Wednesday, February 09, 2011

The Business Friendly Obama Meme

Those tasked with putting out the message of the Obama agenda insist that the top priorities are job creation and deficit reduction. The last two big speeches delivered by President Obama do not inspire much confidence in that message.

The State of the Union was full of increased spending proposals - in the form of "investment in the future" - and of more regulations for businesses. The same with his speech to the Chamber of Commerce. Obama boasted of his desire for heavier regulations which will surely stunt growing businesses.

We must remember this is the President beholden to unions and pushing a card check agenda. His crony capitalism benefits unions and big donors - even Wall Street donors - while it squashes confidence in entrepreneurs that he is truly a business friendly man.

Watch what Barack Obama does, not what he says.

In the speech to the Chamber of Commerce Obama tried to stake out a centrist image. The Chamber of Commerce has a mixed history of support towards the Obama agenda.

One should remember that the Chamber supported Obama’s 2009 stimulus spending plan and is on board with Obama’s current proposal to “invest” billions more in infrastructure and technology that would benefit Chamber members through government contracts. The Chamber is not a conservative group, it is a member-driven organization that seeks the best outcomes for the companies that populate it.

Obama has no personal experience in business. He has not held a traditional job or owned a business. His lack of experience no doubt shapes his policy. Surrounding himself with those also lacking in business world experience has done him no favors. Recently in a widely watched television interview, Obama told the interviewer that he had not raised taxes, "not once". All outlets fact checking this statement have called it a false claim.

In his historic health-care bill, for example, there is the new $27 billion "fee" on drug companies that is already in effect. Next year, device manufacturers will get hit to the tune of $20 billion, and heath insurers will pay $60 billion starting in 2014—all of which are de facto tax increases because these collections will be passed on to consumers as higher costs. Of course, these are merely tax increases on business.

As for tax increases on individuals, perhaps he forgot the health-care bill's new 0.9 percentage point increase in the Medicare payroll tax for families making over $250,000 and singles over $200,000. That tax increase takes effect in 2013, as will the application of what will be a 3.8% Medicare surtax (up from 2.9% today) to "unearned income" for the first time. This is a tax hike on investment and interest income, which will reduce the incentive to save and invest.

The uncertainty in the Obamacare legislation alone has been a jobs killer. Over 600 exemptions have been granted by the Obama administration, mostly his union pals and favored companies by the administration. Crony capitalism. Obama enjoys the game of picking winners and losers.

While Obama claims he was 'forced' to take drastic action and lumps Obamacare into crisis management, this was not the case at all. The legislation is still deeply unpopular - though a few of the provisions are widely popular - and now is stuck with having to defend his actions. More than 80% of Americans were polled as happy with their health care coverage during the first 18 months of the Obama administration as Obama and the Democrats rammed Obama care through on a party line vote. Team Obama and the Democrats hyped the crisis talk to justify their actions. It was the wrong thing to do.

There is no realistic way for Obama to spin the meme that he is a pro-business politician at this point in his first term. He is not. He is pro-regulation, pro-tax, pro-union, pro red tape, etc. He has expanded the ranks of government jobs as the private sector struggles to survive. The media, however, is only to happy to be manipulated by the Obama spin machine.

Now this week brings the announcement that the spending on an expanded rail system moves to the range of more than $10 billion dollars. CNN described the plan as “a significant expansion of the $10.5 billion already spent on high-speed rail expansion since Obama entered office, including $8 billion in the 2009 economic stimulus package.” So, expect a new crisis to develop over the need for train travel, which few will use in ratio to our population, and unions will have more 'make work' projects.

Instead of focusing on more efficient federal spending and job creation during the first half of his term as president, Obama chose to push through job killing, deficit expanding social programs and bail outs to those chosen as winners in the corporate world. Now the talking points are that he is focused like a laser on job creation and deficit reduction. He continues to announce multi billion dollar projects. Hard to reconcile the two.

The budget will soon be submitted by the administration. Last year, the Democratically controlled Congress didn't fulfill the obligation to pass the budget, for the first time in three decades. Let's see what this year brings.

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