Eleven Months of Dithering?

So as the new year starts, where do we stand?  It seems like things are poised to stay about the same or get worse.  Nothing on the horizon suggests that the economy will start moving again on its own.  All of the long-term factors and components of a changed structural economy are in place and will remain in place for a long time, mimicking an economy in recession.  What is true this week was true last week.  And with Congress dithering on the payroll tax cut extension and undecided on continuing aid to the long-term unemployed, the signs are not encouraging.  Add to that the presidential campaign that officially starts tomorrow in Iowa and that will not be resolved for another 11 months – tempting businesses in and outside the United States to hold back from investing in their own growth.  Hard to make a new year’s resolution to remain optimistic.  However:That all being said, it seems that the smart business decision is not to wait to see how the election turns out but to explore how to manage around the fairly likely possibility that the American electorate is going to re-elect Barack Obama.  Were Obama facing credible opposition and had not Republicans demeaned HispanicLatinos and stoked the fires of hate and resentment against them, he would be in real trouble.  It would take another major economic reversal for the coalition that pushed Obama into the White House to dismantle.  Campaigns are about messaging, and the Obama campaign has not begun to fire back to the degree that it can and will to reinvent and re-energize the formula that elected him.

So are businesses – and for that matter entrepreneurs, large or small – going to squander a year?  The facts seem clear: The unemployment rate will stay above 8.5 percent and the economy will grow maybe 1.5 percent at most; the fights in Congress will continue; the problems in Europe most likely will fester.  Business needs to figure out how to manage around the political facts of life.

The Obama camp should do the same thing.  Half of its brain should work to win the campaign and the other half should ignore the Republican attack machine and work to present an ambitious plan that business can look to as the beginning of the second term: A program to redo the tax code; reorganize entitlements; attack waste in a real and meaningful way; allow businesses to repatriate money in foreign accounts effectively; begin to implement an infrastructure strategy; genuinely push for an expansion of international trade – in other words, give business – and the country – a sense of how we can move forward, starting now and into 2017.

The private sector and the Obama Administration are in the same boat: They must engage the reality that surrounds us. The administration’s announcement of the New Engagement should not be staged in a critical state like Ohio unless Obama wants his plan to be dismissed as strategic political electioneering.  Go to a Dallas or a Houston or, heck, Pierre, South Dakota – somewhere red – and talk to people in non-election-year language.

Tell the country that it is in trouble, and that we need to change basic parts of how we live, how we manage ourselves and how we spend.  The country is ready for straight and honest talk, and it is willing to sacrifice if it understands why and how to do what it must do.

Lead, dammit.  Now.

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