I have spoken to this many times in public. Those with the capacity to hire American workers”•small businesses as well as large, publicly traded or private”•are immobilized. Not because they lack entrepreneurial zeal or do not wish to grow; not because they can’t access cheap and available credit. Rather, they simply cannot budget or manage for the uncertainty of fiscal and regulatory policy. In an environment where they are already uncertain of potential growth in demand for their goods and services and have yet to see a significant pickup in top-line revenue, there is palpable angst surrounding the cost of doing business. According to my business contacts, the opera buffa of the debt ceiling negotiations compounded this uncertainty, leaving business decisionmakers frozen in their tracks….
…put yourself in the shoes of a business operator. On the revenue side, you have yet to see a robust recovery in demand; growing your top-line revenue is vexing. You have been driving profits or just maintaining your margins through cost reduction and achieving maximum operating efficiency. You have money in your pocket or a banker increasingly willing to give you credit if and when you decide to expand. But you have no idea where the government will be cutting back on spending, what measures will be taken on the taxation front and how all this will affect your cost structure or customer base. Your most likely reaction is to cross your arms, plant your feet and say: “Show me. I am not going to hire new workers or build a new plant until I have been shown what will come out of this agreement.” Moreover, you might now say to yourself, “I understand from the Federal Reserve that I don’t have to worry about the cost of borrowing for another two years. Given that I don’t know how I am going to be hit by whatever new initiatives the Congress will come up with, but I do know that credit will remain cheap through the next election, what incentive do I have to invest and expand now? Why shouldn’t I wait until the sky is clear?”
That’s a rather politically correct version of what businesses are looking at.
[i]what measures will be taken on the taxation front [/i]
In the business world that would read “what ADDITIONAL measures will be taken on the taxation front”, as any astute business person already knows that Obamacare is set to take a huge chunk of taxes out of the private sector after the 2012 elections.
And that same astute business person heard Obama’s “threat” that he will roll out a new economic plan when he gets back from vacation and no one in the real world expects that new plan to lack for new calls for taxation.
Add to that rampant skeptiscism that we will see any entitlement reform before 2013, and you just have a perfect storm for business folks to sit on their cash and try to survive the “recoverless” recovery.
No one in the real world expects that Obama’s plan to survive congress either.
We have reached an inflection point, a catastrophe in the mathematical sense. Nobody can predict what the results will be, especially not a clueless Marxist like Obama.
Anyone who has the sense to be a successful businessman realizes that the only options right now are to shelter any resources he has, keep his powder dry, and strive to survive until equilibrium on the other side. Then we can start putting the pieces back together. The “invisible hand” about which Keynes scoffed is wearing an iron gauntlet.
#2–The problem with Obamacare is the Congress, in the bill no one read, appropiated $1.5B to start writing regulations to enshrine it whether it is repealed or not. The only hope is for the next president to reverse EVERY regulation put out by this adminsitration and start over from scratch. Some of his regs may be good, but it is too dangerous to take a chance.
I must point out that the current congress has a very different complexion from the last, which can be held responsible for Obamacare. It is also likely that the supreme court ( who were so artfully humiliated by his-archness at the last SOU speech) will get to nullify at least a key portion of it. Depending on just how bad things get we could see further progress in the makeup of congress.
Unfortunately, things are so bad that we will need to overturn regulations going back to 1932; Or even 1913 (federal reserve), not just the health care abomination. The health care bill is just the cherry on the sundae.
I would say our only hope is not reliance on political reorganization, but on divine providence.
And the really sorry truth is that there doesn’t seem to be a single soul on either side of the aisle in either house of Congress that seems to be able to understand the consequences of the the stupid laws they make.
[i]that seems to be able to understand the consequences of the the stupid laws they make[/i]
Marie, I actually think they want us to believe that they don’t understand, because in a way it shields them from having to tell us the truth. Oh yes, Paul Ryan will tell us that the train wreck is coming and why, but John Bohener won’t. And neither will Harry Reid. And the President WANTS to transform America, into what he learned and internalized growing up while never having a real job: the socialist workers paradise run by elites who know better than us “common folk” how to spend the money WE earn.
I truly pray that God has not removed His hedge of protection around the America that was part of His providential plan for mankind; the truest expression of His natural laws. I pray that somehow, enough Americans repent of their ways and like Nineveh, we are spared the consequences of our sordid actions.
There is a faithful remnant in America; I pray it is powerful enough to save the country, or, resilient enough to pass the ideas of America on to future generations.