The economy continues to show few signs of life. No matter what special tricks government employs to stimulate economic growth, unemployment remains high . Yet the Washington Post writes that "Corporate profits are soaring. Companies are sitting on billion of dollars of cash. And still, they've yet to amp up hiring or make major investments."
So, where are the jobs? Why aren't companies investing this money, hiring new workers, and ramping up production? That’s my subject in this week's syndicated column:
The problem today is that the economy is not being left alone. Instead, it is haunted by uncertainty on a hundred fronts. When rules are unintelligible and unpredictable, when new workers are potential threats because of Labor Department regulations, businesses have little confidence to hire. President Obama's vaunted legislative record not only left entrepreneurs with the burden of bigger government, it also makes it impossible for them to accurately estimate the new burden.
In at least three big areas -- health insurance, financial regulation and taxes -- no one can know what will happen.
New intrusive rules for health insurance are yet to be written, and those rules will affect hiring, since most health insurance is provided by employers.
Thanks to the new 2,300 page Dodd-Frank finance regulatory act, The Wall Street Journal reports, there will be "no fewer than 243 new formal rule-makings by 11 different federal agencies". These as-yet unknown rules will govern lending to business and other key financial activity.
The George W. Bush tax cuts might be allowed to expire. But maybe not. Social Security and Medicare are dangerously shaky. Will Congress raise the payroll tax? A "distinguished" deficit commission is meeting. What will it do? Recommend a value-added tax?
Who knows? But few employers will commit to a big investment with those clouds hanging over our heads.
Full column here.