Issue: November 2008 APPLIANCE Magazine
The Enemy Is Uncertainty
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Tim Somheil, Editor
There’s nothing worse than not knowing. But how do we look ahead from here?
traditionally a time of year when APPLIANCE magazine starts to forecast
what the coming year might bring to the appliance industry. Never has
it been more difficult to do so.
So I’m asking you to help. I’m inviting the people of the appliance
industry to share their thoughts on the new APPLIANCE blog. In this
place we can examine the recent upheaval and postulate its impact on
the industry. Better, we can share ideas for making the best of it.
I’m hopeful that, by the time you read this, the chaos will have died
Tim Somheil, Editor
The Crucial Balance
On October 10,
2008, Bart van Ark, PhD, vice president and chief economist of The
Conference Board, had this to say: “If government and business leaders
can calmly—and privately—focus squarely on a way out of all this,
looking to prevent tomorrow’s fires even as they fight today’s, we can
still avoid worse. This means finding a crucial balance between the
short-run steps needed to get the economy back on its feet and the
long-run needed to foster a new phase of global growth.”
The statement was part of a Conference Board release forecasting
further contraction of the U.S. economy into the first half of 2009.
That’s assuming that there will be some loosening of credit markets in
response to measures taken by the U.S. government, that interbank
lending will recover, and that investor and business confidence will
Are those reasonable assumptions? It’s impossible to say from where I
sit now, writing this editorial in mid-October, with global markets
fluctuating wildly and the U.S. fitful over a heated presidential
There are a number of economic and political scenarios that could play
out in the coming months. The success of worldwide bailouts, the
housing markets in the United States and parts of Europe, the stability
of burgeoning third-world economies (they’re becoming important
appliance markets), and the global reaction to the U.S. election
outcome are all linked, and all could affect the overall recovery. A
terrorist/geopolitical event could skew the trajectory of the global
economy and hence the success of the appliance industry.
Writing this in October, there is only one thing I can predict: the
morale of the United States will change after November 4. Reading this
after the fact, you can already judge whether that change was for the
This presidential election has riveted America’s attention like no
other in my lifetime. In mid-October, one of the candidates is
statistically favored to win, but no one can say for sure what the
outcome will be. This election has been a mirror of the times: filled
But with that one significant uncertainty settled, there is a chance
for psychological inertia to spread more calm. To help the financial
markets grow steady. To foster global progress on economic repair
efforts and the development of more-secure financial systems.
With less uncertainty and some feeling of stability, consumers will
begin to find a new footing. Housing can then begin to recover. A short
recession and minimal damage to the global financial system is about
the most optimistic near-term future we can expect. Then things can
slowly—probably over the course of several years—get back to whatever
the new “normal” turns out to be.
Call this scenario wishful thinking. And by the time you read this it
may have proved to be hopelessly naive. Inaccurate predictions are a
shortcoming of writing for print publication in such dynamic times. But
I’ll be updating these thoughts on the new APPLIANCE blog, and I invite
you to respond.
What Does the Future Hold?
What should the
new President and the new Congress do to foster growth in consumer
products industries? What’s the best outcome for the changes to the
global financial systems?
How has the appliance industry been affected by the events of 2008, and how will the industry fare in 2009?
Perhaps most importantly: How can the appliance industry create success in 2010 and beyond?
You’ve got an opinion. Don’t keep it to yourself.