Employment: A Circular Problem - Capital Spending Decision-Making and Unemployment

By: Ian Campbell | Thu, Aug 2, 2012
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Why read: Because this problem is real, and is 'real important'.

Commentary: A friend of mine has a business that manufactures and supplies specialized industrial equipment where:

My friend recently told me that he is increasingly running into the following problem:

To the extent this is a fair summary of what I was told, clearly there is 'negative economic circularity' at work (no pun intended) here.

There is no good solution to this that I can think of in the current economic environment, where 'a job in the hand may be worth as much as five jobs in the bush'. Essentially, while such behavior on the part of plant personnel is understandable - who wants to go 'out on a limb' to have it break off and 'fall' - it is counterproductive to, and inconsistent with, economic stability and perhaps recovery.



Ian Campbell

Author: Ian Campbell

Ian R. Campbell, FCA, FCBV
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Through the Economic Straight Talk Newsletter Ian R. Campbell shares his perspective on the world economy, the financial markets, and natural resources. A recognized business valuation authority, he founded Toronto based Campbell Valuation Partners (1976), Stock Research Portal (2007) a source of resource companies market data and analytic tools, and Economic Straight Talk (2012). The CICBV* annually funds business valuation research in his name**. Contact him at icampbell@srddi.com.
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