It isn’t rocket science, Mr. President
Seriously, by now just about anyone – to include the President’s panel of economic advisers – should be able to figure out why there are no jobs. The QoD below tells you why in so many words. Fareed Zakaria tells you why without mincing words:
The key to a sustainable recovery and robust economic growth is to get companies investing in America. So why are they reluctant, despite having mounds of cash? I put this question to a series of business leaders, all of whom were expansive on the topic yet did not want to be quoted by name, for fear of offending people in Washington.
Economic uncertainty was the primary cause of their caution. "We’ve just been through a tsunami and that produces caution," one told me. But in addition to economics, they kept talking about politics, about the uncertainty surrounding regulations and taxes. Some have even begun to speak out publicly. Jeffrey Immelt, chief executive of General Electric, complained Friday that government was not in sync with entrepreneurs. The Business Roundtable, which had supported the Obama administration, has begun to complain about the myriad laws and regulations being cooked up in Washington.
In other words, back off, get out of the freaking way, quit talking about massive new taxes and programs that deincentivize investment and employment, and let the 1.8 trillion in cash sitting on the sidelines in private hands do its job.
Wow, I wish I’d been saying that for, oh, 18 months or so.
It still astounds me, though, that I and others are still beating this drum this late into this economic disaster. As the title points out – this isn’t rocket science. Incentives work to increase behavior you want, disincentives work to discourage behavior you don’t want. If you talk about making it harder and more expensive to hire someone, you disincentivize hiring. Same with investment.
And that’s precisely what’s going on.
One CEO told me, "Almost every agency we deal with has announced some expansion of its authority, which naturally makes me concerned about what’s in store for us for the future." Another pointed out that between the health-care bill, financial reform and possibly cap-and-trade, his company had lawyers working day and night to figure out the implications of all these new regulations.
The immediate implication is they’re sitting on the sidelines, sitting on their cash instead of investing it, and they’re not hiring. And every reason you seen listed above has to do with government. Not down markets, or lack of demand, or whatever else one might want to blame on “capitalism”.
Of course, as an aside, I have little sympathy for many of these CEOs. They’ve learned you get what you vote for:
Most of the business leaders I spoke to had voted for Barack Obama. They still admire him. Those who had met him thought he was unusually smart. But all think he is, at his core, anti-business.
Yet these titans of industry and banking apparently weren’t astute enough, or didn’t want to look under the veneer this “smart” guy presented. Seems interesting to me that they never got it, but many of us out here in fly-over land saw through candidate Obama immediately.
Now they – and we – are paying a pretty high price for voting for someone they see as “anti-business” and apparently clueless about how to do what is necessary (or, perhaps, unwilling) to settle the markets, help establish a positive business climate and provide incentives for flowing that 1.8 trillion (it won’t cost the taxpayers a dime) into the economy and spur expansion and hiring.
They must be so pleased with the regime they’ve helped put into place, given their current positions on the sidelines trying to figure out how to stay in business.