Businessmen Ambivalent About Clinton's Economics
DEMOCRATIC presidential nominee Bill Clinton bellows out "People First!" in his bid to American voters. If he is sent to Washington, he says, it will mean a victory in the fight for greater investments in the nation's educational system, its infrastructure, its health care, and worker training.
In a departure from past Democratic platforms that have underscored programs the country's citizens are considered entitled to, Clinton's plan stresses that government is powerless without the forceful participation of business.
Business interests from small entrepreneurs to large industrialists are anxious to see whether Arkansas Governor Clinton's deeds match his rhetoric, creating a leaner bureaucracy with more money for contracts in the private sector.
But the capacity of the federal government, almost $4 trillion in debt, to act alone is strictly limited. The Democratic platform rejects the idea that "we can hamstring business and tax and spend our way to prosperity."
The candidate proposes incentives to spur private investment, including a targeted investment tax credit, a permanent research-and-development tax credit, and a credit for investments in new enterprises.
That's good news for the US economy, business economists say, because without a revitalized commercial sector, two-thirds of economic activity - consumer spending - will remain flat. Spending ability lacking
"The consumer is tapped out," says David Wyss, chief financial economist of DRI/McGraw Hill, based in Lexington, Mass.
"The problem this year is not with the consumer's willingness to spend, it's their ability to spend," Mr. Wyss says. Consumers have been in retreat for the past two years, as the lingering recession has threatened their livelihoods and their savings.
"To spend more, consumers need jobs. And the only way that will happen is through increased business spending, which will create employment," Wyss says.
At present, business confidence is at a low ebb, says William MacReynolds, director of the Economic Policy Center at the United States Chamber of Commerce.
He says the most important barometer of economic activity is business borrowing, which is "increasing at an extremely low rate. It's now at 3 percent a year, and it has to reach at least 6 percent a year before we can say it's a healthy level."
Mr. MacReynolds says, "There's been no equivalent [of the poor business climate] since 1930. Asset values are plummeting and debt growth has been rapid."
Would a new Clinton administration reverse this trend? His "Invest in America" pledge to spend $50 billion a year over the next five years is "good news for business," says Wyss. The depressed construction industry will benefit from transportation and other infrastructure spending, he says.
"Fifty billion dollars is less than 1 percent of our gross national product; it's not enough to stimulate the economy much, but it will generate some activity," Wyss notes. Democrats' rhetoric appealing
With its new emphasis on economic growth, the Democratic Party's rhetoric is "more appealing to American business than it has been in a long time," says Michael Roush, chief Senate lobbyist for the Washington-based National Federation of Independent Businesses (NFIB).
Some 45 percent of the NFIB's 570,000 members are Republicans; the remaining 55 percent is split between Democrats and Independents.
Mr. Roush says he hopes "to get beneath the rhetoric of the Clinton campaign." He highlights some chief concerns of NFIB entrepreneurs.
"Our members want to know whether the candidates favor the Democrats' national health insurance plan of pay or play. The NFIB doesn't. Members want to know whether the candidates would require businesses to offer parental leave - we don't," Roush continues.
"Although 94 percent of small businesses already provide some sort of parental leave, they want the flexibility to arrange benefit packages themselves. Our members want to know whether the candidates support businesses' permanent replacement of striking workers - we do."
Businesses distrust the White House and Congress, Roush says. They fear the cost, bureaucracy, litigation and uncertainty of government regulations, he explains. After three Republican administrations, the business community is frustrated with failed economic policies, and wants a change, he adds.
Roush says that, given Clinton's pro-feminist stand, he may win the support of a greater number of businesswomen than either Bush or Perot.
"The fastest-growing segment of our business community is women-owned firms," Roush says. But he notes that business doesn't favor Clinton's running mate, US Sen. Albert Gore Jr. of Tennessee.
"His voting record in Congress is pretty abysmal vis-a-vis business," Roush says, and his environmental stance will translate into tough regulations on business and threaten to cut into its bottom line.