On Sunday, Nov. 6, 2022, Americans turn their clocks back to Standard Time. Earlier in the year, the U.S. Senate unanimously approved a bill that would have made Daylight Savings Time (DST) permanent as of Nov. 20, 2023. What happened?

 

The U.S. House of Representatives has failed to act on the measure. In order to become law, the measure would need to pass the House and be signed into law by the president. Fundamental disagreements over the language of the Senate bill, called the Sunshine Protection Act, ultimately focused on which was the proper time to make permanent -- Daylight Savings or Standard Time.

 

Recent public opinion polls say most Americans would like to see DST made permanent. You might ask why and when did the present system develop, and what is the economic impact of changing it?

 

Benjamin Franklin came up with the idea in 1784, but it was Europe, specifically Germany, that first implemented the change back in 1916. In America, DST has had a checkered past, beginning with President Wilson, who first made it a law in 1918. It was repealed seven months later, reinstated in 1942 by FDR, and made official by Lyndon Johnson in 1966, who made the start and end dates of DST uniform across the country.

 

Arizona, Hawaii, Puerto Rico, American Samoa, the U.S. Virgin Islands, and the Northern Marianas do not recognize DST. Only 70 countries worldwide observe it, but those that do, are strict about it. For example, on Saturday, Oct. 30, 2022, clocks in most of Europe were set back an hour as DST ends.

 

In passing the Sunshine Protection Act, legislators in the U.S. Senate justified the permanent switch to DST by arguing that it could boost consumer spending, while reducing energy consumption by adding an extra hour of daylight at the end of the workday.

 

Historically, not everyone in the U.S. liked the concept of daylight savings. Farmers lobbied against the concept because it would give them one less hour of sunlight to send their crops to market. They also claimed the cows didn't like it because milking is done on a schedule and DST disrupts that.

 

As for energy savings, at one point the U.S. implemented DST year-round (from January 1974 through April 1975) to combat the energy crisis back then. Once again in 2005, Congress extended DST by a month to also keep energy costs down. Unfortunately, studies have shown that the fraction of savings on one's electric and gas bills from DST was more than offset by higher energy usage in other areas.

 

The U.S. Chamber of Commerce has long been a supporter of DST. The Chamber contends that consumer spending increases during DST. Retail sales jump due to more people shopping after work. Energy usage increases as well. More air conditioning and fan usage, and additional driving occur as consumers take advantage of extra daylight to care run errands. That explains the minimal gains in energy savings overall.

 

Two of their members, the golf, and the barbecue industry, have put numbers to their arguments. Golfers take advantage of the extended hour of play to the tune of $200-$400 million annually, according to the Chamber of Commerce, while profits to BBQ-related companies increase by more than $150 million per month. Restaurants, hotels and those businesses in tourism areas are also in favor of DST because they say visitors stay out later.   

 

On the negative side, William F. Shugart II, an economist at Utah State University, states that the changing of clocks itself can cost the country $1.7 billion in lost opportunity costs. He argues people could be doing something more productive. In addition, the Air Transport Association, as far back as 2007, believed the airline industry suffers more than $147 million in snarled time schedules worldwide as a result of the clock change.

 

Beyond the economics, which seems to have as many pros as it does cons, the social impacts are just as confusing. Longer daylight promotes safety for children playing outside, joggers, and dog walkers, and increases visibility causing fewer auto accidents.

 

Countering the pros, are arguments that moving clocks forward provides less sunlight in the morning when most children are going to school. Since most robberies are committed at night, however, extra daylight may cut down on crime.

 

In any case, do not expect Congress to move on legislation to make one or the other time change permanent this year. Depending on the outcome of the mid-term elections, something might change in 2023, but given the partisanship in Congress, I wouldn't hold your breath. 

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

A parade of Spider-Men, dinosaurs, and the kids from "Stranger Things" will likely be ringing your doorbell this weekend. However, adults, schools, and communities are also planning their celebrations. Together, Halloween spending should top $10.2 billion.

 

That's the expectation of the National Retail Federation, which would top last year's record haul of $10.1 billion. More Americans are celebrating Halloween than they have since the onset of COVID-19. Approximately 68 percent of consumers in 2022, versus 69 percent in pre-COVID 2019, are splurging on candy, costumes, lawn decorations, and other Halloween-themed merchandise.

 

And don't forget the household pet, Fido, is also getting into the act. Costumes for pets are boosting sales this year and can total $700 million, out of a total of $3.6 billion in U.S. costume sales overall. Better still, since spook night falls on a Monday, the family can celebrate throughout the entire weekend.

