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A Further Perspective
Did Corporate Downsizing Kill the Economy?
The editors of Newsweek thought so.
“Lay Off the Layoffs,” the magazine advised corporate America in its Feb. 15, 2010 cover story. “Our overreliance on downsizing is killing workers, the economy — and even the bottom line.”
Let’s revisit the moment — for what it says about the soon-to-be-defunct magazine… and the ill-informed thinking that passes for wisdom in Hollywood, academia, and, not least of all, the Obama administration.
Thirteen months into the Obama presidency, it was painfully clear that the American Recovery and Reinvestment Act, signed on Feb. 17, 2009, wasn’t doing what it was supposed to do — which was to keep unemployment below 8 percent. Instead, the nation’s unemployment rate had soared to 10 percent — or 15.8 percent, if you added “discouraged workers” who had given up looking for jobs and others doing part-time work because they couldn’t find full-time employment.
What do you do when the facts don’t fit your narrative?
You change the facts to fit the narrative. You lie if you have to. You stall and obfuscate and wait for people to lose interest as the story grows old and muddled.
That is the Obama way of covering up mistakes and responding to criticism. We have seen it repeatedly.
It is what the Obama administration did following the murder of the U.S. ambassador to Libya and three co-workers on the eleventh anniversary of the date known as 9/11.
With the Nov. 6 election just eight weeks away, the administration decided to stick with the already-established (and self-flattering) narrative for the Middle East and world affairs. This was: “Osama is no more,” Al Qaeda is crippled, and “the tide of war is receding.”
Despite immediate and compelling evidence to the contrary, President Barack Obama, Secretary of State Hillary Clinton, and UN Ambassador Susan Rice refused to admit that the deaths in Benghazi had been the result of a premeditated terrorist attack involving an Al Qaeda affiliate. For two full weeks, they insisted that it was a “spontaneous” demonstration that got out of hand. In short, they threw sand in the face of the American people — in the apparent hope that this would help Obama win a second term.
With that bogus line of thought came the oft repeated and shameful apology, which I will paraphrase as follows:
We hope that our friends in the Islamic world will forgive us for the fact that there was someone amongst us — some wretched and hateful creature out of the 300 million-plus people living in sometimes unseemly freedom inside the United States of America — who put together a 14-minute video that found its way to YouTube… where it offended the tender sensibilities of many devout Muslims — including (and this-is-okay) those who rioted on Sept. 11, 2012, and (this-is-not-so-okay) some others of an extremist bent who murdered our ambassador and three co-workers in Libya.
With the emerging jobs fiasco following the failed stimulus package, the administration acted in a similar way — painting happy faces over damning evidence as long as it possibly could. First of all, it stuck with the narrative that the “Stimulus” was working — and working miracles. This time, it invented a new and entirely meaningless metric — jobs created or saved. This number grew and grew — even as total employment recorded by the Bureau of Labor Statistics was stuck or falling. Eventually, even the administration’s own economists grew tired of this obviously phony metric which took credit for “saving” jobs from disappearing at a theoretically assumed faster rate. So Obama’s advisers dropped the metric — to keep from being laughed at for their stupidity.
But back to Newsweek, which, as Jeffrey Lord noted in a recent column (“Twinkicide: Death by Liberalism”), was sold for a single a dollar.
Not knowing that I would be paying five times the final sale price for the entire magazine, I spotted the issue with “Lay Off the Layoffs” cover as I was checking out a grocery store check-out line in early 2010, and I plunked down $5 to buy a copy.
For me it was money well spent. I just wanted to see how — with its lefty bias — Newsweek would play around the idea that rich and powerful executives had strangled economy — just for the hell of it.
About the Author
Andrew B. Wilson, a frequent contributor to The American Spectator, writes from St. Louis.
