Thursday, September 23, 2010

The Daze of Whine & Business


I read the MSN home page news at least once everyday. What I rarely read is the public response to the news stories. Some of the comments are the most racist and vitriolic nonsense you'd ever want to hear. For instance this one: "We all know how the country got in this mess. I'm tired of hearing about who is responsible. How about holding this president responsible for what he's doing right now. Oh when will we stop criticizing our predecessors, even at our own jobs, for the job they did before?"

Amazing... that's like saying, let's give our predecessor a pass for screwing everything up and let's just judge the man on the hotseat now who has to clean everything up! This comment was probably written by that anonymous nut who often comments on my blog and vows never to comment again. (I'm still waiting for the time when this vow will come true!)

What disturbed me yesterday were the juvenile comments that came from CEO's who are trying to scapegoat the president for their greed and their failure to do what they are supposed to do... that is, create jobs and get the economy up and running.

Yesterday, in unusually vitriolic attacks on a sitting president (including references to Communist Russia and Adolph Hitler), some CEOs have complained they can't predict what President Barack Obama "will do next" and how his new regulations and taxes might hit their companies.

So now, the result is a bunker mentality that has CEOs holding back and the economy growing more slowly as a result. What a load of crap! According to Cyprus Semi-conductor CEO T.J. Rodgers... "We don't know what the latest "great" idea from Obama will be. Therefore, we are hunkering down."

He said that because of President Obama, CEOs are focusing on their core businesses and hiring less people to "control costs and risks. CEOs are uncertain, so they don't want to have the liability of adding a lot of employees," he added. I've heard this all before. No one can argue that there is certainly a lot of uneasiness and uncertainty out there as we approach November's mid-term elections.

Next year's tax rules are kinda in limbo and the effects of health care and financial reform have yet to be seen by the average American (my wife will say as much). And then, there's what many perceive as an "anti-CEO message" in President Obama's rhetoric, aimed not only at chiefs of big banks and health insurers, but also at "hunkered-down execs" in general. Ohh poor, poor "hunkered down execs".

T.J. Rodgers continued to whine..."Obama uses political rhetoric to demean me and my motives, but the fact is I am completely happy with my motives and the morality of my decisions. My moral responsibility is to protect and grow the investment of shareholders," he said. And, there is! The rub is right there and he convicts himself with his own words. These "fat cats" don't care about you and I and they never have. They don't care if you can educate your kids, buy a new home or car (not to mention just keeping the home and car you have), get a loan to start a business, or whatever. All they have ever cared about is their shareholders and that's why he can make such a ridiculous statement about the "liabilitiy of having so many employees."

Check this out... the extreme irony of all of this is that by many measures, public companies like his are in fact doing quite well in the Obama economy. According to an article in MONEY magazine, the S&P 500 index is up about 35% since Inauguration Day. Profits are expected to rise 36% in 2010, Bloomberg reports. And, companies are sitting on a near-record $2 trillion in cash, money they could use to invest and create jobs... but of course won't because they are "hunkering down". Those profits and that treasure are to a great degree the result of "hunkering down and cutting costs". Uh, yeah!

Defenders of President Obama say his criticism of big banks and insurance CEOs have been justified, given the financial meltdown and the number of Americans without health coverage. And, of course, no president can afford to be anti-business. "Using Obama's priorities for fixing the economy as an excuse is deplorable," said Brandon Rees, the deputy director of the AFL-CIO Office of Investment. "These CEOs would be better off focusing on their businesses." Yes, my feelings exactly!

In fact, many CEOs, including Brian Roberts of Comcast (CMCSA, news, msgs) and Mike Duke of Wal-Mart (WMT, news, msgs), have supported President Obama's reforms, and Warren Buffett opined recently that the economy is back on track. It's hardly rare for CEOs to speak out against Washington when it's doing something they don't like. What's different now is the vitriol and directness of these corner-office broadsides.

T.J. Rodgers, who has been whining a lot lately, said that he had "started out happy with President Obama because we had broken through the white male barrier" and made "a step forward for equality." But Rodgers added: "I have become deeply disappointed with him. It is amateur hour in Washington. The guy hasn't got a clue about the economy, how jobs are created, how wealth is created. It reminds me of the Jimmy Carter years, only worse."

Verizon CEO, Ivan Seidenberg said that President Obama has created "an increasingly hostile environment for investment and job creation." And, it gets worse... Blackstone Group CEO Steven Schwarzman seemed to compare the Obama Administration to Hitler by saying in a recent private meeting that Washington's push to increase taxes on private-equity firms is war, "like when Hitler invaded Poland in 1939," according to Newsweek.

Observers say such overt attacks are rare. "I don't remember corporate leaders speaking out this vehemently in the past. People in these positions don't get there unless they know how to keep their mouths shut when they needed," said Gary Shilling of A. Gary Shilling & Company, which offers investment advice. He speculated that CEOs need a scapegoat for the poor economy and that the administration "has mishandled things to the point where it has volunteered itself" for the job.

"Much more than any time that I have seen in my career, business is concerned about specific policies and ideas coming out of Washington," said Fred Fraenkel, the Investment Policy Committee Chairman at Beacon Trust and former Director of Global Research at Lehman Brothers.

Daniel Mitchell, a senior fellow at the Cato Institute, a think tank dedicated to limited government, suggested CEOs are also letting loose because they feel "a little bit liberated" by polls suggesting Republicans may take a majority in the House of Representatives and make significant gains in the Senate in the November elections. Do you want to take a guess that even if the Republicans take the house and the senate in November, things for you and I still won't get any better? In fact, they'll get worse... things will go back to business as usual, which with this crowd means giving the American public the business!

2 comments:

Rich Fitzgerald said...
This comment has been removed by the author.
Rich Fitzgerald said...

You are right they aren't concerned with jobs, just profit. If they were so concerned about impending regulation then M&A (mergers and acquisitions) activity would be down. Why would you buy ANOTHER company if you were so worried about the impending tax liability supposedly coming down the pike. It's a bunch of bull and they know it.

You know why they are feeling "free" to say what they want. It's because the President is black and they just don't have any respect for him. Had this been McCain, they would all be saying "give him a chance, he just got in the door, this is quite a big mess he inherited."

It was, it is, and it shall continue to be about the money.




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