Such a curious time this is. It is a time of treading water for so many of us.
Millions who toss around the idea of buying a house, keep tossing. Will prices fall further? They ask this. Will we keep our jobs? They ask this too. Although at least the worst of the layoffs seems to be behind most industries. Still, this is a time when the economy only creeps forward. Which makes it a time to peep over your shoulder. To check whether the grim job reaper lurks.
So many business managers and directors tread water. So many small business owners do too. What will be the tax rates next year and beyond? What regulations will be created the next two? What will our healthcare costs per employee be? What will our environmental costs become?
And, of course, what will the economy look like? And how will that affect our business? That is a question they perpetually ask. But in times like this they ask it more frequently. And they feel less confident in the answers that bubble up.
This stream of uncertainty flows from the torrent of uncertainty out of Europe. If Europe’s currency collapses, what collapses here? If the EU crumbles, what crumbles here? If Europe plunges into recession, will it suck our economy downward? If European banks drown, will their splashing douse ours? These days no bank is an island.
Perhaps the biggest ingredient in this soup of uncertainty is our political situation. We have a president who has positioned himself above the fray. He chastises the fighters, but never steps into the ring.
He and his advisors know his re-election is in question. And so he is campaigning and fundraising. And campaigning and fundraising. His political weakness has turned the upcoming year – and the last several months – into posture time. He proposes nothing of substance. Anything he does propose he routes through campaign managers. His every comment, it seems, is part of the campaign.
Meanwhile, the Congress is stalled on anything of significance. The Senate fails to come up with a budget. For 950 days, no budget. It is required by law to present a budget plan. The Senate leader Harry Reid has not overlooked this detail. He says it is “foolish” to present a budget.
By that he means he does not want voters to see what tax increases and healthcare rationing will be required in an honest budget.
And so investment money piles up on the sidelines. Investors wait for more hints of what lies ahead. What will the new Congress look like? Who will be in and who out? How beholden will how many representatives be to the Tea Party? Will someone oust Obama? If so, who? What policies will pass and which ones will be mangled?
And so …uncertainty as to what a future budget will look like. And what future taxes will be.
Our stock market reflects this uncertainty. Its moves come from the thinking of tens of millions of buyers and sellers. They feel uncertain. Their uncertainty has had their market treading water for some time. Up 300, down 300. Big companies hold back on new issues of their stock. They eye takeovers and mergers they might undertake. But they hesitate. They draw up plans for expansions here and abroad. And only expand abroad. For now.
When will this water treading end? When will we paddle forward again? When enough people feel they can predict how the elections will turn out. And that may come sooner than you think.
From Tom ... as in Morgan.
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