The number one thing keeping our national economy – and thus all lesser economies – from growing as quickly as conditions would otherwise dictate – is the monumentally constipated and completely ineffective U.S. Congress. And you can take that to the bank.
Geoff Colvin, Fortune senior editor-at-large, has been talking to CEOs and economists. While hearing the usual bitching about regulations and taxes, the dialogue this time has been far overshadowed by one thing: uncertainty. In terms easily understood by economic dolts like me, the issue could be framed this way: “What the Hell’s going to happen tomorrow?”
Regulations and taxes have always been topics of discussion when people making large business decisions gather over their martinis. It used to be, no matter what changes and challenges there were in those two areas, business adjusted and life went on.
BUT – uncertainty has become the largest impediment to business – large and small. For example, the new healthcare law – regardless of what you think about it – is law. Republicans have vowed to repeal it. They can’t. But, as they keep trying, if you’ve got 50 to 100,000 employees in your business, how do you adjust your future planning? For what? Taken another step, if Republicans ever posed a serious legal challenge to the ACA, how long would Democrats tie the whole thing up in court? And to what outcome?
Then, there’s the “fiscal cliff.” With no congressional action to the contrary, there are those huge mandatory cuts in federal spending. Sequestration. Crippling cuts and possible tax increases to offset some of them. Despite how you feel personally about all that, remember the current crop of ideologues, naysayers and the ignorant will still control what Congress does – or doesn’t do. Wanna bet your farm on the outcome? Neither does General Motors. Or your neighborhood grocer.
Then, there’s the Federal Reserve. Its governing body holds the outlook that things economic are “more uncertain than they has been in the last 20 years” so no major actions have been taken. You get any sense of corporate direction out of that?
Life has always been a crap shoot. That’s just life. So, is all this something new? Yep, it is. Normally, as the government moved, changes it fostered affecting marketplace conditions could be anticipated and planned for. You knew what was coming and could adjust. Not now. Polarization in Congress has badly crippled oversight of federal agencies and their regulation-writing and enforcement. Congressional action that was supposed to happen last week – last month – or next month – has ceased. No new-from-the-ground-up federal budget for several decades is likely to be matched by no new-from-the-ground-up federal budgets for the next several years. Contracts expected by the private sector are still sitting on some bureaucrat’s desk. New programs languish in the congressional swamp because there are still no decisions on old ones.
And on and on and on and on.
Dealing with change is a constant in life or business. Dealing with uncertainty should not be. Or at least held to a minimum. Congress has brought uncertainty up to the maximum. Investors are not willing to risk hundreds of millions – or even billions – of dollars on new products, plants and larger workforces when even the Federal Reserve meets, complains about the uncertainty and goes home.
As I read editor Colvin’s story of all this in Fortune, I couldn’t help but ask myself, “Will we – and business – be in any better shape under a new Congress after the November election?” The answer for me – “not likely.”
If congressional majorities remain the same, a billion-dollar election will have changed nothing. No matter how you approach the issue of getting this country moving again, if the presidency and congressional majority are not in the same party, I don’t see anything but more gridlock and stagnation.
The overriding consideration at the polls next November is not so much who’s elected for the next several years. It’s more an issue of giving one person the keys to the White House and a majority of the same party in Congress. Anything short of that could create – and continue – the most uncertain political and business climates in our nation’s long history.
You think you’ve got uncertainty now? If we and our economy have to endure another two-four-six-eight-years of the current climate on Capitol Hill, there may not be much left to save. And you can take THAT to the bank.