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Uncertainty so thick you can cut it with a knife

Aug 29, 2012
Carter Wood

Business Roundtable President John Engler joined Mike Huckabee's national radio program Tuesday discussing all the factors that create the uncertainty that is holding back the U.S. economy.

In the first segment, Engler followed Sen. Jim Inhofe (R-OK), who hit on energy, regulations and the perils of sequestration on national defense spending. Huckabee then went to BRT's Engler:

MIKE HUCKABEE: Business is not exactly flourishing right now, and let’s talk about the reasons why.

JOHN ENGLER: You’ve just heard one of them. There are a lot of businesses that are very much involved in a national security issues, and you think about that disinvestment there.

There’s been a lack of focus on infrastructure and needed investments there. And then you’ve got uncertainty everywhere you look, so thick you can cut it with a knife.

What’s the tax regime for the country? Everything is pretty much expired, or if it isn’t...40 provisions last December 31, probably another 40 or 60 this Dec. 31.

No certainty on the regulatory front, an EPA that's been reversed by courts on multiple occasions.

So lots and lots of uncertainty. And then this looming not just the fiscal cliff but the deficit itself, and the implications for that at a time when America's economic strength could come to the fore. There's significant weakness in Europe, you've seen China slow down. There's really an opportunity for the United States right now if we had a firm hand saying these are the decisions and these are policies.

In the second segment, former Arkansas Governor Huckabee -- a peer of then Michigan Governor Engler in the 1990s -- asked about Michigan's economy. How can Michigan pull itself out of the economic hole it's in, he queried.

Engler first praised the efforts of current Gov. Rick Snyder, elected in 2010, noted how unemployment had touched almost every family in Michigan, and added:

You’ve got to have economic growth. Let’s go to the basic principle here. Two percent growth in the country is not even a replacement rate for jobs. You need to get back to that 3-1/2, 4 percent growth, and oh, by the way, every percent of increases of GDP adds about a trillion dollars in revenues for the federal budget, so it’s also essential to the strategy of getting the nation’s finances straightened out.

I had a businessman say to me, “Look, one thing you’ve got to do, is if you’re struggling in business, you’ve got to have more sales. I’ve never found the best way to do that is raise my prices.” He was making a reference to the tax burdens that are being threatened from Washington today. You’ve got tax rates that area expiring, which means automatic tax increases. Not a good way to go given how weak the economy is.

A transcript of excerpts from the second segment is here. Audio of segment one is here, and segment two, here.

Engler conducted several other interviews on the economy, jobs and election issues on Tuesday in conjunction with the Republican National Convention:

Note: The original post misidentified Sen. Jim Inhofe.

Author

Senior Communications Advisor
Business Roundtable

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