After I posted a story about how there is virtually no one in the Obama administration with private sector business experience, I began to further consider the practical implications of this. Intuitively, one would conclude that a group of policymakers who don’t understand business and capitalism probably would not have a clue about making public policy that is friendly to business. And indeed, this appears to be the case. At every turn, the Obama administration is promoting legislative action that is harmful to businesses – new taxes, regulations and other economically harmful policies.
This ignorance of what drives the private sector was proven by Barack Obama himself this week, at his so-called “Jobs Summit,” where the POTUS stated:
Despite the progress we’ve made, many businesses are still skittish about hiring. Some are still digging themselves out of the losses they incurred over the past year. Many have figured out how to squeeze more productivity out of fewer workers. And that cost-cutting has become embedded in their operations and in their culture. That may result in good profits, but it’s not translating into hiring and so that’s the question that we have to ask ourselves today: How do we get businesses to start hiring again?
Heaven forbid! Productivity? Profits? Does Mr. Obama believe that businesses exist to hire people? I’m sorry, sir, but it is ALL about the profits. Productivity, and in turn, profitability, is improved either by enabling a constant number of people to produce more, or by reducing the number of people and maintaining constant production. New hiring may improve producTION, but not necessarily producTIVITY. Obama’s ideology, like that of his staffies, is disconnected from the realities of a capitalistic economy. And the policies he supports are similarly disconnected.
And now we come to the by-product of the Administration’s disconnect on private sector economics. If the policies of Barack Obama are truly damaging to business, we would expect to see that demonstrated in the marketplace. And indeed we’ve seen it. Remember this diagram showing the trajectory of the unemployment rate, despite the grandiose “stimulus” program implemented by the Left?
Obviously the business community didn’t respond to the “stimulus” as the Obamites anticipated. Strike one on understanding the private sector. But that’s not all.
At the recent “Baird Industrial Outlook” conference in Chicago, David Farr, CEO of St. Louis-based Emerson Electric, stated:
“Washington is doing everything in their manpower, capability, to destroy U.S. manufacturing,…Cap and trade, medical reform, labor rules.”
“What do you think I am going to do?” Farr asked. “I’m not going to hire anybody in the United States. I’m moving. They are doing everything possible to destroy jobs.”
“We as a company today are putting our best people, our best technology and our best investment in these marketplaces to grow,” he said. “My job is to grow that top line, grow my earnings, grow my cash flow and grow my returns to the shareholders. My job is not to shrink and roll over for the U.S. government.”
That is the voice of a man who understands the responsibility of a private-sector corporation and the antagonism of the Obama administration against businesses in the United States. Mr. Farr’s position is unfortunate, as no one wants to see an American company ship jobs offshore. But as Farr states, his job is to grow returns to shareholders. He must do this in spite of the anti-business policies of the government. Strike two for the Obama administration.
Farr is not the only business person expressing such opinions. The WSJ reports:
A number of chief executives say the government should clear up uncertainty over health care, energy prices and financial regulations. “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,’ ” said Dan DiMicco, chief executive of steelmaker Nucor Corp.
USA Today cites a similar example of trepidation due to Obama policies:
Porta-King of the St. Louis area, which makes prefabricated offices and other enclosures, cut spending on new gear from $1 million a year to less than $100,000 in the slump and isn’t planning an increase next year. Like Lubrano, Porta-King CEO Steve Schulte worries that proposals in Congress to tackle climate change and overhaul health care would raise costs. “It’s going to be survival mode in 2010.”
Strike three. You’re out, Mr. President (Or at least we hope that will be the case in 2012)
We should have known this would happen. We received a hint from none other than Rep. Barney Frank, when, in September, 2008, Frank stated “‘THE PRIVATE SECTOR got us into this mess. The government has to get us out of it.” Compare and contrast with Ronald Reagan, who famously stated “In this present crisis, government is not the solution to our problem; government is the problem.”
Emerson’s Farr is by no means the only business leader who finds the Democrats’ policies threatening to their company’s survival. Businesses are not going to begin hiring again until they are comfortable that the economy and government policies will allow them to be profitable without having to resort to cost-cutting to maintain margins. The prospects of business-friendly policies emanating from Capitol Hill are quite dim at this point, and the Obama administration’s sheer lack of experience in private sector fundamentals is most certainly a primary factor in the lack of job growth in the marketplace.
To borrow from Reagan, “Barack Obama’s policies are not the solution to the problem; Barack Obama is the problem.”