What are America’s entrepreneurs wishing for from the government for Christmas and the New Year ahead?
The answers might surprise you. Most fellow company founders and job creators I’ve talked with don’t have "holding the line on personal income tax rates" at the top of their wish lists. They understand we’re in the midst of a fiscal crisis and know all
Americans will have to contribute to solve our fiscal challenges.
Instead, what they most want for Christmas is stability, predictability, and bipartisanship in the nation’s political climate. They’re desperate for an end to the brinksmanship and ideological posturing that passes for governance these days and want it to be replaced by compromise, agreement, and sensible decisive action going forward.
Sure, it’s a big wish – kind of the entrepreneur’s version of “All I want for Christmas is world peace, Santa.” But is it really too much to ask for?
Entrepreneurs are born risk-takers, but they like to take risks they can evaluate and at least partially control. What they don’t like, and what can quickly freeze them up, is political risk: the idea that an unpredictable and unaccountable government will either make arbitrary decisions or no decisions at all about key areas of the budget, the economy, and vital sectors like health care, education, and national defense.
Political risk is usually associated more closely with third world nations or perennially fiscally reckless basket case countries like Greece or Argentina than the US. The idea that we’re a week away from 2013 with no budget, no set tax rates, and no prospect of closing a massive deficit that inevitably will wreak havoc with our currency and our capital formation process is both disconcerting and terribly disheartening.
But it’s hard to see entrepreneurs getting what we’re wishing for. Washington has become a ridiculous and dysfunctional parody of itself. We ask Congress to pass a budget and the president to carry that budget out. None of that’s happening. Instead we have a national drama of pettiness, jealousy, and envy that makes Toddlers and Tiaras
-- from Discovery Communications’ TLC Network
(NASDAQ:DISCA) -- look dignified and intellectual. With just days to go until the fiscal cliff, all the key players are spending valuable time pointing fingers and posturing instead of hammering out solutions that would attract bipartisan support.
With no clear national economic policy or even overarching philosophy of government apparent, entrepreneurs have tended to become abnormally risk averse, putting off major investment decisions. And worse for our current situation, they’re burying any notion of adding to employee headcount.
There’s a world of corporate and investment fund cash stashed away in deposit and money market accounts earning almost precisely zero yield. Anything that could vaguely pass for a functioning federal government not headed over the fiscal cliff and capable of settling on a multi-year, fiscally sound direction for the country’s finances could probably coax a lot of that money off the sidelines and into new job-creating and innovation-spewing enterprises.
But nothing approaching that kind of rationally-behaving, moderately competent government is anywhere in sight. And so the uncertainty grows, and the job creation machine lies dead in the water. But this is a holiday wish list, so we might as well lay it all out while we’re at it.
We entrepreneurs want a president who will articulate a vision but will also be willing to negotiate based on the reality of today, like almost all his predecessors. We want a Congress that passes bills and budgets acceptable to the majority rather than those rammed through by one extreme over the other extreme’s objections. We want Congressional leaders more concerned about creating jobs than about protecting their own.
We want income tax rates that don’t sunset, regulatory frameworks that aren’t subject to whim, and an overall fiscal picture based on a hashed-out consensus that economic growth and innovation are always good for Americans no matter which party controls the White House or either house of Congress.
And there’s something else we want, too. We’ve been watching as the private sector has been completely remade by the innovations of information technology and the Internet. We want elected officials who’ll remake the government the same way – both for its own operations and for the industries and sectors it oversees, regulates, and funds.
We want a military that has a logistics operation that’s as relentlessly efficient and technology-driven as Amazon’s
(NASDAQ:AMZN) is. We want an education establishment that reconsiders whether the “wise man at the front of the room” model is the only way – or even the best way – to educate our kids, or whether new models like Coursera and Khan Academy might be pointing to a better, more powerful way.
We want the country’s largest, most out-of-control industry – health care – to become the province of innovators and visionaries rather than lobbyists and turf-protecting providers. We want agriculture that’s market and information driven rather than subsidy and central planning driven, and we want to know that efficiency and effectiveness will be the guiding factors for reform across all other sectors, too.
In short, we want the same change wave that has made private enterprise leaner and meaner allowed to wash over government now, too. And we want to know the overall rules and know they won’t be changed on us midway through the game.
We want America’s sails tuned to the great winds blowing through the global economy. If they are, we’ll go forward quickly. It sure beats the alternative.
Editor's note: Shawn D. Terry is Co-Founder & Managing Director of MHT Partners, a Dallas middle market investment bank.Shawn D. Terry is Co-Founder & Managing Director of MHT Partners, a Dallas middle market investment bank.
No positions in stocks mentioned.