Look, I hate to be a gloom and doomer, and I’m not. Denver isn’t in all that bad of shape. In Denver there are plenty of jobs for those who are working a good and deep network. But the recession is going to be driven for a while yet by several things. And, in the job market, executives had better be prepared for it.
1). Companies are still laying off people. Some of the hardest hit so far as numbers of those laid off goes are those in the executive ranks. This, alone, is going to keep the recession going on for months, and possibly years, more. Executives buy houses, cars, big screen TVs, vacations, boats, and lots of other expensive things. Executives also spend lots more at the grocery store and even at Walmart. Walmart? Sure. Walmart has some stuff no one else has conveniently. And executives, while they’re in there, will pick up 10 or 15 $10 movies on sale, and a few other things that someone on a strict budget won’t buy. These impulse purchases are what give most retail stores a goodly part of their revenues. If Bob Executive isn’t buying these things, Walmart suffers too. Eventually executive layoffs mean Joe Lunchpail gets laid off. Do the math.
2). There are tons of houses still on the market that are going for fire sale prices. Exactly who is going to “eat” that? If the government does, and they might if Obama keeps giving away the store, we are going to see hyper-inflation, which means further recession. The government has two ways of obtaining money. They can print it or they can tax collect it. Either way leads to a deepening recession. We’re already in an inflationary cycle because of the printing press. But people in modern times notice these things. So, be prepared for higher taxes. Regardless of what they tell you, even if they say “read my lips, no new taxes,” there will be new taxes.
3). There is still a war going on in Iraq and it isn’t getting any cheaper. There is a war in Afghanistan that is getting incredibly expensive. We’re spending billions of dollars a day in Iraq and Afghanistan. I hate to remind our politicians of this, but their little adventures have to be paid for in dollars and, tragically, the lives of brave young men and women. Where is the money going to come from? Again, printing presses or taxes. And what about the young lives? Do you really think that the kids of the CEO of AMEX are going to go to war? Or the kids of a President? In Britain, the Royals have to send their kids to the military. If the Bush kids had been put on the front line (which would have probably generated a real improvement in the gene pool of America) let’s see how much the idiot would have said “Bring it on.”
4). Everyone is terrified. Terrified people don’t spend money. They hoard. The executives I work with are doing incredibly stupid things around money now, and have been since late last year. These folks have hundreds of thousands, or even millions of dollars in the bank, yet are complaining about anything that costs them money. One executive, whose salary was over $250K, and who has substantial investments and savings, asked me reimbursement for parking after a free executive networking event. How much was parking? $7.00. I would put this down to a cheap bahstahd if he was the only one who did this. Actually, four executives, all with similar situations, asked for this at a free networking event. One person didn't come to the event because of the seven dollar parking fee.
This is just plain absurd, but I am seeing it all of the time. Executives are hoarding their money and not spending. Until these guys get out of their heads and start earning big dollars again, the recession is not over, trust me. And when the recession is over, we won’t have a boom again very soon. The congenital stupidity of the Bush, then Obama administrations have kicked these guys in the groin. Understand that the groin of executives does not reside between their legs. It resides in their back left pocket, and has the slang name of “wallet.”
5). Corporations are not terribly intelligent. You would think that corporations would have learned something in 2000 when the dot com bubble burst. You would also think that corporate officers would have learned something over the years about the fact that public reaction is going to effect their stock prices.
These people, alas, are operating on very few working brain cells. They still, obviously, believe that, even after Joe Lunchpail’s taxes have bailed these idiots out of their moronic decisions that they can still take bonuses and go on spa retreats. And you’d think the government would have learned to prosecute these congenital idiots and put them in Club Fed where they can’t do these stupid things, both for the public’s protection and their own. Nope. Because these people own and operate the government, they got a little tiny tap on the wrist and “no, no, no.”
Look, in most other countries in the world, both these incredibly dumb and dumber executives and the pols who enable them would be pulled out of their corporate limos and burned alive. We, however, live in America. This means that we meekly put up with people burning through our tax dollars rather than hauling their sorry asses out of their limos and burning them. I’m not sure whether I’m grateful that Americans are like this, or whether I think that makes us the stupidest people alive. I think I’m grateful. But ask me after a few more of these are swept under the rug, and I might have a different call.
The fact that people are getting away with grand theft of our tax dollars, the fact that the Obama administration and the do-nothing Congress and lazy Justice Department are letting them get away with it, and the fact that more Americans aren’t so outraged that they are demanding prosecution of these people argues that the recession won’t be over soon.
6). They didn’t learn anything. “Change we need?” Ptooey! The Obama administration and the Democratic Congress is business as usual in Washington. The corporations are still running America, not the people. The Dems are as bad as the Republicans, just in a different way. Both parties have sold out the American people to the corporations.
And the corporations haven’t learned a damned thing, either. They are still making the same mistakes that got America in this mess. They have not changed one damned thing!
If there is one thing I have learned about top corporate executives is that they are arrogant as all get out. They believe they are above the law. They believe they are even above laws of common courtesy, common sense, and mutual respect. They are not going to change one bit until they are forced to change, either by public outrage that actually stops buying things from them, or by the government passing laws to make it too expensive to keep doing stupid things.
