In the early 1980s, just 30 years ago, few could have foretold the amazing changes that have since taken place in the technological wizardry of the communications, transportation, distribution, robotics, and other varied means of economic expansion.

While this multiplicity of changes is gaining transitional acceptance, these have primarily been brought forth by such wizards as Microsoft’s Bill Gates and Paul Allen, the Apple king Steve Jobs and current CEO Tim Cook, Mark Zuckerberg’s Facebook, and Google founders Larry Page and Sergey Brin (Google is now part of Alphabet).

The simultaneity of these innovations is spreading into all aspects of human evolution and capability. But within the consumer sector in the U.S., comprising 80 percent of America’s world-leading gross domestic product (GDP) and a fast-growing aspect of economic growth in the world’s developed and developing nations, the revolutionary expansion of the provision of goods to countless millions and billions of demanding customers may become the most important of all in expediting the delivery of goods with greater speed and efficiency than ever before.

The creative genius behind this previously static method of availability has become the focus of Amazon. The patented multitude of technological distribution is already underway. Jeff Bezos, the sole founder of this particular method of high-speed acceleration of goods into the hands of consumers is breathtaking in its diversity.

Whereas a mixture of department stores and shopping centers — and, lately, FedEx and UPS — have picked up the pace of proving acceptable to the consumers’ growing needs, Amazon’s goods provisioners set a new record as Bezos continues the use of new methods of speed and efficiency as well as lowest economic cost for the ultimate user and provider targets.

Like his partners in technological excellence and success, Bezos’s successes have resulted in solid stock-market reaction, which has catapulted Bezos into the top 5 percent of billionaires in the world. 

While the exploration of outer space and the search for life even within our Milky Way galaxy is also underway, it is highly likely that the technological revolution now encompassing the world as a whole will have new surprises to offer before this century hits its halfway mark in the not-too-distant future.

Are big banks limited by size?

While the growing troubles that have befallen both Germany’s Deutsche Bank and America’s banking giant Wells Fargo are of different origins, both share the malady of the world’s large conglomerates — size.

It’s no accident that the “heart and soul” of America’s incomparable business success has been in its flourishing small-business makeup. These are generated by indigenous ownership, either family-wise or on-the-spot leadership. Critical decisions of growth, expansion, and customer relations are usually in the hands of the persons that fully understand the nature of their business as it relates to suppliers, customers, end users, and also the geographical uniqueness in which they operate.

Big business, including banks and financial institutions, are primarily motivated by their overall revenues and profit values. This is reflected by price per share of stock which, in the consummate, reflects the respective value of their corporations. This is especially true of super-giant conglomerates, comprised by ownership of non-related businesses. 

This value focus has been vastly inflated by the 1999 Congressional elimination of the Glass-Steagall legislation, which had prevented today’s simultaneous existence of banks expanding into financial institutions and the latter’s tapping into the savings, and generation thereof, of the multi-billions of “bank-related accounts.”

Glass-Steagall had retained a solid wall between commercial banks and financial investment institutions strictly limited to the maximum, but safety of individual accounts and financial institutions primarily interested in growth through investments, often risk-oriented, maximize their value to shareholders.

In effect, this drive to increase maximum value, no longer protected by the “separation wall” of the giant financial organizations, has been reflected both in the Wells Fargo and the Deutsche Bank fiascos. Both have been primarily motivated by the size and financial powers that their stock can bring to shareholders, rather than primarily protecting the individual savings of their customers, which should have been their overriding responsibility.

It may be overly simplistic to boil down the banking problems and the “small business versus conglomerates” to such stated generalities, but it is likely that such a cleavage has provided the major problem that is now plaguing big conglomerates and big banks alike.

Will record-low interest rates typify 2017?

While the 2016 U.S. economy is finishing up below the 2 percent growth mark mandated by the Federal Reserve as an interest rate increase determiner, the Fed will likely add another quarter percent to the fed funds late in December. This will be only the second time that the Federal Reserve Board has upped the rates since the zero base, which existed at the end of the 2008-2011 Great Recession.

With only India displaying a major GDP growth improvement (7 percent) and China slipping below 6 percent among the world’s developing nations, the developed world (U.S., Germany, Japan, and the U.K.) generated relatively weak GDP increases in the 2016 year just ending.

This record drop in IPO expenditures internally, and with export/import activity at low ebb, world trade has suffered accordingly. This was primarily due to protection of jobs at home and maintaining maximum manufacturing sector bases, which have also affected oceanic trading relationships. This has greatly punished overseas shipping activity, leading to the potential liquidation of Hanjin Shipping, South Korea’s dominant shipbuilding/shipping corporation.

With the U.S. the world’s undisputed No. 1 GDP eminence, only the unexpected increase of America’s huge consumer sector (68 percent of its $18 trillion GDP total) kept its annual increase from dropping even further below the expected minimum 2 percent growth level. Germany, Japan, the U.K., etc., did little better. This has led to the growing imposition of negative interest rates on bond investments, never before seriously considered in the history of global finance.

In examining the root causes of this lack of growth in the U.S., the imposition of excessive economic regulations is considered a major factor. This, combined with the lack of expenditures by “small businesses,” which make up the bulk of U.S.-based gross manufacturing, distribution, and end-use revenues, has experienced one of its sparsest growth years in decades. This has led to the dissolution of more “smalls” for the year than the development of new startups.  Such depressed continuation is expected to continue to at least the first quarter 2017.

