On Topic: Parking the bus

I started developing my working hypothesis on all this probably in late 2008. Right around the same time my wife began what became her oft-repeated - and only partially ironic - sigh of “never let a good recession go to waste” each time she read about a company that fired large numbers of employees and called it “right-sizing.”

Let's call this hypothesis “asset hoarding.” Here's how it came about:

After things got bad, then worse, for the economy in the autumn of 2008, companies bolted their doors and hunkered down - quite literally in some cases, and certainly figuratively almost across the board.

One highly successful soccer coach, Jose Mourinho, these days with Real Madrid, calls this “parking the bus.” He directs the majority of his players to swarm close to the goal so as to not allow the opposing team a ghost of a chance to score.

It doesn't make for an attractive game - and it also does not permit his own team much opportunity to advance the final tally. But it is stubbornly effective.

The key difference, though, is Mourinho calls for this all-hands-to-the-rear play once his team is ahead. Businesses, to my thinking, were implementing this when they were behind.

Don't get me wrong: Caution made good sense for many companies as their customers stopped placing orders.

Why would you expand your business, build additional locations, take risks or, heaven forbid, bring on more workers when the landscape is shifting beneath your feet and you have no idea when it will settle? When everything you read and hear proclaims we're careening toward a New Normal, when getting and spending would be less, and expectations definitely would be bleaker?

It would be, we were told at the time by just about any economist going, a much smaller future.

Many businesses tightened their belts so much it was a wonder that the belts themselves survived at all.

And now, here we are. Has the storm passed?

One sign suggests, well, maybe. Banks are lending again.

For what seemed like a long time, they certainly were not.

After all, to pass newly mandated government stress tests, big financial institutions had to be able to show that, if another economic crisis sneaked up on us, they had the money to ride it out. They had to be too fat to fail, if you will.

But according to a March Federal Reserve report, loans to businesses indeed did grow - yes, grow - by 10 percent last year. (That was after lending plummeted some 19 percent in 2009 and 9 percent in 2010.)

Bank of America, JPMorgan Chase and Wells Fargo - the big Gang of Three - all claimed they shelled out more in loans. Wells Fargo, for example, said it loaned about 15 percent more to middle-market companies in 2011's fourth quarter compared to the same period the year before - some $265 billion.

But the catch is much of that loan increase, they told the Associated Press, was in lines of credit - not your traditional loans.

“It's not utilization,” JPMorgan Chase CEO Jamie Dimon told analysts in January. “It's new lines of credit for the most part.”

Companies - lots of them - are using that cash to “park the bus.”

Another aspect of asset hoarding can be seen in recruitment advertising.

Ads today indicate companies are interested only in interviewing job candidates who hold combined degrees in engineering, biology and marketing, have a strong comfort level with social media, can type 110-plus words a minute and can speak fluent German and/or Cantonese. And, when properly motivated, can leap tall buildings in a single bound.

One could conclude that businesses have become pretty stingy about spending for training for new hires.

Peter Cappelli of the University of Pennsylvania's Wharton School made a similar argument in the Wall Street Journal last October.

“With an abundance of workers to choose from, employers are demanding more of job candidates than ever before,” he wrote. “They want prospective workers to be able to fill a role right away, without any training or ramp-up time.”

Cappelli urged businesses to work even closer with schools to get graduates with the skills they desire, and to “bring back aspects of apprenticeships.”

“It's an important instance where company self-interest and societal interest just happen to coincide,” he concluded.

Now, the good professor didn't claim employers really didn't want to hire. And I could be completely batty about this whole asset-hoarding notion.

But sooner or later, we're all going to have to shake off the PTSD of the Great Recession and decide it's time to get on with the business of business.

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One of the first “On Topic” columns I wrote for Business 380, about a year ago, was about banking. Each week since then, I've tried to find something smart and/or funny to say about that particular edition's business theme - some weeks, I admit, more cogently than others.

Next week's edition will continue to carry my column, but the print format of Business 380 will change. We'll shift from a tabloid to a broadsheet, and our daily “Money” pages thereafter will be called “Business 380 Today.”

It's all good stuff. You'll see.