Obama's Wet Blanket Economic Policy

[sirs]

You have folks on the left decrying how corporate America is sitting on all sorts of money, and won't hire anyone.  You have these OWS twits decrying how unfair it is that some folks actually do well for themselves, and this President, and most of his DC Dems feeding that class warfare crap.  You have pundits who keep trying to lay the blame of this economic & unemployment abyss we're in, on everything from Bush to Greece.

Yes, Obama inherited a mess from Bush and the Democrat controlled congress.  Yes, the actions of Greece, and soon to be seen in other countries as well, who have adopted such a heavy focus on Public sector employment, with its connected-at-the-umbilical need to cover their growing workers' healthcare and pensions. is also throwing a monkey wrench into the international economy, which does effect our market.

That said, instead of helping the situation, Obama has taken the call with his election, as following through with the notion of "fundamentally changing how we do things in America", and damn any serious repercussions to our economy or to job creation, in the process.  That's what Republicans exist for anyways.....to blame them....and Bush....and Greece.  ANYTHING but the stifling level of regulations and micromanaging of the economy thru DC and Obama's policies.  THAT's why businesses won't hire.  They're scared to death what further "fundamental changes" will be wrought upon them.  And if they're going to survive, which many have not been able to,  they're going to avoid hiring, and avoid expanding.  Until there's a clear concise light at the end of the tunnel, as it relates to DC's involvement

[sirs]

Imagine you are a consumer and don't know for sure whether you will have a job next week. How much do you spend? No more than you must, if you're prudent.

Imagine you are a business owner, and sales are down. How many new workers do you hire? Probably none, if those on the payroll meet your customers' demands.

Imagine you run a business with cash in the bank, but you're unsure whether the government will sock you with higher taxes, increase your health care costs or heap on costly new regulations. How much of that money do you spend? To ask the question is to answer it.

A recent New York Times headline bleated the bad news: "A Wave of Worry Threatens to Build on Itself."

The story explained: "Employers delaying or suspending hiring. Homebuyers getting cold feet. Shoppers pulling back on spending. Hesitation is weakening the American economy."

The economy officially left "recession" two years ago. Does it feel like it where you live and work?

Businesses of fewer than 500 employees account for half of U.S. jobs. According to the Los Angeles Times, they are "typically quicker to hire after recessions because they can't make do with less."

But they aren't hiring. The National Federation of Independent Businesses says small-business owners who believe the economy is not improving outnumber those who think it is by 16 percentage points. In a recent survey, nearly 2,100 small-business owners reported reducing employment for the fifth-straight month.

Economic uncertainty is the toughest problem facing small businesses, says a new survey by Pepperdine University's Private Capital Markets Project.

"Just ask a businessman," Northern California Republican Rep. Tom McClintock agrees. "They're scared to death of the additional taxes and regulations they may be facing in the next few years and are pulling back to see what happens. Ask bankers why they're not lending, and you'll hear the same answer."

It is hard to imagine Washington and Sacramento could inhibit economic growth any more if they tried. Here are a few of the hovering swords of Damocles giving rise to foreboding:

•Rules and regulations. Another 81,405 pages of new rules were added this year to the Federal Register, expanding the ever-changing landscape of what once was OK becoming no longer OK. Estimated total cost of compliance: $1.7 trillion.

•Obamacare. The health care overhaul law's countless, detailed regulations are largely yet to be defined by an army of faceless, unaccountable bureaucrats. "Death panel" could just as easily refer to government inflicted regulations as to end-of-life determinations.

•Frank-Dodd. This regulatory overreach expanded federal interference well beyond legitimate boundaries, giving bureaucrats more power to interpret financial matters and to enforce with little oversight. If financial institutions needed another excuse to sit on reserves, this one is a pip.

•Bush tax cuts. If they are not extended beyond 2012, they represent substantial tax increases on everyone.

•More taxes on the rich. This threat targets people who best can afford to protect their income from taxation. In the past that has meant money fled the economy and was denied to businesses in need of expansion capital. Already, more than a trillion U.S. dollars is hiding in foreign banks for just such protection.

•Tax-happy California. This is a state where, no matter how much tax is raised, the government spends even more. It strains credulity to hear from Sacramento that its looming budget shortfall, pegged at $13 billion by July, requires even more taxes. There's a reason California ranks at the bottom in business-friendliness and near the top in tax burdens.

•EPA regulations. A parade of new regulations and the inevitable challenging lawsuits will leave much in limbo in 2012. Among them, reclassifying coal ash as a hazardous waste without justification at a compliance cost of $20 billion, leading to closure of up to 350 coal-fired plants. The Environmental Protection Agency plans to regulate more than 10,000 commercial and industrial boilers (to create steam for heat of power generation) that critics say will result in 800,000 lost jobs. Nothing pending is quite as economy-deadening as the regulation of greenhouse gases that could result in 2.5 million lost jobs by 2030 and an increase of 50 percent for gasoline and home energy costs.

Millions of lost jobs

University of Chicago business professor Steven Davis concludes that, "policy-related uncertainty played a role in the slow growth and fitful recovery" of recent years. Davis says uncertainty alone may be costing the nation 2.5 million jobs.

The U.S. Chamber of Commerce says 79 percent of small businesses surveyed said they want government to inflict more regulations and taxes. Just kidding. They said they want Washington to "get out of the way."

Now, consider this: Imagine you're a consumer without a paycheck. There are nearly 14 million of you, more if we count those no longer drawing unemployment benefits. Or, perhaps you're a business where sales are so low you are considering closing the doors. Reliable numbers for current business closures aren't available, but walk through a business park, manufacturing district or shopping mall, and count the vacancies.

