Plenty of political banter goes on about what is economically good or bad in a given government policy or action. Setting this aside for a moment, it may be helpful to consider another important factor (though not necessarily the deciding factor): how much certainty does a specific policy or type of action offer?
In a recent interview of several CEOs by the Wall Street Journal, investment firm CEO Robert Reynolds addressed the effect uncertainty has on jobs. He mentioned how Washington’s turbulence on issues like the government shutdown, government debt, and the new healthcare laws would cut down on hiring because of the uncertain picture they paint of the future.
“‘The greatest stimulus in the economy is certainty and we haven’t had any of that,’ he said. ‘Are you going to hire people knowing that you won’t know what the cost is going to be?'”
With that in mind, could the government help create more jobs simply by nailing down a strategy on dealing with the debt problem or making sure new laws don’t unfold to spring unexpected surprises on businesses? Would we do better with simple, basic, predictable laws, so businesses know what rules to play by, instead of purportedly helpful but complicated laws?
>>Source: Feintzeig, Rachel. “The Greatest Stimulus is Certainty.” The Wall Street Journal. 19 November 2013.