Restrictions on business travel in a recession are no way to jump-start economic recovery

- Kathy E. Read WASHINGTON, D.C. — President Obama’s recent tongue-lashing of Wells Fargo for rewarding its overachievers with a Las Vegas trip after accepting federal bail-out dollars may be good politics, but it certainly qualifies as bad business — especially during a recession.

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John Stumpf, CEO of the nation’s second-biggest home lender, reacted to Mr. Obama’s scorn by quickly canceling the trip, but then took out a full-page ad in The New York Times defending incentive events that pay homage to a company’s very best employees Wells Fargo, he said, was compelled to cancel the event — which honored its top bankers, financial advisers, tellers and mortgage sales people — because of “misperceptions” created by media coverage of the president’s off-the-cuff remarks. The one-sided stories lead you to believe every employee recognition event “is a junket, a boondoggle, a waste,” or that they’re exclusively for highly-paid executives.” He called that perception “nonsense” and he’s entirely right. It’s a safe bet that the current economic slumber won’t affect the upper brass in the executive boardrooms of hotel and restaurant chains around the country. The ones that get hammered — the reservation clerks, maids, baggage handlers, waiters and tour guides — in short the little guys and gals that Mr. Obama’s stimulus package is supposed to put back to work. A former publisher myself and a longtime marketing executive with a wide variety of magazines, I can tell you from first-hand experience that incentive rewards to fun places like Vegas is one of the best ways of retaining your most valued employees during economic downturn. In fact, America’s best companies — the Exxon’s, the GE’s, the Microsoft’s — emerge from recessions in far better shape than their competitors because they don’t stint on business travel when times are tough. “Having our best marketing and sales people out hustling potential customers during business slowdowns was among our most successful strategies,” a former boss of mine at ABC Publishing once told me. “For one thing, we pretty much had the field to ourselves … while we didn’t bring in a lot of cash at the time, the fact that we were out there and visible was appreciated and won us hundreds of thousands of dollars of business when the economy recovered.” Indeed, with jet fuel prices low and hotels, meeting centers and restaurants offering cut-rate deals to business travelers now is one of the best times for companies — even ones forced to pocket federal aid — to rebuild their bottom lines by taking their show on the road. What goes for business is equally true for vacationers. After all, while the unemployment rate has increased by several percentage points, the overwhelming majority of Americans have jobs that are not in jeopardy. What better time to save money and take that Caribbean cruise or European tour you’ve always longed for. Half-price bargains abound and the dollar’s comeback makes it reasonably-valued against the Euro, the Canadian dollar and most other currencies. A couple of weeks of affordable vacationing this spring will recharge your batteries for the weeks ahead and have the salutary effect of getting away from the TV news shows that blare gloom and doom 24/7. The spending you do will help pump up the deflated economy — and probably a great deal more than the huge chunks of political pork in the just-passed $1.5-trillion stimulus package. You can be sure that the travel industry — always an accurate barometer of the nation’s financial health — will welcome you with open arms. The 737-billion a year industry has been hemorrhaging revenues and employees since the economy started south two years — shedding nearly 200,000 jobs last year. U.S. Commerce Department analysts predict a loss of 247,000 this year. Obama and his Democratic colleagues on Capitol Hill may find business travel an easy target, but it’s time they dispensed with the jibes — particularly when some of the cheap-shots they fired-off may boomerang back on them. After all, few business executives take as many junkets to the world’s leading resorts as members of Congress — and certainly not at taxpayer’s expense. And the day after President Obama castigated Wells Fargo for its business travel, he boarded Air Force One to visit sunny Florida to make the case for a stimulus package that already has been relabeled as “porkulus.” In a burst of the new, post-partisanship spirit, let’s stipulate that Obama and Congress must travel frequently to conduct “the people’s business. In the same candor, politicians should recognize that business travel — even ones that occasionally award productive employees — are absolutely necessary to conduct the nation’s business. The last thing a free America needs is federally-decreed travel restrictions on business travelers or vacationers. They didn’t work well in the old Soviet Union; they’d be an economic disaster in a free-market economy. Kathy E. Read is the former publisher of the Wilson Quarterly, the scholarly journal of the Woodrow Wilson International Center for Scholars. Her freelance articles have appeared in leading papers throughout the United States. Want to do more with Windows Live? Learn “10 hidden secrets” from Jamie. Learn Now

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