Businesses vote ‘no confidence’ in Obama

Terry Garlock's picture

As I watch Obama administration officials, and the President himself, talk on TV news about stimulating the economy, holding jobs summits and discussing techniques to motivate business to hire new employees, I can’t help but wonder if it were a Broadway production whether it would be classified as a comedy or a tragedy. Maybe a farce.

Ask yourself this question. Who do you know that remains cautious about major expenditures, like new appliances, a new car, a pricey vacation or maybe even a house? Your answer will likely confirm that concern about the future is widespread, whether that concern centers on job security or the economy as a whole. Now extend that thinking to how jobs are created.

Small business creates 80 percent of the jobs in America; the rest come from large business and government. Who owns small businesses? The successful people Democrats love to demonize.

This weekend, Treasury Secretary Timothy Geithner said on TV news programs that expiring Bush tax cuts should not be renewed for people earning over $200,000 as an individual, $250,000 as a family, but that they should be continued for people who earn less.

If you put on your thinking cap, you might recognize that every such tax benefit that is “phased out” at a certain level of income amounts to a transfer of wealth from the richer to the poorer, which is great, if that is your objective.

More telling, Geithner said he is not concerned that tax increases on the wealthy are a disincentive for them to invest, and he nearly floored me when he said about deficit spending that today is a great time to borrow because the interest rates are very low. Someone needs to remind him we are paying $100 million per day on our national debt.

But what motivates people with wealth to invest their money in a new venture or expansion, making it necessary to hire new workers? They are betting on the future when they do that, they are hoping for large profits from the risk they take, and there is one primary, essential ingredient necessary to the mix that can be described in one word: confidence. And there isn’t any.

In a speech last week President Obama observed that American businesses have many trillions of dollars in ready cash, available for new ventures, and he wants to motivate them to put that money to work. He seems not to realize that he is the very reason American business is on hold.

It isn’t surprising that the Obama administration is fairly blind when it comes to business. President Obama’s cabinet has far fewer people with any business experience at all than any administration since Teddy Roosevelt. Even Timothy Geithner, U.S. Treasury Secretary, is a career government employee.

The president has surrounded himself with people who believe that government is the solution to everything, and while unemployment has been soaring, government jobs have been growing at 12 percent. You and I get to pay those new government employees for the rest of their lives.

Meanwhile, the anti-business rhetoric and actions of this administration have been relentless. But let’s forget about the past and just look ahead.

There is much uncertainty, never mind worry, about the expense imposed on business by the coming changes mandated in the healthcare legislation. Hundreds of panels and commissions have yet to form in this gargantuan new patchwork of bureaucracy, and I believe a cautious “wait and see” attitude prevails in business on cost-per-employee.

The brand new financial “reform” 2,500-page bill is a monstrosity that will reach into every crevice of your financial life. It requires a number of agencies to create 243 new and complex regulations, each with its own and unknown pile of unintended consequences, and grabs a lot of power for the government to assume control of businesses deemed “too large to fail.”

That all sounds good if you believe government has the answers to everything, but maybe you should wonder why the two financial behemoths central to the financial meltdown, Fannie Mae and Freddie Mac, were specifically excluded from this regulatory squeeze.

Is it just coincidental that their best political friends, Democrats Chris Dodd in the Senate and Barney Frank in the House of Representatives, were in control of this “reform” package?

I know, I know, you’re going to tell me, “Well, we had to do SOMETHING!” Your Congress has just used your worry as a shield to cram through yet another government power grab when a far more limited and targeted list of changes was called for.

Now, on the completely laughable end of the spectrum, Democrats talked this weekend in the news about the Bush tax cuts set to expire the end of this year, and made the claim they had a sunset date because the cuts were “so expensive.” Well, no, there was a sunset date when these cuts were passed to get past Democratic opposition, and tax cuts, especially at a higher level, are generally thought to stimulate investment and therefore job growth.

So, business owners are wary of this administration in general, and specifically worried about new, oppressive and costly legislation, with new cap and trade carbon taxes threatening on the horizon once Democrats regain their muscle, with increases in income tax and capital gains tax and dividends tax, death taxes jumping from zero this year to 55 percent, and a hundred other kinds of taxes set to kick in the end of this year, businesses are not just on hold, they are hunkered down to weather the storm.

