By Joe Palumbo
If you’ve been watching CNN during these very stressful global times, you would have seen what they are referring to as “The Price of War.” They point to the cost of M80 tanks, tomahawk missiles, fighter jets, military personnel, etc., etc. But what about the “Hidden Costs of War?”
The projected economic turnaround for 2003 has fizzled with the unemployment rate in New York City cruising at just under 9 percent. During this uncertain period of war, people are skeptical about their job security. Then there is the loss of discretionary capital, with rising gas prices at the pump and the high cost of home heating oil in what was an unduly cold winter.
When people have to spend several hundred dollars more on oil and gas, they make cuts on such items as restaurants, the movies, Broadway shows or weekend getaways. Reservations at most Queens restaurants are not a factor, and that’s inclusive of Saturday evenings.
Advertising, which was suggestive of a turnaround for 2003, is just treading water with the domination of media war coverage. Perhaps the hardest-hit sector is the travel industry. Airlines and tour operators are being hit extra hard.
People are putting their trips on hold, according to Jessica Nagpal, of Jessica Tours & Travel in Kew Gardens. To lessen the blow and lure in more business, some professionals are offering discounts.
Car dealers are offering advance lease takeover incentives in an effort to beef up business, said Rosa Cruz, of Paragon Honda of Woodside. And according to Bill Russell, of Rusco Construction Inc. of Flushing, the home improvement business is slow. Consumers’ general attitude is, “Perhaps we don’t have to make those home improvements for another year or two.”
After all, isn’t that what the corporate market philosophy has been in equipment updating? It’s that very trend that has kept the high-tech sector stagnate. The policy of a “butter-and-guns” campaign is no less difficult than it was under former President Lyndon B. Johnson’s administration.
Fewer people working equals fewer people buying, resulting in the loss of income tax and sales tax revenue. This further aggravates the city’s fiscal state. And you know who the city comes to when it needs money? It’s a vicious cycle that is eating like a cancer into the government, corporate and family budgets. In answering the question of how’s business in the climate of war, it can truly be said to be quite expensive.
Joe Palumbo is the fund manager for The Palco Group, Inc. and can be reached at palcogroup@aol.com or 718-461-8317.
