We are living in remarkably uncertain times. Middle class families have been facing stagnant wages and declining job prospects for decades, but since the collapse of financial markets and the housing bubble crash in the last years of the presidency of George W. Bush, middle class families are uncertain about keeping their homes and uncertain about keeping their jobs. Older workers worry that if they lose their job now it may be their last one, and younger workers graduating from college worry they may not find a first job for which they are qualified and be able to hold on to a middle-class lifestyle that is as good as that of their parents.
So if you don’t think about it very hard, there is real brilliance to the ubiquitous Republican talking point about businesses needing certainty in order to put Americans back to work. Each time it is delivered, and it is delivered a lot, it connects three ideas: 1) the economic uncertainty that is dominating the public’s landscape 2) the assertion that it is the policies of President Barack Obama that is causing the uncertainty, and 3) the promise that if the uncertainty could be removed business leaders would create more jobs.
Putting logic aside, it is worth noting the powerful emotional appeal of this argument and the connection it makes with the public’s uncertainty about the economy and the public’s desire for more middle class jobs. The line connecting “uncertainty” to Obama’s policies is far more tenuous, but Republicans hope it can be fortified through mere repetition. So when logic is not put aside, the flaws in the argument are glaring. In the current economy, it requires a pretty long leap of logic to believe business leaders are more uncertain about the possibility that they might face new worker safety regulations than they are worried about whether they will have customers with enough money and credit to buy their products.
“Certainty” Is A Myth
The emotional rather than logical flaw in the “certainty” argument is that Americans will not place their confidence in Republicans who consort with a class of “job creators” who are so lacking in confidence. The myth behind this false argument is that there is such a thing as certainty in business. Have business leaders truly become so timid and fearful that they need or expect certainty before hiring new staff or making business investment decisions, or have they decided that it is easier in an environment of uncertainty (what timid rather than risk taking business leaders actually do), to call a congressman to complain about regulations.
“Certainty on regulations, certainty on taxes, on energy costs.”
Representative Phil Roe (R-TN) introduced us to the businessmen he has been listening to writing in the Daily Caller back in February, “What I hear businesses saying clear as day is that when they are uncertain about the action of government in areas of regulation and tax reform, it creates a barrier to job creation.” In a single sentence he links 1) uncertainty, 2) tax and regulatory policy, and 3) job creation — as easy as 1, 2, 3.
We could say Roe was clever, but really there is no way to know where these Republican talking point mantras begin when there are so many politicians and commentators making the same argument using the very same set of words. Perhaps the “certainty” line of attack started with House Budget Committee Chair, Paul Ryan (R-WI), who just last week returned to the theme in an NPR interview saying, “All businesses are coming to Congress. They want certainty… Congress has already proven not to provide much boost [in consumer demand], but more importantly, it actually comes at the expense of giving businesses certainty – certainty on regulations, certainty on taxes, on energy costs.”
The Promise of Certainty
Can politicians really promise to bring certainty to the marketplace, and then deliver on that promise? Mitt Romney seems to be making just such a promise on his webpage for Job Creation, where he blames the poor economy on the policies of “President Obama [who] has neglected the fundamental tasks of creating jobs and growing our economy. Instead, he’s focused his efforts on an anti-jobs, anti-growth agenda that has significantly expanded the role of the federal government. His actions have only succeeded in creating more of the uncertainty and obstacles to investment that threaten the economic vitality of our nation.”
Then further down the page he makes this campaign promise: “We must cut federal spending to free up resources for productive investment, and curtail ever-expanding federal authority to provide businesses with the certainty and stability they need to make those investments.”
If you correctly understand that voters are far more motivated by emotions than logic, then this is a powerful line of argumentation. The various writers and speakers of these talking points connect with voters deep feelings of fear, disappointment, and uncertainty and their desire to see a return to job security and prosperity. And then through repetition, repetition, more repetition, and saying the same thing over again, they hope to tie these feelings and desires to Obama’s regulatory policies and business taxes (even though they are lower, not higher). Like “Listerine kills the germs that cause bad breath” it gains persuasiveness through repetition.
Business Uncertainty is About Consumer Demand not Regulations
Of course, the logical flaws of this argument can be illuminated by pointing the real cause of business uncertainty in 2011 which is lack of consumer demand, not government regulations. The “job creators” are not going to have certainty when the job doers, who are also known as customers to other business, are facing the uncertainty of whether they will have a job to do or a home to live in. And after uncertain demand, businesses large, medium, and small face uncertain access to credit after a financial crisis that was caused by under-regulation not over-regulation of financial markets. With a looming threat of a possible new financial crisis caused by European sovereign debt, only an out of touch Republican politician could suggest that the uncertainty at the top of American business leader’s minds is uncertainty about tax and regulatory policy.
But again, logic does not win political battles – if only. Progressives put too much faith in logic, and time and time again we find ourselves frustrated that Republicans are beating us in the non-logical, reptilian centers of the brain. The good news is the certainty argument is even more vulnerable in the illogical spheres of the brain than it is in the cerebral cortex. The Republicans are talking to the wrong business owners. They are not talking to real American businesswomen and businessmen, they are talking to imaginary business-mice.
Are American Business Leaders Warriors or Worriers?
Mort Zuckerman writes in the Financial Times, “The [industrialized world’s] fear is that a double-dip, or worse, is now upon us. Those who might help us escape are now being held back by the anti-business policies of President Barack Obama” and that this is being made worse by Obama’s recent “resort to divisive populism – laying the blame on ‘fat cats’ and pillorying the president’s favourite villains – ‘millionaires and billionaires’ – [which] is exactly the wrong approach. It seeds the suspicion that the administration is more interested in campaigning and undermines the confidence that business needs if it is to invest in the face of new regulations, healthcare costs and an increased bureaucracy. Businesses sense that the administration no longer understands how this perceived hostility saps the animal spirits required for taking risks on expansions and start-ups.”
He is saying businesses are not hiring because Barack Obama is calling them names: “fat cats” which is “sapping their animal spirit.” We should ask him what animal spirits do they have now. Is he is talking to the Big Dawgs, or the fraidy cats? Perhaps Zuckerman does pal around with timid New York city slickers whose feelings have been hurt by Obama’s speeches, but the rest of America knows it is time to cowboy up.
Who are these businessmen Republicans are talking to that require certainty before making investment decisions? Are business schools still teaching courses in how to manage risk and make decisions despite uncertainty, or do they now just give MBAs instructions to call their congressional representatives and order up some certainty? Was there a time, presumably before Barack Obama was sworn in as President, when business leaders had the certainty they now lack?
No. Real business leaders in the real world know no politician can promise them certainty. And the rest of America knows their uncertainty in employment, homeownership, being able to afford a college education and get a good job afterwards, and pay off their student loan and other debts can also not be magically or rhetorically washed away. We are living in remarkably uncertain times.