Tonight President Obama is going to propose a new jobs plan, and various politicians and media are already weighing in with many opinions about this.
But no one that I have seen is addressing the 800 pound gorilla sitting in the room, to wit:
For both small business owners and big business executves, the reward for eliminating jobs far, far exceeds any reward for creating jobs.
Here is one current example: Just two days ago, Bank of America announced an executive shakeup that signals broad and deep layoffs, which industry analysts say could reach30,000 headcount reductions. According to CNNMoney, “Investors cheered the changes. Bank of America’s stock rallied 5.6% … Wednesday.”
This is not a recent phenomenon either. A really galling example occured in January 2009, when pharmaceutical giants Pfizer ad Wyet announced a $68 billion merger. The main financial justification was cited as the opportunity to reduce costs by eliminating 17,000 jobs. About $20 billion in financing was provided by banks who had received the government’s TARP bailout money, helping mute criticism that they had not been lending enough after getting bailed out.
I wish someone would come up with a real solution to our jobs dilemma. As long as the rewards are greater for eliminating jobs, there is very little (very, very little) that any politician of any party can do that will work.