As a professional investment manager with over 30 years in the business, I believe that the economy is in the early stages of recovery and that the fundamentals are in place to support steady, sustainable economic growth for many years to come. I am, however, very alarmed that the actions and rhetoric from our elected officials in Washington are undermining these economic forces, and jeopardizing what I feel could be a period of robust performance for equity markets and our economy.
I see a lack of leadership in Washington, illustrated by the troubling message that is being communicated to financial markets and investors as a result of numerous recent initiatives proposed by those in office. I continue to hear many criticisms and see much blame directed at Wall Street, but have yet to see any truly effective and rational solutions offered by the House, Senate or White House to the economic and regulatory issues facing our nation. It seems that each day brings a new set of plans and proposals; many new initiatives announced following the President’s recent State of the Union address.
What we need right now is clarity from our elected officials. And I believe that clarity needs to be delivered in the form of targeted and effective regulatory, fiscal, and economic policy that will allow American business to play its crucial role in the economic recovery. What we don’t need are more confusing and punitive policies. For example, the bank tax to recoup TARP funds serves to punish and constrain the same institutions we need to participate in getting Main Street back on its feet. Adding to the anxiousness is the continuing debate on health care, which has dragged on for months with seemingly no end in sight, and has produced more questions than answers as to whether businesses will be able to continue to afford health care costs for their workers.
I truly believe that there is a broad based crisis of confidence among the private sector and all American people. And it is this crisis of confidence that is the biggest hurdle for our economy and financial markets. Faith in our elected officials is non-existent. No longer does the public (all of which are investors in some form or another) trust that those they have put in office have their best interest at heart, but rather only the simple, short-term goal of re-election.
As a small business owner myself, in a highly regulated industry, I am hesitant to make long range decisions as long as the following questions remain unanswered. Will my taxes rise significantly going forward? Will I be able to afford health care costs for my employees? Will government impose further regulation on my business and how will it affect my ability to operate profitably? Businesspeople must have the ground rules clearly defined, and know that impending reform will be constructive and beneficial without crippling their ability to grow, profit, and most importantly, hire. American ingenuity and risk-taking have always been the engine of American economic growth, and new rules must be developed within this framework instead of stifling it.
As a nation, I feel we are drifting. What we desperately need from Washington is a resolution of the health care debate in a way that does not impose unreasonable costs on small businesses, regulatory reform that eliminates redundancies and shortfalls without hampering our nation’s banks from contributing to economic growth, and fiscal policy that is targeted, effective and limited. I know that industry will lead economic recovery, as it has always done. The only question remaining is when Washington will stop playing political games, and instead take a supporting, constructive role, allowing economic recovery to happen.