Acton Institute Powerblog

The Age of Uncertainty

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If you continue to wonder why the U.S. economy, long after it has shown signs of life and has started to recover from the Great Recession in fits and starts, refuses to take off, here’s a pretty good answer: “Our entrepreneurs have lost faith in the federal government,” says Michael Franc.

He’s not the only one saying it, but he says it well. Uncertainty is the bane of commerce; thus it’s no mystery why businesses have stashed a record amount of cash aside rather than pouring it into new initiatives and new jobs. Franc writes:

This layered uncertainty looms as a Sword of Damocles over every business, every investor, and every head of household in America. It has suffocated the risk-taking, entrepreneurial spirit that has made America the exceptional nation in human history. For entrepreneurship hinges on intelligent risk-taking, not closing your eyes and plunging headfirst off the foggy cliff of government intervention and manipulation.

Kevin Schmiesing Kevin Schmiesing, Ph.D., is a research fellow for the research department at the Acton Institute. He is a frequent writer on Catholic social thought and economics, is the author of American Catholic Intellectuals, 1895-1955 (Edwin Mellen Press, 2002) and is most recently the author of Within the Market Strife: American Catholic Economic Thought from Rerum Novarum to Vatican II (Lexington Books, 2004). Dr. Schmiesing holds a Ph.D. in American history from the University of Pennsylvania, and a B.A. in history from Franciscan University ofSteubenville. Author of Within the Market Strife and American Catholic Intellectuals, 1895—1955 (2002), he serves as Book Review Editor for the Journal of Markets & Morality. He is also executive director of CatholicHistory.net.

Comments

  • This complaint accords quite closely with Hayek’s definition of the rule of law, which I admit is formulated rather differently than I would define the concept, but it most definitely has to do with continuity and reliability of positive law. Regulatory and legislative fickleness, unpredictability, and caprice has devastating economic (and cultural) consequences.

  • Roger McKinney

    Those who cry for more state intervention and regulation forget why Jimmy Carter started the ball of de-regulation rolling. We faced a similar situation in the late 70’s. No one would invest, except in real estate because regulation had strangled business. The economy had ground to a halt. We enjoyed high inflation and high unemployment at the same time. Of course at that time the Feds set the prices for trucking, rail, air transport, oil and gas prices and interest rates at banks. We haven’t returned to that level of regulation. Unfortunately we simply cannot learn from the past.

  • Events of the past two weeks in Congress indicate that the Administration remains unrepentant, even after its shellacking in November.

    This creates even more unease. With what manner of people are we dealing? Do they intend to rule by fiat, one way or another?
    Taxes? Regs? Fuel prices? Inflation?

    Our little business has changed course for 2011, to reduce risk exposure. All sorts of things we’d love to undertake, but prudence demands we proceed very cautiously.

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