Welcome to the working week. I know it don’t thrill you; I hope it don’t kill you. Meanwhile, this just in from The Daily Shit Monsoon: 43,000 jobs are headed down the loo. Caterpillar plans to croak 20,000. Sprint Nextel unplugs 8,000. Ditto the expected merger of dope giants Pfizer and Wyeth. Home Depot lops off 7,000 heads. But Ronald McDonald is in line for a fat bonus. I’m lovin’ it.
12 thoughts on “Y’want fries with that?”
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Mad Blog Media 
This is looking more and more like like a replay of 1929. shit o dear….
I don’t have an MBA or a degree in economics…
… but if you don’t have employees, you can’t produce that which you intend to sell.
You can’t run a company with just a board of directors, a CEO, and stockholders. You need grunts, the folks on the line, someone pulling the levers and cranking out the widgets.
Once a company sells a piece of stock, the subsequent trading of said document should have no bearing on the company’s fortunes. Unfortunately, they have all tied in their uppity-ups salaries to stock price, and for some bizarre reason they now care about it. (It’s a little bit more complex than that, but all of the reasons why companies care about trading price are self-inflicted.)
All we need is for one brave CEO to get up in front of the mike and say, “You know what… I couldn’t care less what my stock is worth. Once I sold it to you, I stopped caring. All I care about is making cool products and keeping my employees happy, so they’ll make more cool products.” That simple comment would turn this freighter around.
About five minutes after the first order comes in to these companies for the stuff they can’t make because they don’t have enough experienced employees, 20% of the folks who were just laid off will be asked back as contract workers–same pay or maybe even a little more, but no insurance, no pension, no 401k, no 7.65% contribution to Social Security and Medicare that the company would normally pick up if the employees were W-2’s instead of 1099’s.
Yup, Jeff. And all those savings being picked out of our pockets will go…straight into the overinflated bonuses, stock options, and salaries of the fat cats who screwed the pooch to begin with.
Pardon my cynicism, but I’m starting to think like Marx again, and I don’t mean Groucho.
Leave us not forget that Americans don’t actually make all that much stuff anymore. Our economy is largely based on selling Third World products to each other and moving paper around. Laid-off folks can’t afford to buy Third World products, so more folks get laid off, which means there are even fewer people to buy Third World products, and so on, and so on, and scooby dooby dooby.
In my line of work, meanwhile, the contractors are the first to go. Those still on staff get to pick up the slack, between furtive glances at http://www.journalismjobs.com, which is not unlike keeping an eye on a glacier to see if it suddenly breaks into a sprint.
“Grapes of Wrath” is suddenly looking less like classic American literature and more like current events. Trouble is, this time around it’s all Dust Bowl and no California.
Watched a History Channel special on The Great D yesterday afternoon after my mind gave out on work. The story could have been recast to this past year with virtually no changes. First the speculation and the bubble–in their case, stocks, in our case, real estate. Then someone called “bullshit” and the bubble burst. Then everyone’s credit froze as everyone called each other’s bluff on net worth. Then the loss of business and buying resulting from the credit freeze. And then the layoffs. As Patrick says, once no one has a job, no one can buy shit. So the trip down the bowl quickens.
Under Hoover, the Feds didn’t do much. I fear that under Shrub, they shoveled borrowed greenbacks in like coal into a locomotive but instead of traction, all we got was smoke.
This is going to really, really suck. A friend of mine who has been in the investment world since he and I graduated from the Univ. of Genny Creme Ale had some advice: if you have a big lot, learn to grow vegetables. If you have a small lot, sucks to be you. Hope he is wrong, but will find out as this evolves. Took about three years after the ’29 market collapse to reach the bottom.
Yep. Here comes the big one.
Layoffs Spread to More Sectors of the Economy
“Furloughs, wage reductions, hiring freezes and shorter hours simply did not do enough. A year into this recession, companies across the board are resorting to mass job cuts…”
Here’s a novel idea: instead of giving tax incentives to companies IMPORTING products, why not give tax incentives to companies EXPORTING products?
I, too, saw some tidbit on the History Channel last week talking about the economic downturns in the late 19th century. Seems that the Feds started to raise and lower tariffs on imports and exports to try and stimulate the ecomony. Didn’t work out too well then, but the US of A had more of an exclusionary trading practice at that time (very little exports to developing nations, but lots of imports from developed nations). With the rise of trans-Pacific trade into Asia and the Indian sub-continent it might not hurt to get some of those jobs lost here back.
Being a stockholder in a few companies that have leveraged incorrectly, I would love to see my value go back up as soon as possible. However I would prefer that this be done intelligently instead of the ‘blind leading the blind’ method of the past seven years. Is it too much to ask to NOT give loans to fry cooks at Mickey D’s for a home? I don’t know about anyone else, but that decision was stupid to the extreme. If Joe the Fry Cook is living paycheck to paycheck, what makes you think he can pay back that $120,000 loan at 2.3% over 30 years? Oh, and that rate, will fluctuate constantly because he is a risk to default (based upon his income potential), and he signed up for an “Adjustable Rate Loan.” Ooops…who’s to blame now?
I feel sorry for anyone in this boat…except that I keep remembering the retailers caveat: “Buyer beware!”
Solution: individuals need to cut there discretionary spending, companies need to look at long term growth, and the government needs to look at a way to increase productivity within the country. Raising taxes is not the immediate answer. Cutting jobs is not the ultimate answer as it solves the short-term dilemma but not the long-term one. Changing the way that business is done needs to be the mantra for the next few months (if not years). Because just as with the recession in the early 90’s, it took a few strong willed business people to stand up and say “we can build a better mousetrap …. and here’s how.”
That’s my opinion … but I could be wrong.
Thanks for the link, Patrick. And now, for the Daily Drivel:
Publisher to Launch New Dailies With a Twist
“Amid the din of naysayers who insist that newspapers are on the verge of death, a new company wants to start dozens of new ones — with a twist. The Printed Blog, a Chicago start-up, plans to reprint blog posts on regular paper, surrounded by local ads, and distribute the publications free in big cities.”
Maybe they can look here for startup material. I can’t wait for the royalty checks to start coming in.
I remember an old joke around during Bush I’s reign: more people are at work now than ever before but they’re all working at Burger King.
So yes, there is some growth in the service industries or some sectors of it but no where else. Service industry jobs have low pay and low or no benefits, just like the corporate masters want. And, only slightly related, did you know that when MdD’s first went with the one-button-for-every-item “cash registers” instead of the old ones with numbers and such, where you had to think a bit more, the number of errors they had to deal with went up too. The whole ideas was to make it so that the dumbest person could operate the register so there was less training involved but they ended getting people who therefore didn’t have to think about what they were doing and thus, crap ensued.
Buy local. Eat local. F* McDs and MallWart.
Oh by the way, don’t expect your pot holes to get fixed in this millennium. All 50 states will be bankrupt by the end of the year. The only business showing growth will be printing unemployment checks.
I don’t know about any of the 49 other independent territories we call “states” but here on the Letfy Coast, unemployment checks are soon to be a thing of the past. If the Golden State declares “the check’s in the mail” to the unemployed that’s a lie. Our unemployment fund is quite possibly, according to one report I saw today (or maybe yesterday I forget), flat broke! No more dinero in the till if you’re unemployed in Cali.
Try that on for size: a Top 5 world economy not able to pay their bills. Not to gloat but if I was living in another state, I’d be very worried. I am just worried I might not have a job soon. Thanks Ahrnold “What you talking ’bout Willis?” Schwartz…oh nevermind.