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Bill George

Harvard Business School Professor, former Medtronic CEO

Bill George: A Few Rays of Hope

NEWSWEEK : A Few Rays Of Hope

Economy: The stock market is up. Housing numbers are improving. But NEWSWEEK’s Business Roundtable doesn’t see a bottom yet—and gives mixed reviews to Obama’s early moves to fix things.

Published Mar 28, 2009
From the magazine issue dated Apr 6, 2009

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Bill George, professor, Harvard Business School, and former chair and CEO of Medtronic Although economists say that jobs are “a lagging indicator,” employment data is still the most important indicator to watch for signs that the recession has bottomed. People without jobs, or those who fear they will lose their job, are not going to start spending again in this deep recession, no matter how much liquidity exists or how low interest rates are. However, unlocking the credit system so new companies can be formed and existing companies can start investing again is vital to creating new jobs.

The economy is going to get worse before it gets better, so optimists shouldn’t play up stabilization until the economy finds its bottom. There are many layoffs ahead that will swell the unemployment rolls. Eventually, the massive amounts of money the government is pumping into the economy will take hold and the economy will gradually begin to turn upward again, but this won’t happen until the end of 2009 at the earliest.

The Congress, much more so than the Obama administration, is guilty of playing its old games of pitting social programs against tax cuts. In this crisis, both Democrats and Republicans should set aside their fights and focus entirely on creating jobs. The Obama administration is crying out for at least one businessperson—someone who has made a payroll—to advise the president to point out the enormous difference between saving jobs and creating new ones. The White House needs to focus on the latter, because saving jobs that are no longer viable only slows the retooling required in our economy.

Commentary Posted By: RO in Reno @ 04/03/2009 9:02:47 AM
Good article we can hope Obama reads and heeds it.
In an economy that has some 24 million unemployed the objective should be the creation of 24 million sustainable jobs.
Bill George put it best.
All this hoopla over saving the banks is at best shortsighted, and the Republican mantra of tax cuts for the wealthy to save the middle class is idiotic if not insane.

The effort should be to create the small businesses that would lead the way to the “retooling” of America Mr. George commented on; although it may well be reinventing America.

Small business and by that I mean businesses that are less than 10 or 20 employees, are the businesses that can compete with Chinese workers. Not the Governments interpretation of 500 employees being a small business.

They do not have the huge accounting and other “service” departments that represent overhead. Foreign goods always have the added cost of shipping, brokerage fees, and the profits of two managements, one in China and the other the corporate profits of the company in this country who distribute the products.

The SBA managed to survive the repeated Republican efforts to abolish them. Now they can show just what they can do if Obama would quit saving banks and start saving Main Street. Tim Geithner should be revamping the IRS to allow small business the opportunity to survive the first critical years.

Small business especially those manufacturing a product are doubly targeted by the IRS. First since they are the self employed they are part of a target group and second since they have a much greater investment than say an accounting service they are targeted because they have much greater business deductions perhaps 10 or 20 times as much. Tens of thousands of small manufacturing businesses have been audited into oblivion in the first three years, and will again; if Geithner and the Congress do not act on this problem. But it is a crying shame more of the Stimulus money and perhaps even the remaining TARP money did not go to creating sustainable employment.