Truth be told I have never been in your corner because, in my opinion, your economic plan isn’t right for America. As president and chairman of the board of a small, publicly traded financial services company (Hennessy Advisors Inc. symbol HNNA) I understand the risk of starting and growing a company. After 33 years in the money management business, I have witnessed two important things:

 1.  When people have money in their pockets, they will spend it and corporations do exactly the same thing.

 2.  When people and firms are uncertain about what their taxes are going to be, what health care is going to cost and how existing and future regulations are going to impact their bottom line, they stop spending. 

U.S. companies today are making a tremendous amount of money, yet corporate leaders are fearful of Washington. We spend valuable and countless hours in management meetings and in our board rooms discussing the hurdles we all face from the regulators, the Ways and Means Committee, Obama care, Immigration, Sarbanes-Oxley, Dodd Frank, IRS, Accounting boards, and more. In fact, I often feel that we spend more time discussing what rules and regs we need to comply with than we do about how to grow our business for our shareholders. These obstacles have put companies in a position of ambiguity. The best example of this ambiguity comes directly from the balance sheets of the firms that make up the S&P 500. Those companies are sitting on close to $3 trillion in cash and short-term investments, which I believe could be used to hire and expand business lines. But instead of hiring or instituting new growth initiatives, firms are sitting on lots of cash and waiting; waiting to know if we will have a more business friendly corporate tax rate, waiting to understand what healthcare will really cost their firm, waiting to hire employees. I just cannot imagine myself walking into our Board Room and telling our Directors, “We are going to start to hire more people and begin expanding for the future.” Keeping in mind that all public companies have to comply with Sarbanes-Oxley, which essentially states that all public companies must put their shareholders first, before the interest of their employees or their management, and I know that the immediate question I would receive from the Board would be “What’s that going to cost our shareholders?” 

And I would have to truthfully respond, “Well, I am just not sure.”

That’s exactly why the stock market is doing so well. Companies are utilizing their cash for the following five things: Initiating dividends, increasing dividends, buying back stock, spending on internal infrastructure, and paying for strategic acquisitions. All of these initiatives help a firm’s stock price. But those initiatives do little to help employ the workforce of America. We all watch the unemployment numbers.  When the numbers come down it sparks hope and we feel that perhaps the trends are changing, but I truly believe 20 to 25 million people want work (not just part-time work) in this country to better their lives for themselves, their children and their grandchildren. And I believe that you want the same for the American people, President Obama. So, how can this be achieved?

First and foremost all of you in Washington have got to champion the creation of growth instead focusing on spreading the wealth. The time is now to put aside personal agendas and fear tactics and begin working together for all Americans.  You won’t be able to please everyone (including me), but once the cloud of uncertainty dissipates, corporate America will begin hiring and the economy will expand.  That will benefit every single American.  And of course, once individuals feel more secure, and have a little more money in their pockets, they will start spending!

The perception in our country is that Democrats favor policies that “take care” of everyone, while Republicans are only concerned with making money.  The simple truth is that America needs to create jobs so that everyone, whether they are liberal or conservative, has the opportunity to thrive independently. The partisanship we are experiencing is not about the Rich vs. the Middle Class or Poor; rather Government must finally come together and agree to provide the opportunity for all people to make their own way.  

It’s time for Congress to take the lead, as Fed Chairman Bernanke has been asking for the last 2 years.  This will only happen when companies get clarity on how and why they should risk shareholder money to expand and hire.   Until then, many average Americans won’t get that opportunity because they won’t have jobs.  Jobs equal income and income creates spending and spending creates more jobs.  This is simple and logical and most people can clearly understand this, but why can’t Washington figure this out?

If you’d like to meet either at my office or yours to discuss this further, please give me a call – 415-899-1555.  The one thing we can agree on is that small businesses and entrepreneurs are the life blood of America; however, Big Business has the resources to impact the economy in the long and short term.  It’s time to concentrate on creating growth, not holding the economic growth of this country hostage.

God bless you, your family and all of the American people.

Neil Hennessy is a seasoned portfolio manager with over 30 years of financial industry experience. Neil began his career as a financial advisor, and in 1989 he opened his own broker/dealer firm. In 1996, Neil founded and launched his first mutual fund. Neil has a successful history acquiring asset management companies and starting mutual funds, and today he manages the entire family of sixteen Hennessy Funds. Hennessy serves as President, Chairman and CEO of Novato, California-based Hennessy Advisors, Inc.