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The Biz Roundup 12-6

Bush’s response: “Are there no prisons? Are there no poor houses?”. :: “Business shut down in November. Businesses are in survival mode and are slashing jobs and investment to conserve cash. Unless credit starts flowing soon, big job losses will continue well into next year.” (New York Times, December 5, 2008) I don’t have the heart to be funny, preachy, or writerly. This is a disaster of major proportions that will test and tax the resilience and optimism of all of us.

Barry Diller is visited by three spirits and the ghost of Ronald Reagan. :: “The idea of a company that’s earning money, not losing money, that’s not, let’s say ‘industrially endangered,’ to have just cutbacks so they can earn another $12 million or $20 million or $40 million in a year where no one’s counting is really a horrible act when you think about it on every level. . . . It’s not that you don’t want to earn as much money as you can — it is your obligation, of course — but companies have obligations beyond that and they certainly have obligations beyond that at certain times, in the times in which they operate. And they also certainly ought to know that meeting and beating expectations is probably yesterday’s game and it will be increasingly so, which would be by the way very healthy for companies. Running a company that meets and beats expectations, and that runs their company accordingly, are companies that I would question why anyone would invest in.” (Reuters, “Diller to profitable companies: lay off the layoffs,” December 4, 2008) This is not the rapacious capitalism of the Reagan, Bush, Clinton, and Bush years. We’ve matured to a point where we’re seriously discussing things such as character, responsibility, the limitations of the free market, and reining in excessive executive pay.

Turns out that Paulson and the Fed really screwed everyone’s pooch by not rescuing Lehman. :: “The more than half a million U.S. jobs lost in November were the latest in a drumbeat of dire economic data that may have been triggered by the Federal Reserve’s decision in mid-September to allow Lehman Brothers Holdings Inc. to fail, economists and bankers said. “It’s the collapse heard around the world,” said Ellen Zentner, a senior economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “It’s probably one of the worst decisions the Fed ever made — to save everybody else but Lehman.” “ For those of us, including me, who are advocating letting the auto companies eat the ashes they’ve served themselves, this should give us pause. Lehman got what it deserved, just as the auto companies will if Congress unceremoniously shows them the door out, but right now we’re in survival mode. Tossing failing businesses over the gunwales means throwing a lot of good businesses and people who are chained to them over, as well.

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