By Michelle Price
UCBJ Managing Editor
UPPER CUMBERLAND – Recently, the UCBJ had an opportunity to talk with first-term U.S. Rep. John Rose (6thDistrict) about some hot button issues facing businesses in the Upper Cumberland. The conversation ranged from the Federal Reserve and tariffs to banking and glider kit regulations.
Open markets and tariffs
Rose provided his thoughts on President Donald Trump’s efforts to level the playing field on international trade.
“At the present those (tariffs) are having, in some cases, a detrimental effect on businesses across Tennessee, but ultimately the hope is to level the playing field for Tennessee businesses and Tennessee workers with places like China and India and even our neighbors to the south, Mexico, and our neighbors to the north, Canada, and certainly Europe. I’m optimistic,” said Rose.
“I was just recently hearing from Jamie Dimon, who leads one of the major financial institutions in the country, and he acknowledged ‘you know, I wouldn’t have gone about it this way, but it’s working.’ So, we think the president should see through the strategy he’s undertaking. The hope is to open up business opportunities and level the playing field for our business and our workers.”
Rose recently had the opportunity to meet with the Federal Reserve Chairman at the Federal Reserve Bank in Washington and hear their concerns about the economy.
“Thankfully they keep a very close eye on our nation’s monetary policy,” Rose said. “They are concerned at present because they see a lot of headwinds in the economy around the world. It hasn’t yet manifested here, but I think they are prepared to take aggressive action, if necessary, to make sure that the economy continues to be robust and move forward.”
Earlier this year the Senate voted to confirm three Trump administration picks to serve on the Export-Import Bank’s board. This provided the board with the necessary quorum to conduct business and approve deals of more than $10 million. According to Wall Street Journal reports, about $40 billion of export deals have languished since the board lost its quorum four years ago.
“This week we had hoped that the house financial services committee would extend and renew the Export-Import Bank, which is important to businesses right here in the 6thdistrict who export around the world,” explained Rose. “The Export-Import Bank is basically an arm of the U.S. Government that helps them in financing transactions with customers all around the world. Unfortunately, that is off the tracks for the moment but hopefully before the end of the year we will renew the Export-Import bank and get it back on track.”
The Export-Import Bank is especially important to U.S. small- and medium-sized businesses, which account for more than 85 percent of the Export-Import Bank’s transactions, according to the U.S. Chamber of Commerce. In addition to these direct beneficiaries, tens of thousands of smaller companies that supply goods and services to large exporters also benefit from the bank’s activities.
Rose expressed concern about the fallout on smaller, local banking institutions dating back to the financial crisis of a decade ago.
“We’re working to try to reduce the regulatory burden on our financial institutions which translates to their customers in terms of lower costs,” said Rose. “Unfortunately, there was a pretty significant overreaction in some regards to the 2008 financial crisis, and while our local small community banks didn’t really precipitate that crisis, they are paying the penalty, and their customers are, for the regulation that was put in place to more closely police the financial services industry.
“We’re working to try to get some of those regulatory burdens relieved, which in turn makes those financial institutions more efficient and reduces the costs to their customers and consumers.”
The UCBJ asked Rose if, with the stock market at record levels, the Federal Reserve Chairman gave any indications that they would raise interest rates to slow the economy.
“The Federal reserve is considering rate reductions,” said Rose. “They had been on a gradual program of increasing rates to get them back more in line with the historic norms for interest rates. That’s important to savers in our country who may depend on their savings to get by on.
“We have had historically low interest rates and so the Fed had been gradually increasing interest rates to get back toward the norm that you would expect. They have paused those increases for the moment, and are even considering the possibility of rate reductions, if necessary, to keep the economy moving in the right direction.”
Rose expressed his pleasure with the current economy, based on common indicators such as the stock market, unemployment rates, and wage levels.
