The virulent backlash against companies that have accepted money from the government is understandable – to a point. The question is, have we sped past that point?
It’s reasonable to inveigh against AIG-style bonuses to executives who helped steer their companies into the ditch. It’s understandable to rail against companies for lavish perks, especially if those companies are getting taxpayer money.
But is the pitchfork-and-torch routine being employed a little too reflexively and too often?
A good example is the pillorying of Northern Trust Corp. for its sponsorship of a golf tournament last month at the Riviera Country Club in Pacific Palisades.
Northern Trust pointed out that the event raised $1.5 million this year for charity and $50 million over the years. More to the point, it used no government money for the event, and the tournament adds to its bottom line, thanks to the business contacts it makes and exposure it gets. Besides all that, Northern Trust made a profit last year and doesn’t even want the government money.
What is it that the complainers want, other than to string ’em up? Should companies stop their work for charities? Should they stop sponsoring marathons and bicycle races? Should they stop all advertising? Should they stop business lunch meetings unless it involves a brown bag and all travel unless it involves a Greyhound?
Sadly, a lot of businesses, having watched the way Northern Trust and some other companies have gotten beaten up in recent weeks, will conclude that, yes, they should stop all those expenses.
That’s the bad part.
After all, charities and marathons depend on corporate sponsorships. Media companies depend on advertisers and restaurants depend on business lunches. (By the way, corporate spending on those kinds of things is also called economic stimulus.)
Think, for a moment, of the effect on the travel and hospitality industry if companies have been cowed from most travel.
Business travel, conferences and corporate sponsorships of special events account for 15 percent of all U.S. travel, according to Gary Toebben, the chief executive of the Los Angeles Area Chamber of Commerce. Los Angeles is especially dependent on the meetings industry, which accounts for 250,000 jobs here, he said.
“In addition to the pure economic benefit of corporate travel, there are also the intangible products of these experiences,” Toebben wrote in his column on the chamber’s Web site. “Special events and conferences connect job creators with one another and facilitate networking that is at the heart of business growth and development.
“It’s those important connections that help drive the innovation that in turn drives our economy.”
Sure, wise oversight of taxpayer money is always a good thing.
But rushing to beat up companies for their travel, charity sponsorships and such will likely cause businesses to throttle back their expenditures on such things even more.
Chopping back on such things won’t be good for the companies. It won’t be good for the economy.
And that will be very costly indeed.