Many on the left (including President Obama) are blaming corporations in particular and businessmen in general for sitting on hoards of cash and not investing and creating jobs. The idea is that these businesses are generating returns and should be hiring and investing. Of course, this is a political issue for the Obama Administration as the economy is the number one issue facing his presidency these days.
Winthrop Quigley recently took up the mantle for Obama in the Albuquerque Business Journal when he accused businessmen of “cowering behind piles of cash.” I felt this was an unfair criticism and responded with a letter to the editor:
Winthrop Quigley began his recent column on businesses and risk-taking with a lengthy and quite legitimate laundry list of reasons why businesses are leery to hire large numbers of new workers and make major investments. Then he calls those concerns “a crock” and makes a variety of statements that just don’t make sense.
For starters, he cites the courage of Intel in making new investments in 1980 during a time of high interest rates and economic uncertainty. Of course, Quigley fails to mention that both Carter and Reagan enacted a series of pro-growth tax and regulatory reforms that provided reason for optimism. The two men succeeded in killing stagflation, but the leadership to solve today’s more intractable problems of out-of-control spending and debt is nowhere to be found.
Quigley cites opportunities to privatize infrastructure – a great idea – and improve health care – impossible if Washington doesn’t dramatically alter or abolish ObamaCare – and questions where businesses are. Well, I don’t know any businessmen who don’t want to make money for themselves and their investors. If anything, the current bout of caution is simply a response to the heedless optimism of the last decade.
Threatening to force businesses to hire and spend is obviously the wrong thing to do. Government can do its part by providing political certainty on taxes and regulations and tackling the fiscal crisis facing the nation. Given these needed changes in Washington, I’m sure that this “crisis of confidence” will soon pass.
Paul J. Gessing
Rio Grande Foundation
PO Box 40336
Albuquerque, NM 87196