Can’t Shake That ‘Walking Pneumonia’ Economy

Have you ever had walking pneumonia? Not a lot of fun, right?

You might be able to operate but your inability to fully inhale is a real drag. I had a bout of walking pneumonia a few years back but was fortunate to get over it in about a month. If only our ‘walking pneumonia’ economy were just that lucky.

I first described our domestic economy as sufferring from this malady in early 2010 when I wrote U.S. Economy = “Walking Pneumonia”.

Going on 15 months later we continue to languish from a variety of factors that inhibit the flow of economic oxygen critical to a real recovery. While many ‘quacks’ would like to have us believe differently, let’s navigate and listen to those who write the checks which drive the oxygen into our system and propel our economic vitality. How so? 

A Duke University/CFO Magazine Global Business Outlook Survey was just released and the economic pleurisy-like symptoms persist. CFO diagnoses our condition in writing, CFO Optimism Is Down, and So Is Hiring,

Just 27% of U.S. CFOs say they are more optimistic about the economy this quarter than they were last quarter, while 36% say they are less optimistic, according to the Duke University/CFO Magazine Global Business Outlook Survey released today. When finance chiefs rate their optimism on a scale from 1 to 100, the results are less dramatic, though still down — 57 out of 100, down from 61 last quarter and roughly even with a year ago.

Did the palliative effect of some of Washington’s medication wear off?

“Three to six months ago, I definitely had a more positive outlook on the economy,” says Greg Gould, finance chief at SeraCare Life Sciences, a small publicly traded biotech company. “Now I’m a bit more worried that there could be some kind of a double-dip [recession].” SeraCare, which counts the National Institutes of Health as a customer, benefited from stimulus spending included in the American Reinvestment and Recovery Act. Now, says Gould, that impact appears to be fading.

Not all hope is gone though. Again we are talking about walking pneumonia here. You can still operate and get things done but do not look for a lot of help in the process.

Finance execs do plan to spend money in the coming 12 months, however. Capital expenditures, research and development spending, and advertising and marketing budgets will all grow, but by smaller amounts than CFOs reported last quarter. Tech outlays, however, are expected to increase by 6% on average, up from 5.5% three months ago.

Full-time domestic hiring will continue to be anemic, with finance chiefs saying they will increase staffs by less than 1% in the next 12 months. That number, also down from last quarter, means that unemployment will likely linger at its current rate of just over 9%. Twenty-one percent of CFOs say they are actively hiring, while another 16% say they are short-staffed but lack the resources to hire. Nine percent say they are short-staffed and would like to hire but are having trouble finding the types of employees they need.

Still, many are holding off on hiring as they continue to wait for the economy to improve. “People are hesitant to make a long-term bet,” says Gould. “I think with housing continuing to be unstable and with the continued high unemployment rate, people are going to continue to be nervous.”

How might we ultimately shake this condition and truly get back on our feet? Let’s stop listening to the quacks and go into the field and listen to the sage wisdom provided by a small business owner,

No surprises here. I’ve been a small business owner and manufacturer for almost 30 years. Better than half our products go abroad. This is – by far – the worst we have seen. Washington hasn’t a clue.

It’s not about throwing money at a problem. It is about taking less money at the front end (taxes)and letting business’ have more to grow with. Cut spending and we’ll again see a future.

Stay the course of today and I’ll be damned if I – or anyone else with any sense – will do anything to help get unemployment lower. We all do enough to help people. Get the morons running this country to stop taxing and spending! THEN we can start to help by putting people to work. It’s not rocket science…

Posted by DOUG HULSE | Jun 9, 2011 8:00 AM ET

Regrettably, all too many of the ‘morons’ have little to no real world business experience and accompanying appreciation for how jobs are truly created. Might any other small business owners and operators care to weigh in on this topic?

About Larry Doyle 522 Articles

Larry Doyle embarked on his Wall Street career in 1983 as a mortgage-backed securities trader for The First Boston Corporation. He was involved in the growth and development of the secondary mortgage market from its near infancy.

After close to 7 years at First Boston, Larry joined Bear Stearns in early 1990 as a mortgage trader. In 1993, Larry was named a Senior Managing Director at the firm. He left Bear to join Union Bank of Switzerland in late 1996 as Head of Mortgage Trading.

In 1998, after 15 years of trading and precipitated by Swiss Bank’s takeover of UBS, Larry moved from trading to sales as a senior salesperson at Bank of America. His move into sales led him to the role as National Sales Manager for Securitized Products at JP Morgan Chase in 2000. He was integrally involved in developing the department, hiring 40 salespeople, and generating $300 million in sales revenue. He left JP Morgan in 2006.

Throughout his career, Larry eagerly engaged clients and colleagues. He has mentored dozens of junior colleagues, recruited at a number of colleges and universities, and interviewed hundreds. He has also had extensive public speaking experience. Additionally, Larry served as Chair of the Mortgage Trading Committee for the Public Securities Association (PSA) in the mid-90s.

Larry graduated Cum Laude, Phi Beta Kappa in 1983 from the College of the Holy Cross.

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