The Washington DC Uncertainty Principle
"Sears Holdings shares the stated goal of many public officials of creating jobs. But, we don't believe that we need large government programs to generate these jobs. Public officials often fail to recognize the obstacles they place in the way of job creation. For example, over the past year proposal after proposal has been put forward to reform health care, reform the financial system, increase taxes, and add regulations, all with the intention of making the United States a better and stronger country.
"Yet, as a business, trying to understand which of these proposals might become law, what their impact might be on business prospects and competition, and what additional costs they might impose creates a great deal of uncertainty. It has led our management team and board (and I am sure those managements and boards of other companies) to spend inordinate time trying to determine which investments we should make, defer, or cancel and which jobs to create, maintain, or eliminate. The removal of this uncertainty and the constant drumbeat of new threats against various businesses would go a long way to allowing American entrepreneurial energy to be unleashed."
~"Eddie" Lampert, chairman of Sears Holdings, via the WSJ
MP: Corporate America is often criticized for being short-sighted and focusing on short-term profits only. But as Mr. Lampert reminds us, it's hard for businesses to focus on long-term goals, profits and investments in an atmosphere of uncertainty about future regulations, tax changes, legislation, and public policy.
9 Comments:
Hmmm I wonder if "Eddie" Lampert read March 5th Morning Bell from the Heritage Foundation's blog site?
In short, leave us alone you dopes so that we can restart the engine of the American economy!
K-Marts suck an awful lot. I'm not sure if I'd put much stock in anything their leadership has to say.
Also, unemployment insurance costs have soared, utilities will be taxed, and states are chewing on their own taxing schemes.
"Corporate America is often criticized for being short-sighted and focusing on short-term profits only"
How do explain the many television series where a corporation spends years chasing down someone, like the Pretender?
The Sears CEO isn't alone:
http://www.washingtonpost.com/wp-dyn/content/article/2010/03/01/AR2010030101767.html
[Trey Cook, the genial chief operating officer of Savannah Tire] wants health-care reform, but he does not want government to play a big role in the final product. "The things we heard about health care as a business owner are scary," he said. "That puts the brakes on decision making. You certainly aren't going to make any decisions to expand."
Cook said the best way to get business people like him to hire more workers is to have government lower taxes while easing up on mandates and regulations. "I know people laugh at the term 'trickle-down economics,' " he said. "But it works. I hire more people, they get to spend money, and so on."
As part owner of a small business, I can confirm that we are all in the same situation. It would be better for employment to pass a tax, fee, entiltlement whatever it is going to happen than it is for us to remain in constant limbo. At this point business can't plan for hiring because we have no idea what an employee is going to cost us. Once we know how much it will cost to hire someone we can make economic desions based on cost benefit analysis. As it is we can only see the benefit side with the cost side unknown.
I think Eddie Lampert's point is very true. No investor likes market uncertainty and no business like policy uncertainty. It is amazing that economy has developed to this day with all the chaos in policy making process.
Americans and American business in particular has taken freedom for granted. That freedom is under heavy attack, so it's about time everybody woke up. The Marxists are in charge. Fortunately, like diarrhea, they are a self-limiting disease. I cannot wait until the great purge in November.
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