"Recovery Summer" Flops, Jobless Hardest Hit

It seems fitting that President Obama signed "financial reform" into law and the US Senate belatedly passed another extension of unemployment benefits on the same day. Because what the Democrats are doing in Washington D.C. is hurting economic recovery rather than helping foster growth. It's tempting to compare their actions to those of BP in the Gulf; just as folks in the Gulf states' are forced to subsist on checks from BP because of its negligence, the unemployed rely on checks from a federal government whose policies have kept them jobless. Business leaders are trying to communicate to the Obama White House that it's the Obama/Pelosi/Reid agenda that's the problem, not evil corporations who put greed and profits before people. They began their efforts last week.

Wall St. Journal

Business groups including the U.S. Chamber of Commerce, the Business Roundtable and the National Federation of Independent Businesses will air a list of concerns about government policy at a "Jobs for America Summit" at the Chamber's offices Wednesday.

The Chamber will issue an open letter to President Barack Obama asking that the administration cut taxes, act on pledges to expand export markets, and streamline government rules, according to a copy of the letter obtained by The Wall Street Journal.

On the regulatory front, "What we're looking at here is a tsunami of regulations coming online slowly because of legislation that has either been enacted or legislation that people expect in some form will be enacted," said Bruce Josten, the chamber's chief lobbyist.

The letter points out that the Environmental Protection Agency is moving forward with 29 major economic rules (a major rule would have an impact on the economy of at least $100 million) and 173 major policy rules.

Legislation overhauling financial-markets regulation now nearing passage in Congress would create more than 350 rule makings, 47 studies and 74 reports.

"You can find in these numbers a principal reason why businesses are so reluctant to make investments," the letter reads.

"Investments" is another way of saying "we won't be hiring anytime soon".These entreaties fell on deaf ears. So today business leaders took their concerns to Politico, which unlike that mouthpiece for capitalist dogs Journal, the White House views favorably.

Politico:

Corporate executives counter that the market recovery began as a result of a bank bailout that predates Obama and that the bulk of corporate profits in recent quarters have come not from business expansion but from massive layoffs and cost cutting.

And they do not see a friendly environment for job creation ahead, citing a possible credit crunch and an exploding budget deficit saddled by more health care spending.

“What I think bothers businesspeople is, they feel like they have a multitude of new regulations to comply with, and now they have to hire compliance experts and lawyers and other cost-generating personnel rather than revenue-generating workers,” said Scott Shay, chairman of Signature Bank, which has $10 billion in assets and serves companies in the New York metro area.

“When the devil is in the details, when you are dealing with a lot of new regulation at a time when we desperately need to be [generating] revenue-creating jobs rather than cost-center jobs, it causes concern. I hear it time and time again: ‘Give us broad rules, but don’t micromanage us like this.’”

and

“There is still a great deal of anxiety over the demonization of business, and it is a serious problem” for Obama, said Mort Zuckerman, the billionaire chairman of Boston Properties and owner of the New York Daily News, who has long supported Democrats.

Executives “really feel there is a deliberate attempt, as a populist political measure, to blame the business world for all the problems we have been having, when, in reality, the housing bubble was provoked by Fannie Mae and Freddie Mac. And it wasn’t business or the public that lowered interest rates and created the credit bubble. It was the Federal Reserve.”

American companies are collectively sitting on $1.8 trillion and with unemployment at 9.5%, the White House needs a target for voters to blame, instead of Congressional Democrats. The problem is, it's not only big business that is refusing to put out the Help Wanted signs.

From Reuters:

Small businesses grew more pessimistic about their economic outlook in June in the face of weak sales and political uncertainty, the National Federal of Independent Businesses said on Tuesday.

The NFIB's monthly survey of members showed the small business optimism index fell by 3.2 points in June, dipping to 89, after posting several months of gains.

"Seventy percent of the decline this month resulted from a deterioration in the outlook for business conditions and real sales gains," the NFIB survey concluded. The report is based on 805 responses to a random survey of NFIB members.

"The performance of the economy is mediocre at best, given the extent of the decline over the past two years," the NFIB survey concluded. "Pent-up demand should be immense, but it is not triggering a rapid pickup in economic activity."

Very few small businesses plan to create new jobs, according to respondents. The survey showed that only 10 percent of firms plan new hiring, that is down 4 points from May, the NFIB said. About 8 percent of firms plan to reduce their workforce, up one point from the previous month, the group said.

