By Joe Petrowski
In general, retail convenience and energy won on Tuesday, November 8. Specifically, the issues important to our industry:
- Minimum Wage—The move to raise wages by raising the minimum wage will slow as reason takes hold, and it is understood the best path to a high-paying job is a low-paying job. Employers who provide real training for their employees will receive either tax credits or exemptions from minimum wage for entry-level employees and interns. Our industry is especially important for onboarding people to a productive life with marketable skills.
- Health Care—As even Bill Clinton pointed out, Obamacare was a disaster. In an aging country with an already underfunded Medicare, spending $10,000 per person or 18% of gross domestic product (GDP) on health care is an impending fiscal disaster. Universal coverage will stay, but true believers in markets understand the way to drop prices is to increase supply (look what it did for energy). The Paul Ryan reform bill creating more hospitals, co-op medical organizations, across state line competition, deregulation of procedures, allowing more in-home care and a planned increase in doctors and medical technicians along with private medical savings accounts will drive costs down, increase choices and improve results.
- Climate Change—While not denying the need to limit CO2 emissions, it is not the single biggest threat to our existence. Embracing hydrogen, natural gas and fuel efficiency as well as looking at less costly ways to mitigate carbon (tree planting) will steer us away from subsidizing expensive and losing industries like solar, wind and biofuels. Embracing hydrogen, battery technology and natural gas transport that will move the needle on CO2 while boosting our economy.
- Low-Cost Energy—Trump and Republicans understand that inexpensive and abundant energy is the foundation of consumer spending, a country’s manufacturing and export strength as well as a source of foreign exchange and international security. Increased shale drilling and investments in pipelines, transmission and power plants will further stimulate the economy as roads, bridges and airports are not the only targets for infrastructure spending. If, as expected, the Federal Reserve begins to raise interest rates and the initial apprehension over Trump subsidies, the dollar should strengthen appreciably, which will add to pressure on energy prices (although I still expect WTI to trade above $70 by year’s end on economic growth in the U.S. and worldwide).
Finally, and most importantly, if we can achieve the 4% growth Trump championed by fiscal stimulus, lower corporate taxes and a rationalization of regulations, we will add 35 million jobs, see a 20% rise in equity values and add $3 trillion to GDP, all within four years. That is good for all industries, but especially one with a middle class/working class customer base, transportation and discretionary spending.
The governing slogan should be, “Drain the swamp, not our wallets!”
Joe Petrowski has had a long career in international commodity trading, energy and retail management and public policy development. In 2005, he was named President and CEO of Gulf Oil LP and elected to the Gulf Oil LP Board of Directors. In October of 2008, he was named CEO of the now combined Gulf Oil and Cumberland Farms, whose annual revenues exceed $11 billion and that now operates in 27 states. In September 2013, Petrowski stepped down as CEO of The Cumberland Gulf Group. He is now Managing Director of Mercantor Partners, a private equity firm investing in convenience and energy distribution, and a member of the Gulf Board.
