Uncertainty

The most important thing the White House administration can do during a recession is to establish confidence and stability. However, Obama and the Democrats fiscal and economic policies are creating uncertainty. This is why Obamanomics has failed miserably to create jobs.

First the Democrats created the Recovery Act which was the 862 billion dollar stimulus. This pork riddled legislation failed to create jobs despite the administrations fictitious claims the stimulus created or saved 3.5 million jobs. Anyone with a lick of commonsense can read the recovery.org website and see the White House’s fuzzy math. For instance, one school district received 5 thousand dollars in stimulus money and the government claims it saved every one of the 300 jobs in that school district. One fear created by the Recovery Act is inflation. Inflation is the incremental increase in the price of goods and services sold in our country. The Recovery Act is flooding the economy with an additional one trillion dollars, which is equivalent to 7.5% of our nation’s Gross Domestic Product (GDP). Thus, it is conceivable the extra cash in our economy could cause inflation to rise dramatically. Inflation is a hidden tax on all individuals and corporations in America. If inflation gets too bad it could keep the economy from recovering or force it back into a recession. So how exactly is this policy fostering an environment of confidence for corporations to hire more employees or to spend more in research and development to create new products? It isn’t!

The passing of healthcare reform has generated many unknowns and companies have already adversely changed their balance sheets since they will no longer receive a government subsidy payment for providing prescription coverage to retirees. Here is a statement from my former employer about the implications of ObamaCare (a Fortune 200 company) “Longer term, we must deal with the anticipated higher costs driven by certain provisions in the law”. She added “Healthcare reform will continue to evolve. The ultimate financial impact will depend on additional legislation, guidance and regulations that do not exist yet”. The bottom line is that this 2700 page bill has literally hundreds of provisions that nobody completely understands what implications and impact they will have until the bill is implemented. Does this sound like this law is creating a stable environment that fosters job growth? No! Even Speaker of the House, Nancy Pelosi stated “We will not know how the law will work until it is passed”.

The financial reform legislation is another 2500 page bill loaded with tons of provisions that even the authors of the bill do not understand. For instance, Chris Dodd said he is not sure how the legislation will work, but it will affect every aspect of our lives. The interesting thing about this law is that it reforms Wall Street, but leaves government entities that played a big part in the financial meltdown free to continue their practice of dubious oversight and investing. In essence, Fannie Mae, Freddie Mac, The Treasury Department, and the Federal Reserve received absolutely no reform. This financial bill is therefore, pro government and anti business. So how exactly is this building stability and confidence in the private sector to spend money that could get us out of this miserable recession? It isn’t!

If all of this is not bad enough, the Obama administration and the Democrats still want to pass Cap and Trade legislation and create a green jobs energy plan. Cap and Trade will tax carbon emissions, which will increase the energy costs for every individual and corporation in our country by at least two fold. Obama also wants to create a green jobs economy similar to the one in Spain. However, in Spain for every green job they created they lost two other private sector jobs. The reason for this is simple, renewable energies and the effort to upgrade the infrastructure of our power grid will make our energy bills even more expensive. The more expensive the cost of energy is in our country, the higher the cost is to manufacture products and therefore, jobs move overseas where it is cheaper to manufacture products. The question is why would any businesses begin hiring new employees and expand their business in the face of this uncertainty? They won’t!

The Obama administration has also shown its allegiance to labor unions which scares many businesses in the private sector. Obama and the Democrats want to pass Card Check, which would make it easier for employees at companies to unionize. Obama gave the United Auto Workers (UAW) a higher stake in the ownership of GM during their bankruptcy than the creditors that hold the debt in the company. Democrats passed the Disclosure Act to minimize and restrict campaign contributions from corporations, but the same exemptions did not apply to labor unions. Let’s face facts, the main reason jobs leave the United States is due to labor unions. GM is a classic example of labor union cancer. The reason GM went from a company of 800 thousand employees to under 50 thousand employees is largely due to labor unions. The overhead cost to build a GM automobile in Detroit is 3 thousand dollars more than Honda building a similar type of car in Tennessee. Workers at GM are paid outrageous benefits and salaries. How is the threat of labor unions playing a greater role in our society catering an environment of stability and confidence in the private sector? It isn’t!

Another thing that is creating a lot of unrest and uncertainty in the private sector is the debt owned by the federal government. Although the government’s massive debt does not directly affect a corporation’s bottom line, but the debt can affect tax rates and currency values. Corporations and individuals alike realize the only way to pay off the massive government debt is to increase taxes or reduce the size the government. Since the size of the federal government is growing while the private sector is shrinking under the leadership of Obama, everyone is therefore fearful of massive tax hikes to pay for our debt and continued government growth. There has been talk of creating a national sales tax called a Valued Added Tax (VAT) that will adversely affect every American in a negative way. The question remains why would any business hire workers or increase research and development costs to create new innovative products when they fear the government is going to raise taxes 5 or 10 percent? After all, many think that the United States government is on the brink of a complete economic collapse, similar to Greece, as our debt to GDP ratio approaches 100%.

What has the Obama administration done to foster a stable environment for corporate growth? Nothing! They have not created any trade agreements to improve exports. In fact, Obama, has on a couple of occasions, threatened other nations he would resort to a domestic economic policy of “protectionism”. In other words, he would tax imports from other nations so Americans will buy products made in the United States. However, that economic strategy would create an economic calamity of major proportions. Think about it; other countries would impose taxes on our products to deter their citizens from purchasing them. There are 300 million customers in the United States, but there are over 5 billion customers around the globe. Implying any “protectionism” domestic policy illustrates Obama’s economic ignorance. To “protect” 5% of the global market at the expense of 95% of the global market is simply asinine.

What about Obama’s attitude towards national security? How is making the United States less safe by bending over backwards to give terrorists more rights giving business owners more confidence? It isn’t! How is Obama’s lack of action towards Iran and North Korea giving business owners a sense of stability about our global economic future? It isn’t! How’s Obama’s handling of the BP oil spill, which exposed his and the administrations lack of crisis management skills, exuding confidence in the private sector? It isn’t! Every action the Obama administration has taken has done nothing to promote any confidence in the private sector.

Why has the Obama administration’s policies towards corporations been so inept and is creating an uncertain environment for doing business? The administration has absolutely no practical business experience. Obama is a community organizer and he has absolutely no experience running a business or building anything tangible. What’s worse, he surrounded himself with people like him. The administration is loaded with social liberal elitists with only academic backgrounds and no practical business experience. Obama has surrounded himself with business illiterates such as the pay czar whose chief objective is to interfere in the private sector to regulate, restrict, mandate, and create other bureaucracies that only inhibits corporations from doing their jobs. In essence, the federal government is creating barriers that are not only making it harder for the corporations to conduct business, but these barriers also make their products more expensive. How is this fostering a stable environment for businesses to innovate and to promote the ingenuity they need to thrive in the open market? It isn’t!

The best way to conclude this essay is by considering Obama’s true feelings towards the American worker. The Obama attitude towards the American worker is best summed up by his demeaning attitude towards Joe the Plumber on the campaign trail. He joked and ridiculed Joe the Plumber after their encounter became public. His campaign machine and the media illegally investigated his background to destroy the reputation of an everyday worker trying to live the American dream. Ironically, it was the mechanical sketches from an anonymous plumber that were used to cap the BP oil leak in the Gulf. Yes, it was an everyday humble plumber, not an elitist or union member that solved the biggest environmental calamity of all time.