important point

Letters: Letters: The Reluctance to Invest

To the Editor:

Re “Deer in the Headlights, Financially Speaking” (Economic View, Oct. 9), in which Richard H. Thaler saw a paralysis in the reluctance of individuals and businesses to invest during these uncertain times:

The column did not discuss an important point in regard to the business side of the issue: Businesses hoard cash at their own peril. Unless they are among the very largest companies, they are essentially setting themselves up for leveraged buyouts by corporate raiders who will swoop in, relieve them of their cash and leave the bones for the vultures to pick over.

This doesn’t serve the best interests of stockholders, and it doesn’t bode well for millions of Americans who are employed by these companies. Nothing will stop the gold rush once it commences. I’m surprised it hasn’t started already. Eric P. Jorve

Roseville, Minn., Oct. 10

To the Editor:

Richard H. Thaler wants both businesses and individuals to drop their fears of investing in the future — even suggesting that Americans spend money now in home improvements instead of keeping savings in Treasuries or money market accounts. He also lamented a recent survey in which many companies said they were waiting for economic uncertainty to decline before deploying their huge piles of cash.

Has he dismissed a possibility that many planners, treasurers and wealthier households are considering? After the plunge in stock prices during the summer, everyone seems to be worried about long-term high unemployment, lower wages and benefit cuts. So it is possible, if not likely, that the general price level will fall, or at least not rise so much as to make a delay in investing look unwise.

There is a term for this possible state of affairs. It is not paralysis, and it is not inaction. It’s deflation. Savita A. SahayShort Hills, N.J., Oct. 9

The Art of Food Ads

To the Editor:

“Grilled Chicken, That Temperamental Star” (Oct. 9), which examined the practice of tabletop directing for food commercials, hit home with me.

After years working as a prop person for various masters of the art, I wrote a play called “Tabletop” that won the 2001 Drama Desk award for best ensemble performance.

Theater asks an audience to identify with characters who in some sense feel as if their lives are at stake. While one may question many aspects of television commercials, there’s no doubt about the skill and determination of the people who create them or their importance to capitalist culture.

As an idealistic assistant observes in my play: “In the 13th century, we’d be carving gargoyles on a Gothic cathedral. Well, we don’t make such valuable stuff anymore. But at least we make memorable images.”

Rob Ackerman

Manhattan, Oct. 9

Letters for Sunday Business may be sent to sunbiz@nytimes.com

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Economix: Hour by Hour, a Measure of Economic Stress

David McNew/Getty ImagesAn idled home construction site in Riverside, Calif., in 2009.

Ben S. Bernanke, the Federal Reserve chairman, highlighted a relatively obscure measure of economic health, “aggregate hours of production workers,” to make the important point that our economy is not very healthy at all.

The name pretty much explains the statistic: It measures the total number of hours that Americans are paid to work in production jobs, which make up 80 percent of all jobs.

Why not take the measure of all jobs? Well, the Bureau of Labor Statistics has done just that since 2006, and the numbers show a similar decline, but it has tracked production hours since 1964, allowing comparisons with other recessions.

The comparisons, as Mr. Bernanke noted Tuesday, are not good.

Paid hours “fell, remarkably, by nearly 10 percent from the beginning of the recent recession through October 2009,” he said. Moreover, after two years of renewed growth, paid hours remain about 6.5 percent below the prerecession peak.

“For comparison,” Mr. Bernanke continued, “the maximum decline in aggregate hours worked during the deep 1981-82 recession was less than 6 percent.”

No other recession since 1964 has produced a comparable decline in hours worked.

Bureau of Labor StatisticsIndex of aggregate weekly hours, production and nonsupervisory employees, total private industries. (2002=100; shaded areas indicate United States recessions.)

The hours-worked data also highlights a shortcoming of the work-force statistics that garner more public attention, in particular the unemployment rate.

Those statistics basically treat all jobs as equal. But some people are working part-time or a few hours less each week or their employer has stopped authorizing overtime. They have a job but they are working fewer hours and making less money.

A recent article by Steven Kroll, an economist for the Bureau of Labor Statistics, charts the distinction.

In some parts of the labor market, like professional and business services, job cuts almost entirely explain the decline in hours worked. In that area, 9.9 percent of employees lost their jobs, while the number of hours worked fell 10.1 percent.

In other areas, however, job losses significantly understate the decline in paid work. Construction jobs fell 21.5 percent; hours worked fell 24.5 percent. Manufacturing jobs fell 17.3 percent, while the number of hours worked fell 20.3 percent.

The data, Mr. Kroll wrote, “illustrates employers’ tendency to cut payroll employment rather than hours.” In other words, American companies generally choose to lay off one person rather than reducing two people to half-time work.

Because this is Germany week in the blogosphere, I’ll just close by noting that the plentiful body of research noting that German companies generally do the opposite, with the result that a deeper recession produced fewer job losses in that country.

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Letters: Letters: The Reluctance to Invest

Economix: Hour by Hour, a Measure of Economic Stress

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