THE CONSERVATIVE VIEW

BY RUSSELL TURNER

 

THE DUST INDICATOR

 

I have never considered myself to be a first class shopper (I will leave that distinction to my wife) but I can spot clues to the financial health of a business by the amount of dust that collects on their products setting on their shelves. If the items are clean and you can’t blow dust off of them the store probably has a good turnover of their merchandise. On the other hand if there is a good coating of dust on the shelf and the merchandise, more than likely their volume of sales is pretty low. If you are a business owner that has a product to sell you definitely don’t want to see dust collect on your product; but some recent reports confirm that is exactly what is happening.

 

Economists were predicting that wholesale inventories would decline in January; instead of declining the wholesale inventories increased. The drop in sales in January was twice as much as reported in December. The report for January’s decline is the sixth decline in the last seven months. The thing that should alarm people is the fact that the inventory to sales ratio is the highest since April of 2009 when the U.S. economy was pulling out of the great recession. In the auto industry many dealers are complaining about having too many autos on their lots. We also need to understand that the auto industry is only one industry. High inventories will cause the pilling up of inventories thus causing production cuts and layoffs. Even Wal Mart is closing several stores in our state and others. The dust indicator is just one observation that most people can understand, but it is a sad fact that many of the government class cannot understand.

 

Here in Oklahoma our legislature is wrestling with a huge state budget funding deficit. The sad fact is the state is not taking in enough money to cover its expenses. It doesn’t take a rocket scientist to understand that because of the downturn of the energy sector, along with agriculture, people simply don’t have the disposable income to purchase things other than the basic necessities. While we continually hear about various state agencies needing more money, I have noticed that very little is said about the private sector and their monetary shortfalls. While we hear about all of the billions of dollar in the state budget we forget that all of the money comes from the private sector, government does not create any wealth it only collects and distributes it. There have been proposals to impose additional taxes on cigarettes and a host of other items, in my opinion those short term solutions only compound the problem later.

 

It is a fact that small business is the backbone of our nation, but far too many elected officials don’t understand that countless mom and pop businesses are just hanging on hoping for a better day. We humans have a bad habit of wanting more than we can afford; government is no exception. Until we start auditing each and every department of government we will continue to have problems. We also make the mistake that there will always be good times, but from experience I know there will be times when dust will start to collect.