Fiscal Cliff, New Regulations Fuel Business Uncertainty Says Federal Reserve President
Dallas Federal Reserve president Richard Fisher continues to speak out about policy uncertainty holding back the economy. In a speech to the Gainesville Area Chamber of Commerce he said:
Employers will not deploy the cheap and abundant capital on hand toward job creation while there is so much uncertainty surrounding final demand for the goods and services they sell. Or the uncertainty surrounding the fiscal cliff: Until they know what their taxes will be or how federal spending patterns that affect them and their customers will change (or, one might add, whether the nation will have a more rational regulatory structure), they will sit on their abundant money rather than spend it on unemployment-reducing expansion.
The lack of progress in fiscal cliff negotiations is the most-apparent source of policy uncertainty most in the news, but Fisher also notes regulation fears. The AP reports that more of them are being written:
For months, federal agencies and the White House have sidetracked dozens of major regulations that cover everything from power plant pollution to workplace safety to a crackdown on Wall Street.
The rules had been largely put on hold during the presidential campaign as the White House sought to quiet Republican charges that President Barack Obama was an overzealous regulator who is killing U.S. jobs.
But since the election, the Obama administration has quietly reopened the regulations pipeline.
With Washington letting us get closer and closer to going over the fiscal cliff while at the same time piling on new regulatory burdens, it’s no wonder companies are hesitant to hire and invest.