President Obama Misses Mark Again, More of the Same
Sept. 9, 2011
President Obama is proposing superficial bandaids from political motivations that would accomplish little to solve the structural economic challenges afflicting the U.S.
America’s economy is barely holding together by pins and needles. It could tear completely apart with one more catastrophe. With its $447 billion plan, the Obama Administration has proven again it does not know how to stimulate growth in jobs. If the administration gets its way, a double-dip recession is inevitable — not economic recovery.
Yes, I’m all for roads and education. But I’m troubled. Why? My sense is that the administration is making recommendations for political reasons, and not economic patriotism. More on that later.
U.S. business has too little domestic demand for products. The list of concerns is long. America is no longer a manufacturing center. Television sets and computers are made in Asia. Cars and trucks aren’t selling.
Many big companies like General Motors are investing abroad and making more money there. Yes, ask GM about cars sales in China.
All of this means a stalemate in domestic job creation.
Extend unemployment insurance?
OK, 14 million Americans are jobless. Not to sound unsympathetic, but many workers are partly to blame by not adapting to the new digital age with new skills. There are countless unfilled jobs.
At what point does a helping hand become a handout?
Recessions weren’t kind to me. Long ago, my personal situation helped coin the phrase, corporate downsizing – 14 times. Yes, 14 layoffs. Yet, I always found ways for a sustainable income. It wasn’t always in my preferred industry. Sometimes, I turned to other sectors and got a sales job and worked my way back into management.
As a former mentor, famed broadcaster Del Sharbutt, once bluntly told me: “Every experience is a learning experience.” Reading between the lines, he was also telling me mental toughness was in order. What I eventually learned was that I needed an entrepreneurial spirit. Despite all the jobs, not to be gauche, but a CBS executive referred to my resume as a “rich background.” His comment spurred an even more intense entrepreneurial conviction.
That’s what America, American workers and the Obama Administration need.
The straw that stirs job creation – small business – can’t get credit and enough customers. Studies show most is not hiring nor will they for at least 18 months. Why? Again, there’s too-little domestic consumption.
Family budgets are strained. U.S. consumers are spending more but it’s more precious dollars on food and gas. Both are heavily imported. There isn’t any new drilling for oil and natural gas. So much of domestic consumer money is going abroad but it isn’t returning as a result of exports. The trade imbalance is still way out of whack.
Disingenuous spending
President Obama is calling for more stimulus spending. He apparently thinks spending another $140 billion on roads and schools will work. But my sense is that his proposal is aimed at benefiting the unions for political donations (see this EDITORIAL: How labor unions spend dues money).
Mr. Obama is showing he does not have Bobby Kennedy-like qualities (note this revelation: Dirty work between Obama, Teamsters). Do you recall the administration of John F. Kennedy when his brother, Attorney General Robert Kennedy, had his principled legal fight with the Teamsters in the 1960s?
Meantime, the president proposes to finance his proposed new stimulus with cutbacks in Medicare and Medicaid. It’s fallacious reasoning to think it’s best to spend more for union construction jobs while healthcare workers will lose theirs.
We already know about the devastation caused by his healthcare law. The majority of small businesses are apprehensive. Their workers and all patients face higher costs in their copayments and coverage.
Launching an infrastructure bank to lend money to local and state governments and financed privately?
Please. Government budgets at all levels are stretched too thin, as it is. Government credit ratings are backsliding. Doesn’t anyone remember the U.S. downgrade?
To expect these governments to repay the money isn’t productive, just as businesses fail when they borrow money just to stay in business. At some point, they have to repay the money, or else.
President Obama wants more business regulation – more government bureaucracy. Again, talk to the majority of businesses. You’ll get an earful.
He wants to tax the wealthy at higher rates. So how will they invest and hire workers? What’s their incentive to spend? The hospitality industry – from hotels to restaurants – is barely making it now. Sticking to the wealthy might make some people feel better, but it’s not a solution.
Payroll tax cuts won’t stimulate job growth and are a threat to future Social Security recipients for their retirement. The short-term benefit would be catastrophic for the long term.
There are more red flags, but you get the idea.
We waited weeks for President Obama to outline a new public-policy approach for economic recovery and job creation – in vain.
What we need is common-sense leadership and change from the White House, not politics. Remember the campaign promise? But nearly three years later, are we getting it? No, it’s more of the same politics. There’s no infrastructure being proposed for short-term or lasting recovery.
