It's the Economy, stupid - Languishing & Lingering after the Great Recession

It's not just large corporations. Most businesses cut costs. It's called efficiency and productivity gains. It's one of the cornerstones of business management, though other matters may factor in when it comes to "reshoring" the workforce.

On the other side of the coin, earnings growth will hinge largely on emerging markets such as China and other BRIC nations. If there is uncertainty, it's the uncertainty that most economies are now facing. What America is facing, Canada faces, Germany faces, France faces, the U.K. faces, Japan faces, etc. These are global economic issues. Those economies that have managed some stability in an unstable situation (yes, this includes America) will be poised to benefit from the recovery (return to higher growth, really) of important markets such as China and India.

Prime Minister Harper has been working hard to build on economic ties with China over the past few years. Has Obama?

China’s economy shows no fear of Year of the Snake - The Globe and Mail

China Surpasses U.S. in International Trade - Business Insider

 

Now, when you say "most businesses," are you referring to those among all businesses or those among your neighbourhood with whom you've spoken?

Business cycles are business cycles. Would you say not many businesses cut costs between 2007 and 2009?

It's just one of several in one of three categories. No one with any intelligence looks at the S&P 500 as an oracle.

They also look at things such as:

• Average weekly hours in manufacturing (currently close to past post-war peaks)
• Average weekly jobless claims for unemployment insurance (slowly but steadily declining back to average levels)
• Manufacturers' new orders for consumer goods/materials (back to pre-2008 levels)
• Manufacturers' new orders for non-defense capital goods (back to pre-2008 levels)
• Building permits for new private housing units (still down but recovering at a rate faster than the recovery after the 1990 recession)
• Index of consumer expectations (consumer confidence has its ups and downs as always, but it's currently holding at about the midway point between the recent low and the 2008 level)
• Number of employees on non-agricultural payrolls (two-thirds of the way back to 2008 levels)
• Personal income less transfer payments (real income has climbed 12% since the 2009 trough)
• Industrial production (has increased nearly 18% since the 2009 trough; current capacity use is ~1.5% below historical average levels)
• Manufacturing and trade sale (real sales have increased by 14% since the 2009 trough; 4/5ths the way back to 2008 levels)

There's even more to look at than this. The above, however, is a strong sample gauging the economy. Any uncertainty companies have with any real effect must be in large part politically motivated. They're uncertain because of Obama. They're uncertain because they're tax-averse. They're uncertain because of their perceptions of PPACA. Their uncertainty has much less to do with the economy itself. Do you agree?

 

Aceventura , why are you trying to instruct business to people who know business...both of us know the definitions and concepts...for some time now.

Just because they may have a different opinion or philosophy, doesn't mean they don't get the ideas.

Your arguments are becoming circular, looking for any way to boomerang blame to Obama, who you dislike and the Federal government which you also do not like.

Business has to be culpable for its own errors, it created the bubble, it triggered the bubble and it lingered dealing with the bubble.
Sure, government may have been neglectful or slow in jumping in.

But this is like blaming the rules and refs for your own interception or obvious foul....then losing the game because you tripped.

The only thing government can do is make the law to punish the violation or allow the freedom to advantage of a situation,
but it doesn't MAKE the criminal steal...the manufacturing plant dump waste...or overbid on terrible real estate.

You live by your own efforts, you die by your own mistakes...such is capitalism.
Sure, you can request a safety net...but you do that to prevent total collapse, keep the stability. This can be both good & bad, dependent on the situation and true need.

If you want to make a point, then tell us what solution you would do that isn't a rehash of the same old solutions we know don't work.
That would be interesting.

Or if you have an opinion, then give one that isn't the same old manta, "drank the kool-aid" talking points of neocons, which we've seen don't work.

And please stop giving instructions on business, we know how it works...it doesn't make the point.

 

I've been wondering this for a while now as I pop into this thread to read it.

 

My point is, ultimately, that all companies should (if they aren't already) be looking at cutting costs and becoming more efficient. The failure to do so is inviting catastrophic failure as far as continuing business operations is concerned. I'm not necessarily referring to a net cut in costs, though, like I suggested, I'm sure many companies cut costs as a result of the recession.

Exactly. The S&P 500 tells us how investors feel about the economy, as one example.

I went to a college, so much of the work was hand-on application from a small-business or entrepreneurial perspective, rather than the MBA focus, which is widely theoretical and systems-based. Most of my adult worklife has been spent working for or with small businesses. Much of what I know in a practical sense is from a small- to medium-sized perspective. What I pointed out in that list has an unavoidable impact on enterprise of all sizes, as there are many interrelationships between companies regardless of size.

But I too try to understand the perspective of large corporations/multinationals, despite my lack of direct experience and education regarding them.

 

Cost-cutting is a basic concept. If you're in business, you should know that. It's finding ways to do things more cheaply/efficiently. Businesses that don't do it on a regular are foolish. Do you want to talk about basic business concepts or about the topic? There's no need to confuse matters by providing nonspecific examples and arbitrary percentages, especially after your claim that most businesses don't cut costs. It would be different if you actually had data to back up your claims. Let's just drop the issue, because you're going to make another thread infuriating.

I'd rather talk about the thread. Is that clear enough for you?

 

Good idea. Thank you.

 

So basically, we are our own worst enemy.
And Congress is simply representative of our own bad calls.