Barring major changes in the new administration’s regulatory policies, it is very likely that no substantial economic growth will emerge even as the year 2017 wears on.

Will the new president tackle treasury debt?

While the reaching of a $20 trillion current U.S. Treasury debt had been well-publicized earlier in the year 2016, this incubus hanging over America’s lackluster economic growth seems strangely absent from the formation of upcoming economic plans. As has been cited previously, the horrendous doubling of the Treasury debt during the Obama Administration has been manageable due to record low interest rates. 

Such nonsensical tax revisions offered recently by the contending presidential candidates seem to have been put on the back burner by both party candidates. These, of course, were offered as rewards for the American taxpayers’ income benefits, if only they would elect their candidates to the White House cash generator.

The overall tax plans by either party seem to have forgotten about the Treasury debt, as free college education and elimination of taxes on estates, combined with heavier tax burdens for the super-rich, were put on the table by the Democrats. On the other hand, the Republicans have offered a reduction of a global-high corporate 35 percent tax rate to a 15 percent rate together with a range of lower taxation by the wide-ranging middle class sponsored by the GOP. In either case (Democrat or Republican), the Treasury debt would continue to grow even faster. 

These ludicrous promises are compounded with a call for more expensive and contrived renewables while closing the door on coal mines and putting the squeeze on future development of crude oil and its derivatives, plus a stoppage of natural gas liquidity conversion and export.

While the Federal Reserve Board will finally throw in the towel, this would allow interest rates to climb aggressively in the New Year, though they will likely hold back until late in the year.

The failure of the ongoing Obama Administration, which was unable to even come close to 2 percent annual GDP growth during Obama’s two terms, did not lay the groundwork for the 5-8 percent U.S. economic internal growth that typified by the successful comeback of the eight-year Reagan presidency after following an inflation-ridden Jimmy Carter economic disaster.

While the U.S. still contains the balance of the world’s greatest agricultural and commodity potential combined with a massive consumer sector and a highly capable workforce, the leadership offered to the 330 million American residents has not been blessed by the leadership necessary to utilize these benefits for the foreseeable future.

Is protectionism counterproductive to US economic growth?

A major factor in the recent presidential campaign was the need to reverse the loss of American jobs, especially in the manufacturing sector. In fact, populist extremists have called for bringing jobs back to the U.S., which has lost them by the millions through foreign competition in ever greater numbers in the recent past.

The oversimplification of these reversal promises only dramatizes the deliberate ignorance of America’s current GDP, of which two-thirds is comprised by the world’s most voluminous and dynamic consumer sector.

Much of the “blame” for overseas production of an increasing amount of consumer goods, whose competitive pricing is demanded by America’s 330 million-person population, can be attributed to the same population sector which demanded the ever-higher union contracts of the 20th century’s second half. It also voted for ever more complex work regulations abetted by the desire of huge American conglomerates to maximize their profits by cheaper production overseas.

In addition, what is never openly discussed is the gigantic government-funded “food stamp” sector, which has provided a reasonable financial supplement for the more than 90 million who are not employed in full-time jobs. The latter has developed into a self-serving subsector that is actively protecting its own desire for the status quo.

While the Obama Administration’s openhanded immigration policies have left much to be desired, it has also been supported by much of the non-working masses. They don’t particularly want to fill the menial bottom-rung jobs that could be filled by some of the millions of displaced refugees.

The new administration will have to immediately grapple with this bloated conundrum, which will face the incoming government with an increasingly complex solution as it attempts to carefully get its feet on the ground.

New millionaires emerge from US growth economy

While the crux of the current economy, as debated in the recent presidential campaign, concerned itself with the record number of potential workers not fully employed and the recent U.S. Treasury debt supporting this joblessness, a segment of “penta-millionaires” surpassed the one million mark for the first time in 2015.

Households with $5 million or more in investable assets grew by 5 percent in 2015, a number projected to top that of the 1,015,000 mark this year. This “enrichment” by a growing number of American families is reflective of a solid expansion of independent “small businesses” rather than an inflationary reflection, conspicuous by its absence since the end of the Great Recession in 2011.

This “2 percent” level of upper middle class American income earners ($5 million to $20 million investable ownership) has indicated a 38 percent growth percentage in the past five years. Even more spectacular is the 26 percent outgrowth percentage at the upper end of the “wealth income” pyramid which has witnessed $1 billion plus per year holdings between 2010-2015, growing from 392 to 492. The fastest percentage growth of all these wealth sectors has been the $20 million to $100 million investable funds expansion, jumping 64 percent from 166,000 in 2010 to 171,000 in 2015.

The reason that the $5 million to $20 million group is topped by the much more affluent billionaires and penta-millionaires is that much of this group is comprised by those that have sold out their “funded“ small businesses and are benefitting from the wealth accrued due to hard work and shrewd investments after a lifetime of effort.

It is also a testimonial to the multi-faceted nature of America’s professions and business ingenuity that elicits the technological and creative new ideas that have always been in the forefront of America’s rising population. They are free to make their own choice as its innovative practitioners accumulate their wealth derived therefrom.

While the encroachment of previous administrations has put an increasing effort into regulations requiring government to add more employees for enforcement, the expanding success of these penta-millionaires and others accumulating wealth is still the result of opportunities offered by the “American way of life” of freedom of choice.

This article was originally titled “A look ahead” in the December 2016 print edition of Plumbing & Mechanical.