As long as both the politcos and the brain-dead executives keep doing business as usual, not only is the recession not over…it will deepen and unemployment will get worse.
So what needs to be done? Here are a few common sense tips that will probably not be implemented as long as we keep electing Republicans or Democrats to our government. Perhaps a Congress full of Libertarians might make a difference….but I wouldn’t count on that, either.
1). Make executives actually accountable to stockholders. If a company is publicly traded, the stockholders who are the actual owners of the company should have a large say in how the company is run. Now, for those of you who don’t know how corporations work, it may surprise you that actual stockholders have almost no power in most corporations. But it is a fact. The Boards of Directors and “C” Suite executives in most large companies retain almost all of the power. And the Boards, supposedly independent, are composed of the golfing buddies of the “C” Suite. The executives in the “C" Suite sit on the Boards of most of the people on their Boards. If this isn’t a recipe for corruption, I don’t know what is.
2). Force Boards to be truly independent. Prohibit “C” Suite executives from serving on the Boards of the executives who sit on their Boards. Require that at least half of the Directors directly represent the interests of regular (not preferred) stockholders. Require a 2/3rds vote to pass anything which materially effects the company’s revenues or stock prices.
3). End “Sweetheart” perks for executives. This can be easily done with a simple law that requires that everyone in a company have the exact same access to every benefit.
4). Stop rewarding failure on the part of executives. A company can lose millions or even billions of dollars, lay off half of their workforce, and have stock prices tank, and the “C” Suite can walk off with millions or billions of dollars of bonuses. This is not only morally wrong, it is incredibly bad business! Again, a simple law requiring that executives work for a winning company before being paid even one dollar in bonuses would stop this nonsense at once. And make it a Federal crime to give executives cushy retreats or any bonuses whatsoever if the company takes even one dollar of government bail out money.
And don’t get me started on the failure net called “golden parachutes.” These must end. Rewarding a “C” Suite executive for complete failure is both completely immoral and incredibly bad business. If they fail, fire them, take away their stock options and let ‘em file for unemployment. And don’t give me the B.S. that top talent will go to other countries. NO other country permits these kinds of shenanigans. They’ll stay right here, no matter what fear tactics they deliver.
5). Control Executive salaries. No, not by limiting them to a multiple of average salary, but by requiring a vote of all stockholders on executive salaries and perks. The fact is that, in many companies, stockholders can’t even know how much the executives make. Make it illegal for companies to withhold this information. After all, the stockholders are the owners of the company. They have an absolute right to know how much their employees are making.
And then require a vote on the salaries of top executives by the stockholders. That will control executive salaries in a hurry. The fact that most executives hate this proposal simply shows that they know they’re overpaid and underworked. You see, stockholders might actually tie the salaries of the “C” Suite to their making money. Horrors! Executives want their salaries tied to their bulls**t. This is why this proposal gets hatred from most executives.
6). Completely eliminate corporate income tax. I know this doesn’t seem to fit in with the other proposals, but it does. Think about it. Corporations don’t pay income tax. Their customers do. So eliminate it. Then also eliminate any tax deductions for people making over $1M per year in salary, bonuses and disbursements. This might have taxes actually collected from those who actually utilize corporate profit.
7). Allow individuals to contribute unlimited amounts of money to candidates, but prohibit organizations, groups, corporations and companies from contributing one thin dime. It is the right of individuals (free speech) to endlessly support any candidate they please. Corporations and groups have no rights guaranteed by our Constitution. People do. Put the government back into the ownership of people and take ownership of politicians away from corporations and interest groups altogether. Sure, individuals have certain interests. But that is the way our government is supposed to work. Not having a Congressperson completely owned by an industry. And if a thousand people are allowed to donate all they want, and they happen to oppose the interests of the billionaire that is donating, there is some chance that the people themselves will be able to get the politician’s attention. It is easier to compete with a person than a group.
8). Require the children of everyone elected to public office at the Federal Level to serve in the military in a combat role if physically able. If the children won’t serve, remove the politician from public office immediately. This would certainly make the government much less eager to beat the war drums, and save the country billions. If it’s important enough to risk MY kid and yours, it should be important enough to risk theirs. This is one British idea that should have survived the American revolution. I’d also love to see the requirement that everyone running for Federal office be a veteran. If they love America so much, let’s see if they were willing to put their lives on the line for America’s ideals. If not (or if they deserted or didn’t finish out their term of enlistment, etc.) they shouldn’t be serving in public office. Someone who truly cares about America, if physically able, will put his or her life and the lives of his or her loved ones on the line for America. If not, they are all BS and not worthy of American public office.
I know these proposals won’t totally end the recession nor fix the epidemic of corporate corruption that exists in America. But they might help.
If you are in the Denver Metro Area, join us October 12th (Monday) for Executive Structured Networking at the DAC in LoDo from 12:20 PM - 4 PM. Information is at http://www.heckersdevelopmentgtoup.com/. Limited to Director Level, VP Level and "C" Level executives only. No vendors and nothing is sold nor promoted.
Watch for John's new Book In Transition: Rapidly Finding Your Next Executive Job (Even in Difficult Times) sold through the Internet, radio and TV shows and John's speaking engagements. Available by November 1st, just in time for the Holidays.
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