Q: Although they now have record amounts of cash on their balance sheets, corporate executives have been reluctant to hire and invest, complaining loudly of a new "anti-business" attitude in Washington. Is this public criticism courageous business leadership or an abdication of personal and corporate responsibility?
In so many ways as a nation, unprecedented strategic challenges that in many respects stem from economic uncertainty cloud our future. Blame will not help us to solutions. We now face the prospect of sovereign defaults by a number of countries, defaults that could spin the world economy into a vicious downward spiral making 2009 and 2008 look like very good years. Our own accelerating accumulation of national debt threatens our ability to have the dollar continue as the international sovereign currency. But the clouds on the international horizon are not the only problem.
Our own economy struggles to regain part of the ground lost in the recent recession. The variance in opinions about the near term outlook has created a very unclear environment for investors. CEOs and their boards have difficulty assessing the likelihoods upon which good investments depend.
Economists seem polarized into two camps. One group argues strongly that we must not make the mistake made in the 1930's when the Democratic administration pulled back stimulus prematurely. They argue that decision prolonged the Depression. The other group maintains that to avoid an inflationary spiral and to alleviate the pressures on the economy of our exploding debt, we must pull back now. To add even greater confusion, both parties in the Congress act from ideologically locked positions that obviate the kind of compromise on which enlightened policy depends.
Action and inaction by a number of large financial institutions, Wall Street titans as well as Fannie Mae and Freddie Mac, watch dogs like the SEC, the responsible committees of Congress, and irresponsible use of debt by large numbers of private citizens brought us to the near melt down from which we are only now beginning to recover, however haltingly. Medium and small businesses did not create this mess. How can it be wise to blame them for maintaining a defensive crouch when the way ahead seems so problematic?
Mending our economy by bringing our national debt under control, enhancing productivity, and fostering growth, will require wisdom, discipline that sustains some sacrifice, and an ability to see problems clearly. If we cannot as a nation move away from ideologically stimulated tribal warfare and scapegoating, we are in for a very unpleasant future.
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