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President Obama’s Latest “Jobs” Gambit

If you watched President Obama’s speech to a joint session of Congress, you didn’t see anything new. He did what he does best—campaign for re-election and pay lip service to private enterprise and fiscal responsibility while proposing more top-down economic planning that (despite his claims to the contrary) will surely plunge the government more deeply into debt; that is, if Congress gets stampeded into passing the proposed “American Jobs Act.”

This president’s policies so far have left us with economic stagnation and stubbornly high unemployment. His new proposals are more of the same. Obama’s rigid ideological convictions may render him incapable of supporting the kinds of policies that let job creation flourish. Remember that word “let”—I’ll come back to it.

Over a year and a half ago, my article “Obama’s Anti-Jobs Policy” described several ways by which this president’s policies were killing jobs: heavier taxation and regulation of business, expensive federal jobs programs that triggered a net job loss, and a minimum wage hike, among others.

Team Obama has continued to undercut job formation by waging a relentless campaign against profit-making businesses. To Obama, it seems like the only good business is a business that government funds and/or controls. His modus operandi is government economic planning. Think of the tax dollars blown on uneconomic solar boondoggles.

Team Obama persecutes private businesses. It has just launched lawsuits against banks for peddling the junk mortgages that Fannie Mae and Freddie Mac essentially forced them to issue. Late last month, the feds raided Gibson Guitars, showing far more concern for the possible importation of a little bit of illegal wood than concern for the certain immigration of large numbers of illegal aliens. The executive branch bureaucracies—led by the EPA, the NLRB, the Departments of the Interior, Transportation, Energy, et al.—have hounded, burdened, impeded, blocked, threatened, and intimidated businesses.

No wonder American businesses are reluctant to hire. In this kind of environment, business managers can’t help but wonder if they will be the next to get zapped by some government-hurled bolt out of the blue.

It never ceases to amaze me how some individuals can claim to be pro-jobs when they are aggressively anti-business. If you want jobs, you need businesses to prosper and profit. Businesses equal jobs, period. Did President Obama offer a truce to business in his speech? No. Instead, he trotted out his stale, make-the-most-profitable-businesses-pay-their-fair-share-of-taxes line (i.e., raise their taxes) again.

Yes, he did propose to give businesses a tax credit for hiring workers — another iteration of that government-with-strings-attached “partnership with business” that Obama refuses to abandon. Job creation would be more vigorous and less costly to government if the president could grasp that profit-seeking businesses are the major employers in a growing economy, and you don’t need government to use tax dollars to pay them to hire people. You just need to get government off their back.

Obama presented a new version of his failed “stimulus” plan by proposing various make-work projects. Naturally, these projects are of his choosing, which means more spending targeted to union interests such as teachers and construction workers on federal jobs. What the president fails to grasp is that government attempts to accelerate economic growth and boost job creation are counterproductive. Jobs are like roses: You can’t make them grow; you have to let them grow. If you remove obstacles to growth and protect your crop from disruptive intrusions, you’ll end up with more of what you wanted than if you try to force the issue.

What the president needs is for one of his pals in Big Business to explain to him how free markets generate jobs. Unfortunately, he surrounds himself with the likes of GE’s Jeffrey Immelt who shares his belief in state capitalism. The kind of business friend he really needs is a modern version of Monsieur Legendre.

Few people today remember M. Legendre, an obscure 17th-century French merchant. In 1680, the French economy was stagnant, as ours is today. Merchants labored under the burden of mountains of regulations and the oppressive meddlesomeness of government bureaucrats. Anxious to stimulate the economy (as a means of increasing royal revenues), Louis XIV’s Finance Minister, Jean-Baptiste Colbert, assembled some business leaders to inquire what could be done for them.

The plainspoken M. Legendre replied with the immortal phrase, “Laissez-nous faire” — “Leave us alone.” That was the origin of the term “laissez faire” as a label for a free-market economy. More fundamentally, it set forth a great truth, simple in its elegance and profundity –that the “invisible hand” of a free market generates wealth-producing jobs far more effectively than the heavy hand of government planning. That truth eludes many a bright individual, Barack Obama included.

The president pointedly belittled the laissez faire option in his speech. That is his prerogative — and our job-seekers’ loss. More stimulus, more debt, and more government planning can produce only what they have been producing: more stagnation and reduced employment opportunities.


Dr. Mark W. Hendrickson is a faculty member, economist, and contributing scholar with the Center for Vision & Values at Grove City College.
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  • If my high school French is on-target, “Laissez-nous faire” actually means “Let us make” or “Let us do”. That’s even more fitting I think.

  • Theodore Kobernick

    Dr. Henderson:

    Thank you for your article.

