Marc Faber continues to hit the nail on the head. This time citing from a CNBC interviewe with 81-year-old Bernie Marcus, one of the founding partners of Home Depot:
“None of the small businessmen he talked to had any plans to hire staff, because they felt there was far too much uncertainty about what kinds of regulations and laws Congress and the administration would come up with next. All his business friends and customers had told him that Obamacare would be a complete disaster for them. (It imposes on small businesses enormous non-medical tax compliance. It will require them to mail IRS 1099 tax forms to every vendor from whom they make purchases of more than US$600 in a year, with duplicate forms going to the IRS. Obamacare will also fund 16,000 new IRS agents…)
Marcus was also very critical of the various financial bailouts (unlike the self-serving and hypocritical Charles Munger). But one point he made was particularly interesting. He said that the business people he talked to had access to credit; that banks were willing to lend them money! But they had no interest in borrowing funds given the current regulatory uncertainties.
The latter comment accords with the views of a couple of the better economists I’ve recently had the pleasure of talking to. Economists with classical or Austrian leanings seem to be the only ones living in the real world.