When reading the otherwise rosy stories in the mainstream media, the most glaringly simplistic and attention grabbing subsegments of which continue to proclaim the recession over, while conveniently ignoring that despite $4 trillion in monetary and fiscal stimuli underemployment is at 17%, foodstamp recipients are at all time highs (but who cares about that social stratum), discretionary purchases are continuing to be funded primarily from millions of delinquent homeowners who refuse to pay their mortgage (now on average between 18 and 24 months behind), companies are refusing to hire, capex spending is at all time lows, banks are hoarding cash for the imminent perfect MBS putback storm, commodity price inflation is threatening to collapse profit and net income margins, half of Europe is locked out from capital markets, rampant Chinese inflation is threatening to recreate Tianenman square, investors are pulling cash from markets for 29 weeks in a row, hardship withdrawals from 401(k)s surging, and the muni mess is one political decision from an avalanche of city and state defaults, one may be excused to have a comparable simplistic perspective of the economy. After all stocks are up. Which of course is precisely the response that Bernanke is hoping to elicit from these same simplistic interpreters of economic and market data, who are next supposed to take money procured from selling newsletters and other top and bottom-line declining products, and buy (Chinese) trinkets they don't need. It is these same people who will also conveniently ignore the sad reality that America's small business find themselves increasingly in: and for the most vivid example of this is the latest Reuters report which informs that small business are now calling of Christmas en mass. "The 2010 holiday season represents the worst
slump since the firm began polling 22 years ago, she said. Of 103
leading businesses queried, those holding a celebration of any kind fell
to 79 percent, down from 81 percent both last year and the year before,
during the height of the economic recession." Obviously Wall Street is not among those polled: the country's bankers are preparing to spend over $140 billion in compensation this year. Good luck booking a restaurant, club or lounge in New York in the next month.
Alas, it is small businesses that create economic prosperity in America. Bankers only take it away. Which is why how the small business segment feels might have been relevant if anyone still cared for America as a going concern. That's no longer the case: it is now obvious that the country will persist in its current form only for so long as it can continue to roll its $13.8 trillion in debt (we forgot to add record debt in the list above): an mount which will never be repaid.
Over one-fourth of companies hosting parties said their events this year will be more modest; that comes on the heels of nearly half that cut budgets in 2009. The majority will keep spending the same as last year.
"The only reason that not as many downsized their parties this year was if they downsized more, they wouldn't be having anything," said Winston, noting a shift away from events intended to woo clients toward simpler, employee-only gatherings. "You can't downsize any further."
Those companies that do deck their halls this year are doing so moderately, weighing the signals their events send about business priorities as much as impact on the bottom line, according to providers contracted to put events together.
"With many businesses asking employees to make sacrifices, forego raises and bonuses, even the appearance of a lavish affair projects the wrong message," said Greg Jenkins, owner of Long Beach, California-based Bravo Partner Productions, which has coordinated holiday parties and other events for companies large and small for 25 years.
"A lot of it has to do with perception," said Jenkins, noting that some companies are making a conscious effort to tie their parties to some form of charitable giving. "The last thing you want to do is spend money on caviar and champagne."
Jenkins, himself a small businessman with just five full-time employees, keeps his own year-end celebrations low key with a simple lunch out at a restaurant or a small gathering at his home with light appetizers.
Companies are demanding less costly holiday alternatives, said Tom Walter, CEO of Chicago-based Tasty Catering, whose customers include many small businesses, as well as large corporations like McDonald's.
That America's economic engine has to take such sacrifices merely to perpetuate the Wall Street-Fed-DC kleptocratic status quo is sad, but at this point nothing can be done about it. Until these very people decide to either stop paying their tax outright, pull all their money from the TBTF banks, stop trading in corrupt capital markets entirely, very little if anything will change. After all the ruling class is now focused on one thing, and one thing only: kick the can far enough that those in charge now will not see a posse in front of their front door before arrangement for a one way G-5 fllight to Brazil can be made. Everything else is smoke and mirrors.