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Obama Tells Companies to 'Step Up' and Hire Workers

I just don't seem to understand how practicing anti-capitalistic behavior can improve a capitalistic economy.

Pushing firms to hire people will only lead to them hiring more temporary positions, which will be the first ones laid off when the firm realizes how inefficient it is behaving.
 
apdst said:
Through over-regulation, threats of higher taxes, job killing regulations, yes he is. Believe it, or not, the drilling ban didn't create a single job.



If Obama's anti-business agenda wasn't injecting so much uncertainty into the private sector, these companies would be spending that money, rather than rat-holing it in preparation for Obama's next dumbass move. The drilling ban is a good example. If I hadn't had as much cash in savings as I did, I would be out of business by now. The only problem, is that that money is nearly gone and no relief in sight. This time next year, I might have to put 5 men on the street, without a job and go find a job for myself. The reason these companies are sitting on that money, is so they can keep the doors open in the future, because they don't know how much more Obama is going to **** up the economy. If he raises taxes, they're going to need that money to pay them.

Wasn't it you that said that the government can't create jobs, but it can institute policies that effect job creation? You and I agreed on that, if I recollect.
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Okay, I see where you're coming from. I agree partially.

I believe the government CAN and SHOULD create jobs in certain public sectors, but apart from that, yes the government should focus on policies that allow the private sector to prosper.

That being said, being President isn't just about making lives easier for business. You live in La., I'm sure you know how terrible the oil spill was for people's livelihoods down there. The drilling moratorium was put in place for a very good reason, and even in the aftermath, he recently opened up leases in the Atlantic and the Gulf Coast for drilling (which is more than any other President has done for drilling in the past two decades), because even HE admitted that we need to use the oil resources we have while developing green technology.
 
TheGreatSandeno said:
I just don't seem to understand how practicing anti-capitalistic behavior can improve a capitalistic economy.

Pushing firms to hire people will only lead to them hiring more temporary positions, which will be the first ones laid off when the firm realizes how inefficient it is behaving.
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Only if said firm hires irresponsibly.
 
apdst said:
So, Obama actually saved jobs by banning drilling? :lamo
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yes
look at the incomes which would not have been lost had the deepwater horizon been prevented from operating as it was
 
MrVicchio said:
This is what's wrong with Obama. He doesn't understand what makes businesses tick, economies grow. The man's ignorance is damned scary.
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Then you must have been terrified and in shock during the Bush rein. LOL! To believe he is any more than a parrot for his economic czars would be naive, but I agree they must be living in wonderland to think Capitalism can save this nation.
 
theplaydrive said:
Excessive profits are the kind that enable CEOs to make $15 million dollar salaries instead of hiring people who actually need money.
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Before I begin, let me make clear that many CEOs are overpaid relative to the value they bring their companies. But that overpayment is the fault of shareholders who accept such compensation even as it erodes their wealth. People aren't always rational. The dynamic there is not very different from the dynamic at play where the public wants the nation's debt situation addressed on one hand, but on the other doesn't want any changes to the major entitlement programs that are important structural drivers of the long-term fiscal imbalances.

Having provided the above disclaimer, the CEO is typically a company's most valuable employee so to speak. He/She is responsible for setting and pursuing its strategic direction. That direction plays a key role in determining whether the firm realizes its opportunities, overcomes its challenges, and creates the kind of returns shareholders expect. If he/she is providing returns that consistently exceed shareholder desires, he/she is valuable and worth all of his/her compensation.

All hiring decisions should be consistent with the company's competitive situation, resources/capabilities/needs, opportunities, etc. Hiring people simply because they need the money is a social welfare function. Such functions may not be compatible with a company's business position. If not, then the company is undermining its position by making decisions that are not consistent with its competitive situation.