Letter to the Editor View all comments (26) | Leave a comment
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Appleby| 11.26.12 @ 7:36AM
When I started working for a living, I worked in a typing pool of 12 young women who handled most of the heavy lifting for a branch of a major insurance company. When someone invented and began to market affordable, reasonably easy to use computers, three women could do the work of those 12. The others were laid off. The saying was at that time "Anyone who can be replaced by a machine, should be." About 4 years ago I was laid off from my secretarial job at a major law firm for the same reason -- no longer do attorneys at that firm get their own secretaries; now it's 2 secretaries per 3 lawyers. Oh, and they're firing older and more experienced "girls" to hire shoals of Juniors who are in their prime breeding years and who are rewarded here in Kanukistan with a year off with pay for their pregnancies ... and the law requires that not only must their jobs be held for them, but the employer must hire a contract worker to do the actual work AND pay the regular girl to stay home and play house. It'll be fun to see how that plays out. Meanwhile, the only jobs that are available on a full time basis are the contract jobs. This is probably going to lead right over a cliff, but fortunately I am nearly old enough to retire, so I can watch it happen.
Jack in Wi| 11.26.12 @ 7:44AM
Romney deserved to lose. He ran as a warmongering plutocrat who was pro-abortion and pro-homosexual. There wasn't a dimes worth of difference between Obama and Romney. The people who picked these 2 stooges could care less who won. Because they are still in control with either. This country needs a real opposition.
GobBluthe| 11.26.12 @ 8:06AM
Do you set your alarm clock to get up bright and early so you can make idiotic statements.
GobBluthe| 11.26.12 @ 8:07AM
Hasn't Newsweek done more than their fair share of downsizing?
Kwan| 11.26.12 @ 8:12AM
"Our overreliance on downsizing is killing workers, the economy -- and even the bottom line....."Yes in the non-logical universe of leftist business operating theory, should your business revenues decline by 70% you should still continue employing the same number of employees and run the company at a loss. But when the leftist scam green energy company Solyndra realized that the company was operating at a loss, they immediately laid off 1100 workers, locked the doors, and filed for bankruptcy. The left's anti-business, anti-profit rhetoric is all about trying to convince us that free enterprise/capitalism is Darwinian, -survival of the fittest- and that a Soviet-style command and control of the economy by the central government is what will ultimately lead the country to achieving the sacred goal of fairness and social justice.
TLP| 11.26.12 @ 10:53AM
How much do you wanna bet that all of the Mr. Outraged Newsweekers have an APPLE everything?
Made in China, in a Factory that houses 300,000 Sweatshop Workers, working for Slave Wages?
It's like how The New York Times and The Boston Globe love all of the Unions in the world, except the one's that THEY EMPLOY.
Those Unions are Scumbags, and they make Too Much Money, already.
Or, like Nancy Pelosi, who Loooooooves Unions. Just not at HER VINEYARDS, or in HER RESTAURANTS.
The Clintons love Blacks so much, that they live in The Whitest Town in America.
Obama is Isreal's BFF, if you ignore his many Visits to every Mulim Hellhole within Rocket Distance of Israel, while never setting foot in his Christian Religion's Birthplace.
TLP| 11.26.12 @ 10:59AM
You can throw in that Puerto Rican Mayor of Los Angeles as well, while you're at it.
He Abhores building a Fence to keep Illegals out of this Country, even as he uses $250,000 of City Funds, to put up a WALL around HIS HOUSE.
Scumbag Hipocrytes, all of these Liberal MFers.
Freedomfighter_99| 12.4.12 @ 3:39AM
There ought to be a law that says if you support Open Borders you can NOT have any locks on any doors or gates on your property, and you must have a sign prominently displayed advertising the fact. 90% of ALL Open Borders Nit-Wits are HYPOCRITES!!!
OP4| 11.26.12 @ 8:19AM
I work in a corporate headquarters. We are obsessed with efficiency - because there is no growth! If there was money to be made growing and investing, we would be doing it.
Regulations are out of control and about to get a lot worse as Dodd-Frank becomes fully weaponized in the war on business. Nobody can tell me what capital gains tax will be next year. It is clear that the U.S. will still have the highest job-killing corporate tax rate in the world. I bet the Newsweek article didn't mention any of it.
