To say that these are a difficult times for the world economy is like saying that summer in Arizona can be a little on the warm side. Here are a few thoughts as I consider the rough seas we find ourselves in…
A Washington wake-up call I hope the downgrade by Standard and Poor’s of the U.S. credit rating from AAA to AA+ will serve as a loud wake-up call to Congress and the president to get their collective act together.
I don’t know about you, but I didn’t exactly walk away brimming with confidence from the months-long squabbling over whether and how to raise the debt ceiling that our politicians in Washington have the ability or the will to get serious about deficit reduction.
As our own Sen. John McCain said Sunday on Meet the Press about the S&P downgrade, “don’t shoot the messenger. Is there anybody that believes that S&P is wrong in their assessment of the fiscal situation of this country?”
I’m not going to bet the mortgage that the congressional supercommittee is going to come up with a package that will lower tax rates and broaden the tax base, overhaul entitlements, make spending cuts and get it all approved by a bickering Congress.
The silver lining? I am pleased to see that Sen. Jon Kyl has a spot on the committee. Sen. Kyl has never shied from tough policy decisions, and I know that he’ll force his colleagues to do the math and recognize that we can’t continue to max out the nation’s credit card.
Right track/wrong track Further to Sen. McCain’s point, a recent Reuters poll finds that 73 percent of Americans believe the country is on the wrong track. Forty seven percent believe the “worst is yet to come.”
But I guess we shouldn’t be shocked. We just got through the debt ceiling debacle, our credit rating was downgraded, we had a mini-crash of the stock market and, oh, by the way, unemployment is still north of nine percent.
The American economic psyche is fragile and it doesn’t help when it comes to job creation. The uncertainty that employers are feeling is real, and so capital will continue to sit on the sidelines.
Watch the defense cuts I have plenty of friends with whom I disagree on a host of policy issues. But where we usually agree is that the protection of the American people is a primary function of the U.S. government.
That’s not to say that the Defense Department should be immune to budget cuts, but if the defense cut triggers set out by the debt ceiling agreement come to pass, then there are not only implications for our nation’s security, but there also could be some serious jobs ramifications, especially here in Arizona.
We’ve already seen some Arizona defense companies go through layoffs in anticipation of reduced defense spending, but if the DOD is looking at a $500 billion cut, then the 37,000 manufacturing jobs in our state tied to the defense industry will be on shaky ground, along with their $85,000 average annual salaries.
Overregulation and trade David Walker, the former Comptroller General and head of the Government Accountability Office recently said, “We also have to look at regulatory reform. The pendulum has swung too far with regard to regulations in recent years, and we still don’t know what the regulations are going to be with regard to the Affordable Care Act.”
Don’t think that a call for less regulation is just a GOP talking point. Remember that it was Jimmy Carter of all people who kicked off the deregulation of the energy and airline sectors. And it was Bill Clinton who bucked his party’s traditional position and oversaw the implementation of NAFTA.
With the National Labor Relations Board having gone rogue in a seemingly never-ending quest to thwart job creation and an Environmental Protection Agency always ready with a new rule or regulation, is it any wonder that investors are reluctant to bet on the U.S.?
This president should take a page from Gov. Jan Brewer, who has thrown up the stop sign on red tape, and get behind a federal regulatory moratorium and show some real leadership in getting pending trade deals with Korea, Panama and Colombia out of neutral. And he should clamp down on the NLRB’s job-killing agenda.
Such moves would send a message to employers that he wants to get out of their way and that he’s committed to opening up new markets.
Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce and Industry