ABCDE Mostly sunny. 90/72 • Tomorrow: Evening storm. 86/72 • details, B6 SATURDAY, AUGUST 21, 2010
The real reason companies aren’t hiring CEOs opt for caution
as Americans keep their wallets closed
by Neil Irwin
chicago — Corporate profits are soar- ing. Companies are sitting on billions of dollars of cash. And still, they’ve yet to amp up hiring or make major invest- ments — the missing ingredients for a strong economic recovery. Many Democrats say the economy needs more stimulus. Business lobbyists and their Republican allies say it needs
less regulation and lower taxes. But here in the heartland of America, senior executives say neither side’s as- sessment fits. They blame their profound caution on their view that U.S. consumers are des- tined to disappoint for many years. As a result, they say, the economy is unlikely to see the kind of almost unbroken pros- perity of the quarter-century that preced- ed the financial crisis.
Across the industrial parks and office towers of the Chicago region, in a more than a dozen interviews, senior exec- utives said they see Americans for years ahead paying down debts incurred dur- ing the now-ended credit boom and ad- justing spending to match their often-
Corporate profits have bounced back . . . $2.0 trillion
1.66
reduced incomes. “It’s a different era,” said Daryl Dula-
ney, chief executive of Siemens Industry, which has 30,000 U.S. employees who make lighting systems for buildings and a wide range of other products. “Our hir- ing and investment decisions have to be prudent and reflect that.” Executives see little evidence that the economy is slipping back into recession. But they describe a business environ- ment in which sales come in fits and starts and their customers can’t predict what they will want to buy in the future. “In the past, our customers had more long-term vision on what they’re going to
economy continued on A9
0.5 1.0 1.5
0 Sept.’06 300 Quarterly Mar.’10
. . . but firms have been slow to hire Payroll jobs lost or added, in thousands
71
–900 –600 –300 0
Jan. ’09 1.57 –806 Monthly July ’10
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Afghans, U.S. aim to plug cash drain
TECHNOLOGY VS. CORRUPTION
Currency to be counted at the Kabul airport
by Greg Miller and Joshua Partlow
Alarmed by an exodus of money from Afghanistan, U.S. and Afghan author- ities are trying to constrict a flow of cash through the country’s main airport, be- lieved to be a major conduit for drug pro- ceeds and diverted foreign aid. The plan, part of an effort to monitor an outflow of money thought to exceed $1 billion a year, centers on the installa- tion of U.S.-developed currency counters at the Kabul airport. The devices would be used to record serial numbers on bills to determine whether money being car- ried out of the country has been si- phoned from aid funds flowing in, U.S. and Afghan officials said. Authorities also said they intend to
eliminate an arrangement that has al- lowed top government officials and oth- er well-connected Afghans to board planes — even while carrying suitcases packed with cash — without declaring the transfers or being searched. The measures represent the latest ef-
PHOTOS BY LINDA DAVIDSON/THE WASHINGTON POST John Williams works at a tire store in the Lower Ninth Ward, where business has slowed to a crawl since Katrina. A taco truck now operates out of the store’s parking lot. The changing face of New Orleans Five years after Hurricane Katrina, growth of city’s Latino population creates an uneasy cultural shift
by Ylan Q. Mui in new orleans
drawing racial lines in a town long de- fined by black and white. The change began just weeks after one
F
of the worst natural disasters in U.S. his- tory, which decimated homes, upended lives and drove a chunk of New Orleans’s black population to Baton Rouge, Hous- ton and other places. Although the overall number of Lati-
nos isn’t huge, the population continues to grow and has had an outsize impact on the culture of this proudly eccentric city and on how people here view their
With Latino workers helping rebuild New Orleans since the storm, the Hispanic population has grown. Meanwhile, the city’s black population has decreased.
HOW THE WELL WAS PLUGGED BP and the government: In it together until Macondo dies by Joel Achenbach
It was awkward from the start, this marriage of necessity between BP and the federal government. The government had ultimate authority; BP had the technol- ogy to plug the Macondo well. Something known as the National Contingency Plan called for a “unified command” in which government officials would issue orders and make pronouncements but BP would do the most crucial work and be the “re-
sponsible party.” People got confused. Who was in
charge, really? The well kept gushing; everyone looked bad. Reporters asked top officials why the government didn’t sim- ply take over. But we’re in charge already, the officials said. The fact is, the two sides formed a team, weird as that might be at times. That is true today, still, with the Macondo well looking rather dead — choked by a mile of cement — but not yet terminated to everyone’s satisfaction.