In this setting it is almost funny watching administration meetings and speeches about how to create jobs.

When will the business sector feel the confidence needed to bet on the future and thereby create jobs? Let me answer that by confessing that I believe their protective caution began when it became clear in 2008 that Obama had a good chance to win the presidency.

The Obama administration can hold jobs summits until the cows come home as they earnestly try to learn the unfamiliar language of business, but my guess is job creation will take off only when we elect a new president. Until then, the jobs machine will likely be on hold.

[Terry Garlock is a Certified Financial Planner. He lives in Peachtree City and writes columns occasionally for The Citizen. His email is tgarlock@mindspring.com.]

Courthouserules
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Garlock

I am really getting tired of this same old argument every month nearly!

You, and others, said the same kind of negativity about the health plan, the same about the stimulus plan, the same about the immigration plan, and now you are worried that 3% of the taxpayers will have to pay about 4% more taxes and that is only on those who can't find enough deductions to pay little tax anyway!
Why are you worried? Do you and your wife earn $400,000 per year?

There is small business and then there is smaller business. Most independent retail stores fit the smaller business.
What you and others call small business is those who employ hundreds, become millionaires while most of their employees make little more than a retail clerk---about $8 an hour right now. And no insurance and mostly part-time.

tgarlock
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Courthouse and Lion - naive

You guys who believe our government produces wealth really crack me up. You seem to have no understanding that the beauty of capitalism is it harnesses the selfish profit motive to produce an ever-expanding array of products and services and in the process makes it possible for millions to live a prosperous life by earning a living at the jobs created by these profit-induced ideas.

Government, on the other hand is a necessary drain on the purse up to a point, which we have long passed BTW, after which it is a greater and greater drag on the jobs engine and the economy. If you want to stimulate employment you must invigorate the people with capital to put it at risk in new and expansion ventures. Ever get a job from a poor person?

But since one of you said the government should provide jobs as an alternative to the private sector, your misunderstanding of our system is so deep I'm likely wasting my time.

Terry Garlock

Courthouserules
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garlock

No one is saying that the government can or should provide most jobs.
That is simply silly. Even the Scandnavian countries have a large work force in private enterprise.

Regulation of the capitalists is absolutely necessary. It is just a matter of the minimum needed.

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Mr. Garlock, Just Asking..

Hypothetically, would you turn down the offer of a nice fat government contract to provide financial planning services to all Fayette county workers? Despite your objections to government-created jobs, I would hazard to guess not.

tgarlock
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Ninja - magic?

Ninja, your question suggests you believe there is some magic bag of money in the sky labeled "government" to use on various projects, like hiring financial planners. The reality is for every dollar the government spends, they have to take it away from someone.

In your world maybe we could elevate economic prosperity by hiring each other to dig holes and fill them up. The leftist argues how to allocate slices of the economic pie. Capitalists argue that by motivating wealthy people to voluntarily put personal capital at risk in the pursuit of profit, and creating jobs in the process, the economic pie is made larger for everyone. And that is the system that has built a standard of living that became the envy of the world.

Terry Garlock

Courthouserules
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garlock

I never heard of a rich person loaning money directly to someone to start up a hot dog stand! Banks used to do so, but not the rich person---he put some money into the bank but had no say over what happened to it.

Now banks did such a marvelous job over the last 10 years that you are trying to convince us that we should free them from regulation again and let them rip again!
Right now those wonderful rich people who provide jobs and those banks with their rich people's money ARE NOT lending it to the fell ow who wants the hot dog stand so he can hire a few people!
They are taking the practically FREE loans from the government and loaning to each other and people using credit cards at 20% and simply are floating paper again.

Those banks have next got to get rid of maybe 25% of their "assets" they now call shopping center loans and construction loans, etc., that have no value at present.
We will also soon have to start burning down or de-constructing tens of thousands of foreclosed homes or ones that banks still have with people in them who aren't paying.

Yeah, those wealthy people are certainly voluntarily putting capital up in pursuit of profit but it is all on paper.

