Not the time for profits?

Saturday, January 31, 2009 Comments

Yesterday, Obama said, "There will be time for them to make profits, and there will be time for them to get bonuses -- now is not that time." This was in reference to bank CEO's getting large bonuses after receiving bailout funds.

Now, personally I think that CEO's of failing banks should have been fired by their boards rather than bailed out by the government. That's what typically happens in any other company that is failing. No one is "too big to fail." In fact, success is often only possible with the lessons learned from failure.

Having said that though, I take issue with Obama's continual assaults on capitalism. Profits are not evil. Companies who make profits create jobs and create wealth for their shareholders, many of whom are average Americans who own shares through a 401(k).

Bonuses are not evil either, they offer incentive to meet and exceed performance goals, which in turn benefits the company. When companies do well, their employees, shareholders, and communities benefit.

Companies who are unprofitable will end up having to lay off employees and will eventually go out of business if they remain unprofitable. Our entire economy depends on having profitable businesses. So to say that "now is not the time for profits" makes absolutely no sense.

In fact, now more than ever we need businesses to find a way to make profits because that is the only way we can grow our economy and hope to pull out of this recession.

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