This rant below by Steve Wynn (of Las Vegas fame) is absolutely Back to the Future – as in 1930′s. It is more evidence that part of our problem today in fully recovering from the Great Recession is that we are again experiencing a “capital strike” due to the anti-growth, anti-capitalism policies of the current regime in Washington (not to mention those that have accreted from prior administrations, including Bush II). Here is part of it (with highlights from Business Insider):
I believe in Las Vegas. I think its best days are ahead of it. But I’m afraid to do anything in the current political environment in the United States. You watch television and see what’s going on on this debt ceiling issue. And what I consider to be a total lack of leadership from the President and nothing’s going to get fixed until the President himself steps up and wrangles both parties in Congress. But everybody is so political, so focused on holding their job for the next year that the discussion in Washington is nauseating.
And I’m saying it bluntly, that this administration is the greatest wet blanket to business, and progress and job creation in my lifetime. And I can prove it and I could spend the next 3 hours giving you examples of all of us in this market place that are frightened to death about all the new regulations, our healthcare costs escalate, regulations coming from left and right. A President that seems, that keeps using that word redistribution. Well, my customers and the companies that provide the vitality for the hospitality and restaurant industry, in the United States of America, they are frightened of this administration. And it makes you slow down and not invest your money. Everybody complains about how much money is on the side in America.
You bet and until we change the tempo and the conversation from Washington, it’s not going to change. And those of us who have business opportunities and the capital to do it are going to sit in fear of the President. And a lot of people don’t want to say that. They’ll say, God, don’t be attacking Obama. Well, this is Obama’s deal and it’s Obama that’s responsible for this fear in America.
The guy keeps making speeches about redistribution and maybe we ought to do something to businesses that don’t invest, their holding too much money. We haven’t heard that kind of talk except from pure socialists. Everybody’s afraid of the government and there’s no need soft peddling it, it’s the truth. It is the truth. And that’s true of Democratic businessman and Republican businessman, and I am a Democratic businessman and I support Harry Reid. I support Democrats and Republicans. And I’m telling you that the business community in this company is frightened to death of the weird political philosophy of the President of the United States. And until he’s gone, everybody’s going to be sitting on their thumbs.
Unfortunately, Wynn’s beautiful but depressing verbal screed reminds us that we aren’t learning from history. Robert Higgs some time ago laid out his compelling “regime uncertainty” thesis that part of the explanation for the long duration of the Great Depression is that capital sat on the sidelines fearing Washington’s attack on wealth and property. Why haven’t we learned? Heck, even FDR’s Treasury Secretary Henry Morgenthau understood the problem back then better than those in Washington today. According to Higgs, Morgenthau exclaimed at one 1937 Cabinet meeting, “What business wants to know is: are we headed toward Socialism or are we going to continue on a capitalist basis?”[1]
The clarity of Wynn’s own “strike” thesis is astounding. Equally so is that Wynn isn’t a Republican, a member of the Old Right, or a businessman irked by the NRA’s Blue Eagle. Instead, he is a self-proclaimed Harry Reid Democrat. It would be nice if businessmen – regardless of party – would unite courageously in one voice to defend the free-market system that allows for the kind of wealth creation we’ve seen in our history and that made America the envy of the world.* Instead, we have the world feeling the need to make remarks like this one from a Chinese executive in 2008:
“Right now we do not have the courage to invest in financial institutions because we do not know what problems they may have,” Mr. Lou said as part of a panel discussion on the second and final day of the Clinton Global Initiative conference [in Hong Kong]. . . . Mr. Lou said that the sheer pace of new initiatives and new rules issued by Western regulatory agencies was disconcerting and made it even harder for him to choose worthwhile investments. “If it is changing every week, how can you expect me to have confidence?” he asked. [2] (emphasis added)
* And yet I doubt it for reasons the Old Right clearly understood — some businessmen are nearly as much of the problem as the politicians in Washington.
