How Wall Street Is Screwing Up The RecoveryAugust 19, 2010: 1:31 PM ET
I had to laugh the other day at the way the Market is behaving, but it wasn't a good laugh. It was one of those dark laughs, full of phlegm and bile, a laugh that dies in the back of your throat, turning before it fades away entirely into a short, sharp growl.
One day up. Two days up. Then down, down 150 or 200 points. It's like psychoanalysis. Two steps forward. One step back. Fear and greed. Greed and fear. All of it presided over by a gigantic Cloud of Unknowing, and in the center of that cloud the One Huge Question: Are we recovering? Or is we not? And whoa! Did you see those employment numbers? What a shock! Why are they still so BAD?
Yes, all the Investor Relations people will tell you what the great geniuses on the Street are worried about right now. Jobs, baby. All these people out there are unemployed, see? And a huge chunk of the employed are actually underemployed. And even among the gainfully, profitably employed, the sense of danger, of peril, of massive insecurity, is palpable. You can palpate it. And when you do, it comes up all soft and rotten. So people are saving their money instead of spending it. Which means our little recovery can't really get started, since consumer spending motors the entire economy as we know it. Is it any wonder Wall Street is worried? Why isn't somebody doing something about all that unemployment?
But wait a minute. Stop and listen. Right beneath all the paranoia, the worry, the pessimism about our economy, the shock and awe at what's become of all those jobs!... these very same guys are exhorting Corporate America to cut more of them, to keep costs low, no, lower, don't let them creep back! Do more with less! They love that whole doing more with less thing.
Companies that continue to cut jobs are rewarded with higher stock prices. Companies that create jobs for people run into a wall of ravening analysts. The System has figured out, in the last several years, how to get 100 people to do the job of 250. Woe unto the outfit that forgets that lesson. What's really amazing, stunning and grimly laughable, is that nobody on the Street seems to make the connection. They're the ones maintaining our unemployment stats. And at the same time seem to be truly dismayed by them. Sometimes stupid is worse than evil.
To get back, to get really back, we're going to have to start giving people jobs. Those that do will be walking straight into a huge, malevolent headwind generated by the machine that drives their value. Eventually, you've got to hope that we'll all remember how to do more with more. Until then, the first guys on the beach are likely to get slaughtered. And the recovery will remain an unconquered castle on a distant hill.