Sometimes there can be compatibility. For example, if a company is hiring workers with select skills based on its competitive needs, and then it chooses to give added weight to whether a worker possessing the skills "needs" the income the job would provide (in theory, such workers would have a greater incentive to remain with the firm providing it with lower employee turnover), that's a fair decision. But the decision needs to be justified by competitive needs. Hiring people when the competitive need does not justify such hiring only adds risk exposure vis-a-via a higher cost structure.
 
theplaydrive said:
I agree, they have the right to do what they want just like teachers/police officers and unions have the right to fight for whatever salary they can get. Neither of these rights, however, has any bearing on people's different ideas of what people should or should not sacrifice. Moreover, neither of the rights has any effect on the fact a CEO who takes $15 million instead of hiring 300 people also contributes to the 9% unemployment rate.
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So your upset that people turn a profit while others are unemployed? Or is it that you think that people's profits should be limited? How much money is the CEO of a company allowed to make?
 
donsutherland1 said:
Before I begin, let me make clear that many CEOs are overpaid relative to the value they bring their companies. But that overpayment is the fault of shareholders who accept such compensation even as it erodes their wealth. People aren't always rational. The dynamic there is not very different from the dynamic at play where the public wants the nation's debt situation addressed on one hand, but on the other doesn't want any changes to the major entitlement programs that are important structural drivers of the long-term fiscal imbalances.

Having provided the above disclaimer, the CEO is typically a company's most valuable employee so to speak. He/She is responsible for setting and pursuing its strategic direction. That direction plays a key role in determining whether the firm realizes its opportunities, overcomes its challenges, and creates the kind of returns shareholders expect. If he/she is providing returns that consistently exceed shareholder desires, he/she is valuable and worth all of his/her compensation.

All hiring decisions should be consistent with the company's competitive situation, resources/capabilities/needs, opportunities, etc. Hiring people simply because they need the money is a social welfare function. Such functions may not be compatible with a company's business position. If not, then the company is undermining its position by making decisions that are not consistent with its competitive situation.

Sometimes there can be compatibility. For example, if a company is hiring workers with select skills based on its competitive needs, and then it chooses to give added weight to whether a worker possessing the skills "needs" the income the job would provide (in theory, such workers would have a greater incentive to remain with the firm providing it with lower employee turnover), that's a fair decision. But the decision needs to be justified by competitive needs. Hiring people when the competitive need does not justify such hiring only adds risk exposure vis-a-via a higher cost structure.
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I recognize and agree with all of this to a certain extent. My point is that corporations (not small businesses to clarify) should take the risk (provided that the risk isn't too high) and hire people who can be used. I'm talking about corporations who can afford to hire without hurting themselves and where quality of service is down because they have too few employees and the company could benefit from hiring people at least as far as service is concerned.

I understand that hiring people when the competitive need isn't there is not the ideal move of a corporation. However, neither is taking a pay cut the ideal move a teacher, neither is bailing out banks the ideal move of a government, etc. I think some corporations are taking advantage of the economic downturn and using it to justify keeping their employment lower than it needs to be for the personal gain of a select few at the top. They may not need to hire new people for competition, particularly, if their competition is doing the same thing, but this doesn't take away the potential ethical shortfalls of their selfish actions, which is the basis of my argument - business should be held just as responsible for their own role in contributing to low unemployment as government.

I personally think that after the economy recovers, some business are going to suffer because they chose not to hire employees (for short term profit boosts) whose presence could improve their service while others did hire more people looking at the long term benefits of hiring more employees and not existing at the bare minimum.

(You always make quality posts by the way.)
 
TheGreatSandeno said:
If you're hiring when you don't have to be then it could easily be labeled as irresponsible.
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Sure, but that depends on the company. Businesses hire when they don't "need" to all the time.
 
Whovian said:
What is a companies primary function? To make money for it's shareholders. All else is secondary. I am not saying that is good, or bad. I am saying that's the way it is.

You can't change the nature of the beast by telling the beast to 'step up'.

When companies need workers, they will hire them. When they don't, they won't. It doesn't get much simpler than that... and the President doesn't seem to understand that.
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Not all companies are publicly traded though.
 
muciti said:
So your upset that people turn a profit while others are unemployed? Or is it that you think that people's profits should be limited? How much money is the CEO of a company allowed to make?
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I suspect that the misconception involved is a misunderstanding that de-emphasizes the value a good CEO can provide for shareholders. Let's say a company has market capitalization of $5 billion. It's looking to hire a CEO for 5 years (timeframe just to keep the illustration simple). It is evaluating between two candidates: Candidate 1 who has a track record where market capitalization has increased 15% per year and another with a record where it has increased 5% per year. The first candidate will only accept the job for $20 million per year. The other will accept $5 million per year.

