Friday, January 29, 2010

Chicken Egg Chicken

Which must come first:
  • Hiring workers or higher orders?
  • Consumer spending or new jobs?
  • Consumer confidence or business confidence?
Those are among the big chicken-and-egg questions for our Great Recession. To put it in terms of George Bush the Lesser, it's un-American not to invest in America in times like these.

Yet, reading the financial press and listening to business owners on On Point , Here and Now and other radio programs, I hear inertia spurred by fear. Hesitation is too weak a description.

Even with today's possibly deceptive GDP-growth announcements, we have no reason to expect leaps of faith. In fact, with the widely acknowledged cowardice of banks in lending to small and medium businesses, we have at least that set of villains to blame...short term.

We may end up looking at businesses of all sizes to turn the cranks here and get our economic motor revving. This indeed is a matter of both patriotism and self-interest. If the engine turns the wheel, that means more of us working, more cash flow to consumers, more purchasing of goods and service, and the cycle continuing. At some point, even the dumbest bankers will throw in some money after they are convinced there's profit in the air.

It's a damned shame most banks are not doing their part. It's also wrong that most businesses sit tight, hoping and praying that others will do the hiring and pay their workers so their workers can buy things.

I think back to my days writing for Management Review and Inc. maggies. Nearly all business owners and top managers all seemed infected with the same delusional bug. I'd call it the cabby syndrome. Just like it seems impossible to talk with a cab driver who doesn't say, "I could write a book," business biggies all think their companies and industries are unique, that they themselves have keen and singular insight, and that their company/industry is the key to the nation's economy.

As it turned out, we on those magazine staffs did not ridicule their delusions. We would actually analyze what were similar and dissimilar aspects of their stories. If the sources needed to feel special, what's the harm in that?

Well, now is the time for all those allegedly unique and pivotal businesses to step up, speak out, and for God's sake hire someone!

Granted that bankers are not the heroes here, business owners standing stunned waiting for a turnaround won't inspire them or help companies. Our businesses can speed their own and the nation's recovery by showing some guts and having some faith.

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