The NFL is finally putting expert referees back on the job. If only American businesses could do the same.
Unhappily, while the U.S. economy teeters on the edge of recession – again – the White House continues to spin out red tape and tax uncertainty that is casting a pall over employers. The results are in: Bad calls from the sidelines and rogue penalties are dampening growth and stifling hiring. America: We need a new coach!
The U.S. economy grew far less than expected in the second quarter, with expansion of 1.3 percent falling far short of the 1.7 percent median forecast gathered from economists. Consumer spending rose at an annual clip of only 1.5 percent, down from 2.4 percent in the prior quarter. Compounding disappointing consumer news, durable goods orders plummeted 14 percent in August and new home sales fell last month as well. Corporate profits are faltering and job growth continues muted. Some now put the odds of a recession at 50 percent.
What do we hear from those who might turn this situation around? Surveys just out from the National Federation of Independent Businesses (NFIB) and the National Association of Manufacturing report 69 percent - more than two-thirds- of small business owners and manufacturers say “President Obama’s Executive branch and regulatory policies have hurt American small businesses and manufacturers.” Worse – 55 percent say they would not start a business today “given what they know now and in the current environment.” The head of the NFIB said in a press release, “It’s time Washington started listening to America’s job creators.”
But President Obama isn’t listening. Despite his professed admiration for small business owners, Mr. Obama has shut actual employers out of his White House and out of his line of vision. Mitt Romney should remind him: Small business owners create more than sound bites, Mr. President; they also create jobs. For the record, so do large businesses – a group that Mr. Obama really does not care for. These are the companies, to hear Mr. Obama tell it, that fecklessly send jobs overseas and try to skirt taxes. By all accounts, Big Business does not embrace Mr. Obama either; they surely do not applaud the uncertainty that his administration has sowed.
A new survey just released from members of the Business Roundtable – an organization representing the CEOs of our largest companies, employing almost 16 million employees – shows business heads increasingly gloomy about sales, capital spending and hiring over the next six months. In fact, their pessimism is the worst on record since the third quarter of 2009. That’s saying something.
The recession officially ended in June 2009; we should be seeing a rebound in growth, and certainly in expectations, compared to that dark time. The shift is sharp. Last quarter, three quarters of the CEOs anticipated higher sales; today the figure is 58 percent. Whereas three months ago more than one third anticipated adding jobs in the U.S., now only 29 percent expect to do so. More concerning is that for the first time since 2009, more CEOs looks for their workforce to shrink than expand.
Why the downbeat forecast? Like the rest of us, CEOs are worried about “the approaching fiscal cliff and accompanying debates about the tax code, sequestration and the debt ceiling.” In other words, they fear that our political leaders won’t get the job done. President Obama will lay this concern off on Republicans in the House. Unfortunately for Mr. Obama, that charge no longer rings true. We know that he is as much to blame as House Speaker John Boehner for the collapse of last year’s “grand bargain” on the debt ceiling. We also know that during the two years that Mr. Obama controlled both houses of Congress, his priorities lay elsewhere.
In any event, Americans elected Mr. Obama to lead, and that he has not done. As Business Roundtable John Engler put it on CNBC, “It is sort of like the NFL: The players really don't know how to play the game if they don't know how it's going to be refereed."
Mr. Engler failed to mention: Better coaching could make all the difference.
