The Economic Cost of Division: Why Political Unity is a Business Imperative
Today, our businesses wrestle with a challenge that transcends economic indicators and financial projections: political division. This division, evident among the population and within the halls of Congress, threatens the foundation of our economic stability and potential for growth.
As someone deeply invested in the intersection of commerce and public policy, I see an urgent need for unity and building bridges over divides that hamper our collective prosperity.
Uncertainty is the bane of business. Companies flourish under predictable conditions, where long-term planning and investment are encouraged by a stable regulatory and fiscal environment. However, the stark division of today brings with it an economic tug-of-war, making it challenging for us to commit to the investments that drive economic growth and job creation.
Put simply, political division manifests in a regulatory pendulum that swings wildly with the political winds. Companies are forced to navigate a labyrinth of changing regulations, draining resources that could otherwise be directed towards innovation, expansion, and workforce development and we are seeing the impacts in real time.
As members of our Congress continue to bicker and rely on ad hominem attacks rather than meaningful dialogue, critical policy meant to keep our nation competitive on a global scale remains stalled. Notably, recent changes in the tax code have mandated that businesses capitalize and amortize research and development (R&D) expenses over multiple years, marking a significant departure from the previous practice of allowing full deduction in the year of expenditure.
This shift, while impacting all businesses, particularly burdens small enterprises. However, the resulting legislative stall in addressing these challenges leaves businesses in a state of uncertainty, forcing them to navigate the risk associated with R&D expenditure decisions. Consequently, the vital realm of research and development, essential for our nation's progress, faces setbacks due to this impasse.
At the USHBC we champion the people and policies that support the American small business community. I believe America’s small business community should have a voice in our nation’s dialogue. We should be involved in shaping policy.
After all, it's America’s small business community that creates nearly 70% of net new jobs. We are the ones paying the taxes, creating the jobs and driving the economy that keep America moving forward. But in today’s Washington, if you don’t have a voice you don’t have a choice. And sadly America’s small business community is often unheard and we must change that.
Our businesses are facing hundreds of millions of dollars in tax increases, being forced to close their doors, and our nation’s innovation is grinding to a stand still. Instead of driving innovation through executive orders and mandates we ought to incentivize it with sound policy. In today’s climate, this is becoming increasingly impossible.
Consumer confidence often wavers in the face of political instability as well. In an economy predominantly driven by consumer spending, political theatrics and brinkmanship can lead to consumer reticence, impacting everything from retail sales to housing markets.
What is needed is a presidential style of leadership that prioritizes the national interest over partisan gains and seeks common ground, inspiring practical, forward-thinking, and stabilizing actions. It is essential for both political and business leaders to champion leadership that values negotiation, compromise, and unity as fundamental principles at the core of our politics and businesses.
As we move forward, it is critical for the business community to actively participate in shaping a political environment conducive to economic growth.
While Washington's elite engage in the antics of bickering and stonewalling, leaving the nation waiting as they go on break, it is the business owners who bear the weight of their political theater. We must call for policies that stabilize and predict regulatory frameworks, encourage investment, and foster a united national spirit.
Political harmony is inextricably linked to economic prosperity. As a nation, we must commit to bridging our divides, not for the sake of politics, but for the sustainability and growth of our economy.
Javier Palomarez is the President & CEO of the United States Hispanic Business Council (USHBC). The United States Hispanic Business Council (USHBC) is a voice for the Hispanic business community. A 501(c)6 non-profit organization, the USHBC focuses on improving access to contracting in the public and private sector, fair representation of Hispanics in business, media, and politics and ensuring Hispanics have a voice in the national dialogue. The USHBC is a nonpartisan organization. Follow @JPalomarez @myushbc