CEOs are to blame for slow growth

MSN Money's Anthony Mirhaydari explains why executives are at fault for the snail's pace recovery.

By MSN Money Partner Jun 26, 2013 1:12PM
Who's to blame for the current slow economic growth in the U.S.? The Bush and Obama administrations both responded to the Great Recession with fiscal stimulus measures. The Federal Reserve has spent trillions of dollars to spur growth. Why, then, is the recovery so slow? Blame CEOs, says MSN Money's Anthony Mirhaydari.

In the video below, Mirhaydari explains why a slow growing economy is the fault of CEOs' cautious business strategies and how current executives' attitudes will hurt American workers.
$100 bills growing in grass © REB Images, Blend Images, Getty ImagesThe problem begins, Mirhaydari says, with short-term rather than long-term strategic business decisions. In order to boost profits, executives prefer to cut many costs at the expense, not only of workers, but of their own companies too.

Mirhaydari explains that companies have the money to spend and invest in their businesses, only they choose not to. While corporate profitability and cash on the balance sheet has risen, capital investment has declined.

And this trickles down to the economy, eventually affecting the average American as well.

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13Comments
Jul 17, 2013 9:02AM
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It's hard to believe that Mr. Mirhaydari doesn't hit the reasons WHY companies are not investing...It's UNCERTAINTY on employee benefit costs, regulation and tax changes.  This impacting small businesses available net income for investment. They lost almost 15% of reinvestment cash with that money going to Uncle Sam.  Another issue is the drum beating by the administration and media on what bad people CEO's are.   I believe this is a bigger issue than we realize.  Support for small business has been nonexistent for 4 years and I don't see a change here.  In my business, capital investment has been down 40% since 2008 and has NOT recovered.  The profit we make is going to pay down debt, reducing our breakeven point (it has dropped over 50% since 2007) or investing to reduce labor since I expect our employee cost will be increasing with the health care act.  We have also had an increase in our compliance costs with more regulations.  I would rather make 15% less and have a business in 10 years than spend on new equipment hire people and not be able to pay my loans.  

Jun 26, 2013 4:48PM
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Blaming CEO's for playing it slow because of uncertainty over costs involved in Obamacare, an uncertain regulatory environment, a war on conventional energy sources, and an administration that is constantly telling them they are not paying "their fair share" is laughable. 

 

Mr. Mirhaydari would be doing EXACTLY the same were he running a large corporation. CEO's today have to make multi-million or billion dollar decisions daily that could be affected by White House policy and their apparent shakedowns of corporations that don't toe the party line.

 

From a business-friendly perspective, the current administration is the WORST in my memory, possibly the worst in our nation's history.

Jul 17, 2013 9:07AM
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This is the BIGGEST bunch of Malarky I have ever heard.  Either he knows nothing about business, or he is in someone's pocket being paid to say this CRAP!  If this is what MSN considers responsible journalism, then it is no wonder MSN is losing viewers right and left.  Our Federal government knows NOTHING about how Business works.  And everytime they stick their nose into Business, they MUCK IT UP!  Our Federal Government keeps creating mandates and rules that is making it too expensive to be in business.  IDIOT!  Any first year business student knows more than this twit.  Any person who has tried to run a small business knows more than this twit.  Try getting a job in the real world and let's see how long your theories last.  Better, go into business for yourself as a manufacturer and let's see how fast your tune changes!
Jun 26, 2013 1:34PM
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CEO's are not to blame for slow growth...

The anti-business POLICIES of Obama are.  CEO's just react to GOVERNMENT rules, regulations and laws.  Do you think Obamacare which greatly increases costs on employers will have no effect?    Sorry, but as government creates new burdens, business will adapt to these rules, by buying machine to replace labor, or moving the jobs and production overseas.

Do you think that the world's highest taxes have anything to do with it?   LOL...  If we had the world's lowest taxes, business would be flocking to come here.   

Don't blame CEO's, Blame the imbecile Obama and GOVERNMENT...
Jul 17, 2013 11:09AM
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Anthony, if you can keep your head when all about you are losing theirs... then maybe you haven't heard the news.
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I blame the trees for not blooming more bills.
Jun 26, 2013 1:34PM
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Funny, I thought slow growth is due to the High corporate tax rate in America.

You don't have to have a 6 year degree to understand this.

 

CEO'S want to grow their corporations and provide a yield to stockholders.

 

Cut the corporate tax rate for Corporations wanting to hire and Grow, and watch the Economy take off!

 

More profit for corporations, more Employee's. More Revenue generated for the IRS.

 

Better Economy.

Jul 17, 2013 8:48AM
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The lending world for individuals and corporations alike are not what they use to be, and probably never will.  While we all understand the circumstances behind the tightening of lending as it relates to the economic fall (2008/2009) it is also a contributing factor to the sluggish growth.  2010 was still very difficult in that aftermath.  Many corporations (the ones that actually survived) are now stabilizing.  Not all corporations are multi-billion dollar entities.  Financial lending institutions for businesses are looking at the profitability through that time period rather than the fact that they actually did survive and are able to get back on their feet.  All the banks what to see is the last few years financials rather than the financials over the longer period of time.  
Jul 19, 2013 4:26PM
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Working for a large fortune 500 company, our CEO said that "Obamacare" would have very little or no effect on our business or daily opperations. This video is an exact description of what we are going through every day here in our company. Squeezing today to appeal to shareholders, and not looking at what it is doing to our tomorrow!

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