Dive Brief:
- In an interview with CNBC, Waste Management CEO David Steiner discussed growth in the market that is currently struggling due to commodity prices. "We’ll always be the largest recycler, but we learned how to manage through bad times … I don’t want to get hurt by recycling," he said, explaining that the last three years of the recycling market hurt Waste Management "pretty badly."
- Steiner explained that the potential growth of the housing market will help Waste Management — As more homes and subdivisions are being built, Waste Management has the opportunity to grow and return to where the business was around 2006.
- Additionally, Steiner said he won't be taking out loans to expand his business until the economy appears to be less sluggish, despite low interest rates. In fact, he believes the Federal Reserve's policy of near-zero percent interest rates and tight regulations are responsible for restraining economic growth.
- Steiner called for more availability of bank loans for small businesses. "In my mind, that's where the capital is getting constrained," he said.
Dive Insight:
The federal government adjusted its third-quarter gross domestic product to show a 2.1% annual growth rate, as opposed to the initial 1.5% increase. Central bankers will meet in December, and it is expected that due to job growth and strong domestic demand, the Federal Reserve will raise interest rates at that time.
More jobs, more demand for domestic products, and slightly increased spending may be tied to the steady economic growth seen lately. Just the same, many are not overly optimistic about what the pattern means, and are calling for more action to stimulate the economy and jump start businesses.
"'OK' has become the new normal for CEOs," said Steiner. "We look at it and we say 'Well this negative thing hasn't happened and this negative thing hasn't happened' ... To get growth, you've got to get some positive things to happen."
"American businesses, we say, 'Raise 25 basis points, [it] doesn't make a difference.' But if banks start lending money to small businesses, that makes a huge difference," Steiner said. "2% growth is good, not great. We need to see something that makes us all optimistic. Let's get some 'go' signs instead of 'stop' signs."
He spoke favorably of lowering corporate taxes. “But then [proposed legislation to lower corporate taxes] ties into something else. And all of a sudden it gets dragged down. Let's quit playing that," Steiner said.
Some specific revisions to the government report included higher investments in equipment and in home building; decreased consumer spending, though it is still growing at 3% rate; and an accumulated $90.2 billion inventory in the third quarter, instead of the $56.8 billion reported earlier.
