CEOs aren’t hiring because they don’t know what’s next

by YankeeJim | July 26, 2010 at 05:32 am

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The US government policy toward economic development isn’t clear. Incentives for venture capital aren’t clear. There are no programs and initiatives to motivate entrepreneurs for new product and new business unit development.

Too much of the national capital resources and energy is balled up in big government. Cut that out and get some aggressive growth policies out there. That will release the flood gate.

“Why CEOs aren't hiring

By Robert J. Samuelson

Monday, July 26, 2010

The rebound in profits ought to be a good omen. It frees companies to be more aggressive. They're sitting on huge cash reserves: a record of $838 billion for industrial companies in the Standard & Poor's 500 index (companies such as Apple, Boeing and Caterpillar) at the end of March, up 26 percent from a year earlier. "They have the wherewithal to do whatever they want -- hire; make new investments; raise dividends; do mergers and acquisitions," says S&P's Howard Silverblatt. Historically, higher profits lead to higher employment, says Mark Zandi of Moody's Economy.com. Except for start-ups, loss-making companies don't generate many new jobs.

So far, history be damned. The contrast between revived profits and stunted job growth is stunning. From late 2007 to late 2009, payroll employment dropped nearly 8.4 million. Since then, the economy has recovered a scant 11 percent of those lost jobs. Companies are doing much better than workers; that defines today's economy.”