    You appear to rely upon a fundamental premise which has yet to be demonstrated: namely, that President Obama is harming our economy through ignorance. This is a highly intelligent, well-educated man, who has exhibited a high degree of flexibility in his ascent to the political height.

    I would hope that you, together with others equipped for the task, test the hypothesis that the savaging of our economy is NOT an “unintended consequence” of certain policies; that it is part of a deliberate plan. To explore such an hypothesis might require an investigation into who benefits from it, and how they benefit.

  • goral

    Team Obama is not a bunch of bungling fools although they are that as well.
    Primarily, these are scheming, devious people with a Marxist bent.
    They are damaging us and there are over 40 percent of “Americans” who give him a good job rating.
    This is the enemy within that we’ll soon be facing.
    They’ve already voiced their willingness to “take the SOB’s out”
    That would be us, the true labor of this country.

    • Theodore Kobernick

      Goral:
      You say that the present administration has “a Marxist bent.” I confess to ignorance in this regard. So I looked up in the Wikipedia, Geithner, among others.
      Geithner and Bernanke exerted immense official influence over our economy during both the Bush and the Obama administrations: Republics and and Democrats — same-same.
      Back to Geithner, according to Wikipedia, “he studied Mandarin at Peking University in 1981 and at Beijing Normal University in 1982.” Inasmuch as China has taken over industry and jobs that used to be American, your “enemy within” seems altogether too appropriate.
      One hopes that other persons, more well-informed than I, will help develop this discussion.

  • noelfitz

    TK,

    you have contributed a number of posts here. I find them excellent. To me they seem balanced and reflective, with a nice touch of irony.

    I hope you feel comfortable here and that we will have many more sound opinions from you.

    I have been reading reviews by you in Amazon. They also are excellent. Congratulations and thanks!

    I see there is another person with your name who is involved in real estate, is he connected with you, or do you wear more than one hat?

    • Theodore Kobernick

      noelfitz,

      Thank you for your kind words.

      I do feel comfortable at Catholic Lane. This is an outstanding forum: many of the articles are excellent, and the general level of thought is well above that of the other (few) journals I know. It seems to me that the overall thrust of Catholic Lane is helping Catholics and other Christians to come together regarding many important social, moral and spiritual issues. The editors have welcomed my contributions.

      What a nice surprise to hear that you have read my Amazon reviews. Because of customer reviews, Amazon has become by far my favorite marketplace. In general I try not to clutter the landscape with reviews that duplicate those of others.

      As for real estate, my wife, Paula, is a broker, and I was, until my retirement because of health. Residential real estate was our area of expertise.

      Probably, this is exceeding the bounds of a REPLY, but here goes. We both knew that bad results would occur, as we saw the required down payment for homes drop fro ten percent down to five, then to three. The trend continued, not even bottoming out at zero down. It went to zero down, with buyer’s closing costs added to the sales price. All of these purchases needed to be appraised at the inflated values, or the loans would not be approved. Tie this in with the fact that the lenders made nothing unless they made the loans, and you can see that pressure was applied to the appraiser to overvalue the properties — on pain of never again being called upon to do the appraisals which constituted their livelihood.

      Paula and I knew that whenever an “upside-down” homeowner hit a financial glitch, the home would have to be sold. We also believed that it would not become a major social and economic problem until a large percentage of homeowners owed more that their homes were worth. In such a case, housing would become a “foreclosure-driven market” [technical terminology]. Meanwhile, lenders were urging homeowners to “put your equity to work” by borrowing against it.

      Paula and I knew “the fit would hit the Shan” sometime soon. So we sold our leveraged and expensive luxury condo, and bought a really inexpensive home — paid for with the equity from the condo. We are convinced that the Lord directed our timing, because one week after we closed the condo sale, the bubble began to burst.

      We had had no idea that the economy would actually be devastated; we were aghast as anyone else.

      And we had never heard of “derivatives.” But we did know that because almost all of the mortgages were sold in blocs to the secondary market, the so-called lenders did not really have much of a stake in making GOOD loans.

      The reason I’m telling you this is because I hope you will not regard me as paranoid, or as a “conspiracy theory” kook. In future articles, I hope to participate in discussions of what motivated the economic disaster — not the mechanisms, but the motivations. The information above shows that the bubble bursting was easily predictable, and not just by financial gurus. I was just a residential broker. I have never completed ANY college courses in economics, but even Paula and I could see what was coming. We saw it so clearly that we acted upon it. Noelfitz, if two persons with so little expertise could see what was happening, is it conceivable that the financial giants — with their Harvard and Wharton grads — could not see it? Of course they did!

      Next step. Do you believe their protestations that they were forced into unsound lending because of federal regulations? Or, conversely, do you believe that the federal regulations were tailored to the demands of the financial giants?

      So there. Thank you much for giving me the opportunity to share this with you. Hoping that God continues to bless you and yours,

      Theodore