[1] Quoted in Robert Higgs. “Regime Uncertainty in 1937 and 2008.” Independent Institute’s The Beacon Blog. December 6, 2008 http://blog.independent.org/2008/12/06/regime-uncertainty-in-1937-and-2008/
[2] Quoted in ibid.
Since you mention the previous Bush administration as well as the current Obama administration, I’m hoping that you can help me sort out just what you propose is occurring.
Certainly you’re not proposing that the “capital strike” dates back to the Bush administration. Bush and the previous Republican Congress were doing everything possible to transform a surplus into a deficit, but I don’t recall many businessowners and the like protesting then. Maybe the negative policies date to Bush and continue under Obama, but I don’t remember anyone in the business community noticing this until Obama.
More importantly, Wynn (unlike you) seems to be specifically anti-Obama. I’m seeing little evidence that there’s remorse over the actions of the Bush Administration from the business class. Remorse from Ron Paul, Tea Partiers, and the like doesn’t count.
Bush’s administration presided over the biggest increase in regulation in modern times. We’ll see where Obama ends up, but there was no “capital strike” against Bush for his big government ways.
I really have a hard time pinning all of this on the spending binge when it was the Chamber of Commerce and other business groups pushing for the stimulus in the first place. And they are the ones begging the Republicans to pass an increase in the debt ceiling, spending cuts be damned.
What exactly is so anti-capitalism from Washington either now or during the previous two years with a Democratic Congress? More specifically, what is so anti-capitalism that we haven’t experienced before? Anything you say about Obama and the Democrats can be said about Bush and the Republicans. And it was said about the Bush and the Republicans by this blog, Ron Paul, a few other libertarians, and . . . almost no one among the capitalist class that Wynn seems to be speaking for.
It seems most of the complaints are about regulation. I have yet to see evidence that Obama’s new regulations are increasing faster than Bush’s, outside of anecdotal claims that are practically meaningless.
Wynn seems like a strawman of an angry businessman who’s high on rhetoric but low on actual examples. Obama’s talking about redistribution? That seems like a clear exaggeration, and is Obama’s control over the economy so vast he can drive it into the ground just with speeches? Are you really proposing that mere rhetoric is enough to keep businesses on the sidelines?
P.S. I apologize if I seem overly hostile. I’m not trying to disagree with your observations, not entirely, I just feel like the political debate today contains a lot of folks who are Johnny-Come-Lately’s who are complaining about “big government” now but didn’t under Bush. And I suspect they stop complaining if if Romney is elected President next year, even if he continues most of the spending policies of Obama and Bush.
later in the call, he says this:
Yes, well, as a matter of fact, Tom, you’re quite correct. Coming to the United States is tougher than going almost anywhere else in the world. Homeland Security has — we seem to have been safe more or less, but so much of it is excessive and irrational, like patting down babies and old ladies and stuff like that. But it is very difficult. It’s more difficult today to get to the United States for people who’ve been coming here for years, for decades. Our customers that are big businessmen that have been coming to America for 10, 15, 20 years are asking us for help to relieve the bureaucratic congestion of government over regulation in this area. We’ve talked to Homeland Security. They are aware of the problem, so is Customs and Immigration and the State Department. And when we talk to any given individual in those organizations and those bureaucracies, they’re very sympathetic and they know the truth of the complaint. And they know the truth of the fact that these things are very often excessive and unnecessary. But yet, there seems to be a tremendous amount of inertia to move government in America, whether it’s the deficit management and coming to some kind of logical conclusion before August 2 or whatever it is, or whether it’s getting visas. Everybody has a clear understanding of the problem, but when it comes to our government, it seems to be getting more and more sclerotic, more and more inflexible by its own device, it keeps growing and growing and getting more and more onerous, more and more sluggish in its responses to real problems, and sluggish in its ability to take advantage of real opportunity. And it’s frustrating for me because I got a front row seat