Editorial: Needed - Policies to Halt Economic Damage
In the past week, a number of trucking companies, truck makers and parts suppliers reported weak earnings, production curbs and layoffs. Many other manufacturers, which are customers of truck fleets, made cuts, ensuring there will be fewer loads to move in the future.
These developments increase the urgency for Congress to rapidly approve tax cuts to boost consumer confidence and business investment. They also underscore the need for the Bush administration to find a way to stabilize fuel prices. And they mean the Federal Reserve should keep cutting interest rates in coming months.
As truck-builder Paccar reported a big drop in earnings, its chief executive blamed a “recessionary truck market in North America comparable to 1990-91,” the last time the U.S. economy fell into a recession.
Those reporting losses included tire producer Goodyear and car-hauler Allied Holdings. Parts-maker ArvinMeritor said its earnings fell hard, and marked down its estimate for big-truck production this year.
The Fed has finally pushed down interest rates more aggressively, with four rate cuts so far and another expected in mid-May. That stimulus, however, has been partly offset by surging gasoline costs and the job cuts rippling through businesses.
Meanwhile, Congress still hesitates to lock in tax cuts that most everyone agrees are needed, both for a quick tax-rebate boost and for long-term tax reductions that people and companies can count on. The sooner those cuts are sealed, the sooner they can help.
For the administration, a series of price jolts has put energy policy on the front burner. While diesel prices are again rising steadily for truckers, awesome price shocks have hit gasoline that affects most consumers and many freight deliveries.
There is no time to lose. The wreckage piles higher. New policies are needed now.
This story appeared in the April 30 print edition of Transport Topics. Subscribe today.
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