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As Layoffs Rise, Stock Buybacks Consume Cash
by NELSON D. SCHWARTZ • Nov. 21, 2011

When Pfizer cut its research budget this year and laid off 1,100 employees, it was not because the company needed to save money.

In fact, the drug maker had so much cash left over, it decided to buy back an additional $5 billion worth of stock on top of the $4 billion already earmarked for repurchases in 2011 and beyond.

The moves, announced on the same day, might seem at odds with each other, but they represent an increasingly common pattern among American corporations, which are sitting on record amounts of cash but insist that growth opportunities are hard to find.

The result is that at a time when the nation is looking for ways to battle unemployment, big companies are creating fewer jobs, and critics say they are neglecting to lay the foundation for future growth by expanding into new businesses or building new plants.

What is more, share buybacks have not fulfilled their stated purpose of rewarding investors over the last decade, experts say. “It’s a symptom of a deeper problem, which is a lack of investment in the long term,” said William W. George, a Harvard Business School professor and former chief executive of Medtronic, a medical technology company. “If we’re not investing in research, innovation and entrepreneurship, we’re going to be a slow-growth country for a decade.”

Liberal critics insist the trend is another example of top corporate executives raking in an inordinate share of the nation’s wealth, even as their employees suffer.

“It’s an extraordinarily unimaginative way to use money,” said Robert Reich, a former secretary of labor under President Clinton who now teaches public policy at the University of California, Berkeley. After diving in the wake of the financial crisis, buybacks have made a remarkable comeback in recent years, with $445 billion authorized this year, the most since 2007, when repurchases peaked at $914 billion.

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Campbell Soup said on June 23 that it would buy back $1 billion in stock; five days later it said it would lay off 770 employees. A worker checked labels on Campbell's Chicken Noodle Soup cans at the company's plant in Sacramento.

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we have a current majority in the House who ran on the issue of "creating jobs" ..which they haven't done one damn thing about since they took office ..

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his standing among Democrats, and in particular among blue-collar Democrats, appears to have dropped, according to a new national survey.

According to a CNN/ORC International Poll released Wednesday, 44% of Americans say they approve of the job the president's doing in the White House, with 54% saying they disapprove of how Obama is handling his duties. The president's approval rating has hovered in the same mid-40's range since June in CNN surveys.

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26% of Democrats saying that they would prefer the party to nominate another Democrat for president next year, up from 18% in October.
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"The biggest change comes among white Democrats with no college education, a group typically considered the core of the party's blue-collar constituency," says CNN Polling Director Keating Holland. "Half of all white Democrats with no college education say they don't want President Obama heading their party's ticket next year."

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The CNN survey indicates that the president's signature piece of domestic legislation - last year's health care reform bill - remains unpopular

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they are neglecting to lay the foundation for future growth by expanding into new businesses or building new plants.

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I remember my first experience with the minimum wage. The minimum wage increased and my boss cut my hours.

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they ran on "job creation" ..but the moment they were sworn in they immediately adopted the "it's-not-the-gub'mints-job-to-create-jobs" meme ..