Maybe we should have let the banks go broke and have a depression right now with 25-30% unemployment. We don't need the car companies either---we have the "high quality" Japanese cars to use and then recall them all!

tgarlock
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Courthouse entertainment

Your avatar is truly appropriate, for your analysis reminds me of a monkey trying to figure out an iPod Touch. Similarly, the clowns in Congress couldn't collectively pass an Economics 101 exam, and couldn't lead a group of little old ladies through a pansy patch without serious consequences. If you really want to know who is most guilty in the economic crisis, look to senior clowns Barney Frank in the House and his buddy Chris Dodd in the Senate, who BTW is retiring because he knows if he runs for re-election his misdeeds will get him trounced at the polls. These guys pushed hard on legislation and presidents Clinton and Bush about forcing banks to set aside underwriting stds to get people into homes they want despite their weak ability to pay for it. Even now they are pushing the same, which is the major problem with the Democrats, tossing adult discipline out the window in order to take money from the producers and give it to the non-producers. But I'm sure you won't understand even this broad-brush notion.

Terry Garlock

Ninja Guy
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No Magic Suggested Mr. Garlock

My question suggests nothing about some magic bag of money. In fact, it suggests nothing at all. It only questions whether you would turn down a nice big government contract to supply financial planning services to county (or any group of government) workers. I am well aware that the bulk of tax revenue is generated by the private sector, and on this issue, I generally side with the Miseans, of which I suspect you are one. One could even go so far to argue that government workers do not even pay taxes in a true sense, as their salaries are paid from general tax collections. However, all of these grand arguments do not negate that fact that 1) the US, its states, counties, and municipalities do operate under systems of government that give elected officials the power to levy taxes, and 2) these governments do contract out for the supply of various goods and services. Now, as I hope you can see now, my question does not suggest anything idealogical about taxes. It simply asks whether you would turn down a government contact if offered? I am not so interested in whether you respond yes or no, as I have debated the 'magic bag of money' issue ad nauseam, but whether you can make a solid rhetorical case for your answer.

Davids mom
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Tgarlock

Capitalists argue that by motivating wealthy people to voluntarily put personal capital at risk in the pursuit of profit, and creating jobs in the process, the economic pie is made larger for everyone. And that is the system that has built a standard of living that became the envy of the world.

What happened? Did the wealthiest decide to keep their profits? Enron and others made some wealthy - and bankrupted the nation. Where do we go from here? Who do we trust? No one is envying us now.

Joe Kawfi
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Enron bankrupted the nation, DM?

Really - The U.S. is bankrupt? When exactly did that happen?

Davids mom
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OH KAWFI

I misspoke. We're in so much debt - that we'll never recover - because of Obama. Isn't that what you have been telling us? When that happens - most people file bankruptcy. I guess because we are a 'government', and can rely on China and other countries not to call in our debt - we won't have to file.

Joe Kawfi
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DM

No DM, I've been telling you that Obama is an idiot and a complete and utter failure.

This country will begin to recover in 2012 as soon as Obama is out of office. And he WILL be out of office.

Davids mom
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RECOVER

. .what will happen if we begin to recover before 2012? Maybe in 2010 there will be some incumbents 'gone' - and a Congress with legislators who can work together for the American people. We'll see.

Cyclist
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I suspect that this is Bush's

fault as well. (eyes rolling)

carbonunit52
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But, but, but, Obama

He just don't get it, do he?

"One facet of increased services trade is the increased use of offshore outsourcing in which a company relocates labor-intensive service industry functions to another country... The principal novelty of outsourcing services is the means by which foreign purchases are delivered... The basic economic forces behind the transactions are the same, however. When a good or service is produced more easily abroad, it makes more sense to import it than to make or provide it domestically." - February, 2004 Economic Report of the President, page 229.

lion
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Garlock and business

I guess the unemployed in America just have to wait patiently until the weak-kneed, frightened businessmen--corporate management and small businessmen--finally stop their whining and have the courage to invest and expand and begin hiring again.The private sector now has over 2 trillion dollars in cash but does not want to hire because profits are good now that they have reduced labor costs and because they are just "so very worried" about what President Obama might have planned.

Actually business did just fine before the Bush tax cuts and will do well again when they expire. The estate tax (it is not a death tax) will not apply to most businesses or individuals. There are not a "hundred other kinds of taxes" scheduled to go into effect at the end of the year.

