Yesterday Dallas Federal Reserve Bank President Richard Fisher talked on CNBC's "Squawk Box" about the economy and the type of recovery that we are experiencing. A link to the video appears at the end of this post. The ten-minute discussion was wide-ranging, but one point that Fisher made that I found interesting was that although there's an "enormous" amount of liquidity in corporate America -- companies have money to spend -- businesses are hesitant to put that money to work (e.g., by hiring more employees) because of uncertainty about what "social overhead" costs they will have to add to the calculation. Fisher seemed to be saying that until the debates and activity in DC regarding, for example, health care and "cap and trade", come to rest, businesses will not know what new costs they'll have to shoulder and therefore will not commit to investment or new hiring. He indicated that the lack of corporate spending (e.g., current unemployment levels) is not driven by concerns about the cost of money, but by the uncertainty about social overhead costs.
Worth a listen. Dallas Fed President Speaks - CNBC.com.
