4th Quarter 2021
Market Watch by Joe A. Hollingsworth, Jr.
While I am supposed to be primarily writing about the industrial market, there is a much bigger challenge that faces America that indirectly affects everything, including the industrial real estate market. So, here I go…
First, let me state the problem: Never-ending political promises by both parties with never any accountability or projected risk or reward.
When corporations first began to be traded on Wall Street, there was malfeasance, corporate mistrust, and blatant disregard for fraudulent actions. However, to provide legitimacy, there was a move forward that provided some consistency in accounting rules. Otherwise, how could you ever invest in the stock or the industry without comparable choices and the facts being accurate? This became “generally accepted accounting principles” (GAAP). Without GAAP being instituted and in full force around the beginning of the 1880s, we wouldn’t be able to invest properly today. So, it brings us to a point where legitimate companies all play within the “guardrails”.
Another example might be legal reforms. While there have always been customs and known principles (since God was a little boy), Democratic countries now have a well-defined set of rules topped with legal precedence and consistency that we can all rely on. Now, when businesses or individuals overreach, the ultimate legal guardrails are with an independent board, called the Supreme Court. They provide legal sound reasoning for us to initiate any worthwhile endeavor.
How about the Federal Reserve Board? It is an independent body overseeing central bankers trading with banks; and, while it may be appointed by politicians, the terms are long and overlap. While we don’t always agree (Currently, I don’t), the Federal Reserve Board is independent enough that it does provide a specific set of goals that has been consistent in the banking system, thus the risk/reward is reliable.
What is needed is an independent board that provides estimating for political actions, promises, and projections with accountability. This board would preside over the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO). It should mandate the accounting principles which are going to be factually based; and, therefore, those two institutions will turn out reliable numbers, not politically motivated numbers. This should be transformational. Instead of unrestrained promises like with the $3.5 trillion dollar proposal which have only parts of the cost/liabilities listed in the bill, it will force all costs to be recognized and resulting reactions to be considered. Political reality will become normalized.
In this era of extreme radicalism about every topic, one true healing source could be this proposed board; because, while we may argue, debate, “cuss and discuss” the ending results of political proposals, the facts will be reliably and consistently conveyed about the chosen topic.
Responsibility is a powerful force.
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“From greenfield startup to becoming a national industry leader 10 years later, Hollingsworth continues to play an invaluable role in Service Center Metals growth and success.” -- Scott Kelley, President and CEO, Service Center Metals
"Hollingsworth entered an agreement to ensure quick delivery of the pre-approved standard building sizes . We are committed to deliver the structural steel, ready for erection, in just 6 weeks from receipt of a final building order." -- Jeff Carmean, General Manager, Nucor Building Systems
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