 

Normally, Halloween budgets tend to increase when there are multiple days to celebrate. This year, college students and other adults can start partying on Thursday, Friday, and Saturday nights, plus Sunday and Monday for community events and family outings. In many cases, successive nights of parties can require multiple costumes as well, and there are plenty of dress-up themes to tempt those in the market.

 

While witches topped the list of costumes for 2022 for children, plenty of new costumes are proving popular with adults. Elvis and Priscilla Presley, Patrick Bateman from "American Psycho," DC Comic's Harley Quinn, "Hocus Pocus" characters, as well as "House of the Dragon" and "Lord of the Rings" outfits.

 

Miles, my 11-year-old grandson, will be flying high as Maverick in "Top Gun," while granddaughter Maddie, a few years younger, will be terrorizing the neighborhood as a vampire. If I know her, she will be testing out her fangs on anyone less wary than Abe Van Helsing.

 

To be sure, supply chain issues continue to plague the availability of everything, including Halloween-oriented products. Generally, the good decorations, costumes, and candy started to disappear off the shelves by the end of September 2022. Retailers have done what they could to alleviate the problem. Some companies have used air freight to avoid the backlog of container ships at U.S. ports, but in the end, those who shopped early won.

 

On the inflation front, candy prices have experienced the largest yearly spike in prices ever recorded, according to the U.S. Labor Department. The combination of soaring flour, milk, and sugar prices, as well as higher labor costs, has pushed up candy prices by 13 percent versus last year. 

 

The NRF expects most consumers to spend $100 to celebrate Halloween, which is lower than last year's record of $103. My daughter and son-in-law shopped early. In addition to the costume costs, they spent $150 to decorate the outside of their home and another $150 for neighborhood candy. My kids live in New York City, so everything is more expensive, but they usually tend to spend more than average in celebrating Halloween.

 

In addition to the retail segment, communities and schools are also celebrating. In my town, a community collaboration by MassDevelopment's Transformative Development Initiative and Downtown Pittsfield TDI Partners celebrated Halloween on Friday, Oct. 21, 2022. "It's Alive" turned out to be a gala event, lining both sides of the main street, and included a kid's fun zone, a monster treasure, and candy hunt, music, as well as live performances from local artists and troupes. 

 

Adults enjoyed a "Zombie Pub Crawl" and a night market of local vendors. The entire community showed up, many in costumes, willing and able to spend money and generally have a great time.

 

"We estimate it costs about $10,000 overall," said Rebecca Brien, managing director of Downtown Pittsfield Inc., "and it was a great success with as many as 500 kids, plus adults, who showed up."

 

I believe as time goes by, Halloween will become a bigger holiday in America, if it isn't already. Being able to dress up, become someone we're not, and shed some of the daily trials and tribulations that beset most of us may be just what the doctor might order.     

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

Household heating prices this winter are expected to be higher as a result of the ongoing Russian-Ukraine conflict. Depending on the severity of the winter, gas supplies could be in short supply, especially in the Northeast. 

 

The U.S. Energy Information Administration is forecasting that Americans who heat their homes with natural gas will see their heating bills rise by an average of 28 percent. Given that almost half of the households burn natural gas as their primary heating fuel, that is a painful poke in the eye for consumers who are already contending with high gasoline and food prices

 

Those who use oil for their home heating needs will not fare much better, with heating bills expected to climb as high as 27 percent. On average, your oil bill will cost $2,354 this year versus $1,212 in 2020, while gas bills will average $1,094.

 

Over the last few weeks, natural gas prices have fallen, but they are still up 68 percent thus far in 2022. Unseasonably warm weather in October, as well as an ongoing shutdown in a large liquified, natural gas (LNG) plant, has depressed prices. In addition, several LNG export terminals have closed temporarily for maintenance.

 

Before you ask, yes, we do have an overabundance of natural gas in this country, however natural gas, like oil, has become a political chip in the present conflict in Europe. Natural gas, as we know, has become the Achilles heel of Europe's conflict with Russia over the invasion of Ukraine. As a result, demand for LNG exports from the U.S. has become a critical lifeline for the European Union in both industry and consumers.

 

In the U.S., New England utilities depend on natural gas to generate electricity, unlike other areas of the country. This situation has worsened with the closing of antiquated, oil, nuclear-powered, and coal generators, which historically had accounted for about 25 percent of peak demand in the winter months. That is not a new situation. The Northeast has been wrestling with energy supply problems for more than a decade.