If you prefer visuals, this graph shows how the Obama/Pelosi/Reid agenda is redefining the term "jobless recovery". Actually, they are doing their best to bring the terms "double-dip recession" and "stagflation" back into vogue.

http://www.theatlantic.com/business/archive/2010/07/the-scariest-unemployment-graph-ive-seen-yet/60086/

Duffer-In-Chief

President Obama is in Toronto for the G8 summit. With unemployment in America just shy of 10%, an environmental disaster in the Gulf, record budget deficits that the Fed Chairman has repeatedly called "unsustainable", one would hope our president's mind would be focused like a laser beam on issues that affect Americans. Nope.

When U.S. President Barack Obama stepped off his helicopter in Huntsville on Friday, the first thing he said was, “You’ve got a lot of golf courses here, don’t you?” Industry Minister Tony Clement told the National Post in an exclusive interview.

It would appear that President Obama's priorities are as follows:

1) Expand the power of the federal government into all sectors of the economy, but let Nancy Pelosi and Harry Reid do the heavy lifting.

2) Beat Eisenhower's record for most rounds of golf played in one term of office.

Hopefully, he doesn't get a shot at Ike's eight year record.

To Create Jobs, First Do No Harm

The unemployment numbers for November were just released and Wall Street is chearing that only 11,000 Americans lost their jobs. The news media will no doubt be trumpeting the success of President Obama's job summit. I can just see a gleeful Brian Williams informing America that "only one day after his job summit President Obama has turned the economy around". The sad truth is that 10% unemployment is nothing to crow about. Even more troubling, is that the president doesn't understand that his policies are to blame. In the snippet of the summit aired on the Nightly News an unidentified businessman told the president that companies weren't hiring because of the pending cap and trade and health care legislation. The president nodded and then told this gentleman, who presumably knows a thing or two about creating jobs, that when passed, the legislation will help, not hurt the economy.

For a cool aid free assesment, here's the Heritage Foundation's take:

"Executives like Dan DiMicco, CEO of steelmaker Nucor Corp, who told the Wall Street Journal: “Companies large and small are saying, ‘I am not going to do anything until these things — health care, climate legislation — go away or are resolved.’” Or Porta-King CEO Steve Schulte who tells USA Today his company is not investing because “proposals in Congress to tackle climate change and overhaul health care would raise costs.” These businessmen have every right to be worried. As we’ve detailed before, the Senate Health Bill currently being debated in the Senate would be a disaster for the U.S. economy."


Kills Jobs: All told, the Reid Bill raises taxes by $370.2 billion over the next ten years with many of those taxes starting to be collected this year with unemployment at 10.2% and rising. Worse, the bill includes a job killing employer mandate which taxes companies for hiring people. Specifically, companies with more than 50 employees that do not offer a health plan approved by federal bureaucrats will be forced to pay a $750 per employee job tax.

Hurts Small Businesses: The Reid Bill acknowledges it is terrible public policy for small businesses and tries to address this problem by including a “small business tax credit” to minimize the impact of the job killing employer mandates and regulation-caused increases in private health insurance premiums. But the tax credit only lasts two years and largely excludes small business owners, small businesses with high-average payrolls, and firms with 25 or more workers. Essentially, after all exclusions, the only eligible firms are those firms with 10 or fewer workers as well as those with low-income workers—the least likely to offer coverage even with a significant price reduction.

Hurts Poor: The Reid Bill’s employer mandate is especially punitive on poor families. Firms that hire an employee from a low-income family who qualify for an insurance subsidy are charged a tax penalty of $3,000. So a company could save $3,000 by hiring, say, someone with a working spouse or a teenager with working parents, rather than a single mother with three children. Worse, companies only have to pay $750 an employee instead of $3,000 if one quarter of employees are low-income. This creates a situation where, if a company has a lot of low-income workers, they can actually save money by dropping their health plan and just dumping all their employees into the federal exchange at their own expense."

President Obama refuses to see that his plans for ever bigger government are not good for the American economy. Even the revelations of Climategate haven't changed his mind on the need to reduce carbon emissions via painful tax increases. He only sees the green jobs potentially created covering the states of Arizona with solar panels and West Virginia with windmills.

The American economy will eventually recover and begin to actually add jobs instead of just losing them at a slower pace. The fewer shackles the government places on businesses and consumers, the faster the economy will recover and more jobs will be created.