Sunday, January 24, 2010

Obama on The Economy

What kind of policies stimulate jobs in the American economy? It should be admitted that no one really knows the answer to this question. Republicans say cut taxes and cut regulations. Democrats say increase spending, redistribute income and make sure that whatever is spent is subject to union contracts. Obama leans to the latter view, as one might expect. But, he has his own twist.

The main Obama theme is that businessmen are no damn good. This theme is present in every major piece of legislation and critiques of business show up in every Obama stump speech. The shrill Obama message last week in Ohio is likely to be repeated in the Obama State of the Union message on Wednesday. But, listen to Obama carefully on Wednesday. Look for words that extoll and encourage American business. You won't hear them. They won't be there. But look for words that suggest that businesses are the enemy and should be curbed, controlled and taxed by Washington. You will hear those words. They show up in every single Obama public appearance.

Obama does not like business. Capitalism is the great evil in Obama's mind. This mindset informs Obama's economic program which, in every aspect, is designed to reign in, regulate, tax, and humble capitalism. Obama is never happier or more at ease than when he is attacking business -- insurance companies, Wall Street, whoever is handy. The consistent downbeat rhetoric from the White House has real effects. Business folks are terrified by the Administration, the twists and turns of the Administration, the very personal anger and hatred voiced by the President himself. (A recent poll of investors showed that 77 percent of investors viewed Obama as anti-business).Obama seems to be a happy guy except when he discusses business and business folks. Then, he's angry.

The problem with this approach to the economy is that business is the source of private sector jobs. There is no other. This means that Obamanomics is essentially a war on business and war on those seeking to find employment.

Obama's war on business has been successful. His war on banking has dramatically reduced credit to individuals and business. The credit card legislation passed last Spring has had the effect of denying many households credit cards and led to the reduction of credit limits for those who already had credit cards. The mortgage protection legislation has led banks and other lenders to deny mortgage loans to large swaths of lower income Americans that pre-Obama qualified for mortgage loans. Now, his war on Wall Street threatens the fiscal survival of New York City and will inevitably shift financial jobs from the United States to other parts of the world.

Obama's bank regulators have squeezed available credit to small businesses to the breaking point. How this could be expected to produce jobs is a mystery that only the President seems to understand. Obama exhorts banks to lend when he is in front of microphone, while his regulators are instructed to reign in lending to the private sector. The latter is the true Obama policy, while the former is for show.

Nothing in the Obama agenda will lead to creation of jobs. Almost everything that the Obama Administration has proposed dramatically discourages job creation. Fortunately, much of it has not passed the Congress, limiting the potential destructive impact of Obamanomics.

The economy, by itself, can eventually recover if the Obama agenda is sidetracked. The election of Scott Brown suggests that the most economically damaging parts of the Obama regime may not make it into law. If so, the economy could begin a slow recovery as it fights through the mountain of obstacles that the Obama Administration has put into place.

An Obama Adminstration that did nothing at all (no stimulus, no nothing) would have guaranteed a vibrant economic recovery by now. President Obama is to blame for the sluggish economy and the dour prospects for economic recovery. Until Obama changes course or is defeated for re-election, the American economy will go nowhere and unemployment will remain staggeringly high.

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