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The Biz Roundup January 30

The man who has been given the tiny, inconsequential job of rescuing the American economy.

Since returning to Washington, [Larry Summers] has expanded his turf so that it touches on nearly every area of domestic and international policy, from health-care reform to trade. Obama has elevated Summers to a level on par with the President’s daily intelligence briefers, asking him to orchestrate work-ups each morning on the deteriorating economy. . . .

Summers tells Time that the strategic goal of all these moves is to render a massive fix for the economy but then muscle the federal budget back toward balance. “It is absolutely essential,” he says, “and the President never lets us lose sight of this for an hour, that even as you do those things, you have to also be addressing the longer-range concerns. We inherited trillion-dollar deficits, and his budgets are going to show a path back toward fiscal health.”

(“Can Larry Summers Save the Economy?,” Time, January 29) Gemunon þā mǣla þe wē oft æt meodo sprǣcon, / þonne wē on benċe bēot āhōfon / hæleð on healle, ymbe heard ġewinn. / Nū mæġ cunnian hwā cēne sȳ.

Speaking of which . . .

Gross domestic product, a gauge of the nation’s output, fell at a 3.8% annual rate in the fourth quarter, adjusted for inflation, from the previous quarter. The decline was the largest since 1982, though still well below the postwar record 10.4% quarterly drop seen in 1958.

This week alone saw announcements of more than 70,000 layoffs in sectors from trucks to technology. Many companies are likely to order less merchandise going ahead, particularly given the bleak outlook for 2009. That’s a key reason why forecasters say the early months of this year could now bear the brunt of the recession. In turn, manufacturers might find they need to further ratchet down production — and payrolls.

(“Economy Dives as Goods Pile Up,” Wall Street Journal, January 31) If you’re still on the fence about the stimulus package — or you’re on the wrong side of the fence — note that the data shows that spending and investment held up reasonably well for most of last year at U.S. companies. The problem is not a supply-side problem, which explains why low interest rates have had little effect.

What happens when the news goes out of business, part “I-don’t-know-a-really-big-number”

The Los Angeles Times announced plans Friday to lay off 300 people — including 70 newsroom workers — and fold its California section into the main news pages. The moves are the latest efforts by the West’s largest paper to cope with the steep loss of advertising revenue caused by the recession and the flight of advertisers to online media outlets.

(“L.A. Times to lay off 300, consolidate sections,” Los Angeles Times, January 30) Things are looking just as grim in broadcast. I don’t know if you’ve noticed, but they’re actually broadcasting infomercials in prime time — not just cable, but broadcast. You know, the junk commercials that pay the network around a thousand bucks and so only appear between midnight and 5 AM when no other advertiser wants to appear? Those infomercials? On prime time? Even CNN? ABC? Pretty soon 60 Minutes will be downsized to 40.

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