The Agora

The Blade is actually a better paper than most Toledoans will admit--mocking it is the way we stave off boredom--though it's quality is inconsistent. It's nice to see them hit one out of the park (though I'm not going to forgive them for claiming in a front page article a few years ago that the founder of the local dynasty that currently owns the paper inspired the movie Citizen Kane. That was just stupid).
6:50:30 AM    comment []trackback []

From Wall Street Journal columnist Steve Liesman

CEOs Aren't Spending, So What Will Stimulate The Economic Recovery?

After all, these executives had just closed the books on what is supposed to have been the nation's best quarterly growth showing in years. Most economists estimate third-quarter gross domestic product rose at a rate of between 5% and 6%, according to a recent Wall Street Journal Online economic forecasting survey . This is the economic recovery, isn't it?

So I was a bit surprised to show up there last week and be met by such caution. I heard a lot of talk about compliance, governance and transparency. "OK, so I'm supposed to certify that I have procedures in place to ensure that none of the 40,000 people in my company will misrepresent our financial position?" said one CEO. "And if someone does, then I go to jail?"

A lot of shareholders probably have a hard time feeling sympathy for CEOs these days. But you don't have to feel sorry for them to understand how it just isn't as much fun to be the boss these days.

What really surprised me was how cautious the nation's top executives were about their businesses. They were all optimistic about the economy and their own profits, but few if any planned to hire; and few planned to increase their capital investments.

In fact, their language was all about cost-cutting and productivity. As I interviewed one executive after another, the drumbeat became so monotonous that I told an anchor I would break in to his broadcast if I met an executive who planned to hire or expand.

This is weird and worrisome. Economic growth requires risk-taking as companies try and expand into new markets and some succeed. We won't see a recovery if all companies do is replace their old computers and keep paring down their workforces.

It's also weird because the CEOs, according to the Business Council's twice-annual survey, all expect stronger growth. Yet few planned to contribute greatly to that growth by boosting their capital spending or bringing on new workers.

I asked Franklin Raines, vice-chair of the business council and chair of Fannie Mae (who has his own problems with regulations) whether this made him nervous about a recovery and his succinct reply was, "Yes."

See? Mondays do suck.
6:29:07 AM    comment []trackback []