Incentives

Boyes, in describing the increasing regime uncertainty in the US that has accompanied the expansion of the Welfare, Warfare and Administrative State makes the following observation:

"businesses have no incentive to invest in the United States"

I might extend this observation to assert that businesses do have an incentive to engage in rent seeking, a form of investment that is welfare reducing.

Given the entreprenuerial talent and spirit of those in the business community there are opportunities to "invest" in actions that "protect" specific businesses and activities. Looking at the expansion of K street lobbying activity it is clear that American business react in a predictable fashion to the growing welfare, warfare and administrative scale and scope of government intervention in US society.

So, the incentive is to not invest in productive activities, rather to engage in investing in rent seeking activities. So while net investment may actually be the same or even larger in dollar terms that decades ago, the investment in lobbying, the infrastructure of rent seeking and associated activities, the consequence is not wealth enhancing, but rather wealth destroying.