Obama's New Policy to Crush Small Businesses

Obama's New Policy to Crush Small Businesses
By Lurita Doan
9/5/2011

President Obama and his team of economic advisors are continuing their crusade against entrepreneurs and small companies that are the traditional engine to economic growth. The latest anti-business Obama policies appear in a just-released Executive Order 13495, a new rule to be enforced by the Department of Labor. This particular regulation is aimed directly at small business owners and attacks small businesses' most valuable asset--their employees.

Executive Order 13495, which will be both complicated and costly to enforce, represents just another example of Team Obama’s complete lack of understanding of the concerns of small business owners. After 15 years as a small business owner, and as the former Administrator of the U.S. General Services Administration, I've been to the circus a few times and seen all the strings connected the federal government and its indifference to the plight of small business owners. For small businesses, Executive Order 13495 is perhaps the most damaging action yet to come out of the Obama Administration.

First, in our country, a business has the freedom to hire the workers it thinks are best suited to ensure the company's success. The new Team Obama contracting rule tramples over that basic, capitalist principle by requiring any company which wins a federal contract to hire the employees that the government identifies.

This means that the government has new and expanded powers to direct the hiring, firing and promotion of employees at private companies.

Second, government contracting is challenging and intensely competitive. Profit margins are wire thin. Companies need to have the freedom to hire those whom they best believe can provide the best value to the government at the lowest cost. This new rule will make that kind of entrepreneurial freedom almost impossible as the federal government forces the company into employment and salary negotiations with persons of the government’s choice, with the government participating in the negotiation process.

Third, this new rule shows that Team Obama has no understanding of the challenges facing small businesses. Small businesses create 3 out of every 4 jobs in the United States. Small businesses are the source of much of the innovation in the United States. They are more agile because of their size and more willing to take risks.

A small business' employees are its life's blood. Successful small business leaders all understand the need to hire, retain and build a dedicated base of employees and provide them with whatever additional training is needed to give the business an edge and ability to compete. But now, in this new regulation, Obama seeks to undermine small business owners with a too-heavy, government hand that will give the government broad new powers to poach and strip a successful small business owner of its most valuable employees whenever it wishes. Raiding the employee rolls of small companies robs them of their most important asset.

Lastly, this rule shows a profound disrespect for the employee, and treats them as a kind of indentured servant or slave, chattel to be passed from one company to another without consideration of the employee's desires.

Obama's colossal ignorance of the challenges facing small businesses seems a clear sign that once again, the President just doesn’t get it. Time and again, new, burdensome regulations are heaped upon small businesses and the nation’s job creators. And yet, Obama seems simultaneously unaware of the damage he has done and continues to do, even as he issues platitudes and half-baked thoughts about the need to create jobs.

Unless I miss my guess, Obama’s big Jobs Speech is likely to be "a tale told by an idiot, full of sound and fury, signifying nothing." The fact is, the president lacks even a basic understanding of how difficult it is to start a small business and see it grow. This disturbing anti-business trend is quickly becoming the primary Obama legacy.

Small business owners understand that creating jobs requires a system that encourages risk-taking because it makes it possible for risk takers to reap rewards. What government should do is provide regulatory relief for many of the arcane and obsolete requirements that hinder job creators.

Unfortunately, this latest executive order tells us that Obama is moving his Administration in the opposite direction and has decided to add to the regulatory thicket by making it hard for entrepreneurs and small business owners to succeed.

Creating jobs is fairly straightforward. Getting the White House to abandon union-generated ideas that stifle innovation, crush competitiveness, and condescend to small businesses—well, that's a lot harder.
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To read another article by Lurita Doan, click here.