Monday, November 17, 2008

US Businesses Vote with Their Pink Slips

Before President-elect Barack Obama had a chance to resign from the US Senate there was an out pouring of pink slips through out US industry. Some may argue that they would have happened regardless of who won, but I found it interesting that these businesses held on to these many employees until after the election either to boost Republican hopes for reelection or to make a protest statement if things didn't turn out favorable for business.

We already knew that the job creators -- businesses of all sizes -- were supporting McCain and it wasn't even close. According to CEO Magazine's survey, over 80 percent of CEOs favored McCain over Obama. McCain's support or the fear of Obama was overwhelming.

However, a majority of Americans didn't seem to care. They desired a "tax cut" over a job (although we are now told that being employed will be a requirement for such a cut). It appears that many of them will enjoy neither.

Barron's notes that "A week ago, we got word that the number of unemployed Americans in October shot up by 603,000, the second largest increase in 28 years! Today, the Labor Department tells us the deterioration actually accelerated in the first days of November. The number of people seeking unemployment benefits surged by 516,000 in the week ended Nov. 8. This is the largest weekly increase since immediately after Sept. 11 and the second biggest in 16 years. At this point, more Americans are collecting unemployment insurance than at any time in a quarter century, with some 3.9 million on the dole as of Nov. 1, a 51% increase from a year ago."

The timing of these layoffs and the elections are more than coincidental to me. They are directly connected. I have been told by business owners for months that if Obama was elected, jobs would have to go. We don't know if the new President will keep his promises, but business owners certainly have. Businesses through out the country are having a second election and it is costing Americans their jobs. I don't blame American enterprise, however, but the new Administration that has a predatory view of it.

The current scenario reminds me of a mild version of Ayn Rand's Atlas Shrugged. In the Objectivist philosopher's book, she describes a scenario where the "men of the mind" go on strike and stop contributing to commerce, art, culture, inventions, etc. In that book the people that drive the economy grow tired of being mistreated by the excesses of government and they simply stop working. No, we are not quite there yet, but give us time.

Who knows, Obama might be the pragmatist he claims he wants to as he has stated in a recent interview. The media, however, isn't buying it and in light of his rhetoric and record, I cannot blame them.

Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media.

Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

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