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Thursday, February 12, 2009

Some More Nonsense at Caterpillar and the President's Economic Advisory Board (Update)

Over the weekend, I raised some questions about the President's new Economic Advisory Board. This is a new advisory board where the participants also keep their so called day jobs. These jobs include being CEO's of major corporations. Now, not a week later, we have this story.

President Barack Obama says Caterpillar's chief executive has told him the company will rehire some laid-off workers if the stimulus bill passes.

The heavy equipment maker announced more than 22,000 job cuts last month as it scales back production amid the economic slowdown.

During a visit to a transportation construction site just outside Washington in Springfield, Va., on Wednesday, Obama urged Congress to pass the bill.

The CEO, Jim Owens, just happens to be a member of this newly formed group. This story, originated by the AP, neither mentions this fact. Nor does the story go into detail about which jobs Caterpillar will rehire or why.

One would think that the decision to rehire thousands of people is one that any CEO would be able to explain in detail. What departments would these hires come from? Why would the stimulus create this hiring spree? None of these basic questions are asked or answered. All we have is a vague allusion to a major CEO making a pledge to rehire workers if the President's stimulus is passed. This CEO just happens to now be working for the very same President as he's making this pledge. No one asked how many hires Caterpillar would make if their corporate tax level were dropped.

Instead, we have the perception that major industry is ready to hire if only the stimulus is passed. The industry is represented by a CEO that now just happens to be working for the White House as well. I said that there would be inherent conflicts of interest in such a panel and this particular quote smells of that.


The story gets more intriguing.

But after the president left the event, Owens said the exact opposite.

Asked if the stimulus package would be able to stop the 22,000 layoffs or not, Owens said, "I think realistically no. The truth is we're going to have more layoffs before we start hiring again"

"It is going to take some time before that stimulus bill" means re-hiring, he said

In this case, it appears the President has some explaining to do. It appears the President has mischaracterized the thoughts of the CEO of Caterpillar.

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