ABC: Boating’s seat at the helm of government

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Want to help move the dial? A good place to start is at the American Boating Congress May 8-9 in Washington, D.C. Come to the Capitol and make your voice heard.

We’ve got a good story to tell about the economic impact of recreational boating and the jobs our industry creates. And there are a host of issues that we need to address with a strong, unified voice.

Bollman Yachts owner and president Jeff Erdmann of Fort Lauderdale is rounding up as many members as he can from the Florida Yacht Brokers Association for this year’s conference. “I think it’s absolutely critical,” says Erdmann, who is director of government affairs for FYBA. “One of the biggest problems our industry faces is a lack of understanding of who we are and what we represent. I think it’s imperative that [lawmakers] understand this is a real industry that supports a lot of jobs.”

For politicians and their staff members, face-to-face meetings with business owners and voters from home districts are very effective, says NMMA legislative director Jim Currie. The fear, of course, is being out of step with constituents. “That’s their survival mechanism,” Currie told me recently. “If they satisfy the people back home they stand a much better chance of getting re-elected.”

As NMMA president Thom Dammrich is fond of saying: “Advocacy grows boating.” Without our input, many of the decisions that Congress and federal agencies make can adversely affect boating and the industry, he says. “We work to have boating represented at every table, every forum, every meeting where there is a discussion of policy that could help or hurt recreational boating,” Dammrich says.

And no one is more qualified to tell that story than you.

Your presence will help make it happen. There are at least 30 ABC co-hosts this year, including Soundings Trade Only.

* * *

A recent headline on a Reuters news story shouted: “Dow’s Record Rally May Unleash ‘Wealth Effect.’ ”

The booming stock market and improvements in housing and employment, coupled with recession fatigue and pent-up demand, are providing the industry with a much-needed oomph in new-boat sales. In theory, the wealth effect works this way. Businesses and consumers start to increase their spending when they believe their financial well-being is getting stronger. Triggers include an overall improvement in the economy, a rebound in housing prices and a rising stock market. All of that helps drive sales of boats and other items purchased with discretionary income.

We certainly heard good reports from the New York, Miami and New England shows. Folks with the wherewithal are coming off the fences and starting to spend again. The Palm Beach International Boat Show should provide another good gauge of the wealth effect.

Future prospects? It’s easy enough to find naysayers, but I’d rather hear from analyst Ivy Zelman, who the respected financial blog Calculated Risk says was one of the few to accurately call the high and low of the housing market. CR says the analyst recently told CNBC that housing prices could go up “for four to six years in duration” and that we are in the “first or second inning of the fundamental recovery that could be five to 10 years in duration.”

Zelman said in a CNBC interview, “I think we are in Nirvana for housing.” In a note, full-time Calculated Risk blogger Bill McBride said that he is not only “very positive” on housing, but also positive on the overall economy. “And a key reason is, historically, housing is the best leading indicator for the economy,” he wrote.

Not long ago I referenced in my blog a story in the Wall Street Journal with the headline: “What Recession? Americans Regain a Craving for Luxury.” The story reported that the strong equities market and other positive economic signs were boosting sales of luxury-goods makers such as Hermes, Gucci and Cartier. Wealthy Americans are shrugging off uncertainty, the story said, and “spending freely” on high-end products.

One of the analysts quoted by the newspaper added a caveat that I think is worth repeating. Although the trends in luxury consumption in this country have continued to outperform overall consumer trends, there are limits. “Where some have gone too far,” the analyst told the WSJ, “is in thinking Middle America is going to be buying luxury.”

Something to keep in mind.

This article originally appeared in the April 2013 issue.

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