On February 7th, president Barack Obama spoke before the Chamber of Commerce, reminding them of their “obligation” to create more jobs for Americans. ”Ask yourselves what you can do for America. Ask yourselves what you can do to hire American workers, to support the American economy, and to invest in this nation…If we as a nation are going to invest in innovation, that innovation should lead to new jobs and manufacturing on our shores. The end result of tax breaks and investments cannot simply be that new breakthroughs and technologies are discovered in America, but then the manufacturing takes place overseas,” he said. Yet an unanswered question remains. Why do businesses manufacture overseas?
There are several reasons: the United States has one of the highest corporate tax rates in the world; the hourly wages of some American workers have made them non-competitive on the world stage; many government regulations are overly burdensome and unjustified; companies have an obligation to their shareholders and creditors to maintain their stock price and business share; and the American public demands cheap consumer goods.
The last item above represents perhaps the greatest disconnect of all with regard to the public’s understanding of economic cause and effect. Americans have grown quite fond of affordable computers, big-screen TVs, cell phones, toys, exotic food, and a host of other commodities whose prices reflect the success of business in reducing labor costs. Yet at the same, time the public is angry when jobs are “outsourced.” This economic schizophrenia creates a formidable “damned if we do, damned if don’t” dilemma for many businesses. If they manufacture in America, prices go up, and much of what Americans currently consume becomes unaffordable. If they manufacture overseas to make those goods affordable, Americans consider them “evil” for driving down wages in America by forcing our workers to compete with foreign counterparts who make next to nothing by comparison.
Are Americans willing, or can they afford, to pay higher prices for a variety of goods and services in order to employ more of their fellow, higher-wage, Americans?
The president was also looking for answers. Addressing the reality that corporate America was sitting on $2 trillion dollars that they have so far refused to invest in the economy, he wanted to know, even as “economists and salespeople are now forecasting a healthy increase in demand…if there is a reason you don’t share my confidence, if there is a reason you don’t believe that this is the time to get off the sidelines–to hire and invest–I want to know about it, I want to fix it.”
The president was late to the game. A month ago, Representative Darrell Issa, (R-CA) the new chairman of the House Oversight and Government Reform Committee, sent 171 letters to several businesses and trade associations asking for help in “identifying existing and proposed regulations that have negatively impacted job growth.“ Some of those troublesome requirements were made public on the same day the president spoke to the Chamber, when Issa released 1,947 letters from businesses specifying what irks them the most. While many were highly specific, relating to details of a particular business, a consensus emerged regarding the five most onerous regulations, which were published by the Daily Caller. Unsurprisingly, three of the five were related to what businesses consider an over-reaching Environmental Protection Agency (EPA).
The other two onerous regulations cited by businessmen were an OSHA “occupational noise” statute regulating the amount of noise workers could be subjected to on the jobsite–which was so over-the-top it has already been rescinded–and the Dodd-Frank Fin Reg bill which gives the government “broad discretion” on how to implement financial reform. Unmentioned in the top five, but a source of well-publicized and ongoing frustration for business, is ObamaCare, the implementation of which remains in limbo due to the recent court decision declaring it unconstitutional. The burden it will place on business is indisputable, a characterization supported by the administration itself: 700 entities, including unions which supported the bill, have been granted waivers from ObamaCare. The government’s effort to pick “winners and losers” with respect to health care costs remains an open wound.
Regarding the EPA, businessmen have every reason to be concerned. The Obama administration has made no secret of its intention to use that agency as a means of implementing its agenda without Congressional input. Congressional Republicans addressed that concern two weeks ago, with Energy and Commerce Committee Chairman Fred Upton (R-MI), Rep. Ed Whitfield (R-KY) and Sen. Jim Inhofe (R-OK) introducing a measure to strip the EPA of its authority to regulate greenhouse gases under the Clean Air Act. On February 9th, hearings were held before the U.S. House Energy and Commerce’s Subcommittee on Energy and Power, with EPA head Lisa Jackson testifying that “[O]ur best scientists in this country have reached a consensus and it is unequivocal that the science is clear that man-made emissions or air pollution and global warming gases,” necessitate strict regulations. Previously Ms. Jackson had referred to the proposed measure as “draconian,” as well as insisting the White House would veto any efforts to rein in her agency’s power.
