down the throats of the American people. its simply not ready for prime time so maybe you should check all your facts before you "opine" your ...>> Read the entire comment.

high altitude

please come down from your high altitude on the mountain top because it may be effecting your brain anon! my opinion is that happy was right on target.

Pipeline, cheaper fuel

The Keystone pipeline is intended to bring oil to gulf coast refineries for export, not domestic consumption. The refined oil will be sold based upon the market price. World fuel prices trend up raising American prices at the pump. That is the economics short explanation. Know the facts before you misinform. Thank You

It's called supply and demand

it's not perfect but rarely does excess supply drive prices up nor does excess demand often drive them down. BTW how many oil related protests have you walked to in your life? Since you mentioned safety re the Keystone pipeline I would like to point out that you failed to mention that a train load of oil just recently blew up in Lac Megantic, Quebec killing over 60 people. If you're going try and play tree hugger perhaps you should work on it some more.

Not about tree hugging

You jump to conclusions. Lower Gasoline prices at the pump have nothing to do with new pipelines nor does oil independence for national security when that oil is for export. Environmental protection is not a dirty word. It is cleaner than an oil spill or an toxic Whirlpool leak. In economic terms, too many businesses get a free ride by externalizing the inherent cost to the environment in which profits are made. Polluted air and water exact a price on public health and in turn medical costs via premiums we all pay. So I'd rather breath clean air and drink clean water then pay through the nose for fuel if that is the choice. But that is not the only choice. Clean air,water and land plus affordable domestic energy can be had. The Enrons of today will still make money.

Put a tiger in your tank!

1 A pipeline is the safest way to transport oil 2 Lower prices for oil do mean lower prices at the pump 3 Oil produced here is good for national security because you control whether it's shipped or not 4 Most of the human race does not wish to become extinct protecting the environment..there will always be tradeoffs. The way the soles of your shoes stay perfect is you do not walk in them. The Enrons of today and tomorrow will either make money or they will not produce fuel and they will get that money from us. My guess is people will want to do something besides drive then as they do now.

Silver Spoon Sicard

Sam wants to cut public entitlements. When the estate tax reduces his private inheritance entitlements, then maybe we can take him seriously. When his industry pays back the bailouts to the taxpayer and circulates cash rather than hoarding it, then maybe we can all trust each other. Unfortunately, young Mr. Sicard perpetuates old money ideas of the past....The rich get richer and everybody else gets poorer. Maybe what I am missing is that the privileged offspring are entitled to remain rich just by showing up at birth while the underprivelged and less fortunate are entitled only to stay that way. Such is life on the Fort Smith Plantation.

Stay tuned for what this is really about..

We could change babies at birth I guess. In my clan anyone prone to worry about Sam Sicard's inheritance would be just the one to drag the entire family into court over that 48 state wall plate collection Aunt Nelda promised them years ago... BTW I see it's time for contributions for the homeless campus. Is this why you attempt to throw him on a guilt trip and even mention bailouts his bank didn't need?

Homeless Class

I wonder how many homeless there are due to local bank foreclosures and unwillingness to restructure loans, maybe with lower payment and a large balloon payment at the end of the term of the loan.?

Where does Sam donate to the 'Homeless Campus'?

You continue to bellow about banks including one that had nothing to do with all this. For your information, and I bet there's plenty of room, banks like his got stuck with extra fees because of what the others did. Four years of an absolutely horrible jobs picture yet the banks are the main ones at fault? Something smells rotten in the state of Denmark here starting at the very beginning of this thread.

god save the king

in England they all rejoice when a new heir to the throne is born so he can be controlled by the same old gang that pulls the strings of the bureaucracy. sometimes the perceived leader is just a puppet.

entitlements

What is sad is that you criticize me for suggesting entitlements need to be cut, even though the Medicare fund will be fully depleted by 2024 and the Social Security fund will be fully depleted by 2036 (per the independent, nonpartisan CBO). Most likely this won't negatively impact me, but it is going to be devastating for future middle class and lower income retirees. Sam Sicard

the art of the game

some people do great things for poor people with their own money and then some people make money doing great things for poor people with some other persons money.

Well I've never been to England

The Russians took care of that back when they ended the Czars didn't they? The Germans have brilliantly done it twice now..so far. Since that new bird isn't necessarily a Phoenix might as well let the Brits go ahead and dream. Basically does it really matter anyway if you can't get the other end of the strings attached somehow to your own fingers? If there really is something like a military-industrial complex going on here in Ft Smith I can actually see things getting far worse if replaced by someone that only knows how to mess thing's up royally. Cheerio mate!

Sam Sicard

So, a person who calls himself or herself "anonymous" anonymously throws darts at Sam Sicard. Sam has signed his name to everything he's written. Really, if you are going to insult someone, and you don't have the facts, at least have the courage to identify yourself.

Steve Brawner

Facts don't need a name attached

Sorry Steve, it won't work, get real. You can kiss up to the big shots, that doesn't take courage. Mr. Sicard can speak for himself.

Best Bank Poll

The polls say that the best bank in fort smith is the Blood Bank! just thought you all need a funny----lighten up!

Odd

Why would the citywire publish a personal attack? What's the point of moderating comments if this is considered acceptable and other opinions unacceptable?