At a recent symposium, Intel boss Paul Otellini, a contributor to both parties, expressed concern about the “amount of variability in the system” created by the state of policy flux in healthcare, energy and tax policy. “It is very difficult to make a hiring decision,” he said. General Electric chief executive Jeffery Immelt, a strong supporter of Obama’s cap-and-trade proposal, added he would just like to “know what the rules are.”
All in all, a disturbing replay of the 1930s when FDR’s big changes left business reeling with uncertainty and confusion. The “devil you don’t know” and all that.
Small business is certainly with Big Business on this, particularly regarding the mercurial nature of healthcare reform. The substance of ObamaCare continues to morph daily — from the state of the public option to employer mandates to financing expanded coverage – as Senate leader Harry Reid scrounges for votes. On energy, the president will make big promises at Copenhagen even though cap-and-trade looks stillborn in the Senate.
As for financial reform, Senate banking committee chair Chris Dodd has proposed sweeping changes, while the Tim Geithner-Barney Frank version in the House seems beamed in from a universe where the credit crisis never happened. Compromise could prove elusive. Even Obama’s tax reform panel has delayed releasing its findings.
The thing you have to understand about business is that finding and hiring an employee is an expensive process. If this employee has to be laid off later because of government increasing tax rates or regulations, then that layoff poisons the atmosphere in the entire company. If you want businesses to feel comfortable about hiring, you need to convince them that you aren’t going to raise their taxes or expenses, unionize their work force, fine them for hurting the environment, or pass laws that encourage their employees to sue them for being offended, etc.
Legislative initiatives like card-check, health care mandates, cap-and-trade, ENDA, increased government spending, tariffs, “pay equity” laws, restrictions on executive salaries, capital gains tax hikes, etc., make businesses very risk-averse about hiring decisions. If Obama wants to attack businesses, these businesses may just leave the USA and set up shop elsewhere. But more likely they will just stay here and avoid hiring any new employees until the 2012 election.