Dallas Business Journal by Bill Hethcock, Staff Writer
I asked North Texas business leaders in a variety of industries for their take on the election results, and got back a wave of responses. Some fear we’re headed over the much-maligned “fiscal cliff” and smack into another recession. Others believe, as President Obama reassured the nation last night, that the best is yet to come.
Can’t we just get along? Naw. That would be boring.
Here’s what some of the experts say about where we’re headed:
ARCHITECTURE AND CONSTRUCTION
“Reducing our debt should be a priority. That will improve the design and construction industry. If the president doesn’t reduce expenses vs. increasing taxes, it will dampen the recovery. I believe if we see Congress and the president working together to solve our nation’s problems, we will see growth. If not, we will return to another recession.”
–H. Ralph Hawkins, chairman & CEO, HKS Inc.
“My fear is that with a Democratic Senate, a Republican House and a Democratic president we will continue to see the same gridlock and failure to compromise that we have witnessed for the last four years. Failure to deal with the “fiscal cliff,” our huge deficits and long-term entitlements will come at a price. If we don’t, won’t or are unable to, the markets will, and I fear they are running out of patience. If you’re wondering what that means, take a look at what is going on in Europe as a preview.
“Since I am in the staffing industry, I see two outcomes that are of concern. First, I think that there will continue to be a shortage of skilled IT talent because I don’t believe that we will have meaningful immigration reform that will result in visas being stapled to the college diplomas of math, engineering and science students who have come to the U.S. for their degrees. They are unfortunately going back to their countries in record numbers and we are failing to graduate US citizens in sufficient numbers to address the demand.
“Second, with the Affordable Health Care Act likely to remain the law, you will see an increasing reluctance for small business owners to hire full-time employees. They will be more likely to hire part-workers and restrict their hours to (30 hours or less) in order not to be subject to the health care mandate. This is a trend that will not bode well for business owners or their employees.
–Jim Thompson, CEO, The InSource Group
“The election outcome should bring stability and some predictability, which is a good thing for business owners, who can now plan for policies that they know will be in large part implemented. My clients can now get on with their businesses and move forward with deals because they know what to expect at some level. They may not like what is coming or what has been put into play but now they can bunker down and plan accordingly.
“Based on some of the post-results speeches, I am hopeful that the partisanship that has seized this nation will come to at least a temporary end. I am hopeful that politicians (in the House and Senate) will do what is necessary to avoid the fiscal cliff. They know what needs to be done, but the question will be whether they can compromise.
“Seeing the great red and blue divide in the House and Senate makes me fearful that politicians will not ‘get it’ on what this country needs. We don’t need politicians; we need people doing their job for the people and their businesses. We need people who can take a stand and make some unpopular decisions for the betterment of the country in the long run (eg, the fiscal crisis), even if that means they might lose party standing. I am not sure that we have elected this caliber of individual.
“Job growth will hopefully increase. We can all either sigh with relief or shrug off the results but we now have some measure of predictability (eg. health care) and businesses can plan and loosen up some.
–Karen Hart, partner, Bell Nunnally & Martin LLP in Dallas
“The first priority for our Texas and national clients is to allow them to capitalize on future opportunities through initiatives that encourage and sustain real economic growth and job creation. We also must hold our elected leaders accountable to find an immediate resolution of the impending “fiscal cliff,” while working toward a long-term solution for reducing our staggering national debt; the country must move toward a bipartisan resolution to these challenges if we hope to regain and maintain our position of global leadership in fiscal matters.
“On the micro level, issues such as the proposed implementation of the Affordable Care Act and
impact of Euro-zone/Mid-East geo-political risks dominate the business planning for our firm and counsel to our clients. Despite the national and global challenges we face, Texas remains, unquestionably, the best place for companies and individuals to fully realize their business objectives and economic potential.”
–Glenn B. Callison, chairman and CEO, Munsch Hardt Kopf & Harr PC in Dallas
MEDICAL TECHNOLOGY AND STARTUPS
“Medtech start-ups have had a hard time the last four years and it won’t be much easier in the next four. It will remain difficult for all in health care to predict the continuing changes to the national healthcare law. The medical device tax adds another twist for MedTech start-ups, even though there remains hope that this tax will be repealed. Overall, the investment climate for start-ups will remain tepid, with uncertainty remaining and taxation expected to increase for wealthy individuals and VC’s (venture capitalists). Bright spots for entrepreneurs and start-ups in healthcare/medtech will continue to be in healthcare IT, mobile health & genomics.”
–Dr. Hubert K. Zajicek, managing director, Medical Technology, NTEC Inc – North Texas Enterprise Center for Medical Technology
“Newsflash: The world will not end any time soon, and you will keep going. The best businesses are taking action now to build the revenue and profits they need to pay for their allocation of Obamacare. Even if your business is not affected, I suggest you act like it is. Why? Because there is nothing like looming new expenses to inspire you to figure out how to make your company stronger, more successful, reach more customers, bring in more revenue, and generate higher profits.”
–Matthew Mabel, owner of Surrender, on how restaurants should approach the Affordable Care Act
“This presidential election gave us two clear choices: One who placed fixing our economy as the priority and one who simply does not. The re-election of President Obama will have a less-than-positive effect on the real estate and retail industries and business as a whole for a number of reasons. First, our president has clearly articulated a plan for higher capital gains taxes, personal income taxes and further regulation of private equity and related businesses. There seems to be a philosophy with this administration that more regulation is better and there has been no clear plan to bring the unemployment rate to an acceptable level, which will continue to impede economic growth. Finally, any further regulation of the banking industry will tighten the already tight capital markets, which will hurt investment in real estate and other industries.
“I don’t think the direction of the real estate and retail industries will necessarily change in any material way but I do think expectations will be adjusted down a bit. With the expected higher tax bases and heavier regulatory environment, investment activity will likely be impacted and return expectations will be lowered. All of this impacts the critical areas of consumer spending, housing and unemployment. The looming “fiscal cliff” that continues to be ignored is a wild card since the result of our government’s continuing inaction can be another real impediment to an economic recovery. President Obama has to be willing and able to work with both parties in getting this resolved quickly and responsibly.
“My hope, based on the Obama victory, is that the issues put before him by the voters so passionately during the campaign will persuade him to alter his priorities and realize that until we have true economic growth, get unemployment under control and allow businesses to do what we do best, the rest his agenda cannot be successful. My biggest fear is that he will not do so.
“We have been fortunate at The Retail Connection to have built our company in a responsible way while continuing to grow our organization and our business. Because we are so diverse in our business platforms, have the best team in our industry and enjoy such great relationships with our clients, we have been able to successfully grow our business in positive times and in more challenging times. We will continue to run and grow our business this same way.”
–Alan P. Shor, co-founder and president, The Retail Connection
Bill covers health care, law, education and nonprofits.