But government spending can only be a bridge to private-sector investment. 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.
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. Lobbyists have been delighted by all this activity. “[Obama] exaggerates our power, but he increases demand for our services,” superlobbyist Tony Podesta told the New York Times.
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. When I asked for specifics, they pointed to the fact that Obama has no business executives in his Cabinet, that he rarely consults with CEOs (except for photo ops), that he has almost no private-sector experience, that he’s made clear he thinks government and nonprofit work are superior to the private sector. It all added up to a profound sense of distrust.
I think this was one of the points that really stood out to me in Amity Shlaes’ book “The Forgotten Man”, a badly-written book on the Great Depression. She spoke at length about how the unpredictable interventionism of statists like Herbert Hoover and Franklin Delano Roosevelt caused businesses to get so flustered that they just stopped all entrepreneurial activity, including hiring, in order to wait the big-government socialists out. It ended up delaying the economic recovery.
And that’s what we see with Obama and his interventions into the free market today. Every dollar spend by the government costs jobs. Every regulation passed to control businesses costs jobs. Every line of anti-capitalist rhetoric costs jobs. Every Obama is doing to oppose businesses costs jobs. At some point, he’s going to realize that the election is over and he needs to stop scaring businesses in order to win the votes. Now is the time for tax cuts on businesses.