America’s chief executives are frustrated, and it’s beginning to take a serious toll on the economy and confidence. Yesterday, the Wall Street Journal pointed out a huge decline in business investment; pointing to the more recent durable goods report, capital expenditures declined 3.8% for the year versus 2014. There’s no doubt that businesses are being spooked by something, and they are playing their cards close to the vest and their wallets even closer.
The September-to-October 1.3% increase was a ray of hope, only for a single month. Yesterday, we heard dire warnings from Randall Stephenson, CEO of AT&T and current chairman of Business Roundtable. He states that American companies will continue to move their headquarters outside the United States, just as Pfizer and several other high-profile companies have already done.
Here are some of his comments:
“The Pfizer situation is just a continued reinforcement of how uncompetitive our tax system is in the United States,” Stephenson said in a conference call with reporters. Stephenson is also chairman of the Business Roundtable, a group that represents the largest U.S. companies. “It tells you that something is fundamentally wrong.”
“The administration puts Band-Aid fixes in place to try to discourage companies from doing this but it probably won’t work.”
“What we feel compelled to do is emphasize and communicate what the effect regulations have on business startups and investment.” “I can’t say whether there will be a change in approach.”
You can almost feel the frustration; even anger, from Randall Stephenson, which is reflective of so many business people. Instead of sympathy and logic, the administration has only layered on more taxes and an avalanche of regulations. With things such as climate change at the top of the agenda, the White House is willing to sacrifice all the capitalism instincts of America to right this wrong.
It’s a part of President Obama’s social justice initiative and why temperature targets go back prior to the Industrial Revolution.
What’s going on is that the President is at war with American success and is obsessed with the wrongs of yesteryear. He has a year to address them, and that means more ways to extract cash from businesses and American taxpayers. America’s CEOs know this already; they are bracing by holding onto as much cash as possible, even though this low borrowing environment would be perfect for building plants and increasing research and development.
Consumers are spending a lot more on debit instead of mindlessly charging everything they see; the key to getting this economy moving has to be corporations. For now, they are set on record cash.
Moreover, the last seven years haven’t been about socialism, as much as it’s been about bad America and the need to make amends. It’s costing the nation mightily, with respect to economic opportunities and prestige to military might and global respectability. It’s about any system and new foundations to replace the ones that propelled this upstart former colony of England. For the administration and others, this is our comeuppance.
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