What exactly is this “uncertainty” in everything business-related that Republicans keeping bemoaning? I honestly just don’t know. 
The trouble with the uncertain is that the moment you identify it, it disappears.
Short answer: A business is unsure about what the economy will do in the near future. Will it recover? Will it go into a double-dip recession? How much will the new health care plan cost me per employee in 2014?
Without knowing answers (or having a semblance of an idea) to these questions, it is difficult to know whether a business should expand or hire.
But isn’t this exactly the idea of risk?
Somewhat. But in an economy that is operating normally the risk that you take is whether your product will appeal to consumers, whether the competition does better than you, etc. Risk is more of an informed choice based on predictable odds that you can use to determine what course to take.
This economy is more like blind uncertainty where it is a wild gamble if you do something because nobody can quantify the level of risk you are taking. Should you hire five more people and expand? What the best case scenario? What’s the worst case?
In a regular economy you could get pretty valid models on each of those and know what is the prudent course. Today the best case is a shoulder shrug and hope for the best, and the worst case is bankruptcy.
“Uncertainty” is just an all-purpose political club for one party to use against the other. The Republicans have used it against Obama for a long time, and more recently he invoked it against them.
Nonsense. Obama is either blindly following his ideology or lying or stupid. He should be fully aware that he himself has created the “uncertainty”. That is because businesses believe that new regulations will probably force them to spend more money. This makes them reluctant to hire new employees when they don’t know if they will be able to afford them. This is one of the reasons the “stimulus” didn’t work and 2010’s “Recovery Summer” wasn’t. If the economy actually was recovering, there would be far less uncertainty.
This article summarizes it. http://www.nationalreview.com/corner/273459/how-turn-recovery-another-recession-victor-davis-hanson#
This is just common sense. But don’t take my word for it. Ask an actual businessman who is assuming the risk of the uncertainty and has to meet a payroll, pay his bills, keep the company from folding, and keep his job. Or Google. You’ll find a few out there who will tell you exactly that.
Uncertainty vs. risk - risk is measurable and using historical data and projections you can quantify it and range bound it with some level of precision. Uncertainty is unmeasured risk. In most cases you can turn uncertainty into measurable risks. But sometimes it is not possible. Political and regulatory risks in many cases is not measurable as the past is not a good predictor of the future.
To paraphrase Donald Rumsfeld, risks are known unknowns, and uncertainties are unknown unknowns.
It means Obama is black. Plain and simple.
My understanding is that it’s completely related to the stock market. The stock market is on a roller coaster ride and no one knows whether it’s a good time to buy or to sell.
That is the “uncertainty” of which they speak.
Not it at all. As jtgain 'splains upthread, the “uncertainty” is among business owners, not investors, and relates to whether or not this is a good time to grow their business. Part of that is whether there will be increased demand for their product/service in the future (i.e. what the economy will do), but a big part of it relates to the future tax/regulatory environment. If taxes are going to go up, this might be a bad time to expand. If employers will be required to provide health insurance for all of their employees, that may make expansion prohibitively expensive.
So companies continue to wring high productivity out of their small roster of employees, and they continue (in many cases) to sit on large quantities of cash because it’s completely unclear whether expansion (job creation) is a viable option right now.
I’m so glad you could clear up the uncertainty :rolleyes:
Kinda sorta. With uncertainty, you have…well, uncertainty. You can’t make educated guesses and predictions. With risk, you have known parameters and can actually plan and predict.
Example: I’m thinking about starting a business. I think I have identified a market niche for a specific kind of widget. Will it sell? Well, I’ve done market analysis and seen sales for similar products, and I’ve done surveys that indicate that there might be a demand for this widget. The risk is that the product won’t sell. I’ve analyzed the risk and I think that I’ve reduced the risk to a manageable level and I will make a profit.
However…if I open my company, I’ll need to hire about 25 people. I know what health insurance costs are now, but I have no frickin’ idea (and neither does anyone else) how much those costs are going to go up under Obamacare. All I know is that they will go up. That’s uncertainty. I can’t predict it and I can’t reduce it to manageable levels. As a result, I am reluctant to open the business and invest my capital, and therefore 25 new jobs are not created.
And that is why businesses, investors and entrepeneurs are sitting on capital and our job market is not growing.
And how does one grow a business without investors? I still stand by my claim that it’s market uncertainty that they’re talking about.
There is a risk model. Its a really simple calculation.
Bullshit example: If it rains more than ten days during this phase of construction (probability based on historical data = 10%) there will be an estimated $5M cost due to delays (delayed opening, contract penalty clauses - whatever they are). So rain has a risk value of $500k. You do this for as much as you can possibility identify and add them all up - and add that amount to your project budget as a contingency. Then, with all that in mind, you decide whether to move forward. By the time we are done, its possible that constructing our building isn’t worth the risks for the amount of money we expect to make.
But in order to do that, you need to be able to identify the risks and estimate their probability. When you don’t KNOW what is going to happen, then its harder to be certain you are making the right decision. That’s uncertainty. You can make a lot of money with “damn the torpedoes, full speed ahead.” But more often, you loose your shirt - its just too foggy to see.
Smaller companies and startups can take sometimes advantage of uncertainty. Their risk is already pretty high. Publicly traded companies and larger companies usually shouldn’t - shareholders get angry, stock prices go down, and sometimes you find yourself on the wrong end of shareholder litigation.
Oh, and I don’t think people are worried about health care costs. The uncertainty I’m hearing concerns about are a double dip recession, a reduction in available money. If my health care costs go up for my widget business, they’ll go up for my competitors widget business - and both our costs of goods will go up. (Unless my competitor makes his widgets in Mexico, in which case I’m already not competitive with U.S. labor rates, and I have a poor business model). But if I take out a loan for $500k for a widget manufacturing line, and then can’t meet my debt covenants because I can’t sell my widgets, I’ll be bankrupt.
Because the business owners are sitting on piles of cash. We’re not talking about startups that are cash-starved, we’re talking about established small businesses whose owners see that under the current business climate, it makes sense to grow their business by hiring new employees. They’ve got the cash to get things started, but there is too much uncertainty about whether the revenue stream will continue into the future after they’ve expanded.
What, they weren’t going up before Obama got into office? Oh, that’s right between 1999 and 2009 they went up 130%. I suppose up, up, up, up, up is pretty certain.