Uncertainty is Currently a Certainty
Managing Editor, CNBC.com
There’s been some complaints about uncertainty lately.
“I think the major thing that we all need in business is certainty,” John Chambers said on CNBC’s “Closing Bell” as his company, Cisco Systems , cut its outlook for the year. “Businesses don't spend or react well when it's an uncertain environment, whether it's from the economy or the policy. If they understand what the issues are, then we will make decisions about where we grow our business, where we invest in resources, how much we give in dividends versus how much we do in share buyback, how much we do in acquisitions , et cetera. [It’s] the uncertainty that bothers my customers the most."
Of course, complaints like Chambers aren't necessarily new. For some time, businesses have whined that partisanship in Washington and the resulting back and forth on policy direction doesn't help them figure out future costs.
"The only people who say that uncertainty doesn't matter are in government or the academic world," said Mark Vitner, managing director and senior economist for Wells Fargo Securities, said on CNBC's "Squawk Box" recently. "Every single business person tells me that they are holding back on hiring and investment decisions because of so much uncertainty. They don't know how Europe is going to end, they don't know what's happening with health care costs, they don't know what's happening with taxes. They have to maintain their business."
So to fix American business and get it on the right path, all we have to do is end uncertainty, right?
And then there's the season. We're going to be voting on a new president soon. Each candidate has floated ideas for changing business taxation and treatment under the law. But for these ideas to come to pass, well, you got to have an election and then have Congress back them.
The fact is that as much as businesses crave certainty, this is not the year for it. In fact, you can be certain it will be uncertain.