From the Coach’s Corner, instead of just complaining, this portal’s Public Policy section is filled with solutions.
“The problem with the federal government is that common sense is not necessarily common.”
– Terry Detrick
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Terry Corbell is a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?
Secret to Success in an Uncertain Economy: Expand Marketing
Businesses are self-destructing when they cut back on marketing in downturns. If evaluated and implemented properly, marketing creates a return on investment in multiple ways.
More on that later. Meantime, suffice to say downturns or not, a good marketing approach requires intensity and is based on thought leadership about every facet from social media to internal company communications. And marketing, of course, includes strong public relations.
If anything, maintain your marketing investment and expand your PR efforts.
Sports provide great metaphors for business. As in any sport, remember this basic principle: Write a great game plan using marketing plan essentials, test your ideas and then attack…attack…attack.
An award-winning public relations expert asserts it’s unproductive to stop or trim marketing during a recession.
Devon Blaine
“Though this strategy might seem to make common sense, recessions are times that call for uncommon business wisdom,” says Ms. Devon Blaine, president and CEO of the The Blaine Group, Inc. in Beverly Hills. “Recessions reward the aggressive marketer and penalize the timid one.”
In other words, timorous businesses forego opportunities for niche leadership and to expand their market share.
Authoritative Study
Ms. Blaine cited a noteworthy study, “Advertising & Marketing During An Economic Downturn,” by David Stanley of Industrial Equipment News. It analyzed the situations of more than 1,000 manufacturers in what’s called “Profit Impact of Market Strategy” (PIMS).
Far too often, studies appear to be self-serving for special interests. But this study is objective and unique. It’s from The Strategic Planning Institute in Cambridge, MA, which describes itself as a non-profit membership association that promotes “strategic business management.”
Actually, The Strategic Planning Institute originated as an internal planning project at General Electric. Then, from 1972 to 1974, it evolved into a Harvard Business School project.
The PIMS study concluded that bold marketing in a downturn resulted in strong performance while tepid marketing had undesirable consequences. In addition, the higher marketing investments did not hurt profits for the short-term.
1990’s lessons
“Penton Research Services reports that shortly after the 1990-91 recession, Coopers & Lybrand, in conjunction with Business Science International, surveyed CEOs from growth companies about the effect the recession had on their profit growth and the actions they had taken in response,” cited Ms. Blaine.
So what were the conclusions from the second study?
“A strong marketing program enables a firm to solidify its customer base, take business away from less aggressive competitors, and position itself for future growth during the recovery,” she concluded.
Again, I agree with Ms. Blaine. Having experienced five major economic downturns in my career, I know there is one inescapable fact about marketing and recessions. Companies that view marketing strictly as an expense and not an investment miss opportunities for growth. Successful companies look at the short and long-term ramifications.
During downturns, good companies that cut marketing budgets soon learn they do not retain dominance in their marketplace, and they will learn they have lost market share once the upturn begins.
My thanks to Ms. Blaine for contributing her expertise.
(Disclosure: Ms. Blaine is a talented friend who was named the southern California publicist of year for her work in professional PR and crisis intervention. We have also been members of Consultants West, a roundtable of veteran consultants in Los Angeles.)
From the Coach’s Corner: Not to be redundant and to add to Ms. Blaine’s astute points, here are five lessons I’ve learned about marketing and recessions:
- A quality company that maintains stellar marketing in a recession succeeds. But it is imperative in the worst of conditions to continually evaluate the company’s marketing return on investment.
- If a company does not provide enough value or is a substandard company, marketing does not help them.
- An economic downturn is a terrific opportunity to take a big picture snapshot of a company. It is important to look a client’s total situation – such as in human resources or pricing – and come up with solutions.
- The best companies are proactive about planning and execution in good times and bad. Many companies show poor judgment about pricing and cost-cutting in marketing. Automatically slashing prices without assessing the competitive landscape can undermine your brand’s value, and make it difficult to successfully raise prices later.
- Companies that cut marketing investments fail to sustain their “Top-of-the Mind Awareness” and unnecessarily lose revenue in the recessions, and they endanger their profitability when economic conditions improve. Indeed, it takes more resources – time, energy and money – because they have to work too hard just to re-establish their brand.
Here are related resource links:
- 5 Action Steps To Get Top Results From Your Marketing Plan
- 11 Sales Strategies to Outsell Your Big Competitors
“Unless we change direction, we are likely to end up where we are headed.”
– Chinese proverb
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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.
