Smith Faculty Opinion Article
The 30 Seconds Outlook
August 15, 2010
“Uncertainty about future taxes and regulation is enemy No. 1 of
economic growth.”
— Professor Allan H. Meltzer, Wall Street Journal, June 30, 2010
A summary review of Meltzer’s positions on Obama’s policies and programs
follows:
There are several negative implications of Obama’s policies---they are short
run, political, dedicated to his wants and those of his union supporters, and to
winning the next election. What is missing is an announced, fundamentally sound,
long term strategy and policies—in conjunction with appropriate experts—to begin
to solve the fiscal crisis facing federal and state budgets, but equally
important the tax and regulatory environments in which business will operate.
The long-term implications of Obama’s economic program for the economic
survival of the country have been ignored for short-term political gains and
failed policies. There is no believable program to improve the tomorrows of our
citizens and the economy. There is no “Shining City on the Hill.”
The problems facing the country, such as the Gulf crisis, are confronted on a
politically driven ad hoc basis without sound coordinated policies, plans, or
decisions to bring them to an end at least cost to citizens and the country.
A basic underlying problem that limits the country’s rebound from the crisis
is that it fails to understand that it is business, not the unions, that hire
the unemployed to build new plants and new technologies. So how to encourage
this? Obama must change from an ad hoc personally driven agenda to one that
creates a short- and long-term environment of reasonable certainty for
businesses with respect to taxes, regulation, deficits, and the future of the
overall economy.
Businesses are not going to invest in people or productive assets if their
perceived costs of capital are inflated beyond any reasonable hope of profitable
use of capital and people. Businesses cannot rationally invest in a current and
future environment that features too much politically based UNCERTAINTY.
John A. Haslem
