Flash: Michael Moore may be onto something… well, kinda.

An article in The Daily Beast — by super-sized, unconscionably rich, uber-lib Michael Moore – caught my eye.  In it, Moore says:

To understand what’s happening (in the economy), we have to focus on the bottom line, just like CEOs do.

And what the bottom line says is that the entire business world has figured out how to make huge buckets of money without hiring people to work for them.

I’m not sure how in the long run this benefits these companies. Maybe the same robots who make most things now are also programmed to buy them?

But the upshot is this: We have to face the fact that most of America’s CEOs don’t want the economy to get “better.”

Because for them, it couldn’t get better—they’ve got profit coming out their ears, while with 9.5 percent unemployment their entire workforce is too scared to ask for a 25 cent-an-hour raise.

They’d be happy to have things stay just like they are now. Forever.

Profits Up at GM! And You’re Still Unemployed by Michael Moore, Aug 13, 2001
http://www.thedailybeast.com/blogs-and-stories/2010-08-13/gm-profits-michael-moore-on-unemployment-gm-hiring-new-ceo/?cid=hp:mainpromo1

I think Moore’s conclusion that CEOs don’t want the economy to get better is just plain nuts.

But, he’s onto something: the entire business world has figured out how to make huge buckets of money without hiring people.

Well, maybe not the entire business world, but a big chunk of it.

Fact is that businesses always use economic slowdowns to purge themselves of organizational fat that has accumulated in good years.  This slowdown is no exception.

The differences:

(1) more fat had accumulated this time so the cuts appear deeper

(2) companies are rebuilding their cash balances so that – if there is a double dip – they won’t have to grovel for gov’t aid again

(3) few companies  are expecting a quick return to growth —  so hiring freezes are in place

(4) surviving employees are stepping up and delivering productivity increases

(5) ObamaCare, etc., have substantially increased the cost per employee – so there’s less economic advantage to hiring.

One Response to “Flash: Michael Moore may be onto something… well, kinda.”

  1. Rory B Says:

    Actually point 5 is debatable. Statistics have shown that what some (mostly on the far Right) call Obama care have only affected a small percentage of the population and has no effect on hiring other than being a tool of leverage by employers. Downsizing is always on the mind of employers, large, medium and small. Rumors are abound that many businesses were looking for ways tp downsize and thusly squeeze more out of their existing employees before the economic downturn. Many would consider this part of the method of Disaster Capitalism.

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