Last Thursday, Mr. Issa followed up his letter release with hearings before the committee in which groups such as the National Association of Manufacturers, National Black Chamber of Commerce, Western Growers Association and the heads of plastics and energy companies once again reiterated their primary reasons as to why American jobs get outsourced to foreign countries: labor laws and Environmental Protection Agency regulations. Democrats on the committee countered with a collection of testimony from victims of accidents in order to emphasize the need for government regulation. GOP committee members asked businessmen to testify as to how much time and money they are forced to spend complying with such regulations. Rep. Issa intends to include their responses to be in the review of government regulations ordered by the president, aimed at discovering which of them keep down job creation.
Issa has also launched a website, www.americanjobcreators.com to give the business community greater input into the discussion. House Republicans are also involved, crafting a resolution which would “direct 10 committees to identify federal requirements that impede job creation, discourage innovation, hurt economic growth and investment, harm global competitiveness and limit access to credit and capital.”
At the Chamber of Commerce, one of the inadvertently contentious parts of Mr. Obama’s speech was when the president said that government helping businesses compete “can’t just translate into greater profits and bonuses for those at the top. They have to be shared by American workers…” Why contentious? One might be forgiven for concluding that American workers already share in the profits of a business, with that “share” being known more commonly as a job and a paycheck. Many businesses also make profit-sharing, pension and health care benefits an integral part of their employee compensation as well. There are, however, precious few businesses which ask employees to invest in the risk of creating them, or participating in losses they sustain in down years. And while there is no question that many executives are grossly over-compensated, often with complete disregard to the performance of the companies they oversee, the cure–government-set limits on private enterprise salaries and bonuses–would be worse than the disease.
Furthermore, this president’s desire to “spread the wealth around” is well known. What is less well-known is whether this latest attempt to woo private enterprise is one in which the implied quid pro quo of government helping business so business will help America is a request–or a demand. Despite the president’s assertion he was speaking to the Chamber ”in the interest of being more neighborly,” such neighborliness stands in stark contrast to the president’s contention that the Chamber used foreign campaign donations to fund Democrat opponents during the 2010 election, absent a shred of evidence presented, then or since. ”[Republicans] are being helped along this year by special-interest groups that are spending unlimited amounts … without ever disclosing who’s behind all these attack ads,” Mr. Obama said at an October rally in Philadelphia for Senate candidate Joe Sestak. “It could be the oil industry. It could even be foreign-owned corporations. You don’t know because they [the Chamber of Commerce] don’t have to disclose.”
Thus, it is not wholly unreasonable to consider the president’s latest proposal a veiled threat. House Speaker John Boehner (R-OH) thinks so. ”It’s clear from his policies that President Obama isn’t as interested in winning the future as he is in rigging it for big government,” said Boehner. Therein lies the crux of the issue. Despite trillions of dollars of Keynsian stimulus policies, which have illuminated the government’s inability to stimulate the economy, this president remains convinced government must be an indispensable partner in job creation. Businessmen themselves? One suspects their desires could be reduced to one phrase: get government out of the way and let us do what we do best.
How do the two sides come to a meeting of the minds? Absent overt government coercion, it will be the president’s hand that is forced. If employment remains high through the 2012 election cycle, Mr. Obama is a goner, even if he attempts to lay the blame on Republicans. Like a quarterback in football or a pitcher in baseball, the man at the top gets most of the credit or blame–rightly or wrongly–for economic performance. Last month’s paltry addition of 35,000 jobs when economists were expecting 150,000 (a sign that the aforementioned “increase in demand” may be illusory), is an ominous development, as was the “drop” in unemployment which represented nothing more than the reality that greater numbers of Americans have given up looking for work.
The central conceit of this administration is that what Mr. Obama and company consider “innovative” is premised on one of the most shop-worn socialist/Marxist theories in history: the belief that central planners, aka “enlightened” government bureaucrats, can make better decisions about the economy than millions of Americans acting in their own self-interest. They cannot. A business community “sitting” on almost two trillion dollars represents a massive “no confidence vote” on such economic policies.
It is a vote based largely on the idea that far too much of “other people’s money” is being spent to sustain that which is utterly anathema to free enterprise.
Arnold Ahlert is a contributing columnist to the conservative website, JewishWorldReveiw.com.
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