(As an MBA grad, I see that OB Professors are still completely useless - and probably still laughed at by their students)
Von Mises Jr| 11.26.12 @ 9:33AM
As a fellow MBA and a student of Mises and Hayek, I can tell you that the fascist control of Wall Street manipulating their willing crony capitalist such as Blankfein, Immelt and Buffet (to name a few) along with the "Green Energy" and other scams are the reason for the horrible economy and layoffs.
GM is making electric cars at a $50K loss each. The Obama bundlers like those at Solyndra got over $21K back for every dollar they funneled to the regime.
This is not rocket science, except for the stupid liberals who cannot and will not think. They react only to clichés and emotion.
Seek| 11.26.12 @ 11:56AM
I'm curious: Were you actually a student of Mises and Hayek? They died, respectively, in 1973 and 1992. If you were among their pupils, please shed light on the experience of sitting in their seminars.
TeaPartyNow| 11.26.12 @ 12:24PM
I'm a student of James Madison who passed away in 1836. A person does not have to be living to be worthy of learning from.
Von Mises Jr| 11.26.12 @ 2:17PM
No my friend. I just read several of their books. You can get a very nice library of these great men at www.mises.org.
I read a lot of Sowell over the years, and now that I have the time and under the circumstances, I just self-educated on this subject. Rothbard is also good and Milton Friedman if you don’t get a brain freeze.
Al Adab| 11.26.12 @ 5:41PM
It occurs to me that even if downsizing caused the downturn, there might be found a cause for downsizing in the massive regulatory strictures and its imposed costs. How many companies will downsize in anticipation of the Obamacare costs?
RJ| 11.26.12 @ 10:20PM
All great economists. I find myself favoring Von Mises, I suppose because he was Hayek's Professor. The works of Frederick Bastiat are also a gift to humanity.
TeaPartyNow| 11.26.12 @ 12:20PM
Wall Street is Republican majority. I agree with the fact that they are screwing over America. But it is actually run by what I call RINOs. They call themselves Republicans.
Don't call Wall Street liberal. It's inaccurate. Larry Kudlow & Steve Forbes are still frothing over Romney. & still telling Americans to "invest".
Cats1cowboy| 11.26.12 @ 1:15PM
Wall Sreet makes IRA's and 401K's grow for the middle class. You're killing me!
John786| 11.26.12 @ 10:27AM
Its clever the way the author combines the unemployment rate with Islamophobia. Very creative.
Al Adab| 11.26.12 @ 5:37PM
I trust Ashura was fulfilling. After Thanksgiving, we need a day of fast. Nice how we can combine these traditions.
John786| 11.26.12 @ 7:54PM
Br Al Adab,
I hope you are well. Yes Ashoora has come and gone. It's important to all Muslims particularly the Shia.
Who Knows?| 11.26.12 @ 11:41AM
You actually PAID $5 for a Newsweek?
Boy, are you stupid.
TeaPartyNow| 11.26.12 @ 12:15PM
The economy today is still breathing. It is what they are about to do that will kill it & the American Peoples' wealth. & Republicans are doing everything that they can to accommodate Democrats. Which is what the vast majority of people on the right fail to grasp.
European nations are getting closer to default. America will default too. But before we do, we will cause hyper inflation by printing instead of borrowing, which we are in the process of.
The American People no longer hold the American Spirit of liberty in us. We lay here & pay everything that is asked of us invariably. When things get rough, the right whines, also invariably.
America will never die. But what it prints today will make the people wish for an end. Too bad we no longer believe in freedom in America. Today there'd be no Tea Party. We'll pay everything D.C. wants, oblivious to what we are doing.
America will never die, but the American Peoples' ignorance today most certainly beat her bloody.
Cats1cowboy| 11.26.12 @ 1:14PM
A movie role in which he memorizes lines written by someone else makes clooney an expert?
JD| 11.26.12 @ 2:50PM
Democrats have an incredible ability to conflate causes and symptoms.
Layoffs are a symptom. Government practices are the cause.
Freedomfighter_99| 12.4.12 @ 3:43AM
Actually, Democrat Policies are more usually the CAUSE....
xavier2012 | 11.27.12 @ 2:45AM
Economic downturn, sad day
Get better soon up