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Nov 02

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We need stability more than a jobs bill, a new tax system, or anything else

This morning, Jim Cramer, the current host of CNBC’s Mad Money and co-founder of TheStreet.com, has an interesting (and for him unusual) article regarding the state of our U.S. economy.  In “CEOs: Obama is bigger threat to success than Europe”, Cramer addresses what is ailing our American economy. The real issue is President Obama, and his psychological effect on those who are hiring (or not hiring, in this case) America’s unemployed.

It is important to know Jim Cramer is (or at least used to be) a Barack Obama supporter. He publicly endorsed Obama for President in the 2008 election, and self-described himself as an Obama-supporting Democrat.  In the current article, he is uncomplimentary of the Republicans.  He describes his politics as:

I have known many of these CEOs for many years, before they were CEOs. I know some of them because of my contacts in the Democratic Party, from when I was a substantial giver. They know my politics. I know theirs.”

The article describes that the best thing President Obama will do for the economy this year is be pre-occupied with getting reelected, so that he has no time left for changing anything.  Similarly, the best things the Republicans will do for the economy is to thwart anything that President Obama might otherwise have time to do that would change anything.  Here is a quote:

That said, they [American CEOs with whom Cramer has spoken] think they can do well without the president’s help. They just want him distracted, working on his reelection, not focusing on what they want to accomplish. They want him unfocused on business because almost every one of them that I speak to thinks that he couldn’t help even if he tried and he won’t anyway.

They want him out on the trail going to small businesses and solar factories and wind farms and geothermal sites and biomass facilities. They want him spending time at schools and with first responders and the military because it doesn’t hurt them or stop them from doing business. They want him shaking hands and kissing babies and not doing much else.

And they think they do well because there is enough confusion and worry about his reelection that the president may not have the time to get in their way. They think he might be too busy raising money and meeting with Democrats on the Hill to be sure the Republicans don’t get anywhere. …

They are not being cynical. They are accepting of the whole second-ratedness of it all. …. Most of them just want stability in taxes even at a higher level. They just want certainty from Washington, meaning the certainty that nothing can or will be accomplished.”

But, what I found most interesting is the concern that the CEOs have about the President himself, and how he is personally holding up businesses that might otherwise be growing the economy.

But if offered a chance for help from Washington, almost every one of these manufacturing CEOs I speak to, and I know I speak to a lot more of them than the president does, scoffs and says that help from Washington is inconceivable. Just out of the question. And not just because there is a limited amount of dollars for projects.

There is no help from Washington because the CEOs behind this turn believe that the president is ideologically committed to hurting them, either because their businesses involve some level of pollution — or a build out of a fossil fuel system in some way or another — or because labor is not going to do as well as capital in their successes. There is a “plague on your house” attitude from the White House rather than any encouragement, unless they are all green or the workers own more of the means of production, which, alas, isn’t really a true capitalist doctrine. …

They believe that the president does not think their successes translate into anything good for the country. … When I press them on this, asking them what makes the president so anti-business, they laugh. They say that the president’s agenda isn’t per se, out-loud, anti-business, it’s just anti-wealth and pro-labor and, most of all, pro-Green. There’s no room for anything else on the agenda.”

Europe is not the problem with our economy or stock market, despite all the headlines that want us to focus on the European sovereign debt situation. Here is Cramer’s commentary about his CEO discussions.

It’s funny, as much as we on Wall Street fret every day about Europe, mostly about the imminent collapse of Italy, these execs, and I ask them all, are far more worried about the president and the Democrats and the obstacles they place on success.

They think there is a deep-down anti-success bias. They think that the president is so anti-profit that he is the biggest hindrance to their successes, not Europe. They feel they can work around Europe, but they know, in their hearts, that the president does not want them to succeed.”

I am blessed in my consulting business to be able to speak to a lot of business people and business owners.  Cramer’s comments are exactly what I also hear from America’s business people and employers.  The advice to both political parties is simply “Just stop threatening me.  Don’t make any more changes.  Stop trying to help because you are just making it worse. ”

 

About the author

David Nolte

I am a founding principal of Fulcrum Inquiry, an accounting and economic consulting firm that performs damage analysis for commercial litigation, forensic accountings, financial investigations, and business valuations. I am a Certified Public Accountant (CPA) and an Accredited Senior Appraiser (ASA), as well as having other professional credentials. I regularly serve as an expert witness involving damages measurement. My litigation-oriented resume is on Fulcrum's website.

Permanent link to this article: http://betweenthenumbers.net/2011/11/we-need-stability-more-than-a-jobs-bill-a-new-tax-system-or-anything-else/

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