Wednesday, August 25, 2010
The White House War on Jobs
The White House War on Jobs
The "Summer of Recovery" is looking more and more like the Beltway Chainsaw Massacre for America's workers. As President Obama lolls on Martha's Vineyard with his well-heeled Chicago pals, a new Reuters/Ipsos poll shows that 72 percent of people are very worried about joblessness and 67 percent are very concerned about massive government spending.
After a nearly $1 trillion fiscal stimulus and several multibillion-dollar corporate and union bailouts, unemployment remains stuck near 10 percent nationwide; jobless claims rose again last week. One shudders to think how many more jobs will be on the chopping block after the vacationing president finishes "recharging his batteries."
The blame avoidance industry, of course, never takes a break. Capitol Hill Democrats blame George W. Bush. President Obama blames inaction by the, er, Democrat-controlled Congress. On Tuesday, Vice President Joe Biden derided GOP Leader John Boehner's speech on the Obama job-killing machine as a return to the past. Biden sneered about the "good old days" when Republicans held the majority in Washington. But laid-off, unemployed and endangered Americans in the health care sector, the auto industry, and the oil, mining, gas, and fishing industries are no doubt wondering: What's wrong with returning to the days when we had jobs and steady paychecks?
These are not the wealthy fat cats and Big Business titans Democrats love to demonize.
They're employees of companies like Assurant Health, which announced last week that it would slash 130 jobs at its offices in Milwaukee and Plymouth, Minn., to prepare for costly Obamacare mandates.
They're employees of medical device firms in Massachusetts, where officials say they'll be forced to cut back on operational costs and jobs thanks to a little-noticed Obamacare tax on their products that goes into effect in 2013.
They're employees of restaurants like White Castle and International House of Pancakes, whose executives say they will be forced into layoffs and premium hikes to cope with the federal law's $3,000-per-employee penalty on companies whose workers pay more than 9.5 percent of household income in premiums for company-provided insurance.
They're mom-and-pop enterprises across the country that must now deal with Obamacare's onerous Section 9006 tax-filing mandate. It requires them to file 1099 forms with the IRS for every vendor from whom they purchase $600 or more in goods. Nebraska GOP Sen. Mike Johanns calls it one of many "job-crushing provisions" that will bury small business in paperwork and legal costs.
They're the estimated 23,000 workers in the deepwater drilling industry whom the White House deliberately wrote off in pursuit of its junk science-based drilling moratorium.
They're the estimated tens of thousands of workers employed by car dealers that were shut down by Obama's auto czars at a time, as the TARP inspector general pointed out last month, "when the country was experiencing the worst economic downturn in generations and the government was asking its taxpayers to support a $787 billion stimulus package designed primarily to preserve jobs... -- all based on a theory and without sufficient consideration of the decisions' broader economic impact."
They're employees of Utah oil and gas companies whose leases have been pulled without cause by Interior Secretary Ken Salazar. The Interior Department's own Inspector General rejected Salazar's explanation that the Bush administration had rushed the leases through. The Deseret News reports that "rescinding these leases has likely cost the state millions already. Officials in Uintah county estimate the county lost 3,000 jobs in 2009, and Duchesne lost 1,000 jobs."
They're employees of commercial and recreational fishing businesses in New England, who have organized a flotilla on Martha's Vineyard on Thursday to protest the Obama administration's restrictive environmental policies and stealth regulatory ocean grab.
The White House has invested mightily in creating a propaganda infrastructure to tout its "jobs saved or created." Taxpayers need a full, transparent accounting of how many jobs Team Obama has destroyed. Call it Wreckovery.gov.
To read another article by Michelle Malkin, click here.
Where Are the New Jobs?
"Corporate profits are soaring. Companies are sitting on billions of dollars of cash. And still, they've yet to amp up hiring or make major investments."
So writes The Washington Post about the recession's stubborn refusal to go away. The statisticians at the National Bureau of Economic Research declared the Great Recession over -- but tell that to people who can't find jobs. Today, businesses replace equipment and inventory, but they are reluctant to hire new workers. Investment that does occur aims at replacing the use of labor by adopting advanced technology. In a growing economy, that's a sign of progress. Freed-up workers are then available for new projects. But lately, those new projects aren't being launched.
The two wings of the establishment offer their usual remedies. Government-oriented types want more tax-financed "stimulus" spending, claiming last year's nearly trillion-dollar dose wasn't enough. That's dubious. As economist Mark Skousen writes, "(P)roduction and investment lead the economy into and out of a recession; retail demand is the most stable component of economic activity."
Business-oriented types want tax cuts. I'm sympathetic, but cuts should be accompanied by spending cuts, or the deficit will grow even uglier. There's no free lunch. Deficit spending must be covered by government borrowing, which takes capital that could be used for investment out of the private sector.
Why isn't the economy recovering? After previous recessions, unemployment didn't get stuck at close to 10 percent. If left alone, the economy can and does heal itself, as the mistakes of the previous inflationary boom are corrected.
The problem today is that the economy is not being left alone. Instead, it is haunted by uncertainty on a hundred fronts. When rules are unintelligible and unpredictable, when new workers are potential threats because of Labor Department regulations, businesses have little confidence to hire. President Obama's vaunted legislative record not only left entrepreneurs with the burden of bigger government, it also makes it impossible for them to accurately estimate the new burden.
In at least three big areas -- health insurance, financial regulation and taxes -- no one can know what will happen.
New intrusive rules for health insurance are yet to be written, and those rules will affect hiring, since most health insurance is provided by employers.
Thanks to the new 2,300 page Dodd-Frank finance regulatory act, The Wall Street Journal reports, there will be "no fewer than 243 new formal rule-makings by 11 different federal agencies." These as-yet unknown rules will govern lending to business and other key financial activity.
The George W. Bush tax cuts might be allowed to expire. But maybe not. Social Security and Medicare are dangerously shaky. Will Congress raise the payroll tax? A "distinguished" deficit commission is meeting. What will it do? Recommend a value-added tax?
Who knows? But few employers will commit to a big investment with those clouds hanging over our heads.
"As much as I might want to hire new salespeople, engineers and marketing staff in an effort to grow, I would be increasing my company's vulnerability to government," Michael Fleischer, president of Bogen Communications Inc., wrote in The Wall Street Journal.
Nothing more effectively freezes business in place than what economist and historian Robert Higgs calls "regime uncertainty."
"(A)ll of these unsettling possibilities and others of substantial significance must give pause to anyone considering a long-term investment, because any one of them has the potential to turn what seems to be a profitable investment into a big loser. In short, investors now face regime uncertainty to an extent that few have experienced in this country -- to find anything comparable, one must go back to the 1930s and 1940s, when the menacing clouds of the New Deal and World War II darkened the economic horizon."
Uncertainty created by Obama's legislative "successes" are comparable to the Depression and World War II? This does not bode well for job growth.
Higgs says: "Unless the government acts soon to resolve the looming uncertainties about the half-dozen greatest threats of policy harm to business, investors will remain for the most part on the sideline ... consuming wealth that might otherwise have been invested."
Posted by Brett at 11:09 AM