While CEOs lay off thousands, rake in millions, “A new report concludes that chief executives of the 50 firms that have laid off the most workers since the onset of the economic crisis in 2008 took home 42 percent more pay in 2009 than their peers at other large U.S. companies” and reveals that:
“five of the 50 top layoff leaders received taxpayer-funded bailouts. American Express, for example, gave CEO Kenneth Chenault $16.8 million in 2009, including a $5 million cash bonus…but…has laid off 4,000 employees since receiving $3.4 billion in taxpayer bailout funds…”.
Meanwhile, yesterday, USA Today reported that “Despite record federal debt, Uncle Sam isn’t having any trouble staying afloat. Neither are most large corporations…”
“U.S. corporations are sitting on more than $1 trillion in cash, more than the government is spending on the massive federal stimulus package that Congress approved in February 2009. Earnings are strong, according to Standard & Poor’s, especially in technology and for raw materials producers.”
Contrast wealth of U.S. corporations with the plight of “consumers and homeowners…[who]…are drowning in the USA’s great ocean of debt…are going under at record rates”.
“They used to tell me I was building a dream…I was always there right on the job…
They used to tell me I was building a dream with peace and glory ahead…
Why should I be standing in line just waiting for bread… Hey, brother, can you spare a dime…”
Given record unemployment and a housing market that may not have yet hit bottom but the compensation of layoff leaders is at the top, USA Today defies reason in attributing the difficulty of “consumers and homeowners” in part “to their own greed” – particularly when the Institute for Policy Studies calculates:
“the $598 million total compensation awarded to the top 50 CEO layoff leaders was enough to provide average unemployment benefits to 37,759 workers for an entire year, or nearly one month of benefits for each of the 531,363 workers their companies laid off”.
An earlier commentary, Corporations holding $1.8 trillion in profits, provides insight on the “spin”:
Listen, if a public or private company makes money and wants to keep it close to their chest, that’s their right. But those same businesses can’t then go and collectively fault the White House’s policies for preventing them from hiring more people. And that’s exactly what they’re doing through the U.S. Chamber of Commerce and other business groups.
the U.S. Chamber of Commerce, which held a jobs summit Wednesday and accused the Obama administration of dumping onerous regulations on businesses. That has created an environment of “uncertainty,” which is causing firms to hold back on hiring as the unemployment rate has hovered near 10 percent, the Chamber said.Onerous regulations? What they mean are ANY new regulations that make sure workers and consumers are protected from corporate mistakes.
So what did the White House say?
The White House countered that companies are wary of hiring not because of new regulations but because they’re still waiting for consumer demand to return. The administration also claimed credit for 3.5 million jobs created by the stimulus bill from last year.Then, a little bit more on the money these companies are sitting on:
Nonfinancial companies are sitting on $1.8 trillion in cash, roughly one-quarter more than at the beginning of the recession. And as several major firms report impressive earnings this week, the money continues to flow into firms’ coffers. […]A survey last month of more than 1,000 chief financial officers by Duke University and CFO magazine showed that nearly 60 percent of those executives don’t expect to bring their employment back to pre-recession levels until 2012 or later — even though they’re projecting a 12 percent rise in earnings and a 9 percent boost in capital spending over the next year.
When asked why companies are holding back so much, many economists cite broader uncertainty that goes well beyond anything happening in Washington. Firms aren’t sure whether the economy can sustain a strong recovery. And as long as consumer spending remains low, there’s not much incentive for companies to ramp up.
I’m sure you’re spotting the inherent paradox here. Consumer spending won’t go up as long as firms aren’t hiring. It’s not secret that jobs stimulate far more consumer demand and spending, not the other way around. So what these businesses are essentially asking the American people is to spend money they don’t have so they might start hiring again.
Yeah, that’s a smart plan…”
Hey, brother, can you spare a trillion so “consumers and homeowners” can spend their way to your wealth?