BlackRock Inc. (BLK), the world’s largest asset manager, is urging the candidates for president and Congress in tomorrow’s election to act before federal spending cuts and tax increases automatically take effect.
“Failure to avert this fiscal cliff would likely plunge America back into recession and destroy 2 million jobs,” BlackRock, along with several other firms and institutional investors, said in a letter appearing today in advertisements in the Wall Street Journal, New York Times and Washington Post. “Not only would it arrest the current momentum in our economy, it also would damage our nation’s ability to finance our debt, attract job-creating investment and generate growth for years to come.”
Businesses are already delaying investments because of uncertainty and individual investors are scared about the future of the economy, anticipating the more than $600 billion in spending reductions and tax increases slated for Jan. 1, BlackRock said. Chief Executive Officer Laurence D. Fink has been urging investors to stop focusing on short-term investing.
Last month, BlackRock started the third phase of its five- year branding campaign with a series of ads telling savers to get out of cash and low-yielding bonds and suggesting they put money in high-quality stocks, exchange-traded funds and products that generate higher income.
The most important issue facing the next president is how he’ll deal with the fiscal cliff, Fink said at the Economist’s Buttonwood Gathering in New York on Oct. 25. He called it “shameful” that the debates between President Barack Obama and challenger Mitt Romney didn’t focus on the topic.
The other firms and organizations signing today’s letter include Raymond James Financial Inc. (RJF), TD Ameritrade Holding Corp. (AMTD), Teacher Retirement System of Texas and Illinois Municipal Retirement Fund.
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