No one faults Mr. Obama for wanting to improve the current dismal job prospects for the more than 14 million unemployed Americans. Unfortunately, Mr. Obama doesn’t seem to be able to admit past failure and try a different approach. Be it stubbornness, a lack of basic economic competence or simple left-wing progressive theology, Mr. Obama seems only capable of reissuing a tired and failed policy of government-sponsored jobs.
Mr. Obama’s latest proposals are Cash-for-clunkers repackaged for jobs; government spending to create a bubble of jobs that evaporate when the work is complete. What the president fails to understand is that our current circumstance is the product of private companies shedding long-term jobs in order to resolve long-term expense uncertainty. Combine the effects of Mr. Bush’s Wall Street bail-out with tight lending policies, add a dollop of business-unfriendly regulations and class warfare and you have the perfect storm.
How many of the folks that are unemployed can run a backhoe? How many can operate a paving machine? What happens to the folks that lost their office jobs, or those in retail? How does bridge and road building help them? When the road projects are done, where do those jobs go? Clearly Mr. Obama is looking for a near-term boost to help him get through the 2012 election as nothing in his recent proposals does anything to change the trajectory of the greater private business slump.
While the U.S. Chamber of Commerce, the largest single organization representing private businesses reviewed Mr. Obama speech their initial response was that while there were pieces of the plan they could support, the vast majority did nothing to stem the tide of anti-business policies that have flowed from this administration.
There are two key components critical to the private sector hiring: predictable expenses and positive demand. As long as those with jobs aren’t spending and the government is attacking their income there’s no motivation to increase staffing. Mr. Obama doesn’t understand the basics of Capitalism. When businesses have more demand than they can fulfill they expand, creating additional jobs and in turn buying more supplies and equipment. Businesses must have a positive outlook to stay ahead of demand and they must also be able to justify the rate of growth against the cost. Businesses have exclaimed that the current administration is layering on profit consuming regulations, growing employee costs all while attacking the revenue of small business owners, many of whom reinvest a significant portion of their net income back into their businesses. When a small business owner’s net income is reduced expansion is stymied.
Mr. Obama claims that most of the ideas in his new jobs plan have been supported by Republicans in the past; however an honest review shows that to be quite misleading. While it may be true there has been modest support for many of his proposals, the majority has favored a select few. It appears that Mr. Obama has a two-pronged approach to his proposals: offer up left-wing ideas that should they manage to pass will make any failed ideas shared by Republicans, and blame Republicans on anything that doesn’t pass giving him a campaign issue.
Temporary fixes have proven not to work. If Mr. Obama wanted to enact the laws that business says they need to create a pro-job environment his first step would be a moratorium on new regulations, reduce the corporate tax rate (currently the highest in the world) and propose freezing current tax rates for the next 4 years. Unfortunately Mr. Obama’s priority is re-election, not the U.S. economy. Once re-elected his progressive policies to reshape America will be unbridled when he no longer must face an unhappy electorate. Obama will travel the country saying what he believes the voters want to hear, all the while bashing Republicans for failing to pass his plan to paint his opponents as anti-jobs. It’s not going to be a pleasant 14 months in the nation’s capital, as Obama attacks the Congress and the Republican hopefuls’ fire back at the president. Meanwhile, as always, it’s the little guy who gets screwed.