War on Capitalism (Forcing social and economic change on business)
Market Commentary
By Charles Payne, CEO & Principal Analyst
Market Commentary
By Charles Payne, CEO & Principal Analyst
As each day goes by in the fiscal cliff debate, President Obama becomes stronger among the masses that view this as a fight between very rich guys against little guys barely making ends meet. Beyond the publicly fighting over tax policy, there is a battle waging in an area that businesses cherish most of all - the bottom line. It's all about greed and the notion of how much money is enough.
There is a growing consensus that profits should max out at some point and anything beyond that point is greed - the kind that hurts Americans.
I don't buy the argument, but I'm not walking through life with blinders, headphones, and getting my news from Comedy Central. More than elections are going to be lost if there isn't some way to educate the masses in ways that pierce limited attention spans and avenues of influence. The lure of socialism and disdain for even moderate success makes for a lethal broth equal to economic Kool-Aid.
There has to be a counter argument but that spokesperson hasn't materialized. It just can't be the Donald, or Romney, or anyone else that had a foot-up on the rest at birth, regardless of how impressive their personal journeys have been. The same thing on the political front, there has to be someone that can connect the dots on how strong American businesses with a laser-like focus on the bottom line propelled the nation to the top and have kept us there.
Of course, employee prosperity is critical and doing business in a way that mitigates impact to the environment matters. But these things are a given for long term success. What company wants to retrain workers over and over or ruin the world they serve? It's not a rhetorical question and the answer is a handful, but those companies become flashpoints and the source of movies hinting that all businesses operate in similar vein.
While that search for articulate spokespeople goes on, the business world has to figure out how to handle the onslaught of higher taxes and regulations and less support from the public and current customers. The problem will go beyond neat advertising campaigns and placating photos on websites and annual reports. Customers aren't saying they don't want goods and services, only that they want them with limited profit margins.
So, despite the fact that Uncle Ben has been promoted company CEO, it wouldn't stop a public relations campaign looking to portray the company as greedy, mean-spirited, or out of touch with emerging values, especially among younger people. Or if there had to be adjustments to account for higher taxes and more regulations. Where does this leave most businesses, especially those that are publicly traded?
There is a growing consensus that profits should max out at some point and anything beyond that point is greed - the kind that hurts Americans.
I don't buy the argument, but I'm not walking through life with blinders, headphones, and getting my news from Comedy Central. More than elections are going to be lost if there isn't some way to educate the masses in ways that pierce limited attention spans and avenues of influence. The lure of socialism and disdain for even moderate success makes for a lethal broth equal to economic Kool-Aid.
There has to be a counter argument but that spokesperson hasn't materialized. It just can't be the Donald, or Romney, or anyone else that had a foot-up on the rest at birth, regardless of how impressive their personal journeys have been. The same thing on the political front, there has to be someone that can connect the dots on how strong American businesses with a laser-like focus on the bottom line propelled the nation to the top and have kept us there.
Of course, employee prosperity is critical and doing business in a way that mitigates impact to the environment matters. But these things are a given for long term success. What company wants to retrain workers over and over or ruin the world they serve? It's not a rhetorical question and the answer is a handful, but those companies become flashpoints and the source of movies hinting that all businesses operate in similar vein.
While that search for articulate spokespeople goes on, the business world has to figure out how to handle the onslaught of higher taxes and regulations and less support from the public and current customers. The problem will go beyond neat advertising campaigns and placating photos on websites and annual reports. Customers aren't saying they don't want goods and services, only that they want them with limited profit margins.
So, despite the fact that Uncle Ben has been promoted company CEO, it wouldn't stop a public relations campaign looking to portray the company as greedy, mean-spirited, or out of touch with emerging values, especially among younger people. Or if there had to be adjustments to account for higher taxes and more regulations. Where does this leave most businesses, especially those that are publicly traded?
Quiet Desperation
The mass of men lead lives of quiet desperation. What is called resignation is confirmed desperation. From the desperate city you go into the desperate country, and have to console yourself with the bravery of minks and muskrats. A stereotyped but unconscious despair is concealed even under what are called the games and amusements of mankind. There is no play in them, for this comes after work. But it is a characteristic of wisdom not to do desperate things. Henry David Thoreau
I suspect most businesses will just try to weather the public relations and regulation storm in bunker-mode. Head in the sand and make-nice until something changes. They can make disingenuous commercials like BP touting solar energy or they can keep management quiet. But think about losing that liberty. More important than making profits, is the right to voice an opinion, yet there will probably be gag orders on CEOs speaking out on everything from God to higher prices.
Ironically this approach to business means less hiring and higher prices for consumers. It feels like the proverbial rock and hard place.
Indeed, some companies know they have to relay business moves to shareholders and in the process will be flagged for excessive greed and insensitively. Case in point is yesterday's statement from Clarence Otis, CEO of Darden Restaurant (DRI) parent company of Red Lobster and Olive Garden:
"In light of these upcoming changes, we are being cautious about our sales and earnings forecast for the full year " Otis continued. "Our outlook for the year also reflects the potential impact, though difficult to measure, of recent negative media coverage that focused on Darden within the full-service segment and how we might accommodate healthcare reform."