If the private sector cannot muster the nerve to hire back American workers, then we need more hiring in the public sector.

And government jobs are generally very good jobs--good pay and good benefits--something small business jobs seldom offer.

So my advice is for government to create more jobs and for the unemployed to apply for them. If they get a government job, they will be better off than working for a small business.

Joe Kawfi
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Garlock

Let me guess - You were educated in a government school. Only a government run school could have taught that kind of inane reasoning.

Davids mom
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lion

I understand that the funds that lending institutions have available for small businesses are not being made 'available'. Garlock, anyone - is that correct?

tgarlock
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Lion - exhibit A

Lion, you are exhibit A in support of the argument that the real problem is not Obama. He and his leftist agenda are only the symptom of the real problem, which are uneducated people who have no idea how our system works, and do not understand what they are voting for or against.

I hasten to add I know a lot of people voted their heart, the excitement of having a black president perhaps blinding them to the extreme liberal and anti-business (read that job-killing) policies he brought to the Oval Office. But too many voters like you simply don't understand where the money comes from and how jobs are created and destroyed.

Terry Garlock

lion
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Garlock

Obama is not a "leftist". He is a moderate Democrat. Have you noticed that many liberal Democrats are dissatisfied with many of his decisions.

So those who voted for President Obama are "uneducated people". They voted their "hearts" in the excitement to have a black president? I guess the "educated" and those voting with their heads voted for McCain/Palin because they wanted another white President. Very strange thinking.

Not everyone worships at the feet of private business.

Cyclist
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OMG! If the President is a "moderate"....

then just where in the political spectrum does Pelosi, Reid and my favorite Maxine Waters reside? ☺

Observerofu
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If Obama is a "Moderate"

Then Hitler was a humanitarian.

Look at all the radicals around him.
Look at his Father-Marxist.
Look at his Mother-Communist
Look at his Teachers-Radical Marxist
Look at his Preacher-Radical Black Theology-Collective Salvation-Look it up
Look at his life-Socialist

If you call this a Moderate Democrat then the party of my Father has surely gone away.

Mike King
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lion

And who is it that underwrites all those government jobs to which you refer? Could it be that you believe that government knows best when it comes to producing something that others may wish to buy?

Surely, you realize that the private sector funds government.

.

lion
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Mike Kiing

Yes I believe that the public sector knows best what we should invest in--bridges, highways, space exploration, mass transit, health care, etc. etc.

The private sector hopes we will buy into whatever crap it wants to sell.

Actually the public sector supports the private sector through contracting out, public spending, and tax subsidies.

Mike King
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lion

Obviously you and Courthouserule$ share the same medicine cabinet. Those infrastructure programs (highways, bridges, etc) are funded by you and I primarily through gasoline taxes that are now approaching a half dollar per gallon.

Government contracts are let simply because government agencies have become so cumbersome that they can not accomplish what it is they were designed to do.

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Lion

Keynesian tripe - socialism at its worst.

You have no idea what makes the world work, it's called capital.

Davids mom
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Capital

Our lending institutions used capital to 'bail out' of trouble, and now are giving their minions bonuses - and holding on to capital for dear life! We (tax payers) gave them 'capital' when they needed it - but we're left holding an empty bag - no capital for small businesses, etc. God bless the private sector. Am I mistaken?

Cyclist
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The Obama administration's pay czar

said that he did not try to recoup $1.6 billion in lavish compensation to top executives at bailed-out banks because he thought shaming the banks was punishment enough.

Feinberg couldn't force the banks to repay the money. But the law instructed him to negotiate with banks to return money if he determined that allowing them to keep it was not in the public interest.

Chicago Sun Times 7/24/10

Someday we are going to cross the line.

Davids mom
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Pay Czar
Observerofu
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Obama signs bill to eradicate HALF of Corruption

110 Billion dollars has been identified as going to Felons in Prison-Dead People and other non-eligible persons.

He said he is going to end HALF of it or 50 billion dollars worth with just the stroke of a pen.

My question is if he can do that why not get rid of the other 50 Billion dollars of corruption?

Or is that going to the "right" people instead?