I'm not going to post the whole kit & kabootle, but the comment thread from Fark pretty much shows the argument.
Unfortunately, this represents a more educated and aware segment of society...there are still others who aren't and they still vote.
Polls show Americans largely favor cutting the deficit, however they also largely favor increasing spending without raising revenue. Welp, that's it folks, pack it up, democracy's over...

The economy is up...just not as fast as everyone wants.
The spending is down...just not as fast as everyone wants.

So basically, for the most part, we are a bunch of pre-adolescent kids constantly whining, "Are we there yet??"
And our Congress are another set, all squealing, "Will you stop touching me!"

/I have to pee too

 

The irony is that the recent GDP report of 0.1% growth is in large part due to a drop in fourth-quarter government spending.

U.S. economy (still) wasn't awful in fourth quarter. Here's why. - The Tell - MarketWatch

 

According to Bernanke, it was government spending that helped prevent the kind of thing going on in Japan right now.

Bernanke Says Fed Reduced Risk of ‘Japanese-Style’ Deflation - Bloomberg

How Much Should We Fear Deflation? - The Market Now

Japan Consumer Prices Fall for Third Month as Deflation Lingers - Bloomberg

 

We've been here before...but the big difference is, this is not a bubble...irrational exuberance...based on false numbers and fraud.

This time, every one is cautious, wary, pessimistic
But Manufacturing has come back, Services has waxed higher and so on...
and even those that burst before are coming back to better levels based on literals...not illusions or speculation. (Ex. Real Estate and Construction)

The US is doing well by relative comparison...why hasn't this translated down to the general public?
Retail would go better even more if they did feel better themselves.
And why do all the politicians keep claiming the sky is falling? Fear is still the by-word.

STFU, start investing...not into your stocks...but into your infrastructure, your people, your R&D...create, build.
STFU, start acting...not just waiting.
You say you want to be at what you'd think better levels...but you won't listen and make a decision. This is what it takes, not CYA.
Adjust...Move forward.

 

Well, it looks like the US might have dodged a bullet...and the EU is still in the target area. (as well as other economic sectors, BRIC, etc...)

The US may have something to assist even more so to pull it's fat out of the fire.
It helps that manufacturing is doing better...Retail, Housing, Banking...quite a bit, even the value of it's currency.

Only things dragging it now are Medical, Infrastructure...and inefficient government.
The infrastructure will likely take care of itself as business insist on greater efficiencies and the incoming monies will smooth the appropriations for it.
Medical is a clusterfuck...it needs a good enema.
Government, internally I think on the Fed level the current administration is stream-lining it...so only on Congress to get it's act together. (don't talk to me about the State governments or smaller)

Japan and Europe look like they'll be continuing their slim-fast diets...with less places to eat at, making it even more uncomfortable and less tasty.
BRIC seem to have lost the momentum they've had for the past some years. There's going to be societal changes there that will throw it off balance more.
The Middle-East is losing its edge on the gas commodities as before, and it's experiencing its own societal changes.
And Africa is a hodge-podge of terrible and not-so-bad. Same with the Southern/Central American nations.

I'd say Australia seems to have a running start going for it otherwise. (unless you all know something that I haven't seen)
Canada will also feed off the same tit as the US does...so things are looking decent for it.
South Korea would be fine and dandy, if it weren't for that crazy family next door...

So for the US, Australia and Canada...it's theirs to lose or slow the momentum at least.
I wonder if Europe and Japan can turn it around??

Any insight on everyone else's part?

 

It's nice to have an article back up what I stated before.

Although, I will include Canada and Australia into the same relatively decent status that the US is in.
(but Australia doesn't have the benefit of North American oil/gas deposits that will buffer and enhance those economies)

The EU can take a lessons learned in the histories the US Fed had to go through to make the dollar/central bank stable vs. the States' dynamics.
The States were not always the most cooperative of participants...even unstable, unreliable or hostile.
The same is true for all of the eurozone working together.

But ALL of the nations still need to rein in the banks and other fiscal entities from their abuse and neglect from years before.
They allowed the foxes to rule the hen house...and there is still a subtle inclination to give those hording the benefit of the doubt for short-term gain.

And they also need to get a hold of the new global dynamic where individuals/groups are taking advantage of the chaos and speed,
to hide their gains and transactions to the detriment of nations' ability to fund themselves.
Certain taxes wouldn't need to be as high if everyone played fair and equally.

This is not to emphasize socialism/communism or additional regulation & over-regulation...
capitalism is still seems to be the best at leveraging productivity and ambition.
But this is to enforce and re-enforce those that are still on the books.

If you could control the flow of traffic better, then higher speeds and less stringent laws could be allowed,
but if you've got some greater volume of abuse...then this provokes more laws...and slowing down commerce to check reckless actions.
The analogy in essence the same balance that happen on the highways vs. the monitoring of law enforcement.

Really the two big things that will slow the US down are its Infrastructure, the incessant fee-structure and the Medical game.
Right now, it's engine needs an oil change...old infrastructure friction is making it more inefficient.
And fee-structure of corporations and government and the Medical environ is sucking the money out of its typical citizens.
This puts a hindrance on people to live & buy.

I don't know if other post-industrial nations have those same issues.
Let me know otherwise.

 

I would also include some of the Scandinavian countries and places like Germany. Actually I would consider some of these countries in better shape than the U.S. I think the article and many others put too much emphasis on growth. I think robustness and stability are more important factors overall.