In short, the Company knows the media is going to crucify it for having to make more employees part time rather than full because of higher healthcare costs. Clarence Otis is an Obama backer and Red Lobster has a giant following among black consumers, which means there could be attempts to sway them away from the chain through negative media propaganda. Of course, no company is immune these days.
Other companies have tried to get out in front of things like soaring healthcare costs but it's backfired in the world of public relations. Darden Restaurants is just the latest to say it has to make tough economic decisions to combat higher costs foisted upon the company by Washington's taxes and regulations. Of course, few have admitted making such adjustments could be used to drive away business.
It's a full frontal assault on any negative reaction to Obama policies. The media moving from helping to seal reelection, to joining with White House to punish companies that get out of line of voice criticism:
After the election several companies commented on adjustments needed to deal with the harsh impact of the new healthcare law. Several were skewered in the media as heartless and greedy and the focus of campaigns to drive away business. Three in particular saw an immediate decrease in brand approval according to You Gov.
* Papa Johns: PZZA
* Denny's: DENN
The mass of men lead lives of quiet desperation. What is called resignation is confirmed desperation. From the desperate city you go into the desperate country, and have to console yourself with the bravery of minks and muskrats. A stereotyped but unconscious despair is concealed even under what are called the games and amusements of mankind. There is no play in them, for this comes after work. But it is a characteristic of wisdom not to do desperate things. Henry David Thoreau
I suspect most businesses will just try to weather the public relations and regulation storm in bunker-mode. Head in the sand and make-nice until something changes. They can make disingenuous commercials like BP touting solar energy or they can keep management quiet. But think about losing that liberty. More important than making profits, is the right to voice an opinion, yet there will probably be gag orders on CEOs speaking out on everything from God to higher prices.
Ironically this approach to business means less hiring and higher prices for consumers. It feels like the proverbial rock and hard place.
Indeed, some companies know they have to relay business moves to shareholders and in the process will be flagged for excessive greed and insensitively. Case in point is yesterday's statement from Clarence Otis, CEO of Darden Restaurant (DRI) parent company of Red Lobster and Olive Garden:
"In light of these upcoming changes, we are being cautious about our sales and earnings forecast for the full year " Otis continued. "Our outlook for the year also reflects the potential impact, though difficult to measure, of recent negative media coverage that focused on Darden within the full-service segment and how we might accommodate healthcare reform."
In short, the Company knows the media is going to crucify it for having to make more employees part time rather than full because of higher healthcare costs. Clarence Otis is an Obama backer and Red Lobster has a giant following among black consumers, which means there could be attempts to sway them away from the chain through negative media propaganda. Of course, no company is immune these days.
Other companies have tried to get out in front of things like soaring healthcare costs but it's backfired in the world of public relations. Darden Restaurants is just the latest to say it has to make tough economic decisions to combat higher costs foisted upon the company by Washington's taxes and regulations. Of course, few have admitted making such adjustments could be used to drive away business.
It's a full frontal assault on any negative reaction to Obama policies. The media moving from helping to seal reelection, to joining with White House to punish companies that get out of line of voice criticism:
After the election several companies commented on adjustments needed to deal with the harsh impact of the new healthcare law. Several were skewered in the media as heartless and greedy and the focus of campaigns to drive away business. Three in particular saw an immediate decrease in brand approval according to You Gov.
* Papa Johns: PZZA
* Denny's: DENN
Since their initial reactions to the election outcome, the CEOs of all these companies have spoken out about being taken out of context or simply have gone on the apology tour.
Night of Long Screwdrivers
While the world was watching RG3 do his thing, John Boehner was also running roughshod... over his own party. Actually, he was exacting a form of revenge and fending off the impetuous Tea Party in the middle of the night. It was stunning and perhaps the biggest concession made to date in the fiscal cliff debate. The Tea Party presented a challenge to all entrenched power in both parties. While there is no doubt the GOP is down five easy seats because of the unpolished members of the Tea Party, there is a very important role for them and candidates they sent to Washington.
The vote to boot Tom Price last month from Republican Party Study Committee should have been a clue. But its official, the Tea Party has been screwed.
Night of Long Screwdrivers
While the world was watching RG3 do his thing, John Boehner was also running roughshod... over his own party. Actually, he was exacting a form of revenge and fending off the impetuous Tea Party in the middle of the night. It was stunning and perhaps the biggest concession made to date in the fiscal cliff debate. The Tea Party presented a challenge to all entrenched power in both parties. While there is no doubt the GOP is down five easy seats because of the unpolished members of the Tea Party, there is a very important role for them and candidates they sent to Washington.
The vote to boot Tom Price last month from Republican Party Study Committee should have been a clue. But its official, the Tea Party has been screwed.
The news probably means a deal is closer than expressed in the general media to kick the fiscal can down the road but with serious concessions to President Obama.
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