Even amidst the unremitting stream of bad news, certain days and events stand out with particular ugly clarity. Take Monday, January 26, for example.
According to published reports, the tally of jobs lost by the end of that day due to companies of all sorts cutting back in the face of weak sales and/or huge losses was some 75,000.
75,000! Granted, in an environment where speaking about things (usually dollars) in the billions has become commonplace, a number that doesn’t even reach 100,000 seems piddling. Yet, these are 75,000 people, most of whom have spouses and children, who now are part of that sector of the population that people dread most: those looking for work while a raging recession deepens.
On Jan. 26 as one company after another announced sizeable cutbacks, it was like having one of those unforgiving headaches when you’ve run out of Advil and all the drugstores are closed. Caterpillar, 20,000 jobs cut; Home Depot, 7,000; Sprint, 8,000; Pfizer, 19,500. And in the world of finance, ING, which said it was going to cut 7,000 full-time jobs.
No wonder there is such a feeling of outrage across the land regarding the financial clowns that brought the country to its knees. Most of that rage just sputters, however. Sure, there are some cheers as an obscenely overpaid executive is rudely booted from the corner office, but he is likely to have a substantial cushion on which to rest his weary head.
Then every once in a while, an executive does something so outrageous that he becomes the focal point of our frustrated rage. Enter, on cue, John Thain.
The former head of Merrill Lynch, who was last fall’s hero as he saved his brokerage firm by selling it to Bank of America while Lehman Brothers went down in flames, is now this winter’s sap.
It doesn’t take much to go from being a hero to a sap nowadays. All you need to do is spend $1.2 million on redecorating your office while your company is bleeding billions, arrange to have $4 billion in bonuses paid to people at Merrill before the end of the year and before the deal with BofA was finalized, and then report a $15.3 billion quarterly loss.
Mr. Thain was shown the door at BofA and then kicked out. No doubt he’ll land comfortably on his feet. To make up for the shame of what he did, decorating-wise, he said he would pay the $1.2 million out of his own pocket. This way, I guess, he gets to keep the $87,000 area rug, the $35,000 commode and the $68,000 credenza, among other things, that once graced his office. There was also something about a wastepaper basket that went for upwards of $1,000. Perfect repository for all those crumpled gilt-edged resum?s.
How on earth did we get here? Everyone likes to revile the baby boomers, but one of their mantras is “No pain, no gain.” In the world of exercise, it makes sense–you put in the effort, you get the reward.
What’s happened over the course of the last few years is that the order of cause and effect was reversed. We took the gain first and fooled ourselves into thinking there was no pain.
And to be honest, we still haven’t learned. While many people will acknowledge that times are really bad and things will probably take years to shape up, deep down they’re hoping that President Obama will somehow make it all better real soon. As if all it took to get out of this economic road wreck was the equivalent of a trip to Jiffy-Lube.