…are actively hurting our economy and our businesses—and so us. Here are two illustrations.
First, The Wall Street Journal:
Half of the nation’s 40 biggest publicly traded corporate spenders have announced plans to curtail capital expenditures this year or next, according to a review by The Wall Street Journal of securities filings and conference calls.
Nationwide, business investment in equipment and software—a measure of economic vitality in the corporate sector—stalled in the third quarter for the first time since early 2009. Corporate investment in new buildings has declined.
…business investment fell at a seasonally adjusted annual rate of 1.3%, according to a preliminary estimate from the Commerce Department. The latest drop included a decline in investment in structures, such as buildings, at a 4.4% annual rate. Investment in equipment and software stalled after growing at a roughly 5% annual pace in the first six months of the year.
It’s not just Big Business, though, the whole article from which the above excerpt came notwithstanding:
Of the four ways government can principally influence the economy for better or worse—fiscal policy, regulation, monetary policy, and trade—it appears that investors will continue to be forced to rely on monetary policy for help. Taxes will undoubtedly rise for some, and the one effective way the federal government could effectively ease more—regulatory policy—seems less likely now than ever before. The Wall Street law firm Davis Polk has created a new business of simply keeping track of the seemingly infinite number of rules that will need to be written to complete the process of financial regulation put into place by Dodd-Frank. Sadly, only 33% of the 398 required rulemakings have been finalized. (Only 265 rules to go!) Another 33% have yet to have even been proposed. Is it any wonder the Fed has had trouble turning excess reserves into effective monetary stimulus?
What are we doing as a company in light of this uncertainty? We’ve put on hold business expenses short of pencils, and any capital spending we were considering, including an update of the men’s bathroom some have begun to call “the latrine.” Instead of calling clients and focusing on our research, we are scheduling, probably in vain, conference calls (read fees) with our attorneys and accountants to try to create contingencies against potentially bad outcomes for us in the tax code. It has forced us to ask ourselves questions that seem at odds with economic growth, like, are there any unintended consequences of employing more than 50 people?
h/t for the second for The Spirit of Enterprise