Uncertainty

I really hate political “one liners”. “job destroying”, “job creators”, Medicare killing” etc. My current least favorite is “uncertainty”. All economic woes, particularly unemployment, are attributed to the “uncertainty” faced by the “job creators”. Republicans have been using the term and more and more businessmen are jumping on board. We would hire people but for the regulatory and tax uncertainty.
During one of his early speeches Rick Perry talked about the great job he did in Texas creating an environment where businessmen could “risk their capital” to create wealth. (The Right attributes nobility to risk in business but never to sweat in labor. But that’s another topic) Getting back to risk of capitol and uncertainty. I particularly get riled when businessmen start whining about uncertainty. After all, a major justification for profit in business is the risk; the greater the risk the higher the potential for greater profit. A characteristic of a good businessman is the ability to manage risk.
Without uncertainty, where is the risk? What will be the price of tin? Will it be a rainy season or will we be faced with a major drought. What will the dollar trade for in Europe? There is always regulatory uncertainty. Stores selling wine worry about the impending lifting of restrictions that exist in some states on shipping wine by mail thus reducing their monopoly. Funeral parlors worry about removing restrictions on transporting corpses across state lines. My Father in Law passed away in Massachusetts and was to be buried in NY. A New York undertaker could not pick up his remains from his residence. By law, we had to get a local undertaker to take the body to the Connecticut border, transfer it to a hearse that took it to the NY border where finally a New York undertaker moved him to the place where he was to be prepared for the burial. (A secondary point I am trying to make is that not all regulation is anti business. Many, if not most, regulations are lobbied for by business trying to limit competition, the greatest detriment to profits.)
Anyway, risk, and by implication uncertainty, whatever its nature, is an inherent part of business and one of the factors that conservatives point to that distinguish business from labor. I don’t mean to suggest that risk is not a strong consideration in business decisions. The greatest is the risks of making a profit and since income taxes are a tax on profits they do not affect amount of profit but what portion of it will remain with the organization or individual to do with whatever. Though regulations do affect the cost and availability of supplies and labor, they are with some exception minor. Some notable exceptions are tighter immigration regulations will restrict the availability of cheap labor and there is indeed a cost for limiting pollution and increasing safety in the work place. I don’t believe there is any movement to increase regulation in the pollution or safety areas so the uncertainty may be in whether and to what degree the regulations will be eased not increased. That uncertainty, were it a real reason for economic slowdown, certainly could not be laid at the feet of liberals. There is always risk and there is always uncertainty in business but the emphasis of regulatory and tax uncertainty’s affect on employment is greatly overstated strictly for political reasons. The real uncertainty is when will the consumer get enough disposable income to start spending wildly again?