Government scientists and BP engi- neers have been devising a complex end- game. Before Macondo receives a conclu- sive dose of mud and cement at its base via a relief well, engineers want to take the old, damaged blowout preventer off the wellhead and replace it with a new blowout preventer. That will delay the “bottom kill” until after Labor Day, ac- cording to retired Coast Guard Adm. Thad Allen, the national incident com- mander.
BP engineers and the government sci- INSIDE THE WORLD
Mideast peace pact possible in a year, Clinton says President Obama renews diplomatic process with announcement of direct talks between Palestinians and Israelis to be held in Washington next month. A2
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STYLE Love among the Wookiees “Star Wars” convention-goers in California try to set off sparks during a speed-dating event. C1
Fazing Arizona? A boycott of the state over its immigration law illustrates the mixed success and unintended consequences of such efforts. C1
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Printed using recycled fiber SPORTS “In hindsight, the Z-man was ‘Dave.’ In the
movie, the president goes into a coma and an affable temp agency owner, who looks and talks just like the leader of the free world, is plopped down into the Oval Office.” — Mike Wise on Jim Zorn’s tenure as coach of the Redskins, as Zorn returns to Washington for a preseason game as quarterbacks coach of the Baltimore Ravens. D1
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The Washington Post Year 133, No. 259
CONTENTS© 2010
entists come from different cultures. In general, the engineers want to plunge ahead, and the scientists want to go slow- er.
“We helped them see that there are
dangers lurking here, and there and ev- erywhere,” Energy Secretary Steven Chu told The Washington Post. “The Depart- ment of Energy is in charge of the nuclear arsenal. . . . This is no messing around. In our culture, you want to make sure that
oil continued on A4
ive years after Hurricane Katri- na, the rebuilding of the Big Easy has created a new commu- nity of Latino immigrants in this famously insular city, re-
home town. More than three-quarters of the 1.1million residents in the New Or- leans area were born in the state, com- pared with just 30 percent of residents in the Washington region. Many locals still point to long-defunct businesses as land- marks. Recipes at some beloved restau- rants haven’t changed in 40 years. The emergence of Latinos in the emo- tionally and politically charged after- math of the storm sparked outcries from displaced residents who felt their jobs and their status in the city were being challenged. In one infamous news con- ference, Mayor C. Ray Nagin pledged to return New Orleans to a “chocolate city” after previously asking what he could do to keep the city from being “overrun by Mexican workers.” A documentary re- leased last week by Latino performance
new orleans continued on A5
fort to combat rampant corruption in Af- ghanistan with a combination of sophis- ticated U.S. technology and expanded enforcement. U.S. government agencies have also provided Afghan units with wiretap equipment that has been used to build corruption cases against senior government officials in Afghanistan, in- cluding a top national security adviser to President Hamid Karzai.
afghanistan continued on A7
Karzai agrees to support anti-corruption units. A7
A Blagojevich defense, funded by taxpayers like you?
by Jerry Markon Rod Blagojevich is broke, and U.S. tax-
payers could be on the hook. The former Illinois governor, facing a
retrial on corruption charges, has ex- hausted the $2.7million from his cam- paign treasury that funded his defense. That may force him to rely on federal tax- payers to pay his attorneys — unless he can land more reality television or media gigs, his advisers say. And some Chicagoans are not exactly thrilled at the prospect of paying to de- fend a disgraced politico who already had his day in court in a six-year in- vestigation that has cost millions and re- sulted in jurors deadlocking on 23 of 24 counts. On Tuesday, a federal jury con- victed Blagojevich of one count of lying to the FBI. Prosecutors are vowing a re- trial, which is common in high-profile federal cases with a deadlocked jury. “There is widespread resentment at
any tax dollars going to his defense,” said Andy Shaw, executive director of the Bet- ter Government Association, a Chicago watchdog group. “This state is $12 to $13 billion in the red. But the people of
blagojevich continued on A5
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