The further to the left or the right you move, the more your lens on life distorts.

Tuesday, July 27, 2010

Change the Subject

There’s an aphorism that criminal defense attorneys live by: “When your client is guilty as hell, plea bargain. But if you’re already in front of a jury, change the subject.”

That’s what the Obama administration and its supporters in Congress, the media, and the entertainment industry have been doing for the past two years. In the aftermath of the Great Recession, the President and his people know that their client—big government—is the true guilty party. So, they change the subject.

It was the Congress under both Democratic and Republican administrations that encouraged irresponsible lending practices through ill-advised regulatory changes—the catalyst that turned a bad situation into a catastrophe. It was the administration and Congress that gave new meaning to deficit spending with bailouts and a “stimulus” that did little to create jobs or heal a sputtering economy. It was the President’s vision of big government that imposed ill-conceived health care legislation on a country that didn’t want it and into a business environment that is already roiled with uncertainty. It was the President’s vision of government control that led to passage of a financial “reform” package that does little to reform the underlying problems and continues to leave the tax-payers (a shrinking perentage of the U.S. population) holding the bag for irresponsible Wall Street behavior.

So President Obama changes the subject. In a move that is reflexive, given his strong Leftward ideological bent, the President indicts business as the mastermind of the Great Recession, when in fact, it was only the government’s accomplice. Worse, it is business—and only business—that will create jobs and over the long term get us out of the economic doldrums. But Barack Obama doesn’t seem to recognize this—not surprising given that the President has never spent a day working in the private sector. Worse, the Obama administration has the lowest percentage of cabinet members and top advisors from the private sector of any administration in the past 100 years.

Mort Zuckerman addresses this when he writes:
The growing tension between the Obama administration and business is a cause for national concern. The president has lost the confidence of employers, whose worries over taxes and the increased costs of new regulation are holding back investment and growth. The government must appreciate that confidence is an imperative if business is to invest, take risks and put the millions of unemployed back to productive work.

So the President and the Congressional leadership, in the best traditions of the class warriors that they are, are stumping for tax increases on the “rich.” Of course, the rich are the very people who own and operate small businesses, the economic engine of our country. It is the “rich,” not the big corporations like GM or the Wall street giants (who, by the way, Barack Obama was only too happy to bail out with hundreds of billions of our tax dollars) that are the economic engine of our economy. The “rich” (small business) are the people who create new jobs, spur innovation, and grow the economy. But Barack Obama, Nancy Pelosi, and Harry Reid seem oblivious to these facts. They seem to think that if they decrease the number of dollars “the rich” have to spend, small businesses will grow and prosper. Not.

Zuckerman continues:
This kind of gratuitous and overstated demonisation [of business] – widely seen in the business community as a resort to economic populism on the part of Mr Obama to shore up the growing weakness in his political standing – is exactly the wrong approach. It ignores his disappointing stimulus programme, which was ill-designed to produce the jobs the president promised. It also undermines the confidence that business needs to find if it is to invest in the face of a new generation of regulations, increased bureaucracy and higher taxes.

Disillusion has spread to the Business Roundtable, the US Chamber of Commerce and the National Federation of Independent Business, which represents small businesses. The chief economist of the NFIB recently wrote: “Business owners do not trust the economic policies in place or proposed ... the US economy faces hurricane-force headwinds and the government is at the centre of the storm, making an economic recovery very difficult.”

It’s as if the president wants to cripple small business at the very time he needs them most. In addition to tax increases, Obama has added a hidden tax (largely undefined at this point) associated with the government's ill-conceived health care “reform.” The President, having no experience in the private sector, doesn’t seem to understand that business owners do not like uncertainty and react to it by contracting—no new hires, no expansion, reduced inventories, and the like. Yet Barack Obama is a man on a mission. The problem is, it’s the wrong mission at the wrong time for the wrong reasons.