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Video: Why Profits Are Strong But Hiring Weak
Tweet Share on Facebook August 18, 2010 Comment (1)Corporate America is going gangbusters, beating profit expectations and racking up cash. But they're using little of that money to hire new workers. ABC invited me on its Good Money program recently to explain why companies still aren't hiring. Here's the clip:
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Why the Stimulus Spending Is Over
Tweet Share on Facebook August 16, 2010 Comment (4)Here's one thing you won't have to bother with this fall: Deciding whether to support another big round of federal stimulus spending to aid the wobbly economy.
[See 11 ways to plan for a double-dip recession.]
Some people want it, and we might even need it. Bloggers are battling over the issue, and news organizations are tracking the political maneuvering in Washington as if a big story is brewing. It isn't. There won't be any more big stimulus deals before the midterm elections in November. Here's why:
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What GM Still Needs to Prove
Tweet Share on Facebook August 12, 2010 Comment (5)Not bad. Barely a year after its shameful bankruptcy filing, General Motors has become a profitable, competitive automaker with cars that shoppers want to buy. It wouldn't have happened without an extraordinary $50 billion bailout by the U.S. government, but GM's accomplishments over the past 12 months are still exemplary.
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How Steve Slater Channeled America's Rage
Tweet Share on Facebook August 12, 2010 Comment (6)We're angry. Fed up. Sick of people. It might not show when you stroll through the neighborhood or browse the mall, but when the opportunity arises, boy, do we vent.
Steve Slater has unwittingly provided such an opportunity. Slater is the now-famous JetBlue flight attendant who cursed out a planeful of passengers at the end of a flight at JFK International in New York, grabbed a beer, and popped the emergency exit slide, bailing out of the plane—and his flying career—like an insouciant jet-age cowboy. Then he went home and got into bed, as if it hadn't dawned on him that the authorities might want to ask a few questions. After the cops hauled him down to the station, he was charged with two felonies.
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Why Corporate America Should Quit Carping
Tweet Share on Facebook August 11, 2010 Comment (2)The public doesn't respect them. Regulators are hounding them. And Congress wants to tax all their profits away.
The bellyaching out of corporate America could leave you thinking that the typical conglomerate has become a powerless shell, tormented by vicious bands of policymaker-vigilantes. Wall Street executives, miffed by the treatment they've gotten from the White House and Congress, have shifted the majority of their political donations from Democrats to Republicans. Verizon CEO Ivan Seidenberg, chairman of the Business Roundtable, complained in a recent speech about "the growing disconnect between Washington and the business community"—while pleading for more subsidies for business. The U.S. Chamber of Commerce, corporate America's biggest lobbying group, frets that government policies "are needlessly prolonging the economic agony ... for millions of Americans and their families." The solution? Lower corporate taxes and easier regulations.
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Why the Economy is Addicted to Government Aid
Tweet Share on Facebook August 10, 2010 Comment (3)Painful as it is, important parts of the economy are slowly healing. Overleveraged consumers are paying off crushing debt and starting to save more. The financial system has stabilized, thanks to the bazookaful of aid fired by the government in 2008 and 2009. Ruthless layoffs and aggressive cost-cutting have left corporate America "in its best fundamental condition in decades," according to strategist Brian Belski of investing firm Oppenheimer. Some day, those improvements might help our kids or grandkids enjoy a return to prosperity.
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5 Reasons Companies Still Aren't Hiring
Tweet Share on Facebook August 10, 2010 Comment (23)This is getting tiresome. Since late 2009, corporate profits have been surging, yet companies are hoarding cash instead of hiring more workers.
In the latest earnings period, three-quarters of all S&P 500 firms reported higher sales and profits, with the majority beating Wall Street's earnings estimates. And since last summer, S&P 500 earnings growth has been an astounding 55 percent, according to Bank of America Merrill Lynch. That's the best performance, by far, in any 12-month period following a recession.