 

One of the main issues is New England's limited pipeline capacity. One proposed pipeline, for example, which would have transported natural gas from Appalachia to New England has been blockaded by "not in my back yard" opposition by New Yorkers. Today, more than one-third of natural gas supplies in the form of LNG are imported during periods of peak demand, according to EIA. What's worse, thanks to the Jones Act, which restricts the movement of cargo ships between U.S. ports, sea delivery of U.S. natural gas is almost impossible.

 

As a result, the Northeast is in the unenviable position of competing with Europe and other nations for foreign LNG. The going price for natural gas in Europe is $100 per million British thermal units (BTU), versus $30 per BTU in New England. That makes securing off-shore LNG an extremely expensive prospect. In addition, most utilities only purchase a portion of their imported gas on fixed-price agreements. They rely instead on the volatile, natural gas spot market to purchase additional supplies.

 

 If the winter turns out to be severe, utilities could be paying several times today's prices for fuel on an ongoing basis. In Europe, in countries such as Germany, frantic efforts to purchase and store natural gas in preparation for winter have been going on for months. Right now, the EU’s storage tanks are full and LNG tankers are lined up off the coast of Spain. 

 However, in New England, utilities have a limited capacity to store natural gas. We could see a situation that a harsh winter could set up a bidding war for supplies around the world.

 

As it stands today, if the Northeast has a moderate winter, natural gas supplies, while expensive, will be sufficient. However, if the opposite occurs, the grid may be in trouble as more gas will be diverted to heat homes, and less to generate electricity. If so, that could result in rolling blackouts, or conservation efforts to keep electricity supply and demand in balance similar to what happened in parts of California this summer during the state’s heat waves.

 

Thus far, the National Weather Service is forecasting warmer than normal temperatures across the southern and eastern U.S., let’s hope that is accurate.  

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

"… and were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter."

— Thomas Jefferson (1787)

 

The internet has introduced a brave new world for consumers worldwide, but it has also created enormous challenges for local journalism. Whether or not your local newspaper survives in the years ahead is up to you.

 

We are in the third decade of a continuing collapse in print media. Suffice it to say that without outside help, thousands of communities will end up with no access to local news. This is happening at a time when threats such as climate change, health emergencies, and political turmoil will make local news vitally appointment to all of us. 

 

Two areas, advertising and subscriptions, have traditionally provided the lion's share of sales and profits for newspapers. Both have suffered from the internet incursion by internet giants such as Google and Facebook. Social media now controls more than 75 percent of locally focused digital advertising revenue. The lion's share of those revenues is lost forever to print newspapers.

 

Fundamentally, digital advertising offers a greater reach to consumers at substantially lower costs. How low? As far back as 2015, the cost to advertisers to reach 400,000 readers on Google Search was $16 versus the Los Angeles Times print costs of $40,000, according to a white paper on local journalism by the U.S. Senate's Committee on Commerce, Science, and Transportation.

 

To make matters worse, dominant internet players aggregate local news content and data for their own sites, while forcing local newspapers to accept little-to-no compensation for their journalism output and intellectual property. If an individual newspapers squawks, they will soon find themselves cut off from what little revenue stream they can eke out from these giants.

 

In response, print journalism has scrambled to develop and enhance their own digital versions of the local newspaper with some success. But sadly, it will take years to fully grow that side of the business. In the meantime, how to survive is the burning question for print media.

 

Newspapers across the country have turned to the non-profit arena for help. The logic is unmistakable: newspapers contribute to the public good. Without them, American democracy may not survive, so receiving support from foundations, donors, and the community at large makes a lot of sense. However, tapping the non-profit market for funds is a stop-gap measure at best.

 

It will require years to transition the traditional newspaper business model over to the digital arena. At the same time, the product side of the local news business will require even more investment. Advertising will likely become less of the revenue pie, which leaves new subscribers to carry the load.

 

Berkshire Eagle Publisher Fred Rutberg sees non-profit activity "as a potential way to get from point A to point B." 

 

As for The Berkshire Eagle, "the challenge will be leveraging our strong base of print subscriptions, while increasing our digital subscriptions, when a whole generation of potential readers are accustomed to getting their news for free through the internet," Rutberg explained.

 

That may not prove to be as difficult as it sounds. I believe the impact of climate change on local conditions will create more demand for unbiased, in-depth local news. Fox News or CNN, for example, are not going to cover flooded bridge outings or down electric lines on your local commute, or if brown drinking and bathing water presents a hazard to your town's health and welfare. (Editor's note: Such as iBerkshires' local coverage of Hurricane Irene.)

