We have all witnessed the highly partisan atmosphere in Washington for too many years now. It's hard to find any Democrats and Republicans who are willing to work together — to compromise — to approve budgets and pass legislation in the interests of the public they are paid to represent. That is unfortunate for America and for the business community.
A group of financial executives with the Association for Financial Professionals recently met in Las Vegas (Does anyone else find it ironic that financial executives would choose to meet in the world capital of gambling?) and talked about how the uncivil tone in Washington is hurting economic growth.
"It's time to move on," said Jim Kaitz, president and CEO of the AFP. "Corporations are saying quite clearly that they won't hire or expand in the United States until we find a way to debate in a civilized manner and find the best way to put our house in order."
The AFP released a poll of its members during the conference. Among its findings, the CFOs and other financial executives who responded to the survey overwhelmingly believe that resolving long-term fiscal and deficit issues will be critical to economic growth and that both sides of the political spectrum must be able to solve these issues by working together. Of those who responded, 78% believe a resolution of these issues must be achieved before sustained economic growth can occur.
In addition, 51% say that economic growth is contingent on a positive resolution to political gridlock and an improvement in the tone of political debate. In fact, the continued inability of the White House and Congress to reach a long-term consensus on critical issues affecting business and the economy has made companies more hesitant to invest for future growth, with half the executives saying the impasse has made them reluctant to hire and invest in the US.
The survey generated 1,136 responses from senior finance and treasury executives across a broad range of companies and industry sectors.
One of the issues that Washington needs to discuss that is not currently a major topic of conversation in the nation's capital is energy policy. If any single topic is critical to America's growth it is energy and how the country should respond to the remarkable turnaround our nation's energy producers have achieved through the development of shale reserves and tight oil and gas assets. The hydrocarbons have been there all along, but we've only recently learned how to extract them economically. As a result, the US is on the verge of becoming virtually energy independent within the decade, and we may even be able to exploit cheap gas in this country by exporting it in the form of LNG.
For various reasons, not the least of which is that we have become more energy efficient as a nation, the US is using less energy while producing more. That means prices are down here, although many other countries, in Asia and Europe for instance, are still paying a premium for natural gas. Therefore, it makes economic sense for US oil and gas companies to export part of their production as LNG and LPG in order to improve their bottom line.
Plans are well underway to do just that. However, constructing such export facilities is capital intensive and takes years to complete. It would help if the government would act quickly and decisively to approve permits for the processing and export of these products. Similarly, it would benefit the entire country if the government acted quickly to approve pipelines that move the crude oil, natural gas, and petroleum products from remote regions to market hubs.
Unfortunately, much of the discussion about energy has become politicized. Republicans generally favor business expansion and want these projects to move forward. Democrats typically want to look at the possible environmental impact before pressing ahead. Each side ends up challenging the other side's "facts."
One thing is certain: the energy equation is changing. One energy economist said recently that the US has a narrow "window" of about 10 to 15 years in which to take advantage of its position as a huge producer of natural gas. After that time, other nations around the world, including China, will have caught up with us and will have begun to exploit their own shale reserves, thus reducing the overseas market for American gas supplies.
It seems obvious what we need to do. But to do it, we need to challenge our officials to set aside their partisan differences over such crucial issues as energy. This can be accomplished through cooperation and reasoned dialogue rather than the rants and polemics that are all too common today. Is it asking too much for our elected representatives to be civil with one another?
