Whats the right thing to do?

Most people know I work in construction. My guess is that most people think it is probably a little more blue colar work than it really is. Sure I come home dirty as anything at least once a week. But this week I found myself in a really interesting conversation with a superintendent about the costs of scrap steel going up with every passing day.

The S&P 500 says that your average yearly rate of return over a generation should be between 8-12%. I had a professor in college that said if you would put 10% of your money into this index every check while you are working you would have more money than you knew what to do with when it came time to retire. When construction jobs are bid your margin is usually at least 5% and sometimes as great as 8% if you can get away with it. 5% covers one mistake. 8% covers about 2.

I understand that those are yearly returns and they are not quite the same as operating costs. However, NUCOR Steel sent out an email that steel prices are going up 22% a ton over night. The dollar is weak. Residential Markets are at a screeching hault. Why is this happening? Well its easy... the wise asses in the north east have decided that if China and other markets over seas are willing to pay top dollar for our product. even if its gonna hurt everybody on the home front. I'm all for progress but it kinda goes against the working mans philosophy up there. I just want everyone to know that over the next few years when you build anything commercially your getting hammered and taken advantage of. This situation is very simalir to the unproven collusion of the oil companies and the American auto manufacturers during the late 90's. Gas was cheap because I suspect people in the automobile industry were suplimenting gas. And then when 9/11 happened and our markets became more volitale it soared through the roof and everyone wondered what happened.

The moral of this story is if you're gonna stick it to us now. We're gonna stick it to you later. And if your bottom dollar is all that you care about then that is fine. I understand. But when the cycle moves back around and the producer is at the consumers mercy and we can go elsewhere. We're going elsewhere. Because if you wanna sit and be a fat cat for a little while. I don't care who gets laid off or how poor the northeast is. You did this to yourself.