 

In summary, whether you are an individual reader, a business, or a non-profit entity, there are actionable avenues you can take right now to ensure the health of newspapers and your own well-being on the local level.

 

If you don't subscribe to your local newspaper, do so this week. Consider the money and investment in your own streaming service that will provide you unbiased, accurate and valuable information in the uncertain times ahead.

 

Advertise, advertise, and then advertise some more, if you are a business that depends on the local community for everything from customers to schools, to health care, and more. Finally, those who are considering donations to address critical issues, or are a local or national non-profit entity, get involved, establish links with your local paper, and provide the relief they need. Time is of the essence.

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

Local newspapers are dying. Try as they might, changes in American society, aided and abetted by the internet, have forced many of these institutions to the brink of insolvency. Their demise could impact you in ways that you might never have imagined.

 

The newspaper industry, as most readers are aware, has been in a steady decline for years. A loss of readership and advertising, both traditional sources of revenue for centuries, have migrated to other media, such as the digital arena. The pandemic and the resulting economic impact on the U.S. economy only worsened what was already a bad situation, at least from an economic viewpoint.

 

Penelope Muse Abernathy and Tim Franklin at Northwestern University's Medill School of Journalism, Media and Integrated Marketing Communication recently released a study called The State of Local News 2022. Here is what they found: Since 2005, more than 2,500 newspapers have closed around the nation, on average, 100 newspapers per year or two a week have shut their doors. As a result, the number of newspaper employees have declined by 60 percent and on-staff photographers fell by 80 percent. Today, there are only 7,000-plus newspapers still publishing in the U.S. More than 80 percent are weeklies located in small and rural areas of a nation with a circulation under 15,000.

 

Of the 3,143 counties in the U.S., 200 of them no longer have a newspaper. That may seem small, but the loss impacts 3.2 million people and counting. Two thousand counties no longer have a daily newspaper, and 1,630 counties get by with only one newspaper, usually published weekly. All together that amounts to 70 million people.

 

As a result, "news deserts” have cropped up throughout the country. These are blind spots among local communities, according to research by the University of North Carolina, that no longer have access (or diminished access) to news and information that many consider necessary to the survival of a grassroots democracy.

 

To make matters worse, thanks to mergers and acquisitions, the 25 largest publishers now control about one-third of all newspapers, including two-thirds of all daily newspapers. Today, the 10 largest newspaper owners control half the daily newspapers in the county.

 

The main loser within this trend has been local communities as the focus of these competing media sources concentrates on international and national news. The resources devoted to covering community news and events have shrunk dramatically. This gives rise to a growing number of ghost newspapers.

 

Ghost newspapers is a term used to describe the disappearance of important local coverage that was provided to the community in the past. Since community news has historically been the driver of newspaper readership, less coverage translates into less readership, which generates less revenues and a further decline in local news coverage. This is what one calls a vicious circle.

 

In 2005, newspaper revenues were more than $50 billion, according to The State of Local News 2022 study. Since then, revenues have declined to $20 billion.

 

I wish I could say this circle has been broken but it is getting worse. The decline in local spending in newspapers is predicted to continue to decline. BIA Advisory Services, a firm that tracks ad spending in local media, predicts by 2025, newspaper print ad sales will decline to $5 billion, a massive decline from revenues today.

 

Historically, local newspapers have been the prime, and sometimes only, source of credible and comprehensive news and vital information. It is why the First Amendment was included in the U.S. Constitution. The facts are that newspapers have affected the quality of life in thousands of small and mid-sized communities around the country for centuries.

 

Newspapers have been in the thick of public policy debates in every state, city, town and village in America. The stories, the extended coverage of issues, and their editorials have not only shaped, but have made history time and time again. Today, they are still doing that. From the beginning of the COVID-19 pandemic, if you are like me, the critical information I needed to safeguard and protect my family and friends was supplied by my local newspaper on a daily basis. It was a lifeline that no national news source could hope to furnish.

 

I believe climate change is a mounting danger that communities throughout the country will need to face. Frequent information on local weather conditions, road emergencies, hospitals, shelters and other critical alerts will become increasingly important. We need local newspapers today, now more than ever. Just look at what is happening in Florida today, or eastern Kentucky, or communities that depend on the Colorado River for survival to see where we are heading.

 

Local communities have a choice. The way I see it, unless something is done to save this industry, we are all in trouble. We need to figure out a way to preserve and resuscitate the local newspapers or face an increasingly unknown future without them.

 

The burning question is how? In my next column, I will examine what communities and local newspapers are doing today to not only stem the tide but reverse the direction of the newspaper industry and enhance their communities at the same time.

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.