If each candidate were to deliver results exactly consistent with his/her past track record, the company's market capitalization would amount to just over $10 billion (candidate 1) or just under $6.4 billion (candidate 2) after 5 years. Although the company would have saved $75 million in compensation from hiring the lower-priced CEO and the higher-priced CEO would have generated $50 in market cap per $1 of compensation vs. $56 in market cap per $1 of compensation for the lower-priced one, shareholders would be much worse off from having hired the lower-priced CEO. As a result, rational shareholders would choose the higher-priced CEO and they would receive $3.6 billion in added value from making that decision.
 
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muciti said:
So your upset that people turn a profit while others are unemployed? Or is it that you think that people's profits should be limited?
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None of the above.

How much money is the CEO of a company allowed to make?
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They can make as much as they want. I'm talking about personal ethics.
 
theplaydrive said:
I'm not talking about throwing away profits. I'm talking about not taking a $15 million dollar bonus when you can afford to hire people who need the money. I'm talking about companies whose quality of service is down because they are down to the bare minimum of employees (something investors also don't want to invest in), but who take that $15 million instead of hiring more regular employees.
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The investors reward the CEO for increasing their profits.
 
MrVicchio said:
They forgo pay but not incentive packages, most fo that is PR moves to appeal to the class warfare crowd.
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That's true and if they were held accountable like public workers and unions are, then it people would demand more than a PR move.
 
theplaydrive said:
I personally think that after the economy recovers, some business are going to suffer because they chose not to hire employees (for short term profit boosts) whose presence could improve their service while others did hire more people looking at the long term benefits of hiring more employees and not existing at the bare minimum.
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I don't disagree. Coming out of a recession, there can be opportunities not available during periods of economic growth. For example, top-tier programmers might be available to small- or mid-sized firms when typically they would have been unavailable on account of being retained by the industry leader who paid higher wages. Balancing is key. The business that is in a competitive position to snap up some of those top-tier programmers could well achieve long-term competitive gains from having to done so. The same would be true with respect to acquisitions. An acquisition might be too expensive during an economic boom. Coming out of a recession, the price could be far lower. Those are examples of investments that would be justified by the competitive situation (an opportunity to make marketplace gains in the long-run).

The same kind of balancing is required between short-term and long-term decisions. For instance, a firm could set a goal of providing the highest possible profits each year. One cost that would be cut to the bone would be R&D, because R&D is treated as an expense for financial and tax accounting purposes. Such a firm might achieve higher short-term profits than a rival, but the rival's consistent R&D spending could lead to much larger long-term profits courtesy of resulting innovation and differentiation. Of course, in times of distress, a firm may not have the luxury to spend on R&D, e.g., when it has liquidity challenges that make it necessary to conserve cash in order to pay suppliers, employees, etc.

In short, my point is that one cannot make a general statement that businesses should hire now, because the economy is improving. The decision is much more complicated.

The President's argument is justified by his having broader interests to deal with (economic, political, social welfare, etc.) and it is a position I empathize with. In addition, a high unemployment rate is not good for the nation's welfare. For companies, the considerations are narrower and there can be conflicts between what the President needs/desires and what companies need/desire.
 
muciti said:
Why should they have to?
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I'm not saying they should have to, I'm saying when they don't in some cases (cases when they can and when that money can be used to hire people who won't hurt the company), they share responsibility in the high unemployment rate.
 
MrVicchio said:
This is what's wrong with Obama. He doesn't understand what makes businesses tick, economies grow. The man's ignorance is damned scary.
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What a joke Obama is. "Do it NOW! Your dear leader has spoken!" LOL....This may work for Chavez, not here.


j-mac
 
theplaydrive said:
I'm not saying they should have to, I'm saying when they don't in some cases (cases when they can and when that money can be used to hire people who won't hurt the company), they share responsibility in the high unemployment rate.
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Playdrive- You do not seem to understand the concept of free enterprise. A business has no responsibility to reduce unemployment rates. It is not their responsibility to reduce the deficit. Their only responsibility is to make as much money as possible. That is the point of a business. Otherwise it is a charity. If as a country we want to encourage business to hire, then we need to provide the incentives for them to do so. You cannot blame a business or a person who does what is in its own best interest (legally). Its our responsibility to make sure that it is in a businesses best interest to hire us.
 
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