Maybe you're a business with little money in the bank. You, too, face the uncertain future of higher taxes, health care costs and myriad costly regulations.

Lower expectations

Trends are going in the wrong direction. Over the next three months, only 9 percent of businesses surveyed by the NFIB plan to increase employment. That's fewer than the October survey's 11 percent. Worse yet, 12 percent plan to reduce workforces, and 26 percent expect earnings to decline.

Maybe consumer confidence will kick-start small business. Not quite.

"Consumer sentiment remains at very low levels and is reflected in the 26 percent of small-business owners who cite poor sales as their biggest problem," NFIB Chief Economist Bill Dunkelberg says.

Consumers blessed to have money clutch it tightly. --> 
That retards sales. -->
That affects how many workers businesses hire.

You may have noticed too few waiters to serve tables in your favorite restaurant. Austerity coupled with continuing technological advancements enable companies to do more with less. Consequently, there are fewer secretaries and grocery checkout clerks.

"[W]hat we're in now is uncharted territory," Alec Levenson, a labor economist at the USC Marshall School of Business, told the Los Angeles Times.

SurePayroll, an online payroll service, has good and bad news. Its October survey showed an increase of 20 percent, to a total of 53 percent, of small-business owners with optimistic outlooks. Of course, the previous month was a record-low. That's the good news. The bad news is that October also revealed there continues to be flat or even decreased hiring nationwide – for the 13th month in a row. A persistently bad trend.

Less worse

Here's some quasigood news: Although hiring is down, the decline is slowing. It's getting worse more slowly.

The SurePayroll's Small Business Scorecard asked small-business owners what the administration and presidential candidates should focus on. Balancing the budget, reducing the debt and stabilizing the housing market drew 51 percent response.

But the federal government spends $1 it doesn't have for every $2 it does. The deficit is now past $15 trillion. Home prices are expected to fall further in coming months, pushing them to a new low of 35 percent below the early 2006 peak. Twenty percent of mortgages held by Fannie Mae and Freddie Mac are underwater. You can judge how likely those numbers are to turn around anytime soon.

In the meantime, what is certain?

"As the global economies have collapsed in the past decade, nothing has been certain except for uncertainty," observes Andrew Napolitano, writing at Townhall.com.

Unfortunately, you probably can count on that.

At least until government gets out of the way.

[Plane]

There it is.....fear itself.

[sirs]

The OWS critters are protesting the wrong folks

[sirs]

And arguably at the heart of this Economic Uncertainty......
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Obamacare Abominations

President Obama says his health care "reform" will be good for business.

Business has learned the truth.

Three successful businessmen explained to me how Obamacare is a reason that unemployment stays high. Its length and complexity make businessmen wary of expanding.

Mike Whalen, CEO of Heart of America Group, which runs hotels and restaurants, said that when he asked his company's health insurance experts to summarize the impact of Obamacare, "the three of them kind of looked at each other and said, 'We've gone to seminar after seminar, and, Mike, we can't tell you.' I think that just kind of sums up the uncertainty."

Brad Anderson, CEO of Best Buy, added that Obamacare makes it impossible to achieve even basic certainty about future personnel costs:

"If I was trying to get you to fund a new business I had started and you asked me what my payroll was going to be three years from now per employee, if I went to the deepest specialist in the industry, he can't tell me what it's actually going to cost, let alone what I'm going to be responsible for."

You would think a piece of legislation more than a thousand pages long would at least be clear about the specifics. But a lot of those pages say: "The secretary will determine ..." That means the secretary of health and human services will announce the rules sometime in the future. How can a business make plans in such a fog?

John Allison, former CEO of BB&T, the 12th biggest bank in America, pointed out how Obamacare encourages employers not to insure their employees. Under the law, an employer would be fined for that. But the penalty at present -- about $2,000 -- is lower than the cost of a policy.

"What that means is in theory every company ought to dump their plan on the government plan and pay the penalty," he said. "So you don't really know what the cost is because it's designed to fail."

Of course, then every employee would turn to the government-subsidized health insurance. Maybe that was the central planners' intention all along.

An owner of 12 IHOPS told me that he can't expand his business because he can't afford the burden of Obamacare. Many of his waitresses work part time or change jobs every few months. He hadn't been insuring them, but Obamacare requires him to. He says he can't make money paying a $2,000 penalty for every waitress, so he's cancelled his plans to expand. It's one more reason why job growth hasn't picked up post-recession.

Of course, we were told that government health care would increase hiring. After all, European companies don't have to pay for their employees' health insurance. If every American employer paid the $2,000 penalty and their workers turned to government for insurance, American companies would be better able to compete with European ones. They might save $10,000 per employee.

That sounded good, but like so many politicians' promises, it leaves out the hidden costs. When countries move to a government-funded system, taxes rise to crushing levels, as they have in Europe.

Whalen sees Obamacare as a crossing of the Rubicon.

"We've had an agreement in this country, kind of unwritten, for the last 50 years, that we would spend about 18 to 19 percent of GDP (gross domestic product) on the federal government. This is a tipping point. This takes us to 25 to 30 percent. And that money comes out of the private sector. That means fewer jobs. This is a game-changer."

He means it's a game-changer because of the cost. But the law's impenetrable complication does almost as much damage. Robert Higgs of the Independent Institute is right: If you wonder why businesspeople are not investing and reviving the economy, the answer lies in all the question marks that Obamacare and other new regulations confront them with. Higgs calls this "regime uncertainty."

It's also what prolonged the Great Depression.

No one who understands the nature of government as the wielder of force -- as opposed to the peaceful persuasion of the free market -- is surprised by this.