“Things like the stock market are a barometer, or thermometer if you will, of how the economy is performing and what the forward view is of the robustness of the American economy,” shared Rose. “We don’t talk about that (the stock index) a lot, and the Federal Reserve doesn’t look to that a lot. Sometimes a major correction in the market can end up having an extended effect on the economy but usually the stock market is a measure of how things are going and how they are expected to go.
“The fact that the market has moved up so dramatically over the last three years is a testament to the policies that have been put into place, and the tax cut package from 2017 is having a dramatic impact on extending the recovery and creating opportunity.
“We had the lowest unemployment rate nationally, and in Tennessee and even here in this county in my lifetime. More notably that low unemployment rate extends to historically disadvantaged groups like women, who maybe have had a higher unemployment rate, and minority groups and even our youth that have extremely low unemployment rates right now. And we’ve seen real wages increasing at a very significant pace, which again is a reflection of the health of the economy, and all that has been happening with inflation at a very subdued level. That’s pretty remarkable. It’s a pretty virtuous cycle that then creates more opportunities.”
Glider Kit Emissions standards
The UCBJ wrapped up our conversation with Rose by asking about the EPA’s handling of the glider kit emissions standards that have directly affected Fitzgerald Glider Kits and its hundreds of employees. EPA has previously stated that they would be releasing a revised rule on glider kits this fall and Rose was expecting an update from EPA Administrator Wheeler shortly after our discussion.
“Obviously that issue has had a major impact on Pickett County and Fentress County and by extension the whole region,” said Rose. “My view, and I think the view of lots of folks, is that the prior administration, the Obama administration’s EPA took an unwarranted and overly broad approach to enforcement of the Clean Air Act.
“I think everyone who’s looked at this situation fairly would agree that the regulation that’s currently impacting Fitzgerald was ill considered, ill-conceived, overly broad and illegal in terms of taking action beyond the statutory authority that the EPA has.
“Unfortunately, in this day and age, it’s a very litigious day and age, and some on the environmental side of this question have made it very difficult to roll back that regulation and return to a lawful regulation. So, we have been putting pressure on the Environmental Protection Agency and Administrator Wheeler to expedite resolving that matter.
“They have, as I understand it, largely completed work on a revised rule that would provide some relief to the glider industry,” Rose added. “My own view is that the action of Congress relative to gliders is very clear, which is that we created, we – I say the prior Congress created – a loophole intentionally, an exclusion if you will, for glider trucks, for the remanufacturing of trucks. They did so for good reason because it makes good environmental sense that rather than scrapping perfectly good trucks to recycle them if you will and to reuse them.
“Congress having given a clear directive there for what they want, it’s not the place of the administrative branch of the government, the executive branch through the bureaucracy, to come along and second guess what Congress did. So, I think what EPA did in the Obama administration was unlawful and that it should be overturned, and we’re encouraging Administrator Wheeler at EPA to move as quickly as possible to right that wrong.
“Now there’s been significant damage done not only to Fitzgerald but also to other similarly situated companies all across the country, and it’s wrong. What has ended up happening is, to a very great degree, that entire industry has been pushed offshore, overseas, to our foreign competitors so jobs lost here in the 6thdistrict of Tennessee are showing up in Europe and China. That’s not right and we shouldn’t allow that to stand, so we’re working hard and will continue to work hard to resolve that matter.”
With everything that has happened, Rose continues to have faith in the company that has employed hundreds in the Upper Cumberland.
“This could continue to be a great success story,” added Rose. “I think Tommy (Fitzgerald) will succeed anyway, but it’s just unfortunate that the government stepped in here, and some of the motives are less than pure for his competitors to have arranged for this to happen.”
In a recent follow up, UCBJ received an additional comment from Rose regarding this issue.
“This is about jobs for hardworking people and financial security for families right here in Pickett, Fentress and other counties across the Upper Cumberland,” said Rose. “I had hoped that the EPA would, by now, withdraw this misguided, and I believe illegal, Obama-era regulation that is unfairly disadvantaging this homegrown business. I will continue working with the EPA and the White House for a solution.”