First is the Federal Reserve Board, which seems to be chasing an invisible demon. The Fed wants to brag that it has kept inflation at bay by constantly raising interest rates.
If anyone is trying to push inflation up to front and center, it is a couple of the automobile companies that have announced some massive and frequent price increases when there is no economic justification for such increases. But if you are sold out, or expect to be sold out, the reasoning is that you might as well raise prices. That's inflation, people tell me. Although if you raise your prices too high, competition takes over and all of a sudden, you're not sold out anymore.
But in spite of the Fed's interest rates, the economy is feeling its oats, and there doesn't appear to be any letup in sight. That should be a very nice holiday greeting for the auto industry. Business is great and should stay that way.
I'm amused at the way people take the credit, or shift the blame, for economic changes. Do we blame the Fed or credit the Fed? Is the Clinton administration responsible for the recovery or did the Bush administration put everything in place? Is Congress the solution or is Congress the problem?
It seems like the U.S. economy has a mind of it's own and there is little any local or federal agency can do to make any substantial change - with the possible exception of the Fed.
This year's production and sales numbers should put a smile on just about everyone's face. Next year is going to be just as good for the automotive sector, and that should ensure that the rest of the economy is going to do just as well. The automobile is still the engine that pulls the U.S. economy along, and these days it is doing just fine, thank you very much.
The mix is changing rapidly. More and more people are buying trucks that they think are cars. Light pickups, sport-utilities and minivans soon will approach 50 percent of the U.S. market. Any manufacturer that doesn't have them is scrambling to develop them.
A lot of companies set records in 1994, and might break them next year. That would probably be the best holiday gift of all. Two years with a strong economy. Happy Holidays and Happy New Year.