An open letter to Corporate HQ

(From Gary Crooks latest “Smart Bombs”) To listen to some of the solutions to our moribund economy, you’d think that back in fall 2008 employers were suddenly hit with a wave of taxes and regulations that forced them to lay off workers. At the same time, many workers must’ve left of their own accord and are subsequently enjoying their jobless selves, what with those “cushy” checks they receive from “unemployment assurance.”

Hence the call to cut taxes, repeal regulations and turn off the spigot of jobless benefits (among other areas of government spending), so that job creators who are yearning to breath free can finally exhale and start hiring folks. If these are the barriers to job creation, you have to wonder how the unemployment rate was so low before the Great Recession.

So what really changed? It’s not that complicated. It happened just a couple of years ago. Ir was in all the papers. An economy held aloft by the housing bubble, consumer debt and the leveraging of both suddenly crashed. Consumers freaked. As a result, demand slackened for the products and services that job creators supply, and workers were laid off. This hangover continues today.

Derek Thompson, an editor at the Atlantic, posted a simple graphic on the magazine’s website that tells the tale. Here is his pithy observation:

“In May 2008, six months after the Great Recession set in, a typical family earning less than $90,000 a year spent $105 daily. One year later, in May of 2009, they spent $59 a day. Then in May 2010, they spent $59 a day. In May 2011, they also spent $59 a day.”

So then why are so many solutions focused on the supply side of the equation, instead of that $59 rut? It’s not as if people have piles of money but just can’t find anything of interest to purchase. Put another way, why would a job creator launch a business and start hiring when the consumer trend is so steadily woeful? That’s not to say that it’s nutty to start a new business or to expand, but the money spent on a new venture will be money that isn’t spent elsewhere.

Call me crazy, but my theory for why spending has plunged to such a low level is that middle-class folks have less money and aren’t all that thrilled about returning to debt-fueled shopping sprees. If all of the top-down economic policies of the past 30 years had fulfilled the egalitarian promise of lifting the tide, this could’ve been avoided.

Instead, the middle class is struggling to remain afloat, but the federal solution is to continue tossing life preservers to those on shore

(From “The middle class is spent,” 24 July 2011.) —As a representative of the retail industry, this particular segment of Crooks’ latest editorial struck home with me. I am fully aware during the course of my hours of work just how many people don’t care to spend more than they have money for and may only whip out a credit card if it saves them some money. This is my maxim: Corporations of many kinds did not wish to invest in an American workforce (unions, guaranteed benefits to include pensions and health care, therefore too expensive), did not care to invest in the national interest to even pay for the kind of things only government can provide (eg taxes), moved entire operations to avoid even having to handle the appearance of often unenforced regulations (too expensive to meet even the appearance of it), preferred cheap labor (right to work states enticing businesses for a while with a workforce that is unable to earn a living until the siren song of cheaper labor overseas moved even jobs enabling manufacturing plants to distant and often hostile climes geo-politically speaking). So yes, as a representative of the retail industry, I saw first hand a percentage loss of profits that were in large part lost because the customers were finally waking up to the reality of not spending beyond their means. But, instead of those people who work at Corporate HQ re-tooling their thinking, they continue the same delusion that helped to create the same recession and its continued extension in the first place. And that is, retaliate against the workforce who are not only the potential customers, but also the tax base. In short, Corporate HQ is simply shooting itself in the foot and then looking to government for help. Welfare as a disincentive to accept responsibility and learn to pull yourself up by the boot straps? Yeah, if you are Corporate HQ. What Crooks described was the socialism the GOP prefer. What government will do for those who have deep pockets.


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