If American business-and the metals sector
especially-presented a Word of the Year award, 2010's winner
would be an easy and probably unanimous choice uncertainty.
Throughout the year at conferences and
roundtables, at corporate meetings and in countless interviews,
metal executives and analysts exclaimed the word repeatedly as
an explanation for why there wasn't more growth and also as a
sort of talisman to ward off becoming over-optimistic about
intermittent economic upswings.
The uncertainty, they said, was brought on by
President Obama and Democratic control of Congress, exemplified
by legislation dealing with taxes, energy, jobs, health care,
trade policy, global warming, unions and a host of other
issues. The line of reasoning had it that business could not,
or would not, move forward until it became clear what the new
rules were going to look like. Metal processing and
manufacturing were particularly susceptible to government
overreach and misguided policy, the story went.
So November's mid-term election results
should have all but eliminated uncertainty from a repeat
performance in 2011, right? Maybe not. An AMM survey
of what to expect in the coming year found that less than half
of respondents in the metals industry believe the new year will
bring more certainty with it.
The theory underpinning the concern over
uncertainty is that Democrats are bad for the interests of
business-or at least this President and this particular set of
Democrats-not just because they may be left of center, but also
because their particular policies would be unhealthy for the
economy and, ultimately, profits. Not knowing what they might
do or when they might do it was too much-or maybe not
enough-for metals industry business leaders to take into
account when making decisions.
Yet if uncertainty truly is a fear unto
itself, it wasn't just Democrats to blame. Much uncertainty was
created over the past two years by a recalcitrant Republican
opposition to anything the President proposed, especially in
the Senate. By not allowing a large number of key bills to even
come up for a vote, the climate became volatile. No one, not
even members of Congress or the President let alone business
leaders, could possibly have certainty under such
And this is why the elections have not
definitively resolved the issue. Republicans already have made
it clear they will continue to use their minority position in
the Senate to stop anything and everything Democratic. The
House, on the other hand, is pledging to take up and pass a
host of bills unlikely to survive a Senate fight or, if it
comes to it, a presidential veto.
In other words, gridlock is not just for your
morning commute anymore.
It is possible there will be some movement on
the expiring set of Bush tax cuts, and there has been some
early discussion about common ground on infrastructure
investment, but don't count on it. Beyond these two issues, the
signs are not encouraging. On the other hand, cap-and-trade
legislation is probably dead, as are a host of workplace
regulation issues-both topics that worried metals executives
this past year.
But something bigger is at play The next two
years threaten to become a fight not just over what government
policies might pass, but whether the government has any
business adopting policies at all. That would not be good for
the economy or business. No individual, no single business, no
particular industry and no general economy works and succeeds
in a vacuum. The market requires a structured society, a common
culture in which to grow and thrive. It requires investment and
workers and resources and clients and credit and a court system
and diplomacy and, yes, even safeguards.
In other words, government-which is not a
dirty word-provides general and overall certainty, even when
you disagree with the details of how to get there. Whichever
side of the political spectrum you are on, the truth is that if
one party or another denies this historical and experiential
truth, then the uncertainty of the past two years is going to
look like a golden